I Have been rather busy the last 2-3 months
1. RT, or reservist training, this requires you to go for a physical mass exercise at the army camp twice a week for phase 1 (total 4 weeks) . If I fail, I need to go for phase 2 - 3 times a week . Having my neck injury last year prevented me from training for my IPPT.
And being not fond of running, I failed my IPPT the first time (after 3 weeks, 1 week was CNY). I passed all my station except my 2.4 km running which was 14:04.
Well running 3 km everytime really trained my physical fitness, and I improve leaps and bound. Finally on the 2nd time (the 2nd week of RT phase 2 - total 5 weeks), I manage to clear my 2.4km at 12:48. I really had to push myself very very hard to pass. I remembered when I ran my 5th round, my timing was ard 11:05, so I almost sprinted throughout my last lap to the extent of vomitting.
There were 2 things which helped me pass IPPT. First, I really trained and push myself during the RT to train up my physical fitness. It is really our own determination and preseverance whether we want to put any effort during the RT. One can just go to RT and waste time, but I prefer to make full use of it.
The 2nd thing, (maybe it worked for me only) I took some red bull before my run. I felt it boosted some of my strength and feel less fatique during the run.
Well the incentive of passing is that I pass last year and this year !
2. My MIL was feeling rather depressed after her ops, and so she came to my place for recuperation. At least over here, she will have less things to think about. So she was here for about 3-4 weeks. And this made me rather busy as I had to take care more of my son with my wife taking care of her.
3. My wife was involved in a car accident and 2 months after the accident, the other party issued a legal letter to us claiming medical fees and legal fees. These people are really greedy and unscruplous. My wife car hit their car from a stationary postition (both cars was stationary before my wife pressed on the accelarator), It was my wife fault (she was really very stressed during that time with work and her mother operations) and we agreed to pay for the car repairs which came out 4k ( their toyotoa corolla) . Our car was only slightly dented.
During the settlement, we agreed that there were no injury. This was also stated in the report filed to the insurance. However 2 months later, they wanted 8K -10K a person (3 person) and 3k of legal fees each !
In the medical report, it just stated there were only soreness detected. No X-ray no MRI. Of the 3 person, only 1 got 1 day MC, the rest went home the day itself !
We could either reject their claims and fight legally or negotiate with them. Our insurance company suggested the best way was to negotiate with them, as the legal fees at the end of the day might be more than the negotiated amount. I agreed with the settlement although I felt rip off because my wife would be the person who has to spend the time if we go to court. At that time, her mother was having depression and her company was going to retrench people. I think the best thing to save hassle is to settle this. If this happened to me, I will go to court against them. Money is not an issue, If they want to play punk I will play along, it is a matter of principals, I do not want to get rip off and stamp upon.
Well at the end, through the insurance company advise we settled this at 4.5 K a person (including legal fees). What a rip off!
4. My company I am in is doing badly. We had a restructuring where our section was badly hit (20%). Then, 1 person left on his own with no replacement coming in. His job responsibility was assigned to me, and effectively I am doing 2 persons responsibility. I had to work several weekends and even during CNY, I had to work till 2-3 am to finish my work. Also to make it worse, with the restructuring many things/personnel heads were new and had to start from scratch (Business reports and Sales incentives calculations)
Things at least came down quite a bit, with some negotiating some of my previous work (1o%) to my manager, and setting up certain guidelines and framework already , I also manage to automate some stuff.
As a result, my shorting of the market was disastrous. I actually wanted to short the market in Jan (860+) when Obama was giving his speech, however I fell asleep as I was really tired out and I missed the opportunity. S&P dropped to 660+ before rebounding. It rebounded 5% when Citigroup announce they are operational profitable, and futures was postive, and I went in to short (721). It was really v emotional and stupid. After shorting, actually I knew I was v wrong, but I was hopeful that it was a short bounce. Wrong, it went up till I finally covered at 771. Actually I should have considered cut loss quick and change to another position (higher reward risk ratio).
Risk reward ratio was not really there shorting. It was a costly mistake.
I have to really learn from my costly mistake, when I do not have time, do not short (trade). Emotion was also running high which made me into an errenous mistake. What was I thinking ? I was thinking maybe S&P may hit 600... but the risk reward was really not there. Really dumb of me.
Is this the bottom ? Nobody knows, but S&P after 2-3 weeks is around 815+ ( a rally of >20% from its low).
Where to go from here ? Obama and the FED are committed to spent and spent their way out. Is it sustainable and will this lead to the recovery ? I believe yes, but at a costly price of hyperinflation with things to come. Oil has already recovered fr a low of 34+ to 53+. A bit late to get inside.
