How I outperformed many Fund Managers in last 6 months?

[Dennis Ng]

Readers of our forum might know that I sold out most of my stocks last year before the recent market carnage in the last 4 months.

I only found out that by selling out before the market collapse, I managed to outperform many fund managers in the last 6 months.

Don't believe it? Well, here's the latest statistics of performance by fund managers:

Over a period of roughly 12 weeks to March 21, former market darlings China and India equity funds appear to have registered the steepest drops. Based on Lipper data, India funds fell an average of 31 per cent, and China equity funds 34 per cent.

Those averages, however, mask yet steeper drops by some specific funds. The DWS Noor China, for example, plunged by as much as 39 per cent in value in that short period. SG Asset's Golden China fund dropped by 37 per cent, compared with the 27 per cent fall by its peer group of Greater China funds.

Among India funds, the worst was the 36 per cent slide by BNP's Parvest India fund.

[Dennis Ng]

Asiachart.com is one website I regularly visit for its Charts and Technical Analysis and comments.

Here's what is posted at Asiachart.com on 31 Mar 2008:

31st March 2008: Last week there were noises in the media suggesting that markets in the US have bottomed. There is a chance that this is the case both in the US and throughout Asia and perhaps the rest of the world. But the greater probability is that we are still in the grip of a major bear trend.

Let us review Asian and Global markets and see where the balance lies.

Starting in the US, there is mixed evidence. The major indices are all still in bearish trends that began last October. The NYSE Composite is the most unambiguously bearish index. The Dow, on the other hand, is forming a triangle, which is ambiguous, and the Nasdaq is well supported. No real joy then from the indexes.

Far more suggestive of a bottom are the many turns on long term supports to be found in at least four US sector charts. Staples, Consumer Discretionary, Technology and Materials are all well supported, giving the impression that the long term trend has not changed from bullish but that the recent bear is just a medium term phenomenon with no implications for the major term.

In the rest of the so called developed world, the situation is much the same as in the US indexes - ambiguous. Big double tops threaten. Some good long term supports are still holding. The German MSCI index is sitting on very strong double support. It could well be finding a bottom. UK clearly looks as though it has further to fall. Japan could be bottoming, but we still have an outstanding bearish target. Ambiguity thus prevails in those markets, but the bearish trend starting last October is the dominant trend.

Asia provides a mixed bag. Hongkong is still in a bear trend. But the index and many stocks are well supported on long term supports. The market could be finding a bottom now.

India and Indonesia are well supported in bullish channels. These two markets have not entered bear trends yet at all.

Japan is still subject to a strong bearish trend. Singapore, Korea, Malaysia and Philippines are all subject to tops which really haven't moved anywhere yet. They are like storm clouds brewing over head. They could blow away and amount to nothing, or they could strike with a vengeance. Much will depend on the regional and global trend. If we see world markets bottoming, there is a fair chance that the tops in these markets will subside without causing much damage.

Taiwan is the bullish star of the week. The market broke out of a small reversal pattern with excellent volume inspiring hope for a sustained rally. Thailand is also making bullish noises. But volumes are yet too low in that market to inspire confidence in the near term.

In summary, the global trend is still bearish. There is possible light at the end of the tunnel. But much of that could be wishful thinking. Major bear markets are difficult to apprehend, especially after a long bull market. The bullish habit of thinking is that, after a few weeks, or a few months at most, the inexorable march upwards will resume. The opposite is the case. Bear markets usually continue until hope and despair prevail.

One must remain detached and patient. The analysis that I do on these pages is particularly useful in the case of major bear markets. Being in cash, or partially in cash through much of a bear market can be a real boost to your bottom line and long term annualized return when the bear eventually reverses. The key is to be patient, wait for all the signals to line up and then pounce. Plenty of time for that.


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