My Time

Sunday, September 30, 2007

散戶十宗罪

股市交投暢旺,散戶參與者大增,曹Sir「從來認為投資者分為散戶和大戶沒有什麼意思,關鍵在乎贏家還是輸家。不過散戶由於資金少、資訊慢和經驗差的情況下.要參與真金白銀的投資和專業的大戶競技,明顯處於下風。如何改善自己的技資成績,且聽老曹娓娓道來。

散戶經常犯錯誤,常見的有十項:
一、不賣不蝕。
大部分散戶投資股票後遇上虧蝕,不願面對失敗,常常抱看不切寅際的希望,以為只要一天不把股票交出就不算蝕本。結果很多人持有虧本貨十多年,股價仍未回到買入價。「希望永遠在人間」是說給失敗者聽的謊言,聰明人千萬不要信!

二、你買所以我買。
很多人買入一隻股票,買入的理由是因為別人都在買,而自己對買入的股票竟連基本的認識都沒有。行為心理學家認為,人獨處時保持理性、融入群眾後便失去理性;這說明為什麼大量球迷聚集會放火燒車,少年童黨密集體殺人!成功的投資者必須離群獨處,否則會成為非理性分子。

三、與股票結婚。
有人對股票深入研究後,決定和它「結婚」,一生一世不離不棄。曹Sir「的見解是:對待愛情就是偉大,處理投資就是愚味。筆者按:股票代表的公司,經營環境經常在變.不可以付託終身;例如同是編號為008的香港電訊變身為電訊盈科後是兩間不同公司,怎可和一隻股票結婚呢?

四、過分信賴專家。
大部分散戶和有些讀者過分相信股評家(包括我老曹在內)。差不多人家說什麼他們就相信什麼。這其實很壞,因我老曹也是人並非上帝,投資中十次有六次看錯,四次看對。我自己懂得嚴格遵守止蝕的紀律並同時把賺錢的股份留住。不過很多散戶卻好像一個純情少女遇上了壞男人,死心塌地。我老曹經常強調獨立思考,不要輕信他人(包括我老曹) ,要相信自己,過分崇拜我好比帶好的女孩去「的士高」開舞會,別人見環境不對勁就悄悄離開,純情少女卻懵然不知,結果泥足深陷。人沒有預測能力,所以淡市不猜底,旺市不摸頂。不過也會一時技癢加入猜底摸頂的遊戲而連累了讀者。我老曹和任何人一樣,所做的預測時準時不準,不可盡信,後果自負。跟隨大型投資銀行的建議可行嗎?2006年任何人跟隨高盛的意見而投資高盛的商品指數,虧損高達15%;德銀2006年9月估計2007年油價六十至七十美元一桶,似乎也看錯了。至於銅價和糖價,看錯市場的專家更多。例如羅傑斯2006年一再看好糖價,但糖價卻不聽指揮,一跌再跌。以上例子證明專家的預測跟你我分別不大,同樣是時準,時不準,切忌過分迷信專家。

五、每天到證券公司上班。
投資者最好不要每天到證券公司上班,那裏太多誘惑又太多群眾,容易產生「自助餐」效應,買下很多本來不想買的股票。我老曹決心減肥後,不再去吃自助餐。我不相信自制能力,於是遠離誘惑。美食當前,人往往忘記對自己的承諾。吃完一碟又一碟,然後原諒自己再去吃第三碟。正是吃得性起,什麼高膽固醇、高脂肪、高糖分甜品等的「危險」食品警告全已忘卻;鵝肝?照吃。肥牛肉?照吃。疏乎理?照吃…‥.最後完全失控。我老曹的應付辦法是決心不去吃自助餐,免得失去自律而後悔.而且還要承擔後果。放諸投資也一樣,香港最貴的自助餐只不過每位三百六十元,但亂吃而付出的健康代價.三萬六千元醫藥費有時也不一定能彌補!散戶在證券行裏人買我又買,買下一大堆劣質股票,損失可能是天文數字。

六、投資大多股份。
雖然投資應分散,最少三項最多也不可超過十項。除非你是專業基金經理.因為散戶沒有那麼多時間打理。投資好像生孩子,交精不貴多。投資一隻股票,每天必須花半小時去留意有關它的新聞、技術分析等。如果持有超過十項投資,每天要花上超過五小時,散戶怎可負擔?如沒有上述所需時間請投資基金,找專業人士代勞,不要靠自己亂搞。投資股票可賺可蝕,不做功課的投資者結果是虧本離場。所以不要投資一隻股票,最好是三、五、七隻(最少三隻,最多七隻) ,把兩、三隻蝕本的賣掉,把賺錢的留住,每月檢討一次已足夠。經營超市是大財團的強項,散戶只可經營精品店。

七、買賣都一刀切。
散戶做買賣決定都很灑脫,心血來潮時便買入,不喜歡時便沽出。曹Sir的建議是分段進行,買入時分三次做,千萬別希望自己買到最低的價錢(撈底) :賣出時也可以分三次完成,千萬別希望自己沽得最高價(摸頂)。

八、不願汲取失敗的教訓。
很多投資者失敗後只抱怨自己運氣不夠好,從不檢討自己有否犯錯。結果往往重複犯錯,交了無數次學費還學不到真功夫。投資當然有理論,不過有經濟理論便可發達,經濟系教授豈不是應該成為天下首富?!理論只可加強人類智慧,實踐才最實際。教授一樣控制不到自己的情緒而作出錯誤決定。世上沒有必勝的仗,也沒有必賺的投資技巧,所以交學費去學習如果獲得勝利是無可避免的事。請學習做聰明學生,交一次學費便終生受用。

九、投資沒有策略。
曹Sir「反對投資如遊戲,大家真金白銀,有些投資者更付上畢生血汗錢,豈可兒戲。任何投資事前必須做功課,千萬不可打「天才波」。首先請制訂策略,然後依計劃行事。未認識股市前,請先搞清楚自己為什麼要買,不然容易加入80%輸家行列。一旦情況有變,馬上檢討,確定是犯錯後便不要再找藉口,請立即止蝕,不要讓小問題變大問題,進一步成為無可挽救的問題!當你決定投資甚至只是炒賣一隻股票前,首先要決定投入多少資金,對自己這次決定的信心有多大?分析員是為大眾服務,並非負責為閣下度身訂造。任何時刻都不要用感性做決定,應嚴格遵守自己預先定立的策略。舉例說,長線投資者不應著意短線波幅,中線投資者持有股份一年多或更長,只須嚴守止蝕;做炒家的務必專業。如果連長、中、短策略都搞不清,又怎可期望賺錢呢?煎雞蛋要手快,煎牛排要技巧,烹鮑魚要耐性……。

十、不懂止蝕。
投資第一無就是如何保護本金(唔犯本)。賺不到錢不要緊,但是虧損不可超過本金15%,是我老曹的最高損失。大家要明白五次做買賣.如果有四次賺大錢已經了不起,以十萬元開始.第一次獲利50%,本利和變成十五萬;第二次再獲利50%,變成二十二萬五千;第三次再賺50%,變成三十三萬七千五百元;第四次再賺50%,結果是五十萬六千元。如果不幸第五次虧損本金80%就已經被打回原形,以上情況在不少股民身上出現。1 993年賺 60%,1995年賺50%,1996年賺50%,1997年上半年又再賺50%,然後在1997至1998年十二個月內失去80%,你也只是白忙一場,蹉跎光陰。如果你一天未懂止蝕的重要.遵守止蝕的紀律,仍未可能成為一個精明投資者。

我老曹1997年後發現,失敗的投資者並非投資技巧差,而是失敗在性格的缺陷.例如貪勝不知輸、不肯止蝕等。
我老曹最近七年已大大加強討論人性的弱點,如果你不想發達,便沒有人可幫到你:如果你不改變性格上的弱點,也一樣沒有人可幫到你。
自古成功在嘗試,試過後就會知道好與壞。好的留下,壞的止蝕!永遠不讓損失超過15%,永遠都不要太早賣出賺錢的投資,這樣你也可以成為一位成功的投資者!

恒指難擺脫道指牽引

第二次世界大戰後,美國經濟從未出現經濟蕭條(連續兩年GDP負增長)。1982年之後,美國經濟亦從未出現衰退(連續兩季GDP負增長),未來能否做到連一季GDP負增長都冇?  
道指由7月17日14021點開始回落,技術表現十分差;紐約證交所金融指數情況更壞,不但下降軌已形成,而且早已出現一浪低於一浪【圖】。至今為止,恒生指數仍有一定抗跌能力,最終能否擺脫道指牽引,或只係時差問題(道指7月17日見頂,恒生指數9月5日24283點見頂,滬深A股9月6日5448點見頂)?  
根據CNBC Charlie Gasparino數字,今年超過1000隻對沖基金中,仍然賺錢者只有40隻!上述數字係咪準確仍在調查中。  在不適當時刻買入優質股,亦可隨時失去投入資金三分一到三分二,所以唔好對timing掉以輕心。8月18日美國聯儲局減貼現率,當天透過四大金融機構向市場注資超過20億美元,結果係點?過去三星期商業票據(Commercial Paper)即由企業發行,一般只有30天到90天期,作為短期周轉用卻減少2400億美元,即企業再發行商業票據方面已出現極大阻滯,只有直接向銀行借錢!銀行提供信貸相較商業票據市場萎縮講,兩者邊個影響力大?不但如此,兩個月借錢買樓利率由6.25厘上升到近日超過8厘,唔通真係冇影響?  
仲有CLO(Collateralized loan obligations),即銀行向私人企業提供按揭貸款約2500億美元,家亦面對萎縮,情況有如1990年至今日本。過去十六年日本缺乏唔係資金,而係面對信貸萎縮(錢借唔出去,因為有信用客戶唔使借錢,想借錢客戶卻信用差)。值得注意係,經濟走在股市之後六至九個月,而非走在股市之前。美國在金融方面知識較日本豐富,2001年1月至2003年6月減息潮曾阻止美國經濟進入1990年代日式經濟衰退,隨格蛇退休及去年下半年起美國樓市陷入低潮,美國經濟會否進入長期GDP低增長期?由樓市所引發次按危機,各國央行注資結果只會令新興市場股市泡沫繼續膨脹。
中央政府擔心通脹失控  
滬深A股大幅回落,係令人擔心另一訊號。過去中國人民銀行一再提升利率及提高存款保證金率,仍無法阻止股市上升,8月份中國CPI已大幅拋離人行目標通脹(3%),如人行將利率抽緊至CPI增長率之上2厘,後果會點?中國政府會否為2008年奧運而放棄對付通脹?
周日同詹瑞文兄演出《富爸爸、笑爸爸》喜劇時,提到內地A股,我老曹已警告大家滬深股市已醉醉地,各位有冇收到訊號?What goes up, must come down!國家財政部9月10日公布,將發行2000億元人民幣特別國債,上述債券發行可進一步抽緊內地銀根。上述公布亦粉碎外傳在10月份中共十七大會議前唔會抽緊銀根謠傳。睇8月份CPI升幅,令中央政府進一步擔心未來通脹率唔受控制;加上內地直通車遲遲未到香港,後市國企股點睇(以O計,國企股已進入牛市第三期)?  
會考十優狀元年年有,金融市場炒手最難求。過去十年被視為「出色基金經理」只佔總人數20-25%,或四個之中只有一個。值得注意係,牛市中大部分基金經理成績都幾好,只有熊市中才知邊個基金經理表現出色。例如1997-98年熊市中能夠不敗基金經理只佔總人數10%,2000年3月至2003年4月情況亦一樣。幾時應該睇好而進取?幾時應該睇淡而保守?講就容易做到卻難。70%投資者失敗理由就係最唔應該睇好時睇好、最唔應該睇淡時睇淡。  
賺錢只係一種技能,透過學習再獲得,而非乜天分。只要有足夠動力,加上一定的努力便可獲得。賺錢主要透過智慧而非勤力,例如在每一次失敗經驗中吸取精華,重新站起來再嘗試,唔需要特別聰明或特別勤奮甚至特別幸運。例如你有冇耐性等候一個機會出現?有冇學曉止蝕唔止賺?或靜靜地等候財富自動增加?  
香港由1950、60年代貧窮社會進入1970、80年代小康;到1997年7月1日主權回歸前的富裕社會,再經歷過亞洲金融風暴將香港社會分裂成為20╱80。善於理財者1997年7月1日後財富繼續增長,經過十年時間(以年率15%計),今天家財係1997年7月四倍,成為香港富裕階級。不善理財者過去十年面對工資(或薪金)零增長,部分更負增長,如不幸持有自住樓宇,樓價1997年8月至2003年7月回落65%後,雖然過去四年回升唔少,但今時今日仍只及1997年8月60%。呢80%人口組成香港大多數,加上存款利率低收益少,唔少人生活水平已無法重返1997年上半年水平。  
20%善於理財者因財富過去十年上升四倍,打跛腳唔使做,生活仍然好好,用係名牌,住係豪宅,食係稱心滿意食物。反之,80%不善理財者卻面對身水身汗仍冇啖好食,唔少人住宅上損失唔少,有些人面對十年凍薪(或加薪極少),對社會愈來愈不滿。退休人士面對低利息時代,生活亦唔好過,偏偏呢個時候香港面對退休高潮(戰後出生嬰兒大量步入退休年齡)。至於投資,7月26日至8月16日急跌、8月17日至今急升,唔嚇死才怪。香港進入富裕社會後,勞動要素及資本要素收入分配中地位嚴重失衡。工資(或薪金)收入佔香港人總收入比重大幅下降,80%人口仍然靠工資或薪金作為主要收入來源,面對生活環境係日做夜做都生活得唔好。另外一D人因投資有成,已經可以火燒旗桿。香港會否有一天走上東南亞國家之路(貧富兩極化,最後令社會出現不穩)?財富過分集中小部分人手中問題,正在香港社會上浮現,至今仍冇妥善方法解決。次按問題明年將惡化  
同樣係消費者,年入40萬元或以下家庭,消費極受經濟盛衰影響;反之,年入120萬元或以上家庭消費,經濟影響不大。換言之,消費力愈強,家庭消費行為愈唔受經濟盛衰影響,一旦經濟轉劣,最先受影響反而D服務年收入40萬元家庭行業;反之,高消費及低消費行業不受影響。估計第四季美國CPI增長率低於2%;如無意外,未來應有兩次減息空間。但次按問題在明年不但唔會轉好,反而會進一步轉壞。美國住房價估計在2009年前亦無法轉好,美國失業率估計由目前4.6%上升到4.8%或5%,後市點睇?Bad market, good stock picking,你能否做到?

