1) Many countries are spending huge on infrastructure
Developing countries will benefit more from this. Why ? Infrasture building will create jobs for devleloping countries, and once these infrastructure are up, they will support growth for other industries eg. airport -> Travel, highway -> Trade ,ports->trade etc
How would Developed countries benefit, as I can see nothing much. first, jobless bankers will not be construction workes, 2nd infrasture building have less effect on future growth in other industries.
That is why I am holding tight on my China shares.
If I was the govenment in US, to stimulate growth I will be investing in high tech R&D, alternate energies, space travel (new industries) etc.
2) Companies now should be relooking into their business, shortening their account receivables,wary of giving too much credit (means that companies are lending money), credit reviews on customers which are in bad financial shape.
3) An interesting thing now is that alot of companies convertible bonds are trading at discounts on the dollar. For example, Noble which issued bonds at a high price, can pay a discount to buy them back. This mean that financially stronger and more sound companies can buy back their bonds on the cheap. I will do more analysis on Celestial bonds on a later stage.
4) This recession is set to last as banks horde cash, drying up capital to business. Credit card crisis will hit next year.
Showing posts with label Strategy. Show all posts
Showing posts with label Strategy. Show all posts
Monday, December 8, 2008
Sunday, October 19, 2008
Transactions
After a big crash last week of almost 15% (recovered on Friday -6% to -1.9%), US equites rebounded 13% on Monday night. STI on Monday went up to 6 % and another 7% on Tuesday. I sold 3 SIMISCI at 272.2 (Fr 255), SGX 30 contracts at 6.12, 4 S&P 1043 and 6 1053. Long 10 Nymex mini-oil at 82.9. I had expected a long overdue rally on Monday. So I went in to short on Tuesday STI. S&P futures was positive also. It went as high as 1059 as Paulson went live to talk on the bailout package.
My idea is a pairing where I long oil and short S&P, where if markets go up, oil long will cover my shorts. If markets drop, I expect markets to drop harder than oil.
Very wrong, oil dropped faster than S&P futures. I cut oil at 77.9 as it was speculative. At least my S&P drop could compensate my losses. Why I long oil
- oil with less supply than demand is still a bull market for oil
Why I cut oil and my conclusion.
- entry is important
- oil with reduced demand due to recession
- speculative positions will be cut
- trading firms are now getting their credit lines cut, therefore cutting their position further
- 55 dollars is a good entry point
I also close all my short positions on Friday.
SGX 5.61 (Thursday - very stuipid)
SIMSCI 241.2
S&P 946
Why I close my shorts, did not want to lose a winning position.(more emotional than any logical thinking)
My thoughts right now
(-) things will probably get worse
(-) credit card crisis will be next
(+) LIBOR credit swaps are getting slightly better
(+) FED will purchase 250 billion of shares in Financial institution
(+) Warren Buffett is buying
(+) VIX very very high (70+)
(+) Oil is dropping
(+) Bad news follows a drop before rallying. The situation could be changing to rallying on a bad news. Sentiments are really bad now which is a contarian indicator.
I am anticipating a mini short volatile movement up. Lets see when VIX drop to 50+ or S&P at 99+.
Portfolio down -16% now. with Celestial at 30.5 cents with PE is now 2.2 with expected earnings of 14 cents. Soyabean futures now trading at 905 dollars down 40% from high of 1500+ . It also declared on 13 Oct that its products is cleared of melamine.
My thoughts on S-shares.
Sentiments are quiet bad now on S-shares. My thoughts, it is only in extremely bad sentiments that stocks get battered so badly. China will be the next superpower, and good sentiments will be back, so no worries. We have already seen RMB appreciated 10% against S$ the last 1 year. A lot of people also condemn the S-shares here mentioning that HK shares are much better. Well, this is what I think - HK shares are mostly big blue chips and growth will be quite limited. S shares on the other hand have smaller capilization and growth for 5-10 baggers are there. But saying that, I agree alot of S shares here are very poor quality. No matter how attactive the PE (even 1) or PB (some even below cash value) of textile or capital intensive industries companies or cyclical companies, cashflow negative companies, I avoid them like a plaque.
My investment is still on solid companies with sustainable advantage, continuous growth, continous innovation, management who align themselves with shareholders.
My China Milk divestment was with the same principals. Even with record profits, it did not give a dividend and although it gave a dividend in Q1, it was a puny 0.5 cents. If they could justify with investment within that year, I could still give it a benefit of doubt. Thus, I sold out and reinvested back all in Celestial.
Besides Celestial, there are also a few worth investing, a cosmetic company, a shoe company, a company selling pork, and a bottle manufacturing company. All of these copmanies PE (around 3-4) is still higher than Celestial 2.2, thus I have no urgency to invest in them yet.
Sunday, October 12, 2008
Black Week (Monday- Friday)
This whole week was one of the worst week ever for US financial markets.
US market has been dropping 6 consecutive days, with the last 2 days dropping 7% on Thursday and Friday futures was actually -6% before recovering to -1.5%.
Having closed my S&P shorts at 975 (And I thought I was very greedy already from 1300), my portfolio is also suffering. It is down 23% now. (in fact down 15% last 2 days). My strategy did not do well even though I know a big bear market is coming. My strategy was to buy undervalue stocks but to sell futures. what went wrong ?
1) My shorts was not enough to cover my longs. My shorts was only 25-40%, while my longs was 50-80%
2) In a bear market, one should sell and hold, However, I traded in and out, missing some big movement.
3) My strategy ideally is to cover at a reasonable down point, and buy when it dip, however this time when I really decided to close my shorts, I left 2 big days of down movement (~10%)
4) Will have to review my strategy again.
One of the worst hit is my main investment Celestial now at 28 cents. It is now trading at a ridiculous PE of 2 and dividend yield of 7%. Anybody who buys this now definely make a ton in a few years time.
Recent news on Ferrochina's bankruptcy and China Printing and Dyeing's scandal has caused china S shares on a downward spiral with no respite. The baby is thrown out with the water basin, Is this justified ?