My portfolio has also took a beating down 30% with Celestial dropping fr 37 to 10 cents. Its PE is now less than 1 (0.7) and P/B of 0.1/0.7. A steal and is really a golden opportunity. Why did it hit so low ? Many China companies are facing accounting scandals, inflated cash (FibreChem), receivables cannot be reconcil, suddenly bankrupt although record profit the quarter before (Ferrochina), owners who pledge their shares for loans suddenly have to pay up (beauty China) and they do no have the cash.
Also, it has a convertible bond that they might potentially have to pay back (1200+ Mill RMB) in June 09. With their full-year report, they are net cash of 810+ cash, short of 400+ if we consider full conversion. This risk was also highlighted by PWC auditors.
There are some risk here, however this is what I feel
1. Many scandals in the US lately (Madoff) are caused with dubious/ficticious auditors. At least PWC has audited them and cleared their financial balance sheet.
2. This is the worst scenario of 100% converesion. I will expect prob 60-80%.
3. When they announce their soya bean zone which costs 1bil RMB, they had only 0.1 bill annual profit. They had pulled through risker projects before and I believe they should be able to pull this through
4. Although credit is tight, banks in China are still lending ( recent reports show China banks lending increase last few months). Banks generally will lend you money if you show that you have little issue of paying off. With strong cash flow of 500+ RMB a year, and Net tangible assets of 2-3 bill RMB, I believe banks will lend to them.
5. I have read some forums of the risk of transmitting RMB/other currency overseas. This is overblown as I see it. Many multnational companies have to do business overseas, it will just take longer (some custom declartion) to transmit the legitimately overseas.
All these cause Celestial to become dirt cheap now. Most people are now keeping clear of China companies . I have been buying because at this price it is really a 20-30 bagger in the making.
What are Celestial future plans ? In end Q1 they are rolling out the 100 K tonnes biodiesel business - a opportunistic time with hyperinflation (I expect oil to be the first one to shoot up) coming. They are also rolling out protein nutrional beverages 15K and 5K of powder. With retail products the contributing 56% or revenue and almost 72% of gross profit, I believe with their brand name and distribution scale they can quickly scale this up.
I am formulating some plans now to see my next step.
Showing posts with label trading. Show all posts
Showing posts with label trading. Show all posts
Friday, March 27, 2009
Monday, December 22, 2008
Transactions Dec W2 - oil
Oil dropped from a high of 147 to a low of last week of 40 a barrel.
It then went up about 47 dollars last week. On Friday last week it dropped to 44.7 (Dec contract) and 47.75 Jan Contract due to the saving of Big 3 automobile manufacturers did not go through in congress.
This was my thoughts - they will definetly pass them, Tuesday Fed will cut rate, Wednesday OPEC issued that they will cut supply heavily to balance the ideal price for oil.
So I bought on weakness, with Friday night ending at 46.7+. Monday it rose to above 50 dollars but crash downwards after US release dismal manufacturing data 45 dollars +. Tuesday Fed cut rate to 0.25. Initially it rose, together with US stocks market hitting 4-5%. However, oil slid further to 43.8.
What the heck, Wednesday when OPEC agreed to its biggest supply cut ever (2.2 mill barrels ), it rose a bit then tanked further. Wednesday was my trading date to pull out. Before the OPEC meeting, I just put a price at 47.8 and it got hit.
I was lucky to scrap this flat. From how I see, speculative trades are still in play. with Dec futures ending that week, most people are closing their positions. So we see a long squeeze andthere is a big gap in the next month's contract. (<3-4 dollars)
Lucky in the sense that I initiated the later contract, which was not played that badly and did not fall badly. Things to learn is that 1) I should still monitor US economic news. 2) I should learn to grap big profits even though I have a deadline to exit.
Things that I did well... at least I cut before the OPEC announcement.
Another bad move, the Singapore Share I shorted is Wilmar. Why ? Because it did not decline as much as other blue chips, and palm oil prices are down by more than 50%. Its results have been supported by financial hedging and not real profits. Anyway as I expected oil to rise, I close this at a loss 2.9 fr 2.65.
I am waiting for the automobile bailout and rise in Euphoria to short again.
Last Friday as I was going on a trip, I place an order as I believe it will drop further and I think with the recent rally, it has some sufficient margin. The automobile bailout came that night, too bad, US market rose about 2% but ended flat.
Lets see how things play out.
It then went up about 47 dollars last week. On Friday last week it dropped to 44.7 (Dec contract) and 47.75 Jan Contract due to the saving of Big 3 automobile manufacturers did not go through in congress.
This was my thoughts - they will definetly pass them, Tuesday Fed will cut rate, Wednesday OPEC issued that they will cut supply heavily to balance the ideal price for oil.
So I bought on weakness, with Friday night ending at 46.7+. Monday it rose to above 50 dollars but crash downwards after US release dismal manufacturing data 45 dollars +. Tuesday Fed cut rate to 0.25. Initially it rose, together with US stocks market hitting 4-5%. However, oil slid further to 43.8.