Mr Market

What mistakes can we learn from the retail investors in S'pore stock market:

1) Most retail investors "forgot" to take profits near the previous highest close of 3665 & hence, have no bullets to bargain hunt near 3060 & 3150. Recent low is only 2962. Please note no one can catch the lowest points in recent crash also.

2) Some retail investors are 90% or 100% in stocks before the big crash. Hence, have no more opportunity funds to bargain hunt when STI crash to 2962 recently.

3) Those who have opportunity funds do not know how to bargain hunt as most of them have forgotton the teachings of Warren Buffett & got caught up by extreme fear.

4) The opportunity funds lying in banks only give them less than 1% returns, in less than 2 months. Most banks give zero returns for fixed deposits for less than 2 months. But Mr Market gives these investors >15% returns in less than 2 months. Hence, Mr Market proved these people wrong again, for not seizing the opportunities to make good returns from stocks markets when market crash to STI 2962 as compare to returns putting the same opportunity funds in banks for the past 2 months.

5) Most good stocks has recovered >40% from its low of 2962. Which means an average investors could have made at least 15% easily, although not 40% from the recent crash. Much better returns from recent crash, at least 8 times more returns as comapre to savings deposits or fix deposits returns in less than 2 months. Please do your own sums to confirm also.

6) Some investors has forgotton about valuation & cut loss near the low of STI 2962 due to "irrational fear". The above points is only confined to STI markets only.
Last but not least, please note STI market has recovered more >700 points from the recent crash of 2962 already. Would most retail investors make the same mistakes again, when the next "big correction" come again?
Or would the STI continue to break new high? Your guess is as good as mine.

Nobody can guess the market tops & bottoms of STI & STI break new high to 3714 today.
Unbelievable when everybody is so fearful at STI 2962 & 3100. Whether a person can benefit from bargain hunting is dependent on knowing Mr Valuation, which i am still learning very hard also.Mr Market make a fool of some investors recently, when some were guessing STI 2800 or 2700, as STI hit 3714 today. Hence, guessing market bottoms is proven futile or fruitless when index crash >600pts recently.
For example, those who waiting for STI 2800 or 2700 for bargain hunting is proven wrong by Mr Market because market recover >700pts after hitting 2962.
Most importantly, is to know where is your mistakes as STI has recovered >700pts up to today.
Actually, I almost kanna bombarded when asking people to bargain hunt near 3000 to 3100 recently. He got quite emotional then.. No offence! I may come back to STI at STI 3200 or 3070, no fix views really. In my personal opinion, when STI hit new highs to 3714, there is no more investment value in most stocks now, but not to all counters.
But trading values still exists definitely, as long you are discipline with your take profits or cut loss strategy if STI crash from 3714 or from 3800 or from 3900. No one knows.
Investment value only appears when there is a big correction of 16% to 20%, not too late to know now. Hence, I would rather learn from both Mr Valuation & Mr Market.
Don't forget to learn hard from Mr Valuation also. Lots of people forgot Mr Valuation when market crash to STI 2962 recently.

Hints: If someone want to sell you Capland at $6.50 in the next correction, why not?
If someone want to sell you Hiap Seng at 70cts, why not?
If someone want to sell you AsiaEnt at 41cts, why not?
If someone want to sell you Kepcorp at $10.70 again, why not?

彼得·林奇:25条股票投资黄金法则

1.投资很有趣、很刺激,但如果你不下功夫研究基本面的话,那就会很危险。  
2.作为业余投资者,如果充分发挥你的独特优势来投资于自己充分了解的公司和行业,那么你肯定会打败那些投资专家们。  
3.业余投资者尽可以忽略这群专业机构投资者,照样战胜市场。  
4.每只股票后面其实都是一家公司,你得弄清楚这家公司到底是如何经营的。  
5.长期而言,一家公司业绩表现肯定与其股价表现是完全相关的。弄清楚短期和长期业绩表现与股价表现相关性的差别,是投资赚钱的关键。耐心持有终有回报。  
6.弄清楚你持股的公司基本面究竟如何,你得搞明白持有这只股票的理由究竟是什么。  
7.想着一旦赌赢就会大赚一把,结果往往会大输一把。  
8.把股票看做是你的孩子,但是养孩子不能太多,我建议业余投资者在任何时候都不要同时持有5只以上的股票。  
9.如果你怎么也找不到一只值得投资的上市公司股票,那么就远离股市。  
10.永远不要投资你不了解其财务状况的公司股票。在买入股票之前,一定要先检查一下公司的资产负债表,看看公司是否有足够的偿债能力,有没有破产风险。  
11.避开那些热门股。冷门行业和没有增长的行业中的卓越公司股票往往会成为最赚钱的大牛股。   12.对于小公司股票来说,你最好等到这些小公司开始实现盈利时,再考虑投资也不迟。  
13.如果你打算投资一个正处于困境之中的行业,一定要投资那些有能力渡过难关的公司,而且一定要等到行业出现复苏的信号。  
14.如果你在1只股票上投资1000元,即使亏光也不过1000元,但如果耐心持有,可能会赚1000元甚至50000元。只要找到几只大牛股,集中投资,业余投资者花费的时间精力就远远物超所值。   15.在任何一个行业,平时留心观察的业余投资者就会发现那些卓越的高成长公司,而且发现时间远远早于那些专业投资者。  
16.股市中经常会出现股价大跌,对于事先准备的投资者来说反而是一个低价买入的绝佳机会。   17.每个人都有投资股票赚钱所需要的知识,但并非每个人都有投资股票赚钱所需要的胆略,有识且有胆才能在股票投资上赚大钱。  
18.总会有事让人担心。放心,天塌不下来。除非公司基本面恶化,否则坚决不要恐慌抛出好公司股票。  
19.不要理会任何对未来利率、宏观经济和股市的预测,集中精力关注你投资的公司正发生什么变化。  
20.在股市中总会有意外发现,那就是业绩表现良好却被专业机构投资者忽视的好公司股票。   21.不研究公司基本面就买股票,就像不看牌就打牌一样。  
22.当你持有好公司的股票时,持有时间越长,赚钱的机会就越大。  
23.如果你有胆投资股票,却没有时间也没有兴趣做功课研究基本面,那么你的最佳选择是投资股票型基金,好的基金要坚决长期持有。  
24.你可以购买那些投资于海外股市且业绩表现良好的基金,从而分享其他国家股市的高成长。   25.长期而言,投资一个由精心挑选的股票或股票投资基金的投资组合,业绩肯定要远胜一个由债券或债券基金构成的投资组合,但投资一个胡乱挑选的股票构成的投资组合,还不如把钱放在床底下更安全。

Monday, September 24, 2007

9月下旬市场走势分析 - 李欣京 9月13日于新加坡

新加坡市场随市场经过8月大幅调整后目前处于技术恢复阶段。什么是技术恢复阶段?这要从市场价格波动角度和市场投资心理方面去理解。简单的说市场恢复阶段是市场因为调整过于剧烈而出现的一种技术状况。该阶段的投资心理会相当谨慎。

在9月1日的《股势前线》与投资者交流中提出9月行情基本不会出现类似8月的大跌, 3450是一个没有任何悬念的可以超越的位置,真正体现阻力的位置是在3550,,3500不具备技术特征仅是一个心理位置。

经过两周的走势海指的确超越了3450,而数天站在3500心理位置以上,本月余下的两周海指的可能走势这里从技术方面给出一些看法:

图示说明:绿色和蓝色代表从两个不同下跌顶点(2006年5月和2007年7月)做出的市场平均最高交易价格位置,紫色的代表市场趋势位置。

从图中可以看到2006年5月下跌后通过将近两个月的时间市场才恢复向上的趋势,,今年2月和7月 - 8月都出现短暂急剧下跌的走势,2月下跌恢复的相当快,而7月下跌似乎和2月下跌有异曲同工之处。


但是对7月的下跌从技术角度看属于有效下跌,其下跌性质和去年5月以及今年2月的有所不同,因此对7月下跌到目前的恢复阶段仍应该保持高度警惕.原因如下:

本次下跌在技术上分析属于有效下跌,跌破了很多技术支撑位置,市场投资心理受到极大创伤,有相当一些国家甚至采用政府手段来遏制8月中的剧烈下跌,由此可见7月开始的下跌对市场造成的心理恐慌程度。
这种心理受到的创伤在短期内一旦市场走弱会引起投资者痛苦记忆的恢复,而这种痛苦记忆是需要一段相当长的时间去减轻的。因此,从投资心理上看目前的恢复阶段是需要谨慎对待的。

到本月末市场趋势支撑又目前的3400上升到3450,而这个位置一旦被击穿通常会引发市场投机止损盘出来,从上图也可以看到每次该位置跌破后市场的走势都是不理想的。9月1日提到的阻力位置3450在突破后一般作为支撑位置看待,
而该支撑一旦破坏市场的趋势将接受考验。简单的说在该趋势线上市场投资情绪乐观,市场本月的最大极限上升位置为前期下跌开始的3620+/-20点区间。

投资操作上最好选择一些基本面良好的股票,在本次下跌中这类就体现了价值投资的稳定性, 在接下来的投资中如果选择价值和技术结合的手段是比较适合的一种稳健的投资方式。

Sub-prime woes

U.S. Fed's decision to cut interest rates by 0.5% actually can be seen as negative.
Why? It shows that Fed deems the "credit crunch" TRIGGERED by Sub-prime woes to be more serious than they earlier estimated.

Here's my prediction for the future:
1. FED will continue cutting interest rates in a bid to keep U.S. economy afloat till the Presidential Elections.
2. U.S.$ exchange rate would weaken due to the rate cuts now and in the coming months
3. Oil prices would emerge as another problem the World faces. Oil prices have already creeped up to over US$80. I remember when it first cross US$50, there was lots of concern about Oil prices, ironically, now that OTHER PROBLEMS take centrestage, Oil Prices over US$80 so far has not attracted any media attention.
4. Instability at Iran is another Potential Problem that can be very big or not so big depending on how events unfold.
5. U.S. Housing Market is set to continue its decline. Fed's curtting interest rates can try to help minimise the "blood letting" of subprime woes but it cannot tilt the Supply Demand situation of U.S. properties.
6. U.S.'s stock markets might actually go up in the next few months as interest rates are cut, Dow might break 14,000 or even 15,000....markets have to go higher so that they can Crash.
7. China's Stock Market bubble is also likely to get bigger and bigger before the eventual burst (likely after Beijing Olympics)....China's govt is trying to slow down the bubble by diverting funds to HK stock exchange. HK Stock index would break new high and new high again.
8. Singapore's stock market might break 4,000 or even go to 4,300 as predicted by Simon Sim (Author of Joseph Cycle). However, as I have mentioned many times, as markets go higher, one should invest less and less of your money rather than putting more and more money at risk. Remember, as markets move higher, risks increase, NOT decrease.
9. Singapore Property Market would continue its uptrend after the recent breather in Aug (7th month).....enbloc would start to roll again after developers digest the increase in DC charges and the changes in en-bloc rules. Lehman Brothers have predicted that property prices in Singapore would seee further upside of 26% with Landed Properties and Commercial Properties to be the "stars" in the coming months.

Above is just my personal opinion. You can definitely have a different opinion.
Remember that we must plan for the worst case scenario that what if we are wrong would we still survive financially?
It is never wrong to be better prepared than others.

Below show you extract of an article I read which shows that U.S. Fed is really concerned about U.S. economy.

Global financial losses have far exceeded even the most pessimistic estimates of the credit losses on these loans,' the Fed chairman said.
The situation, he acknowledged, 'has created significant market stress'. The meltdown in the housing and mortgage markets has shaken Wall Street and small investors alike.Sub-prime-mortgage borrowers facing foreclosure may lose their homes at a rate above 50 per cent, higher than the historical average, Mr Bernanke said.'That ratio may turn out to be higher in coming quarters because the proportion of sub-prime borrowers, who have weaker financial conditions than prime borrowers, is higher,' the chairman said

Sunday, September 23, 2007

第二次世界股市大地震的时间预报

请看下图,这是某著名金融机构对美国房地产按揭贷款市场“崩盘”的“引爆时间表”。从2007年1月算起,这张时间表对逐月的“可调整利率”(ARM)按揭贷款总额重设(Reset)进行了精确估算。前文中我们提到,由于“可调整利率”按揭贷款重设,贷款人会出现“月供惊魂”(Monthly Payment Shock),而这张“引爆时间表”则可精确显示会在什么时间出现“月供惊魂”的高潮,这个尖峰时刻的到来大约还有7个月左右,即2007年10月和11月。

美国房地产按揭贷款市场“崩盘”的“引爆时间表”
而股市也将于同样的时间段出现下一波剧烈的“海啸”。从规模上估计,今年2月底和3月初的世界股市震荡仅仅是热身。<货币战争>中提到:“1929年3月,美国金融教父保罗.沃伯格在国际承兑银行的股东年会上发出了警告:‘如果这种毫无节制的贪婪继续扩大的话,最终的崩溃将不仅会打击投机者自己,而且还会使整个国家陷入衰退。’”,美国股市于当年10月出现暴跌,时间大致为7个月。而2007年3月,格林斯潘在一个月中三次发出经济即将衰退的警告,而“定时炸弹”的引爆时间恰恰也是7个月。

历史真是惊人的相似!
保罗.沃伯格乃是美联储的设计者,前任副主席;而格林斯潘则是美国金融业的“教父”级人物,也是前任主席。只怕金融业中没有谁比他们更清楚这个世界表面背后所发生的一切了。
有人会说,这一切仍然是“巧合”,也许他们说得有道理,但是人们难免会狐疑,果真又是“巧合”吗?

