I've noticed this too....is it possible that the bull market for SGX is over before it even began?
Based on the STI, is it time to get out?
Wondering if I missed any obvious signs since I'm a newbie?
Regarding STI correction 100 pts in this week
Moderators: alvin, learner, Dennis Ng
This is not a bear market: Soc Gen
By FELDA CHAY
THE recent outflow of funds from Asia and back into developed markets is just an underperformance cycle that is unlikely to signify the end of the bull run for funds focused on the emerging region, said Todd Martin, Societe Generale Corporate and Investment Banking's Asia equity strategist.
While the 'inflationary flare' that many Asian countries are experiencing will likely continue to encourage fund flows back into developed markets, 'these (Asian) markets could go up on an absolute basis; they will just underperform Europe and the US' as central banks in the region raise interest rates and tighten monetary policy to rein in inflation, said Mr Martin. 'So this isn't a bear market, this is just an underperformance period,' he added. 'We are probably just one-third of our way into a bull market.'
He believes the flow of funds out of Asia will last a few quarters before money starts pouring back in. 'What hasn't changed is that Asian demographics and growth still look better than developed markets'. Their balance sheets look cleaner, so this period of underperformance will only last for a few quarters till we get things (inflation) under control.'
According to Mr Martin, equities are a good investment in this environment because stocks are a good hedge against inflation. He believes that equity markets in Asia will stay attractive over the coming five years.
'A lot of stocks and sectors can raise prices and adjust their business models to fight against inflation,' said Mr Martin. 'So that's the reason why we are not in a bear market right now. We are just moving into a more inflationary environment.'
Still, he notes that not all stocks will thrive. 'There are sectors to avoid,' he said, citing consumer staples. 'There will be certain areas that could get price capped and we will see a big squeeze in their margins,' said Mr Martin.
The recent flow of funds out of Asia and other emerging markets has come as a surprise to many, given that as recently as the end of last year, markets continued to expect funds to keep flowing into emerging markets.
Recent data, however, showed that fund managers are starting to pull some of their money out of emerging markets and putting it back into developed markets. Statistics from Lipper released earlier this month showed a record US$4.1 billion outflow from emerging market equity funds in the week to Feb 2. According to fund-tracker EPFR Global, investors pulled more than US$7 billion out of mutual funds and exchange-traded funds (ETFs) focused on emerging market stocks last week - more than double the US$3 billion outflow the previous week
By FELDA CHAY
THE recent outflow of funds from Asia and back into developed markets is just an underperformance cycle that is unlikely to signify the end of the bull run for funds focused on the emerging region, said Todd Martin, Societe Generale Corporate and Investment Banking's Asia equity strategist.
While the 'inflationary flare' that many Asian countries are experiencing will likely continue to encourage fund flows back into developed markets, 'these (Asian) markets could go up on an absolute basis; they will just underperform Europe and the US' as central banks in the region raise interest rates and tighten monetary policy to rein in inflation, said Mr Martin. 'So this isn't a bear market, this is just an underperformance period,' he added. 'We are probably just one-third of our way into a bull market.'
He believes the flow of funds out of Asia will last a few quarters before money starts pouring back in. 'What hasn't changed is that Asian demographics and growth still look better than developed markets'. Their balance sheets look cleaner, so this period of underperformance will only last for a few quarters till we get things (inflation) under control.'
According to Mr Martin, equities are a good investment in this environment because stocks are a good hedge against inflation. He believes that equity markets in Asia will stay attractive over the coming five years.
'A lot of stocks and sectors can raise prices and adjust their business models to fight against inflation,' said Mr Martin. 'So that's the reason why we are not in a bear market right now. We are just moving into a more inflationary environment.'
Still, he notes that not all stocks will thrive. 'There are sectors to avoid,' he said, citing consumer staples. 'There will be certain areas that could get price capped and we will see a big squeeze in their margins,' said Mr Martin.
The recent flow of funds out of Asia and other emerging markets has come as a surprise to many, given that as recently as the end of last year, markets continued to expect funds to keep flowing into emerging markets.