What the heck, Wednesday when OPEC agreed to its biggest supply cut ever (2.2 mill barrels ), it rose a bit then tanked further. Wednesday was my trading date to pull out. Before the OPEC meeting, I just put a price at 47.8 and it got hit.
I was lucky to scrap this flat. From how I see, speculative trades are still in play. with Dec futures ending that week, most people are closing their positions. So we see a long squeeze andthere is a big gap in the next month's contract. (<3-4 dollars)
Lucky in the sense that I initiated the later contract, which was not played that badly and did not fall badly. Things to learn is that 1) I should still monitor US economic news. 2) I should learn to grap big profits even though I have a deadline to exit.
Things that I did well... at least I cut before the OPEC announcement.
Another bad move, the Singapore Share I shorted is Wilmar. Why ? Because it did not decline as much as other blue chips, and palm oil prices are down by more than 50%. Its results have been supported by financial hedging and not real profits. Anyway as I expected oil to rise, I close this at a loss 2.9 fr 2.65.
I am waiting for the automobile bailout and rise in Euphoria to short again.
Last Friday as I was going on a trip, I place an order as I believe it will drop further and I think with the recent rally, it has some sufficient margin. The automobile bailout came that night, too bad, US market rose about 2% but ended flat.
Lets see how things play out.
Monday, December 8, 2008
thoughts on crisis
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.
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.
Transactions Dec 08 W1
I closed my shorts in early november at 919, and was resisting it (S&P is down 34+ % YTD) . It was a horrid Sep & Oct. However, S&P US market went down further, excaberated by the financial worsening. The auto big 3 companies in US was also facing bankruptcy. I expected them to be bailed out, but as always, the US congress needed some fighting before it got approved. S&P sank to 750+, just before I left for my trip. WHen I came back, it was going up almost every day (5-6 days continous) till 890+.
I shorted 10 at 870 on Monday evening. I was deliberating till the evening as I was busy with work to think through. But after going up for so many days, it was ripe for a fall. US unemployment figures was going to be released on Friday.
Monday dropped 8+% wipping of most gains the last week, Tuesday, it did not break and recover to 840+ and Wednesday 870+. I was thinking of covering, but heck wait till the unemployment data came out. Thursday it drop to 848 which I covered 5, and covered another 5 at 828 once the unemplyment figures came out. It was expected bad, and I quickly covered the rest. As expected, US market rallied on bad news to close at 870+.
I have to be very careful with shorting.
i) The market is now rallying on bad news with the short term low at 750.
ii) I expect the auto makers to be bailed out
iii) Obama wants to spend the greatest amount on infrastructure - Deficit is not important...big words
iv) 22 Jan is Obama ascendancy to his presidency... I expect a good rise till then
v) I find that those who have sold have already sold already, leaving inexperienced shorts.
vi) Things are likely to get worse with more bankruptcies on its way
vii) Just some personal feeling, experiencing the Christmas festival in the city, gives me a good/sombre feeling. Even if I have shares, I will not sell even if I was in a bad shape - next year willl probably be different
Portfolio down 6.8% this YTD. Celestial (my biggest holding) is now 36 cents, PE of 2.8. Longs 44%, shorts 5%. (A singapore share)
I shorted 10 at 870 on Monday evening. I was deliberating till the evening as I was busy with work to think through. But after going up for so many days, it was ripe for a fall. US unemployment figures was going to be released on Friday.
Monday dropped 8+% wipping of most gains the last week, Tuesday, it did not break and recover to 840+ and Wednesday 870+. I was thinking of covering, but heck wait till the unemployment data came out. Thursday it drop to 848 which I covered 5, and covered another 5 at 828 once the unemplyment figures came out. It was expected bad, and I quickly covered the rest. As expected, US market rallied on bad news to close at 870+.
I have to be very careful with shorting.
i) The market is now rallying on bad news with the short term low at 750.
ii) I expect the auto makers to be bailed out
iii) Obama wants to spend the greatest amount on infrastructure - Deficit is not important...big words
iv) 22 Jan is Obama ascendancy to his presidency... I expect a good rise till then
v) I find that those who have sold have already sold already, leaving inexperienced shorts.
vi) Things are likely to get worse with more bankruptcies on its way
vii) Just some personal feeling, experiencing the Christmas festival in the city, gives me a good/sombre feeling. Even if I have shares, I will not sell even if I was in a bad shape - next year willl probably be different
Portfolio down 6.8% this YTD. Celestial (my biggest holding) is now 36 cents, PE of 2.8. Longs 44%, shorts 5%. (A singapore share)
Monday, November 17, 2008
Celestial 2008Q3 performance
Key Highliights:
• Sales rose 28.1% to RMB581.7 million
Growth in sales volume of industrial products
Overall increase in selling prices
• Net profit up 54.6% to RMB162.1 million
Due to unrealised exchange gain of RMB63.2 million
• Maintains healthy financial position and cash flow
Net cash provided by operating activities of RMB205.1 million
Cash and cash equivalents of RMB1.4 billion
• Trial run for biodiesel facilities commenced in late October
Singapore, November 14, 2008 - Mainboard-listed Celestial NutriFoods Limited (天圜 营养集团有限公司) (“Celestial” or the “Group”), a leading soybean protein-based food & beverage products manufacturer in the PRC, today announced its results for the three months ended September 30, 2008 (“3QFY2008”).