但是,这里面还有一个例外因素,那就是伊朗战争突然爆发!
如果战争爆发时间早于2007年10月,世界股市可能提前“海啸”,背黑锅的当然非伊朗莫属。当全世界的资金被吓到美国来避险,美联储顺势猛降利息,则可能使美元在不致巨幅贬值的情况下再度海量增发,以延缓美国金融业总危机爆发的时间。

天,我们刚刚得到消息,美国金融业的泰坦尼克房利美公司在三天前宣布大裁员,比例为10%左右,昨天已经开始执行。第一批200多人在完全没有通知的情况下,被突然解雇。当天午饭后,大批保安警卫手持步话机站满了各楼层,刚刚吃过午饭回来的雇员们被逐个查验身份,凡在“黑名单”上的人马上被两名保安“护送”到自己的座位上,在完全没有任何机会和“领导”申诉的情况下,立刻收拾私人物品,连电脑都无法触摸,然后被“押送”出大门。

这只是第一波裁员。
这是1938年房利美公司成立以来前所未有的大规模裁员行动,这是一个两年前还被评为美国所有公司中“最受雇员热爱的公司”的行为,这是一个典型的由于公司最高领导出现战略判断失误而将所有责任推卸给雇员,自己却拿着2006年度1400万美元超级奖金的“有法无天”的又一例证!
显而易见,房利美的财务出了“状况”。不要忘记,该公司的领导为自己的奖金所冒的风险,不仅仅是由它的雇员来承担“责任”,还有中国的外汇储备中的巨额MBS资产,也会一同“陪绑”。
今年将是国际金融市场异常动荡的一年,美国经济出现衰退将在所难免。中国将很难在一场席卷全球的金融剧烈动荡之中独善其身。

广大中国股民和在美国的华人股民们,需要高度警觉,随时准备撤退,自己辛辛苦苦挣来的血汗财富不要被国际金融巨鳄们“剪了羊毛”。

谢国忠:顶部已见 全球股票市场已达峰值

2月27日,全球股市意外下跌。这次下跌始于中国。当天,上证指数跌去了将近9%。随后,美国道-琼斯指数下跌了大约500点。在之后的交易日中,从日本东京到印度孟买的市场也都经历了类似的下跌。
此后一周,市场出现了小幅恢复。但是,大多数市场都没能收回下跌损失的一半。由于此次下跌伴随着巨大的交易量,而市场又没能充分反弹,因此,熊市气氛依然存在。 国际金融市场弥漫着中国触发股市坍塌的舆论,但这不是真正的原因。由于很多投资者追逐短期投机,市场实际上已经处于超买状态,哪怕微小的冲击都可能引发动荡。沪市下跌之所以引人瞩目,是因为很多投机者相信中国的需求总是强劲的,并且可以抵消美国经济的下滑。绝大多数国际投资者对中国的认识十分有限,因此他们对于中国支撑世界经济以及金融市场的幻想不断膨胀。沪市的下跌在一定程度上打破了这些投资者的中国幻想。
此外,还有两个事件也对全球股市下跌起了关键作用。格林斯潘在2月26日讲到,美国经济可能在2007年底进入衰退期。作为美国经济向来的乐观派,格老的悲观言论对于金融市场影响巨大。而2月27日公布的美国1月数据显示,1月耐用商品订货量降幅超过8%。美国经济增长的可持续性很大程度上取决于企业投资,疲软的耐用商品订单量预示着疲软的企业投资,这引起了市场对于美国经济形势的重新评估。 技术性调整 对于此次调整的性质,市场观察家们仍然有所争论。
有人提出,这只是一次技术性调整。过去两年,投机于市场短期波动的交易者数量急剧增加,因此,至少在短期,他们的资金对市场定价的影响可以压倒传统资金的力量。这类交易者彼此关注,其行为跟企鹅有些类似——一旦危险信号出现,他们会在同一时间跳水,然后在一段时间内一个个地回到岸上。当这类交易者充斥市场时,价格攀升的过程将是渐进的,但下跌则会是突然而急剧的。这种市场波动被认为是技术性的,因为它并不取决于市场基本面,如企业盈利及利率等的变化。根据这个解释,中国股市下跌之所以引发全球震荡,是因为所有投资者都把它看作是一个真实的风险信号。 日元利差交易(carry trade)的平仓,可能也扩大了这次技术调整的幅度。
日本央行刚刚宣布,将基准利率提高25个基点,达到0.5%。这使得借日元比原来要贵一点点。数年来,国际金融机构及对冲基金借日元来购买利率更高的货币,如美元或澳元;只要日元汇率稳定,他们就可以赚取利差。这种被称为“利差交易”的套利行为大约有 1万亿美元的规模,其利润约500亿美元。然而,利差交易的死穴在于日元突然升值。一旦有任何危险迹象显现,交易者会在同一时间平仓,从而更加剧日元的迅速升值。当利差交易者卖出日元,而日本银行回收日元时,全球流动性将会减少,这对于货币供给的影响等同于央行加息。
也有人认为,这次调整是熊市到来的前兆。熊市的催化剂是美国房地产泡沫破裂,波及到经济其他部门所引发的美国经济衰退。美国联邦政府最新的经济调查显示,多数地区和行业经济已经出现减缓。美国的房地产市场在整个经济中占有很大份额。房地产的销售总额占到GDP的15%。有估算指出,从2001年起大约一半的新增就业来自于与房地产相关的经济活动。
房地产业下调的影响是分阶段产生的。当价格下降时,只会引起消费者更加谨慎的消费。然而,由于美国股市活跃,很好地抵消了房地产价值的缩水,美国消费者仍然维持像以前一样的消费。但是,随着待出售的现房存货不断增加,建筑商没有动力开始新的工程,于是当现有工程结束的时候,他们会解雇工人。这种对经济的延迟效应会通过失业率的上升而逐渐显现。当股市察觉到这种影响,也会随之降低对企业收益的预期,这又会减少消费者的支出。最后,上升的失业率以及下跌的股市就有可能导致经济进入衰退。
我认为,这次小型的崩盘是技术性的。全球股市自2006年10月起已经连续上涨了四个月,这段时间的市场波动异乎寻常的低。直到这次下跌前,美国股市在接近四个月的时间里没有经历过单日下跌超过1%,这是历史最好纪录。当市场处于这样一个平缓稳定的上升状态,投资者失去对风险的警惕,不断向市场投钱。短期交易者认识到这个趋势并借钱扑入,进一步扩大了这种趋势。当交易者达到他们借贷能力的极限时,市场停止上涨并出现技术调整需要。一旦危险信号显现,他们会像企鹅看到北极狐的影子一样急于跳水。 金融模式变化 虽然这次下跌风暴可能反映了技术性的因素,它同时也暗示,流动性或许已经不足以支撑股市的进一步上涨。
“流动性”已经变成当今世界的一个流行词,但究竟什么是流动性呢? 经济学家总是嘲笑“流动性”这一定义。对他们来说,流动性就是金融系统里的货币,与其他用途的货币并没有区别。货币是央行创造的,当央行降低或提高基准利率,商业银行希望从央行借出或多或少的货币。这种央行与商业银行之间资金流动的变化导致了货币供应的变化。一个称职的央行能够看到经济中的通胀或通缩压力,并能预见性地调整利率,从而保证相对稳定的低通胀率。 而在金融市场观察者的言谈间,流动性则是另一概念。当银行家说到大量流动性时,指的是他们的客户有大量的闲置货币。当股票首次公开发行(IPO)时,就可以看出流动性的情况。如果基金经理不需要通过出售资产来为IPO融资,就表示经济系统中存在剩余流动性。 金融从业者热爱流动性,因为它会带来免费午餐。例如,股市上涨可以是由于公司业绩的提高或者市盈率的增加。但是,如果投资者愿意为股票支付更多钱,股市就可以脱离公司业绩而上涨。
假设投资者愿意为股票支付15倍于其盈利的价格。有一天,他们忽然有了一笔现金,购买股票的愿望增强,他们或许会愿意支付20倍的价格。于是,股市可以在没有任何基本面变化的情况下上涨三分之一。 经济学家并不相信金融系统中流动性的变化可以不影响实体经济的货币流动。因此,央行必须通过控制实体经济中的货币来控制金融经济中的货币或者说流动性。从长期来看,这是完全正确的。但是,正如凯恩斯说的,“在长期,我们都死了。”在某些特殊情况下,金融系统的货币能够增加很大一块,但是几乎不影响实体经济中的货币流动。
1998年以来就是这样一个特殊的时期。 过去十年,IT业的技术革新已经从根本上改变了金融市场的运作模式。过去,金融从业者习惯于以收取交易佣金为生。例如,当你通过一个经纪人购买股票的时候,他们会收取一定的交易佣金。而你需要一个经纪人的原因,是你不能直接进入市场。
但为什么不能呢?因为有时,市场准入要求你达到一定的规模经济。这类似于你去超市购买蔬菜,是因为超市有规模经济,它可以从农民手中大量购买蔬菜并运送到城市里来。在金融市场里,信息就是被运送给你的货物。互联网突然使得信息的运送成本接近于零了。想象一下,如果蔬菜可以没有成本地运送给你,你还会去超市购买蔬菜吗?IT技术就是这样突然地破坏了金融从业者的基本价值。 在过去,美国股票经纪人一般会向基金经理收取0.25%的买卖股票的佣金。
现在,费率已经下降到了0.06%。这项业务在美国已经不挣钱了。在亚洲,过去五年间,韩国的佣金费率已经下降了一半,香港的也下降了三分之一。可以预见,亚洲市场的佣金像美国一样减少到可以忽略的程度,也只是时间早晚的问题。 这将改变交易文化,金融从业者将试图通过参与市场交易来谋生,而不再是通过服务顾客来挣钱。例如,华尔街的公司已经有超过50%的收入是来自于交易。此外,投资银行也已经变得和对冲基金区别不大。投行的交易员发现他们可以离开投行,设立对冲基金,为自己而不是为投行挣钱。
因此,对冲基金的数量急剧增加。事实上,对冲基金和投资银行共同占据了超过一半的市场交易量。从短期来看,他们的行为决定了市场的价格。 市场已达峰值 上述逻辑对于理解过去三年的流动性现象很有帮助。交易员已经发明了新的交易工具,从信贷调期协议到指数股票型基金,新型市场突然出现在所有地方。这就类似于实体经济中的支付革新。假设有一天,你常去的商店给你提供信用而不是要求你支付现金;同时供货商也给商店提供信用,供货商的银行再给他们提供信用,而银行当然是从央行获得货币。经过这样的创新后,整个世界看起来还是和以前一样,只是你手头有了更多的钱。
如果你决定花掉这些钱,就能刺激经济。在金融世界里,手里有钱的投资者肯定会更多地购买,于是会抬高资产市场的价格。想象金融市场能不断找到类似的支付创新,从而让投资者手里有越来越多的资金—— 这就是我们在过去三年在金融市场看到的景象。这也正是此轮牛市维持时间大大超出多数分析师预测的原因所在。实际上,牛市可以一直维持下去,只要金融市场找到办法,让投资者手中有钱就行。 (货币战争:在<美元的皇帝新衣>中,我们曾指出2005年3月美联储停止公布M3货币发行数据,原因是“用处不大”。这个解释确实也不是完全没有道理,格林斯潘认为,货币的基本概念已经相当“模糊不清”,M3已经无法解释和概括到处泛滥的“流动性”创新。广义的货币概念应该包括凡是能用来购买商品与服务的一切债务凭证。)但有迹象表明,这种支付“创新”或许已经进入尾声。次级市场(sub-prime market)是这些创新中重要的一种,其本质是以低信用级抵押贷款为支撑的债券。这类借款人购买了他们根本无法支付的资产。
一旦经济稍有恶化,他们的收入就会减少并无法履行还款。于是,这类债券的价值也将随之下跌超过20%——这种幅度对于债券来说是很大的。就这样,一种货币创造途径失效了。虽然这只是数以千计的货币创造途径中的一种,但也显示出金融市场的货币创造机制正在破灭。 如果次级市场的问题暗示流动性已经达到峰值,那么全球金融市场也应该已经达到了峰值。我认为的确如此,全球股票市场将在未来数月不断波动,但却无法创造新高。在这种市场中,投资者应该在反弹的时候出售并且不要在下跌时买入。这就是说,减持风险资产是一个不错的策略。 真正的熊市会在金融市场嗅出衰退味道的时候到来。
目前最有可能的诱因就是美国房地产市场衰退,扩散到经济其他部分。我认为,美国经济将在2008年经历一场衰退,到那时,美国房地产市场泡沫破灭将波及到经济的其他部分。金融市场将在2007年三季度察觉到这种衰退。 以上的论述是针对海外市场的。由于中国的资本账户管制,中国市场的反应会比国际市场延迟大约一年左右。在上一个周期,全球市场于2000年达到峰值,但是中国在2001年才达到峰值。这种延迟的主要原因在于,中国的流动性主要是通过贸易而不是资本流动与国际联系的。 历史或许还会重复。但是,外国资本流入可能会扮演更加重要的角色。2006年,外资通过直接或间接的途径,已经占到了中国房地产投资的20%。或许,中国已经比我们想象更快地融入了全球金融市场。因此,中国与全球金融市场周期在时间上的延迟也许会比上次短很多。

《财经》杂志 /总181期 [2007-03-19]