1) Celestial has a net cash of 300+ Mio RMB after deducting its CB and loans. (About 10 cents per share)
2) It has already spent the majority of its capital infrastructure (ex inventory I think) for its immediate expansion (15,000 ton beverages, 5000 ton powder,10,000 noodles, 5000 pasteries) lauching 2008 year end. Thus its cash position is alright
3) Being granted as a sole company in charge of the soya bean technology zone speaks volume of the trust and due dilligence done on Ming Dequan (the Chairman) and Celestial, not your Tom/Dick/Harry China textile company.
4) It has exciting plans for the company expansion, which I believe it will grow to be one of top brands in China and not in a downward spiral. Yes I think the tainted milk incident will pass in 6 months time (as in SARs ) and yes most importantly milk is not soya.
5) Why I persist in continuing buying (maybe I am stupid) is that the only companies for exponential growth you can buy is in China and not local Singapore companies (maybe 1 or 2 Raffles Education locally)
Lets see Celestial performance in the coming quarters. Soya Bean prices have been trending down almost 40% from its peak. It probably will affect industrial products like soya oil however I think it will be positive for its retail products.
I will hold my shares and see how it performs in 3-5 years time. It should give me a few baggers by then. It is a no brainer now to average down.
US market has been dropping 6 consecutive days, with the last 2 days dropping 7% on Thursday and Friday futures was actually -6% before recovering to -1.5%.
Having closed my S&P shorts at 975 (And I thought I was very greedy already from 1300), my portfolio is also suffering. It is down 23% now. (in fact down 15% last 2 days). My strategy did not do well even though I know a big bear market is coming. My strategy was to buy undervalue stocks but to sell futures. what went wrong ?
1) My shorts was not enough to cover my longs. My shorts was only 25-40%, while my longs was 50-80%
2) In a bear market, one should sell and hold, However, I traded in and out, missing some big movement.
3) My strategy ideally is to cover at a reasonable down point, and buy when it dip, however this time when I really decided to close my shorts, I left 2 big days of down movement (~10%)
4) Will have to review my strategy again.
One of the worst hit is my main investment Celestial now at 28 cents. It is now trading at a ridiculous PE of 2 and dividend yield of 7%. Anybody who buys this now definely make a ton in a few years time.
Recent news on Ferrochina's bankruptcy and China Printing and Dyeing's scandal has caused china S shares on a downward spiral with no respite. The baby is thrown out with the water basin, Is this justified ?
1) Celestial has a net cash of 300+ Mio RMB after deducting its CB and loans. (About 10 cents per share)
2) It has already spent the majority of its capital infrastructure (ex inventory I think) for its immediate expansion (15,000 ton beverages, 5000 ton powder,10,000 noodles, 5000 pasteries) lauching 2008 year end. Thus its cash position is alright
3) Being granted as a sole company in charge of the soya bean technology zone speaks volume of the trust and due dilligence done on Ming Dequan (the Chairman) and Celestial, not your Tom/Dick/Harry China textile company.
4) It has exciting plans for the company expansion, which I believe it will grow to be one of top brands in China and not in a downward spiral. Yes I think the tainted milk incident will pass in 6 months time (as in SARs ) and yes most importantly milk is not soya.
5) Why I persist in continuing buying (maybe I am stupid) is that the only companies for exponential growth you can buy is in China and not local Singapore companies (maybe 1 or 2 Raffles Education locally)
Lets see Celestial performance in the coming quarters. Soya Bean prices have been trending down almost 40% from its peak. It probably will affect industrial products like soya oil however I think it will be positive for its retail products.
I will hold my shares and see how it performs in 3-5 years time. It should give me a few baggers by then. It is a no brainer now to average down.
Wednesday, October 8, 2008
Capitulation ...Blood on the street
Wednesday.
STI is now down to 2035 (down 125+ points) on 9 October.
S&P has been down 5 consecutive days, and down about 15 % just last 5 days.
VIX has also reach a high of 50+.
European banks are now feeling the heat, with the Iceland nationalizing 2 banks. UK spending 1 trillion to prop up banks. UK is now down 5% to 4300. There was blood in the street, and reaching capitulation level.
I closed my S&P shorts at 978. I had wanted to hold it but the futures profit was too good.
I also closed my SGX shorts at 5.61. I expected a rally coming soon.
I closed my SIMSCI at 262. I actually put an order at 255, but the stupid DBSVickers call me and say cannot reach my price in the morning which was 263 (fr 268). This distracted me and emotions overcame me. I should have waited as after being down so long, and Dow went down another 4% yesterday, capitulation will reach in the afternoon. SIMSCI close at 252. Next time, think for 10 seconds and call him back.
Went into DBS 14.88 (fr 15.6+), Keppel 5.61 (fr 6.1)...it has actually been dropping 18 % last 3 days. (fr 7.2), Swiber (0.78) and Celestial (0.43).
Lesson learnt, go for big caps... for small caps have to catch extreme (10%) at least.
STI is now down to 2035 (down 125+ points) on 9 October.
S&P has been down 5 consecutive days, and down about 15 % just last 5 days.
VIX has also reach a high of 50+.
European banks are now feeling the heat, with the Iceland nationalizing 2 banks. UK spending 1 trillion to prop up banks. UK is now down 5% to 4300. There was blood in the street, and reaching capitulation level.
I closed my S&P shorts at 978. I had wanted to hold it but the futures profit was too good.
I also closed my SGX shorts at 5.61. I expected a rally coming soon.
I closed my SIMSCI at 262. I actually put an order at 255, but the stupid DBSVickers call me and say cannot reach my price in the morning which was 263 (fr 268). This distracted me and emotions overcame me. I should have waited as after being down so long, and Dow went down another 4% yesterday, capitulation will reach in the afternoon. SIMSCI close at 252. Next time, think for 10 seconds and call him back.
Went into DBS 14.88 (fr 15.6+), Keppel 5.61 (fr 6.1)...it has actually been dropping 18 % last 3 days. (fr 7.2), Swiber (0.78) and Celestial (0.43).
Lesson learnt, go for big caps... for small caps have to catch extreme (10%) at least.