Recent data, however, showed that fund managers are starting to pull some of their money out of emerging markets and putting it back into developed markets. Statistics from Lipper released earlier this month showed a record US$4.1 billion outflow from emerging market equity funds in the week to Feb 2. According to fund-tracker EPFR Global, investors pulled more than US$7 billion out of mutual funds and exchange-traded funds (ETFs) focused on emerging market stocks last week - more than double the US$3 billion outflow the previous week
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Books by Master Ryuho Okawa - Happy Science
Books by Master Ryuho Okawa - Happy Science
I think the major trend is still pointing upwards. If we look at SSE which I gauge as leading indicator, as it has been for the past 2-3 yrs or so, the technicals are very bullish.
SSE has crossed 2800 quite decisively, and testing 2900 yesterday. Dow keep on breaking 2 yrs high for the past week. So I still believe that we are still in bull market..
SSE has crossed 2800 quite decisively, and testing 2900 yesterday. Dow keep on breaking 2 yrs high for the past week. So I still believe that we are still in bull market..
Hi Stradlinz,Stradlinz wrote:I think the major trend is still pointing upwards. If we look at SSE which I gauge as leading indicator, as it has been for the past 2-3 yrs or so, the technicals are very bullish.
SSE has crossed 2800 quite decisively, and testing 2900 yesterday. Dow keep on breaking 2 yrs high for the past week. So I still believe that we are still in bull market..
agree with you.
The recent Asia market fall is due to taking profits by some funds, which pulled out money from Asian markets.
However, based on analysing from TA point of view, from FA point of view (market PE, expected profits for year 2011, economic growth etc), and based on Psychology (I observe that not many retail investors are really invested into stocks in a Big way yet), it all points to the View that, there is still a Last Rally in the Global Stock Markets in this current bull market that started in Mar 2009.
And yes, I think China Shanghai market SSE is a leading market for Asia. Recently, after correction, it has recovered to close above 2,800 level, which means China stock market is still on an uptrend. Based on the fact that Asian markets fell partly due to hiking of interest rates by China, it is weired that when China is now coming to terms of higher interest rates, but the Asian regional stock markets are not.
I encourage everyone to write down how you feel and your analysis NOW as it can provide for useful reference and good learning when we look back to this moment some time in future.
Learning to Invest is a never-ending journey, and one of the things I like about investing is that it helps me to understand myself better and also help me to build emotional control. These are Priceless, for everything else there is Visa (haha). (Benefit of investing is not just becoming Richer, it's much more than that).
Cheers!
Dennis Ng
Cheers!
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Hi Dennis and Stradlinz,
Thank you for sharing the info, I guess the problem is that the current correction is unexpectedly far greater than the one in Oct and Nov 2010 which STI bottom at 3124 pts. The current correction as of today is already break below 3100 and the next strong support level is at 3000 pts.
If you buy the stock between June and Sep 2010 and still hold on to them, there are still profit to be make from them but the profit is greatly reduce as much as 70%. But if you bought the stock between Oct 2010 and Jan 2011, most probably all those stock you are losing money now. From the STI chart I don't see any reversal sign that will happen for this month and it seem to indicate downtrend.
Therefore I think we just need to look at our stock portfolio and understand what risk level you want to take to hold on to those individual stock you have. For me I wont touch the stock that I bought in between June to Oct 2010. But as for the rest, I will have to see how much level of lost I can tolerate to make a judgement call myself to hold or to sell. As I feel that one need to protect it's capital and wait for the market to show sign of reversal and then buy back good FA stock again.
I hope the Singapore Budget plan announcement tomorrow will help the STI to rebounce from the current down trend.
James Tai
Thank you for sharing the info, I guess the problem is that the current correction is unexpectedly far greater than the one in Oct and Nov 2010 which STI bottom at 3124 pts. The current correction as of today is already break below 3100 and the next strong support level is at 3000 pts.
If you buy the stock between June and Sep 2010 and still hold on to them, there are still profit to be make from them but the profit is greatly reduce as much as 70%. But if you bought the stock between Oct 2010 and Jan 2011, most probably all those stock you are losing money now. From the STI chart I don't see any reversal sign that will happen for this month and it seem to indicate downtrend.