The Group posted a 28.1% growth in total sales from RMB454.3 million in the three months ended September 30, 2007 (“3QFY2007”) to RMB581.7 million in the quarter under review. Net profit surged 54.6% to RMB162.1 million from RMB104.8 million in 3QFY2007.
In 3QFY2008, the Group maintained a healthy and satisfactory financial position and cash flow, with net cash provided by operating activities of RMB205.1 million and cash and cash equivalents of RMB1.4 billion as at end of this quarter.
Outlook and Future Plans
Due to overall concern on food hygiene, sluggish stock and property markets and the uncertain domestic economy in the PRC resulting from the global economic downturn, the Group believes that retail sentiment will continue to be depressed. In addition, managing the costs of raw materials will remain challenging for the Group despite the fairly stable raw materials market in the quarter under review.
“We will continue to observe market trends and raw material price trends closely, and take necessary actions to sustain our competitiveness and our leading position in the industry. We also hope that the economic stimulus measures announced by the PRC government will boost economic growth in the country, as well as improve consumer confidence, and in turn, induce
higher domestic consumption,” said Mr Ming.
My thots.........
It reported a credible performance of 25 RMB or profit of RMB 162 Mio.....notice the way they made the announcement. They have no intention of hiding that the quarter performance is boosted by foreign exchange rate on their convertible bond.... this is a testament of honest management. Other companies may not even highlight this.
It also reported that no dividend may be given in this Q3. I believe this is prudent, and also shows the candid and honest relation with shareholders . It could have waited for Q4 and just remove the dividend.
I believe all economies and companies will face great challenge ahead in 2009. However, I believe the strong management will manage to continue to deliver satisfactory performance, and will boost strong growth when the upturn comes. China is in one of the best economy to weather this global recession. It has one of the highest foreign reserves, and has the economic power to stimulate its economy with stimulas package on infrastructure and cutting interest rates.
Celestial price is now 36 cents with projected PE of 2.4 . I will continue to hold and add to my holdings at opportunistic down prices. It is now trading at depressed valuations and has the potential of being a multi-bagger with a market cap of 230 Mio (636 Mio shares outstanding). I will compare this vs Want Want which has a market cap of a few billions dollars, and has the potential to reach its height.
Portfolio now down 8% with 44% vested. I have been a good boy, closing my shorts position as I think Oct has been a torrid month. At the same time, I am also going for a short holiday in Gold Coast. This cost me 4-5 %, but bo pian.
I think it is rather risky to short now. However, last week Japan went to recession, Germany also showed a strong downturn. US data is also horrid.... Lets see, I am resisting temptation to short....
What I will do is to wait for a major change, a major bankruptcy and deploy 15 %.
• Sales rose 28.1% to RMB581.7 million
Growth in sales volume of industrial products
Overall increase in selling prices
• Net profit up 54.6% to RMB162.1 million
Due to unrealised exchange gain of RMB63.2 million
• Maintains healthy financial position and cash flow
Net cash provided by operating activities of RMB205.1 million
Cash and cash equivalents of RMB1.4 billion
• Trial run for biodiesel facilities commenced in late October
Singapore, November 14, 2008 - Mainboard-listed Celestial NutriFoods Limited (天圜 营养集团有限公司) (“Celestial” or the “Group”), a leading soybean protein-based food & beverage products manufacturer in the PRC, today announced its results for the three months ended September 30, 2008 (“3QFY2008”).
The Group posted a 28.1% growth in total sales from RMB454.3 million in the three months ended September 30, 2007 (“3QFY2007”) to RMB581.7 million in the quarter under review. Net profit surged 54.6% to RMB162.1 million from RMB104.8 million in 3QFY2007.
In 3QFY2008, the Group maintained a healthy and satisfactory financial position and cash flow, with net cash provided by operating activities of RMB205.1 million and cash and cash equivalents of RMB1.4 billion as at end of this quarter.
Outlook and Future Plans
Due to overall concern on food hygiene, sluggish stock and property markets and the uncertain domestic economy in the PRC resulting from the global economic downturn, the Group believes that retail sentiment will continue to be depressed. In addition, managing the costs of raw materials will remain challenging for the Group despite the fairly stable raw materials market in the quarter under review.