Wednesday, October 1, 2008
Portfolio End Sep08
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.
Saturday, September 20, 2008
Portfolio Sep 08
with the massive roller coaster....I manage to clear out my shorts....maybe left the last big chunk of meat but too bad. The big movement out also went in too little....should just have wacked ....VIX was around 36, and 2-3 major bad news + already down 3-4 months......
What to look out for next ....3-4 months down + VIX above 33 + 2-3 major events already rally but failed....and blood on the street..... last 5 day downs 8%....
Portfolio down 5 %.
Longs 57 % + 5 % just added, cash 43 %. No shorts.
Short Term Plan
i) clear my short term investments
ii) start shorting
iii) clear my longs
With what the FED has done, it has prolong the downturn....so I see another 2 more years (total 3) of downturn till 2010...... Strategy....cover shorts in 2010...boost equity in 2010 100%..... and leverage if neccessary....and next year buy commodities.
What to look out for next ....3-4 months down + VIX above 33 + 2-3 major events already rally but failed....and blood on the street..... last 5 day downs 8%....
Portfolio down 5 %.
Longs 57 % + 5 % just added, cash 43 %. No shorts.
Short Term Plan
i) clear my short term investments
ii) start shorting
iii) clear my longs
With what the FED has done, it has prolong the downturn....so I see another 2 more years (total 3) of downturn till 2010...... Strategy....cover shorts in 2010...boost equity in 2010 100%..... and leverage if neccessary....and next year buy commodities.
Friday, September 19, 2008
Capitulation & Massive recovery Sep 08
Recounting Capitulation & Massive recovery
2 weeks ago
Freddie/Fannie Mae required a bailout, massive rally followed follow by dropping again and drop further
1 week ago,
Lehman brothers had some issues, they had the weekend to find a buyer, failing which they have to file for chapter 11. At that point of time, I felt that with the Fed digesting FN/FM, they would not have appetite for this.
Monday,
STI started dropping early in the morning. I covered 7 S&P futures which was down around -30 points at 1212. I quickly shorted SIMSCI at 7 lots 304. (went down 4 + points )
Monday Night, Lehman file for Chapter 11, Dow crashes 4 % to 1190
On Tuesday 16 sep, I covered at 6 lots 296.4. Made an order the same day sell 4 lots at 301 and got it as STI recovered. As you can see, my shorts was getting smaller and smaller..... cannot be too greedy.
As I know with STI dropping already 20+% since June to Sep (4 months) the odds are great that a rebound was coming. I know I am getting overwhelm with fear. I would probably have capitulated if not for my shorts shoring up my longs.
On Wednesday, Dow was flat the previous day. So STI recovered. I also covered back 301.6 at a small loss.I wanted to change to the DOW as Dow futures were up 18 points around 1220. I wanted to change to Dow shorts, but I put an order at 1222. So, I did not get it unfortunately.
Wednesday night, AIG ran into trouble.....they have 1 day to sort out to refinance their capital. Fed was unwilling to bail out AIG, and was pushing the banks to help bail them out. S&P crash 4.5% to 1155. I watch in unbelive as my potential profit of 37K vanished !
So how.... I was overwhelm with fear and pek chek..... so now... I have to buy from blood on the streets. I put in several orders... Hong Guo 0.18 (0.22), Beauty China 0.445 (50.5), Hi-P 35 (38), Swiber 1.03 (1.14), Celestial 0.485 (0.55) DBS & SGX (did not want to put as the minimum bid that can be placed is 10 points which is little). In the end DBS 15.50 (16.14) ...I wanted about 80 cents shortfall and it has a daily buyback in place.... and SGX 5.55 (6.04) one of the most shorted stocks.... SIMSCI 282.2 (297)
Thursday...as expected STI crashed 100+ pints or 3.8% in the noon.... a few things happened......unfortunately a friend was distracting me asking me for investment advice...this made me not monitor the SIMSCI closely...also I had to settle FixMarket stupid issue again....
In the morning, I got 100lots BC which dropped 13%, in the afternoon I saw STI climbing already...so I quickly bought 100 lots celestial. In the end only about 5 % bought ( 90K).
In the afternoon, with Central banks intervention pumping in 100 billions of money into the financial market, most Asian countries made an astonishing rebound !
Thursday night , AIG got bailed out and massive 400 point for the DOW. After Britain's Financial Services Authority (FSA) imposed a four-month ban (January 16 next year) on short-selling financial stocks on Thursday the U.S. Securities and Exchange Commission followed suit on Friday with an immediate 10-day ban (799 Financial stocks till Oct 2)
Friday STI went up an astonishing 135 points (5.4%). DOW also went up another 300 points. What a roller coasting week !
What is next...I expect something postive to happen over the weekend or next few days probably Morgan Stanley.... massive shorts covering and novice investors pouring in should boost market up another 2-3 % at least.
STI 2559 (SIMSCI 317.15), DOW (11388) S&P (1255)... SIMSCI 324.4 will look nice, S&P (1280)
DBS High Notes investors at risk Bank warns they may lose entire stake in Lehman-linked product
SOME local investors of a product linked to bankrupt investment giant Lehman Brothers have received late-night phone calls from DBS Bank warning them that their entire stake may be wiped out. The investors have their cash in a product called DBS High Notes 5 that the bank offered wealthier clients last year. It came with a promised annual return of about 5 per cent.
But Lehman's collapse on Monday means the product will be unwound and investors may only get a portion of their investment back - or none at all.
One 52-year-old customer told The Straits Times: 'I received a call from my relationship manager late Tuesday night. He told me that...my investment may amount to zero.' The man had invested $50,000 - savings he had earmarked for retirement.
A customer in her late 40s said: 'My relationship manager called and told me to be prepared to receive a letter from the bank...[it] would say something to the effect that my investments in products like High Notes 5 may be totally gone.' She invested $50,000 and US$30,000 (S$43,000) in two separate transactions.
Investors are mostly clients of DBS's priority banking unit, DBS Treasures.
The product - DBS High Notes 5 - is a 5-1/2 year structured product linked to eight underlying shares, including Goldman Sachs, Morgan Stanley, Merrill Lynch, Macquarie Bank and Lehman.