日本惨败后的这一站:“货币战争”贴身紧逼中国 - 宋鸿兵

如今,几乎一模一样的药方又被“热心和急切”的美国金融大夫们介绍到了中国,所不同的是,中国经济的身子骨远不如当年的日本糟糕的是,中国现在的早期症状与1985 年到1990 年的日本极其类似金融开放的本质实际上是一场“货币战争”,缺乏战争的意识和准备是中国当前最大的危机!想当然地把金融领域的开放理解成普通行业的开放是极端危险的。货币是一种商品,而它不同于其他一切商品之处就在于它是一种社会中每一个行业、每一个机构、每一个人都需要的商品,对货币发行的控制是所有垄断中的最高形式。
中国的货币发行原本为国家所控制,也只有国家控制货币才能保障社会结构的基本公平。当外资银行进入中国后,中国的货币发行权将处于危险境地。外资银行们会引进大量令人眼花缭乱的“创新”金融产品,以各种方式创造债务工具并使之货币化,这就是货币的类似物“流动性”。这些金融货币完全具备实体经济领域货币的购买力,从这个意义上说,外资银行将参与中国人民币的货币发行。如果当外资银行“创造”的人民币信贷总量超过国有商业银行时,它们实际上就架空了中国的中央银行,控制了中国货币的发行权!它们将有能力和意图来恶意制造货币供应的波动,从而先是通过通货膨胀然后是通货紧缩来血洗中国人民的财富,就像历史上反复出现的经济危机一样。
当外国银行势力日渐做大之后,通过金钱与权力的交易,金钱与金钱的交易,实现“金融超级特殊利益集团”的“强强联合”,通过资助地方经济发展来拉拢地方政府,物色和重点栽培“有潜力”的新一代政治新星,以图长期政治回报。通过投资来控制电信、石油、军工等国有垄断行业,毕竟没有法律规定国有垄断行业只能从国有银行贷款,当这些行业主要依靠外资银行的资金时,它们的资金链将有可能会“突然”断裂。外资银行还会建立各种“基金会”逐步渗透到中国的教育事业、新闻媒体业、图书出版业、司法执法系统、医疗制药行业、甚至军队系统。它们将广泛捐助社会公益项目,广泛培植人脉关系,以润物细无声般的耐心和细心,默默地推广着有利于它们的社会价值观念。
金融开放所面临的战略风险远不是金融业本身那么简单,它涵盖了整个中国社会的各个层面,稍有闪失则后果不堪设想。建议组建“国家金融安全委员会”将银监会、证监会和保监会三者的职能统一起来,直属最高决策层。增加金融情报研究部门,加强对外资银行中的人员背景、资金调动、战例收集等方面的研究分析工作。建立国家金融安全保密等级(Security Clearance)制度,重要金融决策者必须通过该制度审核。要货币主权还是要货币稳定?货币主权理应高于一切外来因素,包括所有国际惯例和国际协议,以及外来政治压力。
货币主权只应服务于本国人民的根本利益。保持货币稳定指的是维护本国货币在国际货币体系中的币值稳定,以便向国内行业提供良好和平稳的经济发展生态环境。对于中国而言,目前是采取紧盯美元的政策。目前,中国的困境在于货币主权与货币稳定只能二者择一。中国现在的政策是为了经济发展而不得不追求货币稳定,从而放弃货币主权。问题的要害是,美联储实际在很大的程度上左右着中国的货币供应量,由于中国是采用强制结汇制度,美国可以通过增加对中国的贸易赤字来迫使中国央行增发基础货币,而这些基础货币经过商业银行的放大,会产生若干倍的货币增发效应,造成流动性泛滥,推高了股市和房地产泡沫,极大地恶化了中国金融生态环境。为了对冲这样的货币增发,政府和央行只能被迫增发国债和央行票据来吸纳过剩的流动性,但是这又将增加政府的债务负担,这些债务早晚是要连本带利偿还的。反之,如果美国需要制造中国的货币供应紧缩效应,当然目前更严重的问题是前者。这样一种完全被动的金融战略态势对中国极端不利。只要美元是世界储备货币,中国就无法摆脱这样的局面。从根本上讲,只有推动黄金的重新货币化,才能给世界各国创造出一个自由、公平与和谐的金融生态环境。如果难以一步到位,也应该大力推动国际储备货币多元化,采取分而治之的策略。货币升值与金融系统“内分泌紊乱”如果说有谁可作为货币剧烈升值的反面教材的话,日本无疑是最恰当的人选了。
日本《金融战败》的作者吉川元忠哀叹就财富损失的比例而言,日本1990年金融战败的后果几乎和第二次世界大战中战败的损失相当。日本和中国一样,是老老实实一手一脚努力创造物质财富的典型,对于虚无缥缈的金融财富的理念向来持怀疑态度。1985 年到1990 年,日本国内经济和出口贸易空前红火,股市房地产连年暴涨,大批收购海外资产,日本人的自信也达到了空前程度,超过美国似乎只是十年之遥。从1985 年的“广场协议”签订时1 美元兑250 日元的汇率,在3 个月内剧烈贬值到200 日元左右,美元贬值高达20%,到1987 年1 美元贬值到120 日元,日元在短短3 年中升值了一倍,这是日本金融业最重要的外在生态环境的巨变。美国的金融大夫们早就明白,强迫日元短时间内剧烈升值,其疗效类似于强迫日本吞服大剂量的激素,后果必然是造成日本经济出现“金融系统内分泌”严重紊乱。再胁迫日本保持2.5%超低利率达两年之久,则疗效更佳。果然,日本的经济在金融内分泌失调和大剂量激素的刺激下,股市房地产等脂肪组织迅速增生,生产出口行业的肌肉组织严重萎缩,然后的经济高血脂、高血糖、高血压症状如期出现,最后导致了金融系统患上了心脏病和冠心病。
为了更加容易地诱发这些并发症,1987 年国际银行家们在国际清算银行又研制出针对日本的新型特效药——巴塞尔协议,要求从事国际业务的银行自有资本率必须达到8%。而美国和英国率先签署协议,然后胁迫日本和其他国家必须遵守,否则就无法同占据着国际金融制高点的美英银行进行交易。日本银行普遍存在着资本金偏低的问题,只有依靠银行股票高价格所产生的账外资产才能达标。高度依赖股票市场和房地产市场的日本银行系统终于将自己的软肋暴露在美国金融战争的利剑之下。沼谠?990 年1 月12 日,美国在纽约股票市场利用“日经指数认沽权证”这一新型金融“核武器”,发动了对日本东京股市的“远程非接触式”战略打击。日本金融系统的心脏病和冠心病经受不住这样的强烈刺激,终于发生了中风,然后导致了日本经济长达17 年的偏瘫。如今,几乎一模一样的药方又被“热心和急切”的美国金融大夫们介绍到了中国,所不同的是,中国经济的身子骨远不如当年的日本。
糟糕的是,中国现在的早期症状与1985 年到1990 年的日本极其类似。对等开放下的外线作战“国际惯例”眼下是个颇为时髦的词汇,仿佛遵循了“国际惯例”,天下就从此太平了,金融开放就像田园牧歌般的优美舒畅了。如此天真烂漫的想法只怕会误国误民的。“国际惯例”的形成完全在业已形成垄断地位的国际银行家的操控之下,在特定条件下,也非常可能为中国量身制作一套全面封杀中国银行业生存壮大的“国际惯例”,这一手已经成为居于金融行业垄断制高点的美英银行封杀竞争对手的有效武器。当年成功打垮日本金融业扩张势头的老巴塞尔协议,已经改头换面地升级为2004 年巴塞尔新资本协议,完全可能被用在中国银行系统的头上,从而成为阻止中国金融行业海外发展的重要障碍。如果中国本土的银行尚未实现巴塞尔新资本协议,意味着这些银行在美国和欧洲的分行有可能被改制甚至关闭,中国辛辛苦苦建立起来的海外金融网络存在着被一网打尽的危险。来而不往非礼也。中国的对策就是,也只能是,“对等开放下的外线作战”。如果所在国利用不管何种“国际惯例”来封杀中国的海外银行分支,中国也将如法炮制,制定出“具有中国特色”的银行业规定,限制乃至关闭其银行在中国的运作。
回顾英美成为国际银行业的主导力量的历程,我们不难发现建立国际银行网络是必经之路。中国的银行业与其只在中国本土与国际接轨,不如实施外线作战,去直接收购欧美的银行或扩张分行,建立中国自己遍布世界各地的金融网络,在战争中去学习战争。藏汇于民不如藏金于民面对美元的长期贬值的趋势,许多学者提出要藏汇于民,以分摊国家的外汇储备损失的风险。与其藏汇于民,不如藏金于民。任何外汇从长期来看都会对黄金贬值,只是贬值速度不同而已。
要想将中国已经创造出的巨大财富实现购买力保值,唯有变外汇储备为黄金白银储备。国际黄金价格波动其实不过是个假象而已,看破了这一层,哪怕它汇率市场掀起千重浪,中国自有万吨黄金作为定海神针。藏金于民从根本上保护了人民的财富安全,无论是商品还是资产形式的通货膨胀都无法侵蚀老百姓的真实购买力,这是所有致力于和谐与平等社会构建所不可或缺的经济自由的基石。黄金作为中国的镇国之宝,具有所有货币中最高等级的流动性。黄金不仅在人类5000 年的历史上,被不同文明、不同种族、不同地域、不同时代、不同政体的社会公认为财富的最高形式,它也必将在未来的社会担当起经济活动最基本度量衡的重大历史重任。
在世界历史上,人们曾四次尝试抛弃黄金作为货币体系的基石,而试图“发明”更为聪明的货币制度,前三次已经失败,而我们当今的世界正在经历第四次失败。人类与生俱来的贪婪本性注定了以人的主观意识来标定客观经济活动的尝试不会成功。藏金于民以待天下有变,以黄金为支撑的“中国元”将在一片由过度债务贪婪所造成的国际金融废墟上卓尔屹立,中华文明自有出头之日。