“We will continue to observe market trends and raw material price trends closely, and take necessary actions to sustain our competitiveness and our leading position in the industry. We also hope that the economic stimulus measures announced by the PRC government will boost economic growth in the country, as well as improve consumer confidence, and in turn, induce
higher domestic consumption,” said Mr Ming.
My thots.........
It reported a credible performance of 25 RMB or profit of RMB 162 Mio.....notice the way they made the announcement. They have no intention of hiding that the quarter performance is boosted by foreign exchange rate on their convertible bond.... this is a testament of honest management. Other companies may not even highlight this.
It also reported that no dividend may be given in this Q3. I believe this is prudent, and also shows the candid and honest relation with shareholders . It could have waited for Q4 and just remove the dividend.
I believe all economies and companies will face great challenge ahead in 2009. However, I believe the strong management will manage to continue to deliver satisfactory performance, and will boost strong growth when the upturn comes. China is in one of the best economy to weather this global recession. It has one of the highest foreign reserves, and has the economic power to stimulate its economy with stimulas package on infrastructure and cutting interest rates.
Celestial price is now 36 cents with projected PE of 2.4 . I will continue to hold and add to my holdings at opportunistic down prices. It is now trading at depressed valuations and has the potential of being a multi-bagger with a market cap of 230 Mio (636 Mio shares outstanding). I will compare this vs Want Want which has a market cap of a few billions dollars, and has the potential to reach its height.
Portfolio now down 8% with 44% vested. I have been a good boy, closing my shorts position as I think Oct has been a torrid month. At the same time, I am also going for a short holiday in Gold Coast. This cost me 4-5 %, but bo pian.
I think it is rather risky to short now. However, last week Japan went to recession, Germany also showed a strong downturn. US data is also horrid.... Lets see, I am resisting temptation to short....
What I will do is to wait for a major change, a major bankruptcy and deploy 15 %.
Saturday, November 8, 2008
Novemeber 1st Week Transaction
As October was a bad month, I was waiting for a re-entry. US elections was round the corner, and US market will rally with any moderate move.
On Tuesday, US market rally with anticipation of Obama winning. I entered at 996.75....yes lousy again. I also use this opportunity to close my Soyabean futures 972.( buy at 970 and went down as low as 933). I also sold SCI at 230.4
Why I entered Soyabeans ? China is a top importer of soyabeans, and last week commodity prices was rising. With the milk scare in China, it could possible create demand for soyabean products. However, I was wrong as usual, with deleveraging still going on. The BDI index was also plunging from 9000+ to 1000+ in a matter of 3 months. Better keep my commodity speculation to a minimum first. maybe wait for it to stabilise within a ban +-10% in 2/3 months before making my move.
I also closed my US futures on Friday. Wednesday+Thursday plunged by about 10% to 905. With good money, better zao. Dun be greedy. Friday may be a bounce even though the work employment numbers are coming out and GM + Ford reporting as well. STI bucked the trend and stayed flat ! Astonishingly.
Weekly Recap - Week ending 07-Nov-08
It was a tremendous week in our country's political and social history, even if it wasn't a tremendous week for the stock market.
On Tuesday the United States made history, electing its first African-American president in Barack Obama while holding true to the longstanding, democratic principle of a peaceful transition of power.
As remarkable as that proud fact is, it unfortunately doesn't change the fact that the U.S. economy is in a slump that is pressuring earnings prospects and stock prices. Accordingly, the stock market didn't spend any time basking in the monumental history that was made Tuesday, which also included the biggest Election Day rally ever in the stock market when the S&P 500 surged 4.1%.
It became evident in no time at all that the market's economic concerns weren't assuaged in the voting booth. Over the course of the two trading sessions on Wednesday and Thursday the S&P 500 dropped 10.0%.
The decline followed an 18% gain over the preceding six sessions, so it was understandable that there would be some retracement of those gains. However, the scope of the pullback made it clear that there was more behind the selling than simple profit taking.
The item that got the market's attention turned back so quickly to the ailing economy was Wednesday's ADP employment report, which estimated 157,000 jobs were lost in the private sector in October, the largest decline since November 2002.
This report followed some dismal auto sales reports for October on Monday and set a very nervous tone ahead of the government's employment report for October on Friday.
Several other economic reports compounded the selling pressure in the middle of the week. In particular, September factory orders declined 2.5%, the October ISM Services Index at 44.4 slipped below 50.0, which is viewed as the dividing line between expansion and contraction, Q3 productivity slowed to a 1.1% growth rate from 3.6%, and continued jobless claims of 3.843 million were at their highest level since 1983.
The disappointments weren't confined solely to economic news either. Another wave of cautious-sounding guidance from corporate America also factored heavily in the action.