Customers who invested in Notes 5 said they were sold on the relatively high 5 per cent annual payout by DBS. But now they just want their money back. 'What we do not understand is: How can the fall of one bank cause our funds to just vanish when there are seven other stocks within the product that are still trading?' said a man whose elderly aunt invested $50,000 in DBS High Notes 5.
According to a person familiar with the matter, the largest single investment made on High Notes 5 was $2 million, although this could not be verified by DBS.
DBS confirmed that it took immediate action to notify customers once it learned of Lehman's chapter 11 bankruptcy filing.
'As soon as the news broke we immediately started communicating...to our retail investor customer base,' the bank said in an e-mail reply to The Straits Times. 'We are very concerned and understand the anxieties our customers face as they wonder what will become of their hard-earned money.'
DBS said the Lehman collapse has triggered a 'credit event' and the bank called for a redemption of the notes on Monday. It said unwinding of the product has begun and it will be at least 30 business days before clients learn of the final payout. But DBS also confirmed that investors in High Notes 5 may - 'in the worst-case scenario' - not get back their entire principal amount invested.
The product's prospectus also indicated that in a credit event such as bankruptcy, the notes 'will be terminated and the investor will receive zero payout'.
The bank said the product does not contain a guarantee that the principal will be protected. It also told The Straits Times it would 'fully investigate' claims by some customers that High Notes 5 was in fact sold on such a promise.
Meanwhile, UOB and OCBC Bank said that though some customers have invested in Lehman-linked products, the volume was 'modest' and 'negligible'. 'Since news of Lehman filing for Chapter 11 broke, we have taken a proactive approach in updating clients on the latest developments,' said UOB's spokesman.
My comments, ever since I lost almost 50% in a unit trust (albeit small around 5K invested) I never trusted bank products.
Always remind ourselves this rule : Your banker is not your friend
But Lehman's collapse on Monday means the product will be unwound and investors may only get a portion of their investment back - or none at all.
One 52-year-old customer told The Straits Times: 'I received a call from my relationship manager late Tuesday night. He told me that...my investment may amount to zero.' The man had invested $50,000 - savings he had earmarked for retirement.
A customer in her late 40s said: 'My relationship manager called and told me to be prepared to receive a letter from the bank...[it] would say something to the effect that my investments in products like High Notes 5 may be totally gone.' She invested $50,000 and US$30,000 (S$43,000) in two separate transactions.
Investors are mostly clients of DBS's priority banking unit, DBS Treasures.
The product - DBS High Notes 5 - is a 5-1/2 year structured product linked to eight underlying shares, including Goldman Sachs, Morgan Stanley, Merrill Lynch, Macquarie Bank and Lehman.
Customers who invested in Notes 5 said they were sold on the relatively high 5 per cent annual payout by DBS. But now they just want their money back. 'What we do not understand is: How can the fall of one bank cause our funds to just vanish when there are seven other stocks within the product that are still trading?' said a man whose elderly aunt invested $50,000 in DBS High Notes 5.
According to a person familiar with the matter, the largest single investment made on High Notes 5 was $2 million, although this could not be verified by DBS.
DBS confirmed that it took immediate action to notify customers once it learned of Lehman's chapter 11 bankruptcy filing.
'As soon as the news broke we immediately started communicating...to our retail investor customer base,' the bank said in an e-mail reply to The Straits Times. 'We are very concerned and understand the anxieties our customers face as they wonder what will become of their hard-earned money.'
DBS said the Lehman collapse has triggered a 'credit event' and the bank called for a redemption of the notes on Monday. It said unwinding of the product has begun and it will be at least 30 business days before clients learn of the final payout. But DBS also confirmed that investors in High Notes 5 may - 'in the worst-case scenario' - not get back their entire principal amount invested.
The product's prospectus also indicated that in a credit event such as bankruptcy, the notes 'will be terminated and the investor will receive zero payout'.
The bank said the product does not contain a guarantee that the principal will be protected. It also told The Straits Times it would 'fully investigate' claims by some customers that High Notes 5 was in fact sold on such a promise.
Meanwhile, UOB and OCBC Bank said that though some customers have invested in Lehman-linked products, the volume was 'modest' and 'negligible'. 'Since news of Lehman filing for Chapter 11 broke, we have taken a proactive approach in updating clients on the latest developments,' said UOB's spokesman.
My comments, ever since I lost almost 50% in a unit trust (albeit small around 5K invested) I never trusted bank products.
Always remind ourselves this rule : Your banker is not your friend
Wednesday, September 17, 2008
Investment/Sentiment Sep 08
STI crashes from 2600-2450 around 5 %. due to Lehman brothers collapse.... Now AIG is next....I see panic selling and blood on the streets...butDow is still very high at 11000 down 15% from 13000 YTD.
I have caution myself for buying shares, but somehow or rather I was seduced into buying...maybe overconfident
In a extreme bear market, PE 6 to PE 3 is a 50% loss..... so even PE 6 may not give you a sufficient margin.
Right now, every upday is followed by 2-3 days of crashing, so every upday is an opportunity to sell. People thinking of cashing into the upside have fallen flat.
Now, many people are anticipating the market to come down even further. When it does, people will think that they are lucky to have avoided the market.
When there is a mini rally, people will think that it is a bear rally.“It will fall further.”And usually, it really does fall further.
Again, it makes people feel that they are right not to buy.It will go up and down until a point where even the most bullish person turns bearish.“......this will repeat a few times till people believe..."Oh its another bear rally"......that is when the finally the bull will turn up.
Even me right now, my shorts have not been covering the longs.... Lately, my shorts were 40% and Longs 55%. And what I learnt,
1) don't trade shorting in a bear market. In a Bear market, sell and hold.
2) Consider the US market vs the Singapore Market. Eg, Lehman did not secure fundings over the weekend. US futures very negative, but STI not that negative yet....can cover US and short Singapore futures. As when US market open, STI may drop further.
Eg 2, US rally the previous day, and futures up the next day. It is better to cover and short the US futures.