Therefore I think we just need to look at our stock portfolio and understand what risk level you want to take to hold on to those individual stock you have. For me I wont touch the stock that I bought in between June to Oct 2010. But as for the rest, I will have to see how much level of lost I can tolerate to make a judgement call myself to hold or to sell. As I feel that one need to protect it's capital and wait for the market to show sign of reversal and then buy back good FA stock again.
I hope the Singapore Budget plan announcement tomorrow will help the STI to rebounce from the current down trend.
James Tai
Hi Rocha,
One of the thing I look whether to sell or hold the stock which I bought between Oct 2010 and Jan 2011, is to look at their dividend payout base on their last financial report. To me if I am able to get dividend above 6% payout, even though I am making a lost on it's share price at this time, I would keep them as long as I think it's FA is still sound. For example I cut lost on Tiong Woon because, there is no dividend pay out this time, FA getting weaker and share price has drop nearly more than 20% since Nov 2010.
James Tai
One of the thing I look whether to sell or hold the stock which I bought between Oct 2010 and Jan 2011, is to look at their dividend payout base on their last financial report. To me if I am able to get dividend above 6% payout, even though I am making a lost on it's share price at this time, I would keep them as long as I think it's FA is still sound. For example I cut lost on Tiong Woon because, there is no dividend pay out this time, FA getting weaker and share price has drop nearly more than 20% since Nov 2010.
James Tai
Sign of possible reversal today for mid cycle correction:
1) STI tries double bottom for the 2nd time (first was at 3180, fails to rebound, then down to 3080, hope it can reverse this time, let's observe next 2 days).
2) Many stocks show hammer candlestick pattern, mainly because of sudden drop in the morning (including STI), then recovery in the afternoon, leaving a long tail
If there are no further major bad news (new ones), investors/traders will try to interpret any possible good news to push up the price. There is always a tolerance level for stock price to fall, eg in May 2010, a mid-cycle low record was set. What goes up will come down, what comes down will also go up eventually, as long the major trend is up. Therefore, we should always check the major trend : both past major trend (based on 200 day MA, remaining upward) and future major trend (based on business data such as PMI, investment plan, business outlook, inventory level, etc).
This round Singapore is badly hit, mainly because of 4 bad news:
1) Jan 14 - Singapore property tax
2) Bad corporate news (business performance) in US
3) Egypt crisis
4) China inflation / interest rate
In short, it is a major correction comprising of 4 normal corrections. Will there be a 5th normal correction in this round? We can't control, but when most of the bad news are out, impact of good news will be higher.... cycle will repeat itself, after each rally (eg. US stock market now), there will be a correction.
If the subsequent bad news is still within these 4 areas, further correction will be little. Instead, any new good news (eg corporate business reports) may be used as an excuse to buy now at lower price.
Fund manager is also human, they remove the fund from Asia back to US is mainly following the trend. Similarly, when Asia starts to recover (probably starts with retail investors with small volume), these fund managers will come back again to push up the price.
Lesson learned from this mid cycle correction:
We (esp for new investors who join in the past few months) need to have buy/sell strategy for BOTH market cycle and mid term cycle, depending on nature of the stocks (esp for penny stocks which are volatile, mid term trend trading will be helpful). In this mid cycle, some previously actively penny stocks are corrected by more than 10%, while STI (blue chips) are around 7%. If we can buy/sell to keep around 5% profit in each mid-term cycle, it will help us mentally to stay in the stock market. If not, the correction may wipe out all the earlier earning, forcing some to sell now (sell low, hoping it will get lower) but the worst case is if the rebounce is again unexpected, may again force to buy high.
Yes, let's share and learn from each round of rally & correction.
1) STI tries double bottom for the 2nd time (first was at 3180, fails to rebound, then down to 3080, hope it can reverse this time, let's observe next 2 days).