货币战争 - 宋鸿兵

策划大衰退的真正图谋

毫无疑问,1929年的股票暴跌是在1927年的秘密会议上就敲定的事,由于纽约的利率被人为地压低,伦敦的利率被有意地拔高,两地之间的利差导致美国的黄金流向英国,以帮助英国和其他欧洲国家恢复金本位。  
其实,欧洲的金融家早就知道以通货膨胀的手段掠夺财富的效率要远胜于放贷所得到的利息收入。以黄金作为货币发放的基石,并且纸币可自由兑换为黄金,这一切无疑会大大制约银行家放手使用通货膨胀这种高效能武器的效力。令人困惑的是,为什么当时以英国银行家为代表的欧洲金融界要恢复金本位呢?  原来,国际银行家们在下一盘大棋。  
第一次世界大战以德国战败而告终,庞大的战争赔款当然不能由德国罗斯柴尔德家族和沃伯格家族银行来承担,不仅如此,他们还要大发一笔国难财。所以,第一步棋,就是由德国银行家启动通货膨胀这部财富绞肉机来迅速掠夺德国人民的积蓄,人类第一次见识了超级通货膨胀的威力。  
从1913年到1918年,在战争期间,德国货币发行量增加了8.5倍,德国马克相对于美元仅贬值了50%,从1921年开始,德国中央银行的货币发放量呈火山喷发的态势,1921年比1918年增加5倍,1922年比1921年增加10倍,1923年比1922年增加7 253万倍。从1923年8月起,物价达到天文数字,一片面包或一 张邮票的价格高达1 000亿马克。德国工人每天的工资必须支付两次,拿到钱之后要在一个小时之内花出去。  
德国银行家血洗中产阶级的储蓄,使大量社会主流人士一夜之间沦为赤贫,从而奠定了日后纳粹上台的群众基础,并深深种下了德国人对犹太银行家仇恨的种子。比起1870年普法战争失败后法国的境遇,德国人民所遭受的苦难要深重得多,下一场更为惨烈的世界大战的所有诱因已在1923年全部到位了。  
当德国人的财富被搜刮得差不多了,德国的马克也该稳定下来了。在国际银行家们的调度之下,美国人民的黄金成了稳定德国货币的救生圈。  
第二步棋轮到英国银行家大展拳脚了。由于1914年第一次世界大战爆发后德国潜艇在大西洋的频繁袭击,英国运送黄金的船只无法出港,导致了英格兰银行不得不宣布暂时停止黄金兑换,英镑的金本位已名存实亡。  
1924年,后来名震英仑的丘吉尔就任英国财政大臣。对金融事务完全没有感觉的丘吉尔在伦敦银行家的鼓噪之下准备恢复金本位,理由是必须捍卫英镑在世界金融领域绝对的权威地位。1925年5月13日,英国通过了金本位法案(Gold Standard Act)。当时英国的国力经过战争的剧烈消耗早已严重受损,其经济实力已远逊于新兴的美国,甚至在欧洲也已不是一家独大的局面,强行恢复金本位势必导致英镑坚挺,严重打击本已日益丧失竞争力的英国出口贸易,同时还会造成国内物价下降,工资缩水,失业率大幅上升等经济后果。  
这时,一代宗师凯恩斯横空出世了。凯恩斯在1919年巴黎和会上曾担任英国财政部的代表,他坚决反对对德国的严厉条款,并不惜以辞职来抗议。他力主废除金本位,与伦敦的银行家势力形成水火不容的态势。在英国政府调查金本位的可行性的麦克米兰委员会上,凯恩斯慷慨激昂,痛陈金本位的弊端,在他看来,黄金只是“野蛮的遗迹”,是对经济发展的制约。英格兰银行的诺曼也不示弱,坚称金本位对于诚实的银行家是不可或缺的,无论英国的负担有多重,无论多少行业严重受损,不然何以体现伦敦金融城银行家的超级信誉。英国人民被弄糊涂了。和美国的情况一样,伦敦银行家在人民当中也是名誉不佳,既然是银行家支持的,想必是不好的,而猛烈抨击银行家的观点,应该是向着人民的。  
这才是戏的精彩部分。  来历很不简单的凯恩斯扮演了为民请命的角色,而银行家们则以黄金卫道士的形象出现,这出双簧演得出神入化,舆论和民心就这样被轻松地操纵着 
果然不出凯恩斯的“预言”和银行家的计划,英国经济在恢复金本位之后一落千丈,失业率由1920年的3%猛涨到1926年的18%,各种罢工此起彼伏,政局陷入混乱,英国政府面临严重的危机。  
而银行家们要的就是危机!只有制造危机才能推动“金融改革”,在一片强烈呼吁修改法律的呼声中,通过了1928年货币和银行券法案(Currency and Bank Notes Act 1928),该法案砸碎了套在英格兰银行头上长达84年的以国债为抵押的货币发行上限的紧箍,1844年法案规定英格兰银行以国债为抵押的英镑发行上限为1 975万英镑,其余的英镑纸币发行必须用黄金做抵押。以国债为抵押发行“债务”货币而绕开讨厌的黄金制约,就像后起之秀美联储一样,这实在是一个让伦敦银行家魂牵梦萦的境界。在新法案通过后仅几个星期,英格兰银行就发行了2.6亿“债务”英镑。新法案还授权英格兰银行在紧急情况下可以无限制发行“债务”英镑,只要财政部和议会事后认可就行了。[29] 美联储的近乎无限制的发行货币的大权终于被英格兰银行也搞到手了。  
第三步棋就是美国这只肥羊又到了该爆剪羊毛的季节了。1927年的秘密会议之后,由于美联储的低利率政策,使得美国价值5亿美元的巨额黄金外流,在1929年美联储猛然提高利率之后,造成银行缺乏黄金储备而无法有效发放信贷,美国这只健壮的肥羊由于极度失血而休克。国际银行家们随后一拥而上,以正常价格的几分之一甚至几十分之一的超低价格大举吃进蓝筹股和其他优质资产。麦克法登议员这样描述道:“最近仅一个州就有6万处房产和农场在一天中被拍卖。在密歇根州的奥克兰郡,有7.1万户房主和农场主被扫地出门。类似的情况正发生在美国的每一个郡县。”  
在这场美国空前的经济浩劫中,只有最核心圈子里的少数人事先知道美国历史上最大的投机大戏即将落幕,这些人得以及时抛出所有股票转而大量持有政府债券,他们都与伦敦罗斯柴尔德家族保持着密切联系。这个圈子以外的人,有些即使是超级富豪,也未能幸免于难。这个圈子里包括J.P.摩根和库恩雷波公司,以及他们选定的“优先客户”,如伙伴银行及与他们保持亲善的著名实业家、重要政客和友好国家的统治者。  
当银行家默里森从美联储辞职时,1936年5月30日的《新闻周刊》是这样评价他的:“大家一致认为美联储失去了一位能干的人。在1929年(股票崩盘之前),他召集了一个会议,命令他属下的几家银行在9月1日之前全部结束对证券交易商的贷款业务。所以,它们得以在随后的衰退中乘风而起。”[30]  乔伊·肯尼迪(Joe Kennedy)的身家从1929年的400万美元,增加到1935年的1 亿美元,翻了25倍。伯纳德·巴鲁在大崩溃前卖掉了所有股票转而持有国债。亨利·摩根索在“黑色星期二”(1929年10月29日)前几天匆匆赶到银行家信托公司,命令他的公司在三天之内卖掉总价值达6 000万美元的所有股票。他的手下困惑不已,建议他在几个星期的时间里逐步清仓,这样至少能多赚500万美元。亨利·摩根索勃然大怒,冲着手下怒吼:“我到这里来不是和你讨论的!照我说的去做!”  
经过近80年后回过头来看这段历史,我们仍然要惊叹这些国际银行家们的智商,他们毫无疑问是人类最为聪明的一群人。这样的手法,这样的权谋,这样丝丝入扣的设计,这样玩弄天下于股掌之中的胆略,实在是令人叹为观止。甚至直到今天,大多数人完全不相信他们的命运实际上被操纵在极少数人的手中。  
在国际银行家们“羊毛”喜获丰收之后,凯恩斯的“廉价货币思想”成为了银行家们的最新财富收割机,在他们主导下的“罗斯福新政”开启了一个银行家们新的收获季节。

Saturday, September 22, 2007

ENJOY THE RIDE UP, MAXIMISE YOUR GAINS BUT DON'T GET INTOXICATED BY GREED

Dow continues to its uptrend, so will Asian markets....

The most important thing to do in such a market for longer term investors is to stay invested and ride it up all the way. Your job now is to figure out the reversal point, and clear out ...I'll explain why there is a need to get out after this upward movement a bit further down.

For day traders and short term investors, I would like to share some experience.
In such a market the best approach is to play the rebound. As the market move up, there will be profit taking and the market will move down intermittently. Look for these and play the rebound....as the market is in a general uptrend, such dips are short lived...and there will be opportunities in the coming days to play this Back to the longer term trend.
The bull upswing should be quite big but my feel is that this would be the last and mark the end of this massive 7 year bull market. It might last for some time (a few months/weeks) before it is exhausted but don't forget to get out and stay out when the time comes. Problems came, Fed cuts rates problems disappear - almost like magic.

The 3-month LIBOR fells even the US$/Yen is now at healthy levels 116+ which is good for the carry trade. It is like everything fell into place once the Fed cut the rate. When something is too good to be true look harder - gold is at a 27 year high...what does this mean? ...

The US Fed has been pumping money into the economy without any inflation. How is this possible? ...Simple the money went into speculative markets like tech bubble and housing bubble instead of consumer products or things on which inflation is measured. Even yesterday's CPI actually fell to indicate no inflation. At the same time corporate profits surged in the past few years, but the wages earned by consumers only went up moderately..how is this possible?
The answer is debt.
Debt and more debt...the US consumer is among the most indebted in the world, the US govt under Bush has alot of debt. Remember long before this subprime woes and problem, there was some publicity that Americans have negative savings - imagine that...they are spending more than they earn to keep the economy afloat. It is a very unhealthy economy.
The cure for an unhealthy economy is a good old fashion recession or a slowdown. If not for the credit crunch, the FED might have allowed some slow down to soft land the economy.
No credit crunch no rate cuts. But because of the crunch, they went ahead to cut rates. This will allow the unhealthy economy to persist instead of correcting its imbalances. There is however a limit to how long the Fed can do this without inflation returning strongly. Because there is this limit, there will be a limit to how far the DOW can go up.

For Asian markets, we will run up until we become overvalued OR we get stalled when these other problems start to surface. Subprime is yesterday's problem, Fed cuts is today's joy...but keep thinking one step ahead of everyone else, while they are celebrating, look for the small fire that is starting at the corner of the room...if it gets out of control, leave the party before the crowd stampedes.....

Mini-Buffett

Many people apply Buffett's approach to small caps in Singapore with the hope of discovering the next See's candy or McDonalds. The problem with small caps is the failure rate is very high. A company growing at 20% and P/E ratio of 6....can sink very quickly when competitors come in or when raw material prices come it.

Also Buffett never wrote a book or identify his exact methods so people who profess to 'follow Buffetts' method' are merely following what some writers say are his methods. What his exact methods are is a mystery. Some people say look at ROE looking for businesses with a moat etc.

Learning from that Mary Buffett (Buffett's former daughter-in-law who retained the Buffett name after her divorce with Buffett son) video may be the furthest thing from Buffett's actual methods. What is important is not whether your are following Buffett's method or not but whether you know what you're are doing, the risk you're taking and how/when you discover you're wrong.

I doubt the $30 book at MPH can capture the genius of Buffett, it may have distilled is genius in to useless simplicity for the mass market....manufacturing countless people who think they are mini-Buffetts but actually they are fodder for big boys to eat up, chew and spit out.
If you want to follow Buffett, just buy BRK (Berkshire) which is run by Buffett! What better way to follow Buffett than to have him run your money...

The Turtle Traders

I don't think trading strategies are as vulnerable to not working if people know about them, as most traders believe. If what you are doing is right, it will work even if people have a general idea about it. I always say you could publish rules in a newspaper and no one would follow them. The key is consistency and discipline.

Richard Dennis
...he placed classified ads proclaiming 'trader wanted,' he got some 1,000 responses from people eager to learn his methods. He settled on fewer than two dozen novices--among them two professional gamblers and a fantasy-game designer--and after a two-week training program, he gave them money to trade under his firm's auspices. Several went on to become top commodity-fund managers...Business Week

Unlike Eckhardt (and most other savants) Dennis believed that trading could be taught and learned. Eckhardt belonged to the you're born with it or you're not camp.Barclays Report
Richard Dennis must be saluted for his skills as a trader and teacher. His instruction to his students the Turtles was a great story and Trend Following philosophy has stood the test of time.

Dennis himself has made hundreds of millions of dollars over the years. But while his students have had successful money management careers, Dennis seems to not mesh well with clients. If Dennis just traded for himself he would be fine (and much richer).


Michael Carr: Turtle Trader from Dennis Camp
With a reasonably good trading program, the number one priority is staying in the game--to be there to participate and benefit when the really outstanding market opportunities come along. That means that good money management is essential. If the severity of drawdowns can be limited, comebacks are much easier.

Michael Carr
Michael Carr was a Turtle. His company is MC Futures.
Former Profession: Carr was on the creative management staff of TSR, the game company of Dungeons and Dragons fame.

Q. How did you become a Turtle?
A. I started with TSR when there were only a few employees. In the ensuing years, the company went through a spectacular growth phase, which culminated with over three hundred people on the payroll. The company hit hard times and made drastic cutbacks in order to survive. I lost my job along with two hundred other workers. It was around this time that I picked up a copy of the Wall Street Journal. Ironically, that was the same day that Richard Dennis ran his ad seeking trading trainees.

The New Market Wizards by Jack Schwager
Another of the Turtles, Michael Carr, a former fantasy game designer found Dennis' ad in a newspaper the day he'd lost his job. Michael had no trading experience at all, but shortly before getting fired he conceived an idea to create a game based on stock trading. He'd read several brochures and visited 6-day evening courses, so he did have a rudimentary idea of what market is. He was probably one of the few applicants who didn't know who Richard Dennis was - a funny accident happened when Carr asked Dennis whether he used technical or fundamental analysis. Dennis couldn't help giggling - everybody knew he used strictly technical analysis.


Jonathan R. Craven
2nd Generation TurtleInspiration to New Traders

We're not really interested in people who are experts at the French stock markets or German bond markets. It doesn't take a huge monster infrastructure - not Harvard MBAs and people from Goldman Sachs.Jerry Parker of Chesapeake Capital

Jonathan Craven must be glad his former boss views the world as he does in the above quote. Craven, a second generation Turtle, is not of Harvard pedigree, but rather he attended Old Dominion University in Norfolk, VA. ODU is not what most would consider the fast track to Wall Street success, but it has not stopped Craven from kicking butt. He is another in a long line of trained Trend Followers.

Now in his 30's Craven spent 7 years as an associated person with Chesapeake Capital under Jerry Parker's tutelage. After launching his small one-man firm in 1998 and struggling for two years with meager returns, he finally hit his stride with Trend Following.

His firm GIC, LLC has produced the following results:
2003: +16.0% (first 2 months)
2002: +25.62%
2001: +24.9%
2000: +13.6%
1999: -11.0%
1998: -5.0%

On quick glance it is easy to see that for clients Craven has elected to not shoot for Bill Dunn type returns (Dunn is now up +50% for the first 8 months of 2002), but Craven's returns easily outpace buy and holding the Nasdaq over the same period.
So what makes Craven special? He essentially started from scratch and works solo. His firm launched with $50,000 out of the gate. Now with $16 million under management he proves hard work and determination are still the keys to Turtle-style success. He proves the one-man only potential of trading like a Turtle on a small budget. If Jonathan Craven can do it, he must be an inspiration to all seeking success as a money manager or just trading their own account from home or work.

Friday, September 21, 2007

Turtle Trading is Trend Following: Learn the Pros, Cons and Myths

This website was named TurtleTrader and the phrase "turtle trading" was coined because it described a great story about how a group of non-traders were taught to trade for big profits. Some of these original TurtleTraders have continued to be successful while others have failed in grand fashion. Jack Schwager's Market Wizards books originally positioned these traders as winners all, but secretive and reluctant to share their so-called "secrets" with the world.

Today, TurtleTrader remains the ONLY independent voice on this subject -- revealing the pros, cons and myths.

The following 4 books and online interview paint a true picture of the Turtles -- fact and fiction:
The Complete TurtleTrader (Collins, October 2007).
The Market Wizards
The New Market Wizards
Trend Following:How Great Traders Make Millions in Up or Down Markets

Richard Dennis (and the Turtles)
In 1984, Richard Dennis taught a Trend Following trading methodology to a group of students (neophyte non-traders) in a two-week seminar. Dennis' motivation for conducting the sessions was to settle a dispute with his friend and business partner William Eckhardt over whether trading skills could be taught. Dennis strongly believed that trading abilities could be broken down into a set of rules that could be passed on to others. Eckhardt believed trading abilities had more to do with innate instincts. Eckhardt lost the bet with Dennis. Dennis nicknamed his proteges Turtles after visiting turtle farms in Singapore and deciding to develop traders like farm-grown turtles.