I have caution myself for buying shares, but somehow or rather I was seduced into buying...maybe overconfident
In a extreme bear market, PE 6 to PE 3 is a 50% loss..... so even PE 6 may not give you a sufficient margin.
Right now, every upday is followed by 2-3 days of crashing, so every upday is an opportunity to sell. People thinking of cashing into the upside have fallen flat.
Now, many people are anticipating the market to come down even further. When it does, people will think that they are lucky to have avoided the market.
When there is a mini rally, people will think that it is a bear rally.“It will fall further.”And usually, it really does fall further.
Again, it makes people feel that they are right not to buy.It will go up and down until a point where even the most bullish person turns bearish.“......this will repeat a few times till people believe..."Oh its another bear rally"......that is when the finally the bull will turn up.
Even me right now, my shorts have not been covering the longs.... Lately, my shorts were 40% and Longs 55%. And what I learnt,
1) don't trade shorting in a bear market. In a Bear market, sell and hold.
2) Consider the US market vs the Singapore Market. Eg, Lehman did not secure fundings over the weekend. US futures very negative, but STI not that negative yet....can cover US and short Singapore futures. As when US market open, STI may drop further.
Eg 2, US rally the previous day, and futures up the next day. It is better to cover and short the US futures.
Thursday, August 14, 2008
Investments update
Haven't been updating so far as I have been extremely busy with work.
So what's new....as writing now, DOW is 11,640 up 100 points after reporting houses plunge by 7.6 % and foreclosure surge 55 %.... this is also 2 days after the FED's decision to close naked shorting period is over. DOW was actually down 10800+ 3/4 weeks ago with various news that a banks Freddic/Fannie/ Merill Lynch are going kaput
....so a suckers rally so far up 800 points....
My portfolio is up about 2 % ( it was up 13% highest in end May when Celestial hit 93-94 cents)...
Most of my profits is coming from my shorts
Trades so far
- 6 lots City Development from 11.6 - 10.5..... within 1 month
- 7 SIM SCI from 390 to 370.....left it to early.... mistake....should hold till blood in the street...no blood yet what for cover ?
- 10 contracts 356 to 353..... SIM SCI rebounded for 2 days from a low of 346 and I went it ....also mistake... after going down for so long and FED made the move, should wait for 1 week+ at least as it went to a high of 363...... here emotions have been affecting me as it has been sliding 3-4 weeks...
- shorted 20 lots Captialand 5.73 to 4.98 and covered.... Capitaland has more meat than City Development....CD is more astute having cleared most of their properties and less agreesive at the top.... their land bank is relatively cheap as seen in Lividia in Pasir Ris which was got really cheap in 1999 I think 200-300 psf only.
- 10 contracts from 357 to 347...... 1 mistake is that I should cover probably in the early morning if I expect a National Day/Olympic rally on Friday... here DOW was closing down 3 days and the it went down 200 points the day before..... If SIM SCI contracts is down a good portion in the early morning (at 8:45 it was trading around 343 down from 347), I should just cover
- now SIM SCI is 344 and STI has not been participating in the latest rally, so more meat is in the US market.... my current shorting is 7 S&P mini at 1300.45
- went it for a speculative play buying SGX from 7.45, cut loss at 7.05.... was expecting oil to drop....but oil did not drop till 1-2 weeks later, and the US market more important news were the bankruptcy of the banks. I was actually deliberating between SIA and SGX. I expected SGX to be more shorted, thereby more short fuel rally....this is being greedy....next time, take the safer and more direct theme related bet.... I would have earned at least 10 K and not lost 10 K if I were to employ this....knock my head..better learn
Stock portfolio wise
Celestial 51 % price now 72 cents
China Milk 13 % price now 69 cents
SMRT 3% price now 1.84 (my 2nd best gainer from 1.71....regretting did not add up)
Pokka 3 % price no 65 cents ( up 70% still in the process of a General Take over by its parent)
Maqurie Infrastructure 1%
Darco 0.6 %
S&P 7 contracts short 1300.25
Celestial reported 2nd quarter earnining...will update some of the business development.... I think it is doing rather well considering its revenue was affected by the Chengdu earthquake which affected its most profitable drink business... its profit is up 11% YoY.
I think it is an excellent business with PE around 5.8 FY 0708 and 4.7 FY 0809, which can grow sustainably with stable growth 10-20% next few years. Sentiment is quite bad now, but I am confident Mr. Market will rerate this excellent business with excellent business management.
I think I can get a 2-4 bagger in 2-4 years time. Lets see.
So what's new....as writing now, DOW is 11,640 up 100 points after reporting houses plunge by 7.6 % and foreclosure surge 55 %.... this is also 2 days after the FED's decision to close naked shorting period is over. DOW was actually down 10800+ 3/4 weeks ago with various news that a banks Freddic/Fannie/ Merill Lynch are going kaput
....so a suckers rally so far up 800 points....
My portfolio is up about 2 % ( it was up 13% highest in end May when Celestial hit 93-94 cents)...
Most of my profits is coming from my shorts
Trades so far
- 6 lots City Development from 11.6 - 10.5..... within 1 month
- 7 SIM SCI from 390 to 370.....left it to early.... mistake....should hold till blood in the street...no blood yet what for cover ?
- 10 contracts 356 to 353..... SIM SCI rebounded for 2 days from a low of 346 and I went it ....also mistake... after going down for so long and FED made the move, should wait for 1 week+ at least as it went to a high of 363...... here emotions have been affecting me as it has been sliding 3-4 weeks...
- shorted 20 lots Captialand 5.73 to 4.98 and covered.... Capitaland has more meat than City Development....CD is more astute having cleared most of their properties and less agreesive at the top.... their land bank is relatively cheap as seen in Lividia in Pasir Ris which was got really cheap in 1999 I think 200-300 psf only.