Tech bellwether Cisco (CSCO) led the pack of disappointments with a warning that its fiscal second quarter revenues were expected to decline 5% to 10% as most enterprise customers across all industries it serves are facing a very challenging business environment.
Separately, influential banking analyst Meredith Whitney of Oppenheimer & Co. suggested in a CNBC interview Wednesday that she felt big banks were going to be in the position of having to complete more capital raises in coming months and that she felt many of their stocks still had a lot more downside risk in them. She feels that Citigroup (C), for one, could trade into the single digits.
On the heels of her bleak assessment, retailers on Thursday posted some lousy same-store sales results for October, with the exception of price leader Wal-Mart (WMT), which reported a 2.4% gain. Overall, same-store sales declined 0.9% (and 4.2% excluding Wal-Mart), according to the International Council of Shopping Centers.
In the midst of the reports from the retailers, it was learned that the European Central Bank cut its key borrowing rate 50 basis points to 3.25%, as expected, but that the Bank of England stunned everyone by cutting its key rate 150 basis points to 3.00%.
The move by the Bank of England was so aggressive that it was scary. Central banks simply don't cut rates in this fashion, unless they feel they are way behind the curve with the appropriate monetary policy as it relates to economic prospects.
The Bank of England for its part said there has been a marked deterioration in the outlook for economic activity at home and abroad and that it took the action it did to guard against inflation undershooting its 2.00% target.
It deserves pointing out that the annual rate of consumer price inflation in the U.K. was 5.2% in September or just ahead of the 4.9% growth rate in the U.S. where the fed funds rate is now 1.00%. From the market's vantage point then, the Bank of England, as well as the ECB, still hasn't cut rates enough to help forestall a protracted, global economic slowdown.
This brings us to Friday's employment report, which didn't contain any good economic news.
Nonfarm payrolls declined 240,000 (consensus -200,000) and the prior month was revised to show a decline of 284,000 positions versus an originally reported loss of 159,000. Job losses were seen in all areas in October, with the exception of modest gains in education and health services and government.
The unemployment rate rose from 6.1% to 6.5% (consensus 6.3%). Hourly earnings were in line with expectations, up 0.2%, as was the average workweek at 33.6 hours.
1.2 million jobs have been lost over the first 10 months of 2008, but tellingly, over half of those losses have occurred in just the past three months.
Ironically, in the wake of the worst economic news of the week, the stock market rallied on Friday, jumping 2.9% in a broad-based effort. The upside move was even more striking considering Disney (DIS) had disappointing earnings, Qualcomm (QCOM) provided fiscal first quarter revenue and earnings guidance well below current consensus estimates, and both Ford (F) and General Motors (GM) posted massive third quarter losses while showing they were burning through their cash.
Ford used $7.7 billion in cash in the quarter while GM used $6.9 billion. GM went on to say that, looking into the first two quarters of 2009, the company will fall short in capital unless economic conditions improve, it can gain access to capital markets, can sell assets, or can secure government funding.
That the market would rally on this battery of bad news indicated it had already accounted for it in the prior two sessions when it fell 10%.
It would be remiss not to add that President-Elect Obama gave his first press conference during afternoon trading Friday in which he summarized a discussion he had with his economic advisory team. He mentioned four initiatives he would pursue immediately upon entering office in January: (1) a rescue plan for the middle class that would include a new fiscal stimulus package, which will be his first priority (2) working to stem the spread of the impact of the crisis on other sectors of the economy (3) reviewing the current administration's implementation of the financial program and (4) laying out policies that grow the middle class and strengthen the economy for the long term.
When Obama acknowledged that he doesn't officially take over until January and will stand by to let the current administration see things through to the end of its term, the stock market gave back over half of the day's gains. However, the session ended on a positive note as a late rush of buying interest left the indices near their highs for the day, which were seen just before President-Elect Obama started his press conference.
So, while President-Elect Obama has made it clear that he wants to bring change for the country, it was clear that things remained the same for the stock market, which had another volatile week of trading.
The volatility is a by-product of the uncertainty about the timing of an economic recovery and a nettlesome belief that consensus earnings estimates for the fourth quarter and 2009 still haven't been lowered enough to reflect the economic deterioration.
In brief, there was a lot of emotion during this historic week, yet it was fundamentals -- or the perception at least that fundamentals are weakening -- that seemed to be driving the market.
--Patrick J. O'Hare, Briefing.com
**For interested readers, the S&P 400 Midcap Index, which isn't included in the table below, declined 5.1% for the week and is down 37.1% year-to-date.
On Tuesday, US market rally with anticipation of Obama winning. I entered at 996.75....yes lousy again. I also use this opportunity to close my Soyabean futures 972.( buy at 970 and went down as low as 933). I also sold SCI at 230.4
Why I entered Soyabeans ? China is a top importer of soyabeans, and last week commodity prices was rising. With the milk scare in China, it could possible create demand for soyabean products. However, I was wrong as usual, with deleveraging still going on. The BDI index was also plunging from 9000+ to 1000+ in a matter of 3 months. Better keep my commodity speculation to a minimum first. maybe wait for it to stabilise within a ban +-10% in 2/3 months before making my move.