The Turtle Selection Process
What questions were used to select students? Read true-false questions used in selection process.
However, the Turtle hype, over the years, has grown larger than reality. Dennis and the Turtles were always trend followers. No matter how "secretive" they acted, they were just good trend followers. Interestingly, while some Turtles are still great successes, some are dismal failures (and many of these failures work really hard at pretending to be successes):

Indicator Bullshit

Indicator Bullshit

Michael Covel (March 01, 2005)

We are repeatedly asked: Which is better: MACD or Bollinger Bands? Which is more profitable: ADX or Williams %R?
And we repeatedly answer: None of them. Technical indicators are simply small components of an overall trading system and not systems in and of themselves. They are like a couple of tools in a tool kit, not the kit itself. A technical indicator accounts for typically 10% of the overall trading success of a trend following system. Comments such as: I tried Indicator X and found it was worthless or I tried Indicator Y and found it useful, make no sense. These statements imply that an indicator is the actual trading system. Nothing could be farther from the truth.
Many popular financial web sites (i.e. CBS MarketWatch, etc.) and many trading books have popularized the idea of technical indicators as Holy Grails. Keep in mind, when you hear the hype about indicators, that money management actually makes up the bulk of a winning trading system.

No Predictions
Trend Following is not based on support and resistance lines or areas of congestion. Trend Following is not based on Fibonacci numbers, the golden mean, nor is it related to the works of Gann or Elliott.

The following predictive indicators are not used in Trend Following:
No Bollinger bands
No RSI
No MACD
No OBV
No stochastics
No ROC
No Williams %R
No P/E ratios
No momentum
No Advance/Decline lines, etc.
More ...

These indicators are all designed to predict what a market will do. You can discount all indicators designed to predict a market move. They are not, by themselves, a predictive trading system. Technical indicators are only useful as part of a complete reactive trading system.
The Trend Following uses a straightforward reactive, technical indicator as part of an overall-trading plan. The only true method for trading is a long term trend following system that reacts to the market.
Don't fixate on the technical indicator used in any trend following system. It's important, but it is not the key. It?s the tool, but not the kit. Moreover, by itself, a technical indicator is meaningless.
More on indicator issues.
Here are examples of useless Technical Analysis.
Breakouts.

Entry and Exit Straight Talk
Q. My understanding of trend following is that if you want to make money, buy low and sell high. Sounds simple. The trick is to identify entry and exit positions and there is a host of guys out there promising that their particular system will solve all your needs. Right?
A. Why do you feel entry and exit is the crucial issue in trading? What if you have an entry that wins 80% of the time but wins you very little money? And what if you only lose 20% of the time, but when you lose, your losses far exceed your wins the other 80% of the time? Additionally, you don?t buy low and sell high. Good traders buy higher and sell lower all along, focusing on how much money they are making or losing (not just winning percentages). Buying higher means that as a trend moves up you buy more as the price increases.
For example, let's say a trend begins at a price of 5 and goes up a 100. Would you only want to buy at a price of 5 or 6 or 7? Of course not. Depending on your system, you might buy at 20 or 30 or even higher. Not sure what we mean?

Q. If the trend goes to 100, how do you know it in advance?
A. You don't know. Let's say looking back into the past we knew a market went from 5 to 100. The point is to ask yourself, when do you buy? At price levels of 5, 6 or 7? At 20 or 30? Buying more as the trend progresses is what we mean by buying higher highs. Trying to buy low is nonsense. You can?t ever know that it is going to go to 100, but you are fully prepared with a precise well thought out strategy so it doesn?t matter that you don?t know. Whether it's from 5 to 6 or 5 to 100, you are ready to act.

Q. Are you promoting an alternative way of identifying the trend plus a money management system?
A. Realize that identifying a potential trend is maybe 10% of the overall success of a trend following trading system. The key is not where you enter and whether you have a profit or loss on a position. The key is how big must you be trading based on market volatility. That must be your concern. You?re not interested in the level of the market is; you?re concerned with the market's volatility. For example, if it's the day of a crash or the day after a crash, the volatility is a lot bigger. So you should be trading smaller. Lose the concept that where you enter is critical. What is relevant? your current position, your equity and where the market is now.
Editor's Note: Of course, there is an entry/exit method involved in Trend Following. But, focus on where real trading success comes from: money management.

How High Will It Go?
The other day we were speaking with a successful broker and he revealed that one of his strategies was to ride a stock up for 30% gains and then exit. That was his strategy. Let it go up 30% and get out. Sounds reasonable. But as Trend Followers know, this type of strategy is prone to problems. The biggest problem is that it goes against the math of getting rich. He is not letting his profits run!

Tom Basso tells the story of the new trader who approaches an old Trend Follower and asks, Where's your objective on this trade? The old Trend Follower replies that his objective is for the position to go to the moon. He says, I have not had one get there yet, but maybe someday.
When you trade as a Trend Follower, your objective is to stay in a position forever. You don't want to think about exiting. Of course, you have a plan for exiting long before you enter the trade, but the idea is to follow the trend as far as it will go up.

Support, Resistance and Entry
Many people use the jargon terms support and resistance. You have probably heard brokers talk of their importance or TV's continuous babble of predictions, meaningless advice and analysis. The words are used to describe perceived tops and bottoms in a market.
Unfortunately, support and resistance is a waste of time. Whether the market is going to penetrate support or resistance has nothing to do with your entry price. Your entry price has only personal significance. It has no objective significance in the market. The market is not going to go through a support point or go through a resistance point just because of what your entry price is.
The concept is not a relevant factor.
It's hype.

Rogers, Faber Say Fed Rate Cuts Will Spur a Recession

Interest rate cuts by Federal Reserve Chairman Ben S. Bernanke will spur inflation, cause the U.S. dollar to collapse and push the world's largest economy into recession, investors Jim Rogers and Marc Faber said.
``Every time the Fed turns around to save its friends on Wall Street, it makes the situation worse,'' Rogers said in an interview from Shanghai. ``If Bernanke starts running those printing presses even faster than he's doing already, yes we are going to have a serious recession. The dollar's going to collapse, the bond market's going to collapse. There's going to be a lot of problems in the U.S.''
Defaults on subprime home loans have spurred a rise in worldwide borrowing costs and caused losses at investment funds and banks that made bad bets on stocks and debt securities. The Fed today lowered its benchmark interest rate by a half point to 4.75 percent, the first cut in four years. The dollar fell to a record low against the euro, while U.S. stocks surged the most in four years and Treasury two-year notes gained.
Faber and Rogers, who both spoke today before the Fed decision on rates, said the central bank should raise borrowing costs to quell inflation and support the U.S. currency.
``The cause of the problems we have today, they are due to artificially low interest rates, expansionary monetary policies and extremely rapid credit growth that was fueled by a totally irresponsible Fed,'' said Faber, who oversees about $300 million as managing director of Hong Kong-based investment advisory company Marc Faber Ltd. ``It's suicidal to cut interest rates.''
`Stop Inflation'
``They should do something to stop inflation as soon as they can,'' said Rogers, the 64-year-old chairman of Beeland Interests Inc. ``If you don't do something now, if you don't nip it in the bud, it gets much worse down the road.''
Today's rate decision ``is intended to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets,'' the rate-setting Federal Open Market Committee said in a statement. The Fed will ``act as needed to foster price stability and sustainable economic growth.''
Fed officials have said the central bank doesn't want to be seen as caving in to funds that piled into the market for securities linked to subprime mortgages, those made to borrowers with poor or limited credit histories.
Sell Dollars, Bonds
``It is not the responsibility of the Federal Reserve -- nor would it be appropriate -- to protect lenders and investors from the consequences of their financial decisions,'' Bernanke said in an Aug. 31 speech in Jackson Hole, Wyoming.
Rogers, who predicted the start of the global commodities rally in 1999, said investors should sell U.S. dollars and bonds. He said he's selling short shares of investment banks and expects them to fall further. The Amex Securities Broker/Dealer Index rose 4.8 percent today, trimming its loss for 2007 to 2.8 percent.
Short selling is the sale of stock borrowed from shareholders in the hope of profiting by repurchasing the securities later at a lower price.
The Standard & Poor's 500 Index advanced the most since March 2003 following the Fed's rate cut, surging 2.9 percent to 1,519.78. The measure has gained 7.2 percent gain this year. The yield on two-year notes fell 0.08 percentage point to 3.99 percent at 3:23 p.m. in New York, according to bond broker Cantor Fitzgerald LP.
Rogers said he is buying agricultural commodities and recommended investors purchase Asian currencies including the Chinese renminbi and the Japanese yen.
Faber, publisher of the Gloom, Boom & Doom Report, said he is buying gold.
`Ballistic' Gold
``Gold is very cheap even at over $700 compared to many other commodities and also compared to many other assets in the world,'' he said in an interview from Hong Kong. ``If the Fed cuts interest rates by a half a point, I think it will go ballistic, I think it will go up a lot.''
Gold rose to a 27-year high today. December futures climbed 1.6 percent to $735.50 an ounce in New York, the highest since Feb. 11, 1980.
The dollar fell 0.8 percent, the most since Aug. 24, to $1.3972 per euro at 4:04 p.m. in New York and touched an all-time low of $1.3981.
Rogers co-founded the Quantum Hedge Fund with George Soros in the 1970s. He traveled the world by motorcycle and car in the 1990s researching investment ideas for his books, which include ``Adventure Capitalist'' and ``Hot Commodities.''
Faber told investors to bail out of U.S. stocks a week before the 1987 Black Monday crash, according to his Web site. He also told investors to buy gold in 2001, before it more than doubled.
Last month, Faber said U.S. stocks are at the beginning of a bear market in which benchmark indexes may fall more than 30 percent. The Dow Jones Industrial Average has since gained 3.8 percent.

Does History repeat itself ?

Does history will repeat itself?
If you believe it, you should watch outnext month as one of the reporter mentioned that Hang Seng Index will makea major turning point on every 55 months, either on the top
¨Come down or bottom-up".

I have find out the bad signal, the writer make a small error, but the major trend is correct.
It was a a big turn up/down on every 55months. Hence, investor may take caution step to prevent it.

What will cause it to turn worst?
- subprime turn worst
- major policy change imposed by China authority to cool off the economics during the upcoming Golden Week (Oct 1 -7)
- China stock market crash

Disclaimer: I am not an analyst, historian. So I I cannot guarantee its accuracy or completeness.

Thursday, September 20, 2007

TA

TA is a skill for life.

Before you enter, you know your risk. this is something which is very important in the long run.

The only group of people who didn't make money from our class are those who in the first place do not believe, or search for a holy grail (which there is really none), or go for shortcut and didn't want to be hardworking -
Lastly this is what i believe:
Is there a holy grail? The answer is no. There isn't ANY trading strategy that will make you a consistently profitable trader. Sorry to disappoint you. The only thing that will enable you to consistently pull money out of the markets is you.

You must have discipline. You must be able to take losses. You must be able to take your profits. You must eliminate fear. Put simply, you must be able to control the emotional and psychological problems that prevent success.
That will be your biggest challenge in learning how to trade stocks with any strategy.

LEARN TO MASTER FOREX TRADING : THE BIGGEST MARKET IN THE WORLD

With the increasingly widespread availability of electronic trading networks, trading on the currency exchanges is now getting hotter than ever. The foreign exchange market, FX or Forex, is previously the domain of government central banks and commercial and investment banks, not to mention hedge funds and massive international corporations. Now it has been the playground of many highly addictive punters. Forex market offers trading 24-hours a day, five days a week, and the daily dollar volume of currencies traded in the currency market exceeds USD 2 trillion, making it the largest and most liquid market in the world. In Malaysia, Forex trading has been explosive since the last twelve months in tandem with the government liberalisation of the foreign exchange accounts. More and more traders and man on the street are seduced by the merits and promises of Forex, rightly or wrongly, as compared to the other much slower financial markets. Among the killer merits of Forex trading are Forex offer zero trading commision, maximum leverage up to 500, minimum starting capital as low as USD50, minimum margin as low as 50 cents per lot, superior liquidity, 24 hours market, generally no gaps trading, automatic trading by computers, broad diversication up to 150 world currencies and finally super efficient no dealing desk (no market maker and sucker) execution. Investors and traders are attracted to the Forex market simply because of these merits. The question now is, are they able to trade in the market successfully, and if they enter the market, how long does it take for them to achieve their aim?

Based on research by Forex brokers, only 5% of the traders achieve consistent profit results, 90% totally lose their money and the other 5% operate at break even point. From this statistics, it can be realized that it is very difficult to trade the Forex market. It is difficult as well, trying to get to the top of other endeavors like writers and musicians and even other businesses. Comparatively, the success rates are almost the same. Despite the fact, many traders became victims to several ponzi forex schemes who claimed that they can made a hefty 100% a month or even a week !!

Before delving further into the realities of Forex, it is important to know some basic concepts of Forex. What is traded in the Forex market? The instrument traded by Forex traders and investors are generally currency pairs, which is the exchange rate of one currency over another. The most popular traded currency pairs are:

EUR/USD: Euro Against Dollar
GBP/USD: Pound Against Dollar
USD/CAD: Canadian Dollar Against Dollar
USD/JPY: Yen Against Dollar
USD/CHF: Swiss Franc Against Dollar
AUD/USD: Aussie Dollar Against Dollar

Although it is possible to trade exotic currencies such as Kenya Tenge and Iraq Dinar, they are not advisable for novice traders as it involved high degrees of volatility and speculation. Note that the first and second currencies quoted of each pair are known as the base and counter (quote) currencies respectively. Each pair is expressed in units of the counter currency that is needed to get one unit of the base currency. About 85% of the entire volume generated in the Forex market is generated by these currency pairs. If for example, a trader goes long or buys the pound, he or she is at the same time buying the GBP and selling the USD. If he or she goes short or sells the Yen, he or she is at the same time selling the JPY and buying the USD.

Using 1.325CHF to get one USD means that the price or quote of the currency pair USD/CHF is 1.325.

Bid/Ask Spread

Currency pairs always come with bid and ask price; the bid price is always lower than the ask price. Bid price is the price one’s broker is willing to buy at and the trader should sell at. On the other hand, the ask price is the price one’s broker is willing to sell at and the trader should buy at.