- 10 contracts from 357 to 347...... 1 mistake is that I should cover probably in the early morning if I expect a National Day/Olympic rally on Friday... here DOW was closing down 3 days and the it went down 200 points the day before..... If SIM SCI contracts is down a good portion in the early morning (at 8:45 it was trading around 343 down from 347), I should just cover
- now SIM SCI is 344 and STI has not been participating in the latest rally, so more meat is in the US market.... my current shorting is 7 S&P mini at 1300.45
- went it for a speculative play buying SGX from 7.45, cut loss at 7.05.... was expecting oil to drop....but oil did not drop till 1-2 weeks later, and the US market more important news were the bankruptcy of the banks. I was actually deliberating between SIA and SGX. I expected SGX to be more shorted, thereby more short fuel rally....this is being greedy....next time, take the safer and more direct theme related bet.... I would have earned at least 10 K and not lost 10 K if I were to employ this....knock my head..better learn
Stock portfolio wise
Celestial 51 % price now 72 cents
China Milk 13 % price now 69 cents
SMRT 3% price now 1.84 (my 2nd best gainer from 1.71....regretting did not add up)
Pokka 3 % price no 65 cents ( up 70% still in the process of a General Take over by its parent)
Maqurie Infrastructure 1%
Darco 0.6 %
S&P 7 contracts short 1300.25
Celestial reported 2nd quarter earnining...will update some of the business development.... I think it is doing rather well considering its revenue was affected by the Chengdu earthquake which affected its most profitable drink business... its profit is up 11% YoY.
I think it is an excellent business with PE around 5.8 FY 0708 and 4.7 FY 0809, which can grow sustainably with stable growth 10-20% next few years. Sentiment is quite bad now, but I am confident Mr. Market will rerate this excellent business with excellent business management.
I think I can get a 2-4 bagger in 2-4 years time. Lets see.
Friday, May 16, 2008
May review part 2 / Living with the Enemy
It is around 2 months since the rebound of the low in march.
Mistake 1
- went in puts too early. Oil has been inching up last 4-5 days. (coincidentally DOW also went up).
I was expecting oil to drop bringing in another rally from DOW. Unfortunately Oil went up again and Dow went down. I went to short it, thus shorting not at a high. Should have waited as Oil is up another day 6 days, chances are oil will go down, brining another up day.
....emotions running high
Mistake 2
- tikam to sell off celestial at 80.5 cents (75.5 previous day). Another mistake I repeated 2 years ago. Should never have sold off my best investment. PE around 5 and business up 40-50% this year. Worse still, that day I was in meeting whole day and the proxy hang up during that time. before placing an order, check how busy u r the next day.
Mistake 3
- bought back Celestial at a high of 88 cents. emotions again.... but should be okay long run.
Mistake 4
- I should have realise Celestial will be my big winner. I should have switch other stocks to this. too slow to recognise this.
What I did right.
Bought big (all available cash) when I realise Celestial made a superb business performance. At that time nearly 40% cash (10 % FD).
Entered in when fear was greatest. Did not let go of most shares/or started shorting until 2 months.
Strategy Next
- living with the enemy. I have not still an open position on SIM SCI and City Developments. Lets see how this plays out.
Mistake 1
- went in puts too early. Oil has been inching up last 4-5 days. (coincidentally DOW also went up).
I was expecting oil to drop bringing in another rally from DOW. Unfortunately Oil went up again and Dow went down. I went to short it, thus shorting not at a high. Should have waited as Oil is up another day 6 days, chances are oil will go down, brining another up day.
....emotions running high
Mistake 2
- tikam to sell off celestial at 80.5 cents (75.5 previous day). Another mistake I repeated 2 years ago. Should never have sold off my best investment. PE around 5 and business up 40-50% this year. Worse still, that day I was in meeting whole day and the proxy hang up during that time. before placing an order, check how busy u r the next day.
Mistake 3
- bought back Celestial at a high of 88 cents. emotions again.... but should be okay long run.
Mistake 4
- I should have realise Celestial will be my big winner. I should have switch other stocks to this. too slow to recognise this.
What I did right.
Bought big (all available cash) when I realise Celestial made a superb business performance. At that time nearly 40% cash (10 % FD).
Entered in when fear was greatest. Did not let go of most shares/or started shorting until 2 months.
Strategy Next
- living with the enemy. I have not still an open position on SIM SCI and City Developments. Lets see how this plays out.
Tuesday, February 5, 2008
Investments Strategy
Wallstraits forum has a thread about investment strategy.
I think this is mine.
I will consider mine as Growth Investing (Certain level of Moat) taking into account Macroeconomics environment coupled with short term trading.
Now the macro environment is bad and will get worse.
1) There was already a bull run from 2003 to 2007 (5 years)
2) The property bubble in the US has burst (It is in the news)
Someone will say if it is in the news, the share price has already discounted it. However I feel that is the tip of the iceburg and will be a self fulfilling prophecy making the housing market spin into the downturn, as from the peak it only drop about 1 year. It is still long way off. At least 1.5 - 2 years.
3) The CDOs in the finanicals are weapons of mass destruction. This will cause at least 1-2 major banks to crash.
4) The US property crash, the financial crash and after China olympics, investments in China will slow. Property markets in UK, Spain, Ireleand will also crash. The India economy which is highly dependant on the textile industry (about 50%) will also slow. China stock market is a bubble. I have heard stories that as there are many people playing the stock market, the company who employ them will hire someone full time so that the employees can concentrate on working.
What is my investment strategy now ? I guess cash (95%). I have made more than 7 times (600%) my investments from 2003. I was already cautious last year. This time is the 3rd time I am making the call that the downturn to be true.
Money can be made in the best times. In the worse times, I do not have the confident to make correct judgement calls. It is the best to stay in cash, and play my short term play.
I think this is mine.
I will consider mine as Growth Investing (Certain level of Moat) taking into account Macroeconomics environment coupled with short term trading.
Now the macro environment is bad and will get worse.
1) There was already a bull run from 2003 to 2007 (5 years)
2) The property bubble in the US has burst (It is in the news)
Someone will say if it is in the news, the share price has already discounted it. However I feel that is the tip of the iceburg and will be a self fulfilling prophecy making the housing market spin into the downturn, as from the peak it only drop about 1 year. It is still long way off. At least 1.5 - 2 years.
3) The CDOs in the finanicals are weapons of mass destruction. This will cause at least 1-2 major banks to crash.