I also closed my US futures on Friday. Wednesday+Thursday plunged by about 10% to 905. With good money, better zao. Dun be greedy. Friday may be a bounce even though the work employment numbers are coming out and GM + Ford reporting as well. STI bucked the trend and stayed flat ! Astonishingly.
Weekly Recap - Week ending 07-Nov-08
It was a tremendous week in our country's political and social history, even if it wasn't a tremendous week for the stock market.
On Tuesday the United States made history, electing its first African-American president in Barack Obama while holding true to the longstanding, democratic principle of a peaceful transition of power.
As remarkable as that proud fact is, it unfortunately doesn't change the fact that the U.S. economy is in a slump that is pressuring earnings prospects and stock prices. Accordingly, the stock market didn't spend any time basking in the monumental history that was made Tuesday, which also included the biggest Election Day rally ever in the stock market when the S&P 500 surged 4.1%.
It became evident in no time at all that the market's economic concerns weren't assuaged in the voting booth. Over the course of the two trading sessions on Wednesday and Thursday the S&P 500 dropped 10.0%.
The decline followed an 18% gain over the preceding six sessions, so it was understandable that there would be some retracement of those gains. However, the scope of the pullback made it clear that there was more behind the selling than simple profit taking.
The item that got the market's attention turned back so quickly to the ailing economy was Wednesday's ADP employment report, which estimated 157,000 jobs were lost in the private sector in October, the largest decline since November 2002.
This report followed some dismal auto sales reports for October on Monday and set a very nervous tone ahead of the government's employment report for October on Friday.
Several other economic reports compounded the selling pressure in the middle of the week. In particular, September factory orders declined 2.5%, the October ISM Services Index at 44.4 slipped below 50.0, which is viewed as the dividing line between expansion and contraction, Q3 productivity slowed to a 1.1% growth rate from 3.6%, and continued jobless claims of 3.843 million were at their highest level since 1983.
The disappointments weren't confined solely to economic news either. Another wave of cautious-sounding guidance from corporate America also factored heavily in the action.
Tech bellwether Cisco (CSCO) led the pack of disappointments with a warning that its fiscal second quarter revenues were expected to decline 5% to 10% as most enterprise customers across all industries it serves are facing a very challenging business environment.
Separately, influential banking analyst Meredith Whitney of Oppenheimer & Co. suggested in a CNBC interview Wednesday that she felt big banks were going to be in the position of having to complete more capital raises in coming months and that she felt many of their stocks still had a lot more downside risk in them. She feels that Citigroup (C), for one, could trade into the single digits.
On the heels of her bleak assessment, retailers on Thursday posted some lousy same-store sales results for October, with the exception of price leader Wal-Mart (WMT), which reported a 2.4% gain. Overall, same-store sales declined 0.9% (and 4.2% excluding Wal-Mart), according to the International Council of Shopping Centers.
In the midst of the reports from the retailers, it was learned that the European Central Bank cut its key borrowing rate 50 basis points to 3.25%, as expected, but that the Bank of England stunned everyone by cutting its key rate 150 basis points to 3.00%.
The move by the Bank of England was so aggressive that it was scary. Central banks simply don't cut rates in this fashion, unless they feel they are way behind the curve with the appropriate monetary policy as it relates to economic prospects.
The Bank of England for its part said there has been a marked deterioration in the outlook for economic activity at home and abroad and that it took the action it did to guard against inflation undershooting its 2.00% target.
It deserves pointing out that the annual rate of consumer price inflation in the U.K. was 5.2% in September or just ahead of the 4.9% growth rate in the U.S. where the fed funds rate is now 1.00%. From the market's vantage point then, the Bank of England, as well as the ECB, still hasn't cut rates enough to help forestall a protracted, global economic slowdown.
This brings us to Friday's employment report, which didn't contain any good economic news.
Nonfarm payrolls declined 240,000 (consensus -200,000) and the prior month was revised to show a decline of 284,000 positions versus an originally reported loss of 159,000. Job losses were seen in all areas in October, with the exception of modest gains in education and health services and government.
The unemployment rate rose from 6.1% to 6.5% (consensus 6.3%). Hourly earnings were in line with expectations, up 0.2%, as was the average workweek at 33.6 hours.
1.2 million jobs have been lost over the first 10 months of 2008, but tellingly, over half of those losses have occurred in just the past three months.