For example, if we have GBP/USD 4.321/23 or 4.321/3;

Trader will sell at the bid price which is 4.321
Trader will buy at the ask price which is 4.323

A Pip

Pip is the acronym for “price interest point” and it is the lowest incremental move a currency pair can go through. For example, a move in the USD/CAD from 1.723 to 1.731 equals 8 pips and a move from EUR/USD from 107.23 to 108.24 equals 1.01 pips. Generally speaking, a pip is worth between USD6 to USD10 depending on the currency pairs traded.

Margin Trading (Leverage)

As opposed to other financial markets where the full deposit of the amount traded is required, in the case of Forex market, only a margin deposit is required. Your broker will grant the rest.

Some brokers such as InterbankFX, MigFX and NorthFinance can provide leverage up to 400:1 which means that you need only 1/400 or .25% in balance in addition to floating gains/losses. Most brokers however offer 100:1 for which every trader requires 1% in balance to open up a position.

For example if a trader wants to get long one lot in EUR/USD and he/she is using 100:1 leverage, he/she requires 1% in balance or $ 1000 USD, that is,

1/100 × $ 100,000 USD = $ 1000 where $ 100,000 is the standard lot size in the Forex market.

Traders however are cautioned that high leverage can be a double edged sword. If one opens a position with limited funds in our trading balance and the trade goes against our trader, the broker has to close this position. Hence, it is advisable not to open a position with limited funds. This leads us to the term known as Margin Call.

Margin Call

This normally occurs when money management is misapplied resulting in the balance of the trading account falling below the maintenance margin, that is, the capital required to open one position , 1% when using the leverage of 100:1 or 2% when using the leverage of 50:1 etc. Theoretically, the trader is left with only the maintenance margin when the broker sells off or buys back, in the case of short positions, of all their trades. It is important that traders have sufficient capital to withdraw any temporary gyration in trading the Forex market.

For example, let’s take a case of a trader who has analyzed the market and decided that there is a higher probability for the British pound to go up. If he decides to go long risking 30 pips and having a target or reward of 60 pips and the market goes not in his favor, he will loss 30 pips. Conversely, if the market goes in his favor, he will gain 60 pips.

Assuming the actual quote of the pound is 1.8524/27, 3 pips spread and the trader gets long at 1.8530 which is the ask price; the time the market gets to either his target, that is, “take the profit order” or his risk point, that is, “stop loss level”, he will be compelled to sell it at the bid price, the price his broker is willing to buy his position back. To be able to make 60 pips, he should place his take profit level at 1.8590 bid price. If he is able to hit the target, the market ran 60 pips, that is 60 pips after accounting for the initial 3 pip spread. On the other hand, if his stop loss level is hit, the market ran 26 pips against him. Before one can adventure in a live trading account, it is very necessary for one to master every single aspect of it by starting from the very basic concepts and then proceed to the more complex issues like Forex trading systems, trading psychology, trade and risk management.

A few charts below highlighted some excitement of trading Forex with low margin and high leverage :

EUR/USD currency pair moved from 1.3347 to 1.3435 giving 88 pips or USD880 profit in three hours (88% profit on a standard lot account) !!

EUR/USD Hourly Charts (Courtesy from www.interbankfx.com)

GBP/USD fell from 1.9680 TO 1.9635 giving 45 pips or USD450 profit for traders who short the pair within 15 minutes !!

GBP/USD 15 Minute Charts (Courtesy from www.interbankfx.com)

AUD/USD fell from 0.8118 to 0.8064 giving traders who short the pair, 54 pips or USD540 profit in five minutes !!

AUD/USD 5 Minute Chart (Courtesy from www.interbankfx.com)

USD/JPY spiked from 118.83 to 119.14 giving 31 pips or USD300 pips profit for traders in just a single minute !!

USD/JPY 1 Minute Chart (Courtesy from www.interbankfx.com)

Characteristics Of Successful Traders

It is clear now that it is not easy for one to achieve huge profit in a highly leveraged instrument such as Forex. Another question that arises is that, why are some traders able to move to the top whilst others lag behind? The answer to this question is not far fetched. What is known is that, these successful traders think and behave differently towards their businesses as compared to the others. Generally, they have the following characteristic which accelerate the success rate of Forex trading, namely:

Ø Education: successful traders have in-depth knowledge and experience about what they are doing and avail themselves to learn every little thing about trading. They humbly approach the Forex market as an ordinary business which requires hardworks and dedication.
Ø Forex trading system: successful traders have devised a strongly backtested Forex trading system, and they follow it diligently with discipline knowing the higher success rate in the past attached to trades conducted through such systems.
Ø Price behavior: successful traders know the importance of reliable price action before currencies explode, they have included such price behavior in their trading system before pulling the trigger.
Ø Money management: successful traders know forex is money and odds game, they avoid the risk of ruin, by betting small and managing their money properly.
Ø Trading psychology: successful traders know that the outcome of every trade is either winning or losing can impact their spirit, they have kept themselves informed of every psychological issue affecting decisions made by traders. They understand that occassionally they have to stomach big losses before taking even bigger profits.

Though it is possible to make huge money by trading the Forex market, it is not as easy as one may think. The length of time for which one realizes consistent profit results differs from one trader to another. In some cases, it can take a shorter period (less than three months) to achieve this while in other cases; a trader can struggle through a long period of time (up to five years) but will still not achieve this feat. Finally, research shows that all successful traders made losses in the early trading stage. Hence, all novice traders must understand that losses are part of trading game. Successful trader Ever Klipp famously said “you must love to loss money and you must hate to make money to be a successful trader. In other words, you have to overcome your humanness,” Instead of viewing losses as a threat, treat them as a crucial part of trading. What Ever Klipp believe is that taking a loss improves a trader’s self-discipline and self-control in the subsequent trades. To summarize, trading successfully in the Forex market is a very difficult task as this is a lengthy process which can take a long period of time to bring a trader’s effort to fruition. Nevertheless, if a trader accustoms himself to the characteristics above, the learning curve should be shortened significantly. Bear in mind, Forex trading is not an overnight get rich quick scheme. It should be regarded just like other career which should take years to complete a bachelor degree, perhaps additional few years to complete a master degree, another few months to go through probation and finally another few years to be a proven practitioner master.

STI fell to low of 2962 on 18 Aug.

It has now risen from this low to near previous high. In fact, the index is about 100 points away from previous high.

Let's do a hypothetical question.
If STI is near to previous high, what will you do?
Will you:-
1. Buy some more
2. Sell into strength
3. Wait and see, if break above previous high, buy
Well, if your answer is 2 or 3, then the resistance by previous high would be a strong resistance where people might be using this chance to sell out in profit, or break even point ( as those who didn't sell would likely have sat through the fall and now wait to sell at break even).
Regardless of which choice, resistance at previous high is likely to be very strong.
On the indicator, MACD-H shows potential bearish divgerence while RSI and Stochastic move towards the overbought region.
Well, it might be better to put some money in pocket first (to secure part profit).

Wednesday, September 19, 2007

Candle Sheds More Light Than The MACD

Let's take a trip off the beaten path. We'll administer some necessary medicine to a revered technical indicator - the moving average convergence divergence (MACD).
Enough articles have been written about the MACD to depopulate half the world's rain forests, but little has been said about the downsides of using this very popular tool. In short, the MACD doesn't work as well as some say it does. It's a glorified moving average, and it's weak at forecasting price direction. In this article we'll cover the controversial perspective of those who spurn the use of this prevalent indicator and what can be used in its place. (For background info, see Trading The MACD Divergence, Keep An Eye On Momentum and Moving Average Convergence Divergence - Part 1 and Part 2.)

The MACD's Seduction
When applied over a long time frame, the signals generated by a given moving average will often seem very random, but a moving average can be a seductive indicator. An exponential moving average is just advanced enough to entice the delight of the technically-minded, but is not so arcane as to perplex the rest of us.And although anyone could program charting software to reprint the physical separation between any two moving lines, so far, only the MACD holds that claim. This is an attribute that fascinates many traders, while the MACD histogram provides an added air of sophistication.
The true allure of the MACD, however, is that it requires interpretation, in particular with regard to convergence or divergence from upper-screen price action. According to critics of the MACD, this alone has guaranteed its perpetual placement in the pantheon of trading studies - once an idea can be interpreted, it can be elevated to mystical status.

The Good Side of the MACD
Supporters of the MACD argue that there have been countless times when the venerable work horse presaged a profitable move. They would also argue that the MACD is a tool that can be used to quickly gauge the short-term direction of an asset's momentum, without the need for the skills of a professional trader. Readings above 0 indicate that the short-term moving average is accelerating faster than the longer-term moving average, which most traders would view as a sign that the short-term upward momentum is increasing. The opposite is true when the MACD values are below 0. Having an outlook on future momentum, as predicted by the MACD, allows traders to have greater confidence about when they enter a given trade because the underlying momentum is working in their favor.

The Ugly Side of the MACD
However, it is possible that the MACD's success is a result of chance - after all, even a stopped clock is correct 730 times each year. When used as an entry signal to the lush pip-filled world lurking just beyond the hard right edge of our computer screen, the MACD fails time and again - just what we should expect from any mathematically averaged smoothing of past price action. If only we could trade in reverse!Those inclined to count how many pips can fit on the head of a pin might wish to tweak their MACD in an attempt to make it even more predictive. This is a bit like feeding a variety of performance enhancing drugs to a snail and watching to see whether its meandering trail will bend just a little more to our liking. But would it help us to know where the snail is going next? No, we won't have a clue, and the snail probably won't either.
The MACD uses 26 periods as its farthest backward-looking value. On a 15-minute chart, 26 periods total six hours and 30 minutes. Fifteen minutes goes by pretty fast. There are 96 such periods in a 24 hour day - 480 in a five-day trading week. Therefore, in the grand scheme of things, a single period of 15 minutes is really just noise.Let's say it's 8am New York time and Bob is watching the 15 minute chart. What is the MACD doing? Still paying attention to what happened back at 1:30am, when New York traders were sawing logs. Nevertheless Bob is sitting there trying to get pips based on where he thinks the market is going in the next 15 or 30 minutes. He wants pips right now. What does he care about where the price was 6.5 hours ago? His favorite pair may have traded above the daily pivot during the Asian session, taken a bounce off strong-long term resistance on the London open and dropped like a rock right into the New York session.Bob is trying to divine what the Big Boys are likely to do in the next 15 to 30 minutes, which means he needs to understand what they were thinking 15 or 30 minutes ago, not in the middle of last night!In the end, the performance of moving averages and indicators based on moving averages will always be, well, average.

So let's move on. The Tools of the TradeWhat can we use to tell where price is going next?
The answer is: nothing. There is nothing in existence that can tell us where price is going next.

But there are a few simple tools that can tell us where price is likely to go next - perhaps as often as 80% of the time.

These tools include:
1. The trusty trendline
2. The reliable pivot point
3. The common candlestick

These tools are not sophisticated and require no divinity degree to interpret. In fact, they are not subject to interpretation. Let's take a closer look. Using a demo account remove all the indicators except for support and resistance (trend) lines, pivots and candlesticks.

Here is a short list of what you won't need if you follow this way of investing:
1. Moving averages
2. MACD
3. Stochastics
4. Parabolic SARs
5. Bollinger bands

The Candlestick Will Light Your Path
First and foremost, learn to recognize candlestick action. Learn all you can about the hammer, the star - the tower of strength. They are even better when they appear at pivot points or trend lines (for added epiphany think of trend lines as tilted pivots). Learn to recognize that price is a fickle thing that can change its mind faster than Hollywood actors change relationships. The price moves like the people who move it. (For more insight, see The Art Of Candlestick Charting - Part 1, Part 2, Part 3 and Part 4.) When candlestick reversals occur at places where fear and greed occurred before (tilted support or resistance = trendlines), or at anticipated price levels (horizontal support or resistance = pivot points), we have an extraordinarily high probability trade.Price zigs. A hammer at key support! Price zags. An evening star following a double top at key resistance!
And where's the MACD? It's still meandering through the charts like a picturesque mountain stream.

Conclusion
In the time it takes a MACD devotee to get out their compass and protractor and divine where price is heading next you could already be in and out of a profitable trade or two. It may go against the accepted norm, but if you give it a try you may just find yourself on a brighter path to profit.

By Gordon PhilipsGordon Philips is the director of The Institute Of Higher Earning. He is involved with distance learning programs for forex traders and stock investors, providing superior trading, investing and financial education. He also works with ForeXcellent Profits, a forex trading course and FXMoneyMachine.

Master puntfast

I had the good fortune of knowing a number of Simex locals who were highly talented traders. The important thing is not that they taught me the "how", more importantly they showed it is actually possible.

I use alot of computing power to work out various scenarios and probabalistic trajectory ...by historical matching. ...these are unique tools ...they are tools because much of the output still has to be studied and interpreted.

Many years ago one Simex trader who specialise in trading the Nikkei...he would work out the resistances and support every day before he start trading and he trade based on that and makes an average of $30K per month. How he derive those support and resistance the exact technique differs from my methodology but that is not the critical thing. The most important thing is he was very disciplined and did his homework every day and goes into each trading session with a complete plan....and he follows it.
What I learn from him is to take all the information and work out a complete plan then execute....avoid making wild/emotional decisions during the trading session everything has to be planned.

The other thing I learn is that the market is always there, it is an endless stream of money making opportunities so one should not be too eager and take too much risk ...basically don't treat any day as a 'chance in a life time" ...it is just too dangerous.

Views on the new StanChart Share-financing Scheme.