4) The US property crash, the financial crash and after China olympics, investments in China will slow. Property markets in UK, Spain, Ireleand will also crash. The India economy which is highly dependant on the textile industry (about 50%) will also slow. China stock market is a bubble. I have heard stories that as there are many people playing the stock market, the company who employ them will hire someone full time so that the employees can concentrate on working.
What is my investment strategy now ? I guess cash (95%). I have made more than 7 times (600%) my investments from 2003. I was already cautious last year. This time is the 3rd time I am making the call that the downturn to be true.
Money can be made in the best times. In the worse times, I do not have the confident to make correct judgement calls. It is the best to stay in cash, and play my short term play.
Monday, October 29, 2007
Best Financial Advice
Gary Belsky, co-author of "Why Smart People Make Big Money Mistakes and How to Correct Them: Lessons from the New Science of Behavioral Economics":
"Be afraid when people are greedy, and greedy when people are afraid. It's basically, 'Buy low and sell high.' In general, I've been doing better than market averages when I've been handling my investments. I've basically done that by being conservative when the market is frothing and aggressive when the market is down."
Wayne W. Dyer, Ph.D., author of "Your Erroneous Zones" and "It's Not What You've Got: Lessons for Kids on Money and Abundance":
The lesson "for me was, first, pay yourself," Dyer says.
While in the Navy stationed in Guam, Dyer saved 90 percent of his pay over the last 18 months he was there. "So I came home with enough money to pay tuition for four years of school and a car. Even today I pay myself first. If you want to be financially independent by the time you're 30 years old, pay yourself first.
"When you get your paycheck, take a percentage -- between 10 percent and 30 percent -- and put that away," Dyer says. "You'll be rich enough to be financially independent within a short period of time."
Neale S. Godfrey, author of "Money Doesn't Grow on Trees: A Parent's Guide to Raising Financially Responsible Children," and chair of the Children's Financial Network:
"Step away from the television and the magazines. All they serve to do is show you how stupid you are because you've missed whatever they're talking about. It's old news. It's already happened."
The advice came from her financial adviser, she recalls. "I used to call him and say, 'Why didn't we ...?' He'd say, 'Stop it. Step away from the television. It's done.'"
She realized that he was right. "By the time you see it or read it, it's done; it's happened," Godfrey says. And if you listen and follow the hot news, she says, "You will buy at the top and sell at the bottom -- exactly what you're not supposed to do."
George Kinder, Certified Financial Planner, author of "The Seven Stages of Money Maturity: Understanding the Spirit and Value of Money in Your Life," and founder of The Kinder Institute:
"It's about the meaning, not the money. If my investing is not really deeply tied to what I think is most important in my life," he says, then, "the asset allocation, the estate plan, the retirement plan might as well be thrown out the window."
His best advice: "Hire a Registered Life Planner (a financial planner with additional training in helping clients identify and reach life goals) to help you through this," Kinder says. "Nobody can do this themselves."
A life trainer, he says, "is trained in how to elicit from a client what is meaningful and how to keep their eyes on the prize."
Robert Kiyosaki, co-author of "Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money -- That the Poor and Middle Class Do Not!":
"My rich dad gave me lots of advice. One of the better ones: There's good debt and bad debt. Bad debt is debt you have to pay for and makes you poor. If I use credit cards to buy new shoes it makes me poor. Good debt makes me rich and someone else pays for it."
One example: "I'm closing on a $17 million property and financing $14 million. That $14 million is good debt. It makes me richer every month by putting $20,000 in my pocket."
Rieva Lesonsky, co-author of "Start Your Own Business," and senior vice president and editorial director at Entrepreneur magazine:
Lesonsky's best advice "was from the owner of our magazine, Peter Shea," she recalls. "He said, 'Housing prices have gone up -- get a second mortgage and pay off your debt.' I did, and I'm debt-free."
Peter Navarro, Ph.D., author of "The Coming China Wars: Where They Will Be Fought and How They Can Be Won," and associate professor of economics and public policy at the University of California, Irvine:
"Take every piece of advice you get from any investment adviser with a barrel of salt. Most are trying to sell you things that you probably don't need or want. Think for yourself."
Navarro says he learned that lesson after a bad experience with a financial adviser. "I lost some money, then took control and never looked back," he says.
Dave Ramsey, author of "The Total Money Makeover: A Proven Plan for Financial Fitness" and host of a nationally syndicated radio show focusing on personal finance:
"A friend of mine who is a billionaire told me that he reads a book to his grandkids and I should read that book. The book is 'The Tortoise and the Hare.' Every time he reads the book, the tortoise wins. Slow and steady wins the race, and consistency matters. Get-rich-quick never wins.
"If you try to impress other people, you'll lose the wealth race, as well," Ramsey says. "It sure did give me a nice metaphor. It's a good reminder to somebody like me to keep me in check. It has implications for debt, for mutual funds, for budgets -- an overlay for everything."
"Be afraid when people are greedy, and greedy when people are afraid. It's basically, 'Buy low and sell high.' In general, I've been doing better than market averages when I've been handling my investments. I've basically done that by being conservative when the market is frothing and aggressive when the market is down."
Wayne W. Dyer, Ph.D., author of "Your Erroneous Zones" and "It's Not What You've Got: Lessons for Kids on Money and Abundance":
The lesson "for me was, first, pay yourself," Dyer says.
While in the Navy stationed in Guam, Dyer saved 90 percent of his pay over the last 18 months he was there. "So I came home with enough money to pay tuition for four years of school and a car. Even today I pay myself first. If you want to be financially independent by the time you're 30 years old, pay yourself first.
"When you get your paycheck, take a percentage -- between 10 percent and 30 percent -- and put that away," Dyer says. "You'll be rich enough to be financially independent within a short period of time."
Neale S. Godfrey, author of "Money Doesn't Grow on Trees: A Parent's Guide to Raising Financially Responsible Children," and chair of the Children's Financial Network:
"Step away from the television and the magazines. All they serve to do is show you how stupid you are because you've missed whatever they're talking about. It's old news. It's already happened."