2) Many stocks show hammer candlestick pattern, mainly because of sudden drop in the morning (including STI), then recovery in the afternoon, leaving a long tail
If there are no further major bad news (new ones), investors/traders will try to interpret any possible good news to push up the price. There is always a tolerance level for stock price to fall, eg in May 2010, a mid-cycle low record was set. What goes up will come down, what comes down will also go up eventually, as long the major trend is up. Therefore, we should always check the major trend : both past major trend (based on 200 day MA, remaining upward) and future major trend (based on business data such as PMI, investment plan, business outlook, inventory level, etc).
This round Singapore is badly hit, mainly because of 4 bad news:
1) Jan 14 - Singapore property tax
2) Bad corporate news (business performance) in US
3) Egypt crisis
4) China inflation / interest rate
In short, it is a major correction comprising of 4 normal corrections. Will there be a 5th normal correction in this round? We can't control, but when most of the bad news are out, impact of good news will be higher.... cycle will repeat itself, after each rally (eg. US stock market now), there will be a correction.
If the subsequent bad news is still within these 4 areas, further correction will be little. Instead, any new good news (eg corporate business reports) may be used as an excuse to buy now at lower price.
Fund manager is also human, they remove the fund from Asia back to US is mainly following the trend. Similarly, when Asia starts to recover (probably starts with retail investors with small volume), these fund managers will come back again to push up the price.
Lesson learned from this mid cycle correction:
We (esp for new investors who join in the past few months) need to have buy/sell strategy for BOTH market cycle and mid term cycle, depending on nature of the stocks (esp for penny stocks which are volatile, mid term trend trading will be helpful). In this mid cycle, some previously actively penny stocks are corrected by more than 10%, while STI (blue chips) are around 7%. If we can buy/sell to keep around 5% profit in each mid-term cycle, it will help us mentally to stay in the stock market. If not, the correction may wipe out all the earlier earning, forcing some to sell now (sell low, hoping it will get lower) but the worst case is if the rebounce is again unexpected, may again force to buy high.
Yes, let's share and learn from each round of rally & correction.
Hi James;
Found this, not sure whether is useful:
http://www.midf.com.my/project/midf/med ... 31-123.pdf
cheers;
Found this, not sure whether is useful:
http://www.midf.com.my/project/midf/med ... 31-123.pdf
cheers;
I agree with Dennis "I encourage everyone to write down how you feel and your analysis NOW as it can provide for useful reference and good learning when we look back to this moment some time in future."
and Ein, "let's share and learn from each round of rally & correction"
All of us need to get used to the rhythm of the market. For whatever method we use, and the time horizon of our investments, we need to understand the the difference between corrections from reversals.
The market loves to scare people who are not mentally strong. Every correction will scare you to sell stock to a certain extent. The on hindsight, you realise it was a correction when the market rallied in following months. You would notice your perception swings from bear to bull periodically. So how did this correction affect your emotions? Managing the emotions is another factor to successful investing.
Trust me, the market will scare us many times more in the future. Learn to deal with it.
and Ein, "let's share and learn from each round of rally & correction"
All of us need to get used to the rhythm of the market. For whatever method we use, and the time horizon of our investments, we need to understand the the difference between corrections from reversals.
The market loves to scare people who are not mentally strong. Every correction will scare you to sell stock to a certain extent. The on hindsight, you realise it was a correction when the market rallied in following months. You would notice your perception swings from bear to bull periodically. So how did this correction affect your emotions? Managing the emotions is another factor to successful investing.
Trust me, the market will scare us many times more in the future. Learn to deal with it.
www.bigfatpurse.com - Living a Life of Abundance
So far it does not affect to speculative reits and certain gd fa stocks e.g chip eng seng and others.. Singapore budget and probably end of Feb, then see how I suspect all the bb fund manager, trader and investor are shorting the markets due to 4 news with low volume. However, the most important thing is STI havent move towards 3040 200ma.. I reckon once budget is out, end of this month singapore could take direction from SSE not US as US could be dropping soon a week to come.. Rabbit is a year full of surprise, stay patient and of course take profit if you can and rebuy low before the election come a short rally again.. 