Standard Chartered Bank is tying up with local brokerages to offer a scheme under which investors can obtain financing while buying their shares.
The SharePower Plus scheme allows individuals to draw up to ten times their monthly salary to invest in shares listed in Singapore.For a start, Standard Chartered has signed up two partner brokerages for its new share financing scheme.
The two brokerages are Lim & Tan Securities and Phillip Securities.SharePower Plus provides customers with up to ten times of their monthly salary to invest in Singapore-listed shares – up to a maximum of S$200,000.They may draw on this limit when purchasing shares through any broker partner.
Lim Cheng Teck, CEO of Standard Chartered Bank Singapore, said: "So from a customer's point of view, it's totally transparent to him. He just goes to the broker, does the trade and all the administrative stuff is taken care of by the bank via the credit hub, and the interchanges between the security companies, the bank and CDP (The Central Depository). So all this is hassle-free as far as the customer is concerned."Interest is charged on the amount of credit used at a rate of 12 percent an annum.The scheme is seen as an example of how banks and brokerages can join hands to help boost the local equities market.
Hsieh Fu Hua, CEO of Singapore Exchange, said: "This is a product which actually brings out the best of brokers. We hope to see more of such launch by other banks and other brokers."There are some 250,000 active share investors in Singapore.StanChart plans to sign up other stock brokers as partners to this share-financing scheme.

Views on this Share-financing scheme.
Dr. Michael Leong aka Oldman from shareinvestor:
I think the entry of StanChart into the share margin business will help propel the Sesdaq index to new highs.Firstly, more banks are likely to join in to provide margin based on salaries. For the StanChart arrangement, my understanding is that they provide margin based on a max of 4 times monthly salary, without any margin calls. Meaning that someone with a $5K monthly income can immediately buy shares worth $20K and he will never face margin calls no matter what price his shares are in the market.StanChart also has a 10 times monthly salary offering but this comes with margin calls and I doubt many would want to take this on as the margin calls are not based on max amount available but on what has been bought. This is my understanding and feel free to correct me.Sesdaq stocks are also more valuable now. The recent backdoor listing of St James into JK Tech is a case in point. St James is a relatively new company and may not fulfil all the requirements of a Sesdaq listing but will probably fulfil the requirements of the proposed new SGX board. Hence, it was stated in the reverse takeover that they will apply to go to the new board when it is available.

This is starting to smell like the tech bubble period. Back then, most people are taking so much leverage that they lost count how much they took. Most will never touch their margin calls, so most brokers would just lend. We knew what happens after that.Now SCB is bringing CFD to the mass public and even one step better. CFD allows up to 5X of your account size. But it's off the counter. SCB one is 10 X your salary and direct with SGX.
Wow...nirvana heaven for most speculators.
I can see a mass carnage soon.

Bernanke strike hard, DOW surge....Asian markets to follow!!!

Wow....the FED makes a bold less expected move. Looks like they want to jolt the credit market out of its crunch. The DOW surge 335pts....how big is 335pts? This is the biggest one day rise in 5 years. Bigger than the rise after Fed cut discount rate in mid-Aug. ...and that mid-Aug rise propelled our markets - STI rose 100+pts and marked an important reversal. My models show STI to rise by more than 150pts and HSI to surge up by 1200pts. Today will be a BIG BIG day. I tried in my last playbook to explain the recent selling is due to reduction in exposure not something fundamentally bad happening in our markets....and that investors shouldn't follow blindly or be overly concerned. Those who reduced their exposure will now want to come back in. My expectation is for the DOW to make a move of more than 5% after the Fed cuts. It already move half that amount yesterday alone. I expect the total size of the move for STI to be about 300+ pts including today's 150pts. This will propel us just above our historic high. To see 4000 by end of the year, watch the credit markets for answers, is credit easing in the commercial paper market? ... THE STI WILL SURGE...WE WILL SEE NEW HIGHS IN THE COMING DAYS!!!

12 investment themes for 2007

Gary Shilling has laid out his 12 investment themes for 2007

Eight of them are likely to unfold this year while four will probably work but maybe not until later:

1. The housing bubble will burst. If so,
2. The Fed will ease; meanwhile, the yield curve will remain inverted
3. U.S. stock prices will fall, perhaps below the 2002 lows, in the midst of a major recession
4. China will suffer a hard landing due to domestic cooling measures and U.S. recession
5. Weakness in U.S. and China will spread globally, dragging down economies and stocks
universally
6. Treasury bonds will rally
7. The dollar will rally, but not before the recession is global
8. Commodity prices will nosedive
9. Maybe global and chronic deflation will commence in 2007.
10. Maybe U.S. consumers will start a long-run saving spree, replacing their 25-year borrowing and spending binge
11. Maybe deflationary expectations will become widespread and robust
12. Speculative areas beyond housing may suffer in 2007

Tuesday, September 18, 2007

Ken Fisher on Market Analysis (From 4/7/06)

Guru Grades ranks a group of 29 stock market experts according to our assessments of the accuracy of their stock market forecasts. Since Ken Fisher has been at or near the top of the list since inception, we asked him to encapsulate his thinking on anticipating financial markets. He graciously agreed. Here is Ken Fisher on market analysis:
Forecasting (Macro and Micro) and Future Concepts
by Ken Fisher
When Steve LeCompte asked me to explain how I work, I was flattered. As background, at 55 years old, I have been in the investment advisory world all my adult life, founded a firm that runs more than $30 billion with 800+ great employees and written the Forbes "Portfolio Strategy" column and its predecessor for 22 years. I have written three books -- the first one also 22 years ago -- and published many other things in many different places. It’s not like the world needs a lot more words from me.
So, what I decided to do here is try to summarize what I think are the most important elements of market analysis. My experience tells me that the only basis for making a bet is believing somehow, some way, that I know something other people do not know. If I make bets based on things others widely believe, I will end up being wrong/unlucky as often as I am right/lucky, with transaction costs leaving me worse off than if I made no bets at all.
The Value of Knowing Something Others Do Not Know
Pretty much everyone would agree that knowing something others do not know is worthwhile. But how do you get there?
Most investors treat investing as a craft. Craftsmanship is an age-old human modality based on passing skills from generation to generation in fields as diverse as the building trades, blacksmithing, medicine, accounting, law and jewelry making.
Professional investors and investment advisors typically go to school and then extend their learning via apprenticeship with a master craftsman focused on a particular investing style (value, growth, small capitalization...). Once they learn the craft, they "practice" like a doctor or a lawyer. They seldom try to change the craft, and the rare changes they introduce are minimal because they believe the craft basically sufficient to the task at hand. Craftsmanship is fine. I want any doctor hacking into me to have had one heck of a lot of mentoring and practice. But craftsmanship assumes the existing body of knowledge is sufficient, and that kind of complacency does not support outperformance in investing. Markets discount all widely known information, including the traditional craft.
We do not know much today about how capital markets work compared to what we will know 10, 20, 30 and 50 years from now. One way to know something that others do not know is to be the first to envision the capital markets technology of the future. I focus on building capital markets technology that explains parts of the investing world never understood before.
The Three Questions
When I envision the future, I try to answer three basic questions. In fact, I am in the process of writing a book about these three questions that I hope to have out in early 2007. Briefly, the three questions are:
1) What do I believe that is actually wrong?
2) What can I fathom that others do not?
3) What is my brain doing to mess me up right now?
I used to read the media and see something posited that I thought wrong. I would run off to do the statistics to prove that I was right — that there was no correlation there and without correlation there could be no causality. Some years later I realized I was doing the wrong thing. I should instead monitor the media for ideas with which I agree, and then check to see whether these ideas are actually wrong. I am better trained, apprenticed, educated and practiced as an investor than the average person, so if I believe something is right when it is actually wrong, most of the world is probably about to get snookered. Suppose I, along with most people, believe X causes Y. But through systematic self-critique, I determine that my belief is wrong. X does not, in fact, cause Y. Then X happens, and most people bet on Y, but I bet against Y. I have an edge, what finance theory calls the rational basis for a bet, because I know something others do not know. That takes care of question one.
Suppose no one has a clue what causes Q, and most people therefore pessimistically think it is a waste of time to try to figure out what causes Q. To me, such an abandoned field is fertile ground for exploration. I start contemplating what variables might generate causality. I seek correlations, and then look inside them for causality consistent with fundamental economics and capital markets theory. Invariably, I try to link any conclusions back to shifts in supply and demand for securities. I have had successes with this approach. In this website are snippets from columns of mine going back some years — including timely warnings that the technology bubble was about to burst, even though I had previously been favorable toward technology stocks. That prediction came directly from prior securities supply and demand analysis I had done on the bursting of the energy bubble in 1980. The supply-demand dynamics for the two cases are almost identical! I have done many such analyses, the most recent on the supply-demand dynamics underlying the current stock buy-back and cash-based takeover explosion. If you make a commitment to fathom the unfathomable, you can go farther than most people think. That takes care of question two.
The third question is steeped in the post-1970s emergent field of behavioralism, which exposes and examines the dilemma of framing. When we experience problems (opportunities) presented or framed one way, we cannot see a solution; but when the problem is framed another way, we see the solution clearly and quickly. Framing is important in all fields, but solutions to financial market problems seem to be especially blinded by an endless array of bad frames. So I try to look at things upside down, backwards and inside out! I make a point of finding new perspectives. That’s how I first cooked up the Price/Sales Ratio decades ago and why I think in terms of E/P instead of P/E. Further, I always test in other countries everything that we believe works in the United States, because foreign perspectives might present better frames. That takes care of question three.
Simply Unbelievable, and Supposed to Be
Over the course of my career, I have learned many things that a lot of people do not believe. Differences in beliefs are fine with me. How else could I know something that others do not know?
For example, it is easy to prove that current account and trade deficits are not bad for an otherwise healthy economy. I know that fact and have publicly covered it a fair amount. The United States and most of the western world are not over-indebted but, in fact, markedly under-indebted and need more debt of almost any type. That assertion elicits an almost religious hostility from many people, but their anger does not negate the truth. They just do not want to believe it. I like that. When I see people freaking about a big current account deficit, I can bet against them. Understanding that we need more debt changes the way I think about many other things.
I know high P/E stock markets by themselves say nothing at all about market risk. I know if most people forecast something, whatever it is, it cannot happen, and I have learned how to forecast against the consensus with the bell curve technology I talked about in Forbes many years ago. And, as the years have gone by, I have learned how to adapt that technology to a variety of obscure markets — always trying to do something new and assuming that what I have done before will soon be obsolete. I aim all this effort at simply trying to know something that others do not know. The crazier others think my beliefs are, the better I like it. It means they will work longer. I find that rejection of seemingly offbeat views stems from a lazy reliance on market mythology. I repeat, I like that.
Within this framework, I always think globally. A global perspective helps me see my home markets better, as it would for anyone from any country. Because I spend a lot of time in Great Britain, I often compare supposed truisms in both countries and translate them from one market/economy to the other to test consistency. Both commonalities and differences teach me lessons. Britain is the best single laboratory for validating the U.S. frame of reference, although many other countries provide good tests.
For perspectives on stocks, I always think in terms of the MSCI World Index or the MSCI All Country World Index before I ever think of the S&P 500 Index. I think about the S&P 500 Index no more often than I think of the FTSE 100 or the Topix 150. I never think in term of the Dow — haven’t in decades. Our long-term interest rates are fully set in global markets, so I think in terms of global money supply growth, global interest rates and global yield curves. My firm is nearly unique in systematically maintaining a set of all those global statistics, rather than domestic ones, as a decision-making framework. Late in 2005, as the yield curve in the United States inverted, lots of folks assume that bad times lie ahead. Because of the adequately steep global yield curve, I am unconcerned. Major banks will just borrow in one country and lend in another. At worst, the inversion of the yield curve in the United States argues for underweighting domestic securities in comparison with foreign stocks. Most people see my view as simply unbelievable. And that’s fine with me.
It's Boring, But It's Boring Down
Next, I think in terms of sectors and countries, looking deeper via the three questions for what I can know that others do not. For example, I have learned that, other things being equal, federal budget deficits are great for future stock returns. Therefore, I look for countries where deficits are worse than expected, with investors illogically recoiling in fear. I bet against that fear. Ultimately, I progress from selecting countries and sectors to picking specific stocks within them. I want to own individual securities, because it is way too expensive in the long term for active investors to own packaged financial products. (Packaged products are OK for passive investors who accept not knowing something that others do not. Just not my style.)
When Graham and Dodd prepared the third edition of Security Analysis, the last revision they did themselves, mutual funds and other packaged products were well known — tiny by today’s standards but still well established. That edition appeared 11 years after the Investment Company Act of 1940, in large part a regulatory reaction to the emerging world of mutual funds. Yet Graham and Dodd purposefully did not include mutual funds in their book — not even a mention. They considered them to be artificial securities unworthy of real security analysis. They would look askance at the degree to which current investors use expensive packaged products today in preference to primary portfolio building blocks. I want to hold the underlying fundamental securities.
So, I am finally down to picking individual securities. Stocks! Bonds! Primary instruments! It is easier to do this now than it was 25 years ago. Back then, there were so few securities in most categories that it was hard to find stocks (except those of tiny firms) not completely picked over by everyone else. Today, with over 20,000 equities around the world you can find many relatively ignored opportunities. All I do is choose those with underappreciated attributes and good relative pricing from within the categories I like.
We're All Still Blind and Seeing the Wrong Frames
I am sure I do not see myself accurately. None of us do. Our mental machinery was not built to do this stuff. We got our brains from thousands of generations past, and our brains are little evolved from their brains. I have a neo-stone-age information processor in my head trying to deal with a post-industrial information explosion in extremely complicated capital markets that my great, great grandfather could never have contemplated. The biggest advantage I have over most people is I know I am blind. But even if I screw up a lot, and I do, I have been getting by using the approach described above for more than a third of a century. My time is running out fast, with less ahead of me than behind. I am not yet quite adjusted to that fact.
Meanwhile, I like what I do. I like looking for new things. I like trying to figure out the next new thing. I like it when I shift frames and discover something that was right in front of me the whole time — that makes me feel really stupid. It is awe inspiring. Developing new things is the most important, exciting and contributing part of being alive at this point in human evolution. It is a lot more fun than applying, with a few minor modifications, some craft I learned 30 years ago. If I were a doctor or accountant, I would get bored fast. I hope to have some more years to have fun.