The advice came from her financial adviser, she recalls. "I used to call him and say, 'Why didn't we ...?' He'd say, 'Stop it. Step away from the television. It's done.'"
She realized that he was right. "By the time you see it or read it, it's done; it's happened," Godfrey says. And if you listen and follow the hot news, she says, "You will buy at the top and sell at the bottom -- exactly what you're not supposed to do."
George Kinder, Certified Financial Planner, author of "The Seven Stages of Money Maturity: Understanding the Spirit and Value of Money in Your Life," and founder of The Kinder Institute:
"It's about the meaning, not the money. If my investing is not really deeply tied to what I think is most important in my life," he says, then, "the asset allocation, the estate plan, the retirement plan might as well be thrown out the window."
His best advice: "Hire a Registered Life Planner (a financial planner with additional training in helping clients identify and reach life goals) to help you through this," Kinder says. "Nobody can do this themselves."
A life trainer, he says, "is trained in how to elicit from a client what is meaningful and how to keep their eyes on the prize."
Robert Kiyosaki, co-author of "Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money -- That the Poor and Middle Class Do Not!":
"My rich dad gave me lots of advice. One of the better ones: There's good debt and bad debt. Bad debt is debt you have to pay for and makes you poor. If I use credit cards to buy new shoes it makes me poor. Good debt makes me rich and someone else pays for it."
One example: "I'm closing on a $17 million property and financing $14 million. That $14 million is good debt. It makes me richer every month by putting $20,000 in my pocket."
Rieva Lesonsky, co-author of "Start Your Own Business," and senior vice president and editorial director at Entrepreneur magazine:
Lesonsky's best advice "was from the owner of our magazine, Peter Shea," she recalls. "He said, 'Housing prices have gone up -- get a second mortgage and pay off your debt.' I did, and I'm debt-free."
Peter Navarro, Ph.D., author of "The Coming China Wars: Where They Will Be Fought and How They Can Be Won," and associate professor of economics and public policy at the University of California, Irvine:
"Take every piece of advice you get from any investment adviser with a barrel of salt. Most are trying to sell you things that you probably don't need or want. Think for yourself."
Navarro says he learned that lesson after a bad experience with a financial adviser. "I lost some money, then took control and never looked back," he says.
Dave Ramsey, author of "The Total Money Makeover: A Proven Plan for Financial Fitness" and host of a nationally syndicated radio show focusing on personal finance:
"A friend of mine who is a billionaire told me that he reads a book to his grandkids and I should read that book. The book is 'The Tortoise and the Hare.' Every time he reads the book, the tortoise wins. Slow and steady wins the race, and consistency matters. Get-rich-quick never wins.
"If you try to impress other people, you'll lose the wealth race, as well," Ramsey says. "It sure did give me a nice metaphor. It's a good reminder to somebody like me to keep me in check. It has implications for debt, for mutual funds, for budgets -- an overlay for everything."
Tuesday, September 4, 2007
Investment Strategy and Sentiment Sep07
Investment Strategy
After the recent rebound, I was not able to particpate fully in the recovery. On the following day after the Fed rate cut, I entered extra 13% in ASL Marine, CSC and Hiap Seng. Although it gave me decent returns, it was insignificant compared to my portfolio.
I discover that I have to refine my investment strategy due to my size of my portfolio. My past investment strategy on looking at small caps is not as effective as I cannot enter and exit as easily.
1) I cannot concentrate on small caps, but have to look at the mid and blue chips right now. The small cap volumn is too small to go in or out.
2) Each entry will have to have at least 13% to be effective.
3) With my bearish sentiment, I will have to have a hit and run strategy on the blue chips. What are interesting ? UOB (Share buyback) 18.2, OCBC (Ningbo IPO) 7.6, Keppel Corp 9.8 (Oil Rigs), Singtel (Bharti)
Investment Sentiment
With the elections coming in 2008, I believe Helicopter Berneke will pay lip service on the inflation topic, and flood easy money to the economy. He is handpick by Bush to take over Greenspan. Will he cut this sep18 ? Although that is the worst option, I believe he will.
I think the US economy will tailspin into stagflation, and while US Stock market may go higher, I prefer to stay in the sideline. Like what Warren Buffet mention,
...Orgies tend to be wildest toward the end. It's like being Cinderella at the ball. You know that at midnight everything's going to turn back to pumpkins & mice. But you look around and say, 'one more dance,' and so does everyone else. The party does get to be more fun -- and besides, there are no clocks on the wall. And then suddenly the clock strikes 12, and everything turns back to pumpkins and mice."
After the recent rebound, I was not able to particpate fully in the recovery. On the following day after the Fed rate cut, I entered extra 13% in ASL Marine, CSC and Hiap Seng. Although it gave me decent returns, it was insignificant compared to my portfolio.
I discover that I have to refine my investment strategy due to my size of my portfolio. My past investment strategy on looking at small caps is not as effective as I cannot enter and exit as easily.
1) I cannot concentrate on small caps, but have to look at the mid and blue chips right now. The small cap volumn is too small to go in or out.
2) Each entry will have to have at least 13% to be effective.
3) With my bearish sentiment, I will have to have a hit and run strategy on the blue chips. What are interesting ? UOB (Share buyback) 18.2, OCBC (Ningbo IPO) 7.6, Keppel Corp 9.8 (Oil Rigs), Singtel (Bharti)
Investment Sentiment
With the elections coming in 2008, I believe Helicopter Berneke will pay lip service on the inflation topic, and flood easy money to the economy. He is handpick by Bush to take over Greenspan. Will he cut this sep18 ? Although that is the worst option, I believe he will.
I think the US economy will tailspin into stagflation, and while US Stock market may go higher, I prefer to stay in the sideline. Like what Warren Buffet mention,
...Orgies tend to be wildest toward the end. It's like being Cinderella at the ball. You know that at midnight everything's going to turn back to pumpkins & mice. But you look around and say, 'one more dance,' and so does everyone else. The party does get to be more fun -- and besides, there are no clocks on the wall. And then suddenly the clock strikes 12, and everything turns back to pumpkins and mice."
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