Kept closely to my short term trades and sold off C &BC for a small profit. Also sold off my CM (0.4), a bit emotional on my part but I find that the next few months milk demand will go down. So even though it is an innocent party, it will still be affected. After I sold, it rebounded as it was at a depressed price...sigh.
Shorted S&P on 1208 on Tues ....wanted to cover on Friday as I thought the Bill is going to be passed, however I overslept...in the end covered at 1210.5. A small loss
On Monday...wanted to long SIMSCI as STI has been dropping from Tuesday to Friday last week. Long 10 SIMSCI at 299.3...it reached till 302.8 before dropping.... In the afternoon, I was deliberating whether to wait for the bailout news to be announced as SIMSCI was still dropping. I close it at a lost at 294.3. Furthermore Dow futures were dropping. My rationale is that in a bear market, longing is very dangerous especially it is speculative, so I cut off my loss.
On Monday, Fortis and some banks in UK were going belly up. Their CDS doubled within a week and had liquidity problems. Fortis had to be partly sold and nationalised. In the US some banks were also having issues. I shorted S&P in the US morning at 1176 (down 44 points) I was feeling rather naked in a bear market. What if I am wrong...I can still hold. If I don't short, my position will be quite bad. After I shorted, I realise I might be shorting at a low position, so I put a cover at 1169. After which, I made an order at 1176 again.
Somehow or rather, I could not sleep very well. My order was filled at around 3am. I went to turn on the TV at around 4-5+... wah I thought I saw wrongly...S&P at 1107.... Dow had drop 777 points as Congress did not pass the Bill.
In the morning, I tried to make a sell order for SIM SCI at 281.8 (fr 291), unfortunately futures only reach 281.7 ! So morning it went as low as 275+ before making a restounding recovery to 291 ! There was more fear in me, that is why I did not do too much. As most shares rose back, I bought Celestial at 0.53 (-0.05). I also closed my S&P short at 1129. (VIX over 40+ and big fall)
Most shares recovered , but not Celestial. I think it is not justified. Probably some big funds are still trying to unload.
Celestial is now trading at PE of 3.7. With the milk scandal going on, will it get affected ? My view is that sales might slow down, however, it will be buffeted by some people who switch from milk to soya bean. This will probably last 3-6 months (1-2 quarters), however I think this will be a good opportunity to grab an excellent company.
CN has shown over the years to increase revenue and profit. It posses strong branding which is one of the top 500 retail brands in China. It also posses top technology evident by the government decision to award it the Soyabean technology zone, as well as its additional industraial products it has diversified to. Is it shareholder friendly ? I believe its dividend policy is much better that other China companies. I will continue to hold and add to much position if it goes down further.
Well, Dow (4%)/S&P has rallied on Tuesday after the big slide on news the bill may be reinstated. Let see how things work out.
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