Ironically, in the wake of the worst economic news of the week, the stock market rallied on Friday, jumping 2.9% in a broad-based effort. The upside move was even more striking considering Disney (DIS) had disappointing earnings, Qualcomm (QCOM) provided fiscal first quarter revenue and earnings guidance well below current consensus estimates, and both Ford (F) and General Motors (GM) posted massive third quarter losses while showing they were burning through their cash.
Ford used $7.7 billion in cash in the quarter while GM used $6.9 billion. GM went on to say that, looking into the first two quarters of 2009, the company will fall short in capital unless economic conditions improve, it can gain access to capital markets, can sell assets, or can secure government funding.
That the market would rally on this battery of bad news indicated it had already accounted for it in the prior two sessions when it fell 10%.
It would be remiss not to add that President-Elect Obama gave his first press conference during afternoon trading Friday in which he summarized a discussion he had with his economic advisory team. He mentioned four initiatives he would pursue immediately upon entering office in January: (1) a rescue plan for the middle class that would include a new fiscal stimulus package, which will be his first priority (2) working to stem the spread of the impact of the crisis on other sectors of the economy (3) reviewing the current administration's implementation of the financial program and (4) laying out policies that grow the middle class and strengthen the economy for the long term.
When Obama acknowledged that he doesn't officially take over until January and will stand by to let the current administration see things through to the end of its term, the stock market gave back over half of the day's gains. However, the session ended on a positive note as a late rush of buying interest left the indices near their highs for the day, which were seen just before President-Elect Obama started his press conference.
So, while President-Elect Obama has made it clear that he wants to bring change for the country, it was clear that things remained the same for the stock market, which had another volatile week of trading.
The volatility is a by-product of the uncertainty about the timing of an economic recovery and a nettlesome belief that consensus earnings estimates for the fourth quarter and 2009 still haven't been lowered enough to reflect the economic deterioration.
In brief, there was a lot of emotion during this historic week, yet it was fundamentals -- or the perception at least that fundamentals are weakening -- that seemed to be driving the market.
--Patrick J. O'Hare, Briefing.com
**For interested readers, the S&P 400 Midcap Index, which isn't included in the table below, declined 5.1% for the week and is down 37.1% year-to-date.
Monday, November 3, 2008
Oct W4 Transactions
Portfolio YTD down 1% with the Celestial now up reaching 45.5 cents. PE now 3.4 still cheap cheap :). Celestial just released a report on 31 Oct that they will release results at 14 November. With this, I believe their results should not come too bad. (no profit warning). I hope for a pleasant surprise as some upside might be seen with a better results after the earthquake in Sichuan on 12 May. I suspect it will be around +-10%.
I closed my S&P shorts at 936.25, (from 945... yes I went in again...and yes I let a potential 100K off when it was down 10% to around 830...., the ASIAN market distracted me, I thought with ASIAN markets plunging, US market has to do the same, and I was waiting for the big captitulation which did not happen) the day after the big surge.
I closed my S&P shorts at 936.25, (from 945... yes I went in again...and yes I let a potential 100K off when it was down 10% to around 830...., the ASIAN market distracted me, I thought with ASIAN markets plunging, US market has to do the same, and I was waiting for the big captitulation which did not happen) the day after the big surge.
I was deliberating whether to close my shorts after previous day 10% surge (yucks). After a few hours, the US market was deliberating between negative and positive, so I believe the sellers who want to sell have already sold. With this, I close my shorts as it has been a terrible October for stocks, and VIX had been reaching precendedly high of 80+. DOW had not had a positive through day till the last 2 days of October. I was actually deliberating whether to close my shorts the day before as it had been going down about 5 days in a row. Last Friday, S&P ftures hit a down of 855, however it closed 2+ percent down. STI closed on Friday down 6-7%.
1 Lesson learnt here is in the global crisis, emerging market will be hit more even though the orginator is in the US.
In October, the Dow Jones industrial average fell 14.1 percent and the broader Standard & Poor's 500 index lost 16.9 percent as the panic over a now-easing freeze in credit markets shifted to fears of an acute recession.
1 Lesson learnt here is in the global crisis, emerging market will be hit more even though the orginator is in the US.
In October, the Dow Jones industrial average fell 14.1 percent and the broader Standard & Poor's 500 index lost 16.9 percent as the panic over a now-easing freeze in credit markets shifted to fears of an acute recession.
Tuesday, February 5, 2008
Jan 2008 Investments
Was around 35 % vested going into the New Year. With China Milk and SMRT my big counters.
But the last day I saw Dow dropping heavy. Jia Luk, looks like it was a foreboding warning for me. I quickly pared down my holdings on the opening of 2008 to 14%. Looks like my hand itchy is getting me into trouble.
As expected, Dow continued dropping the next 2-3 weeks from 13200 to 11800+.
STI dropped from 3400+ to 2780+ about a drop of 20+%. I was already itching to go in, but I was waiting for Dow to drop before buying the next day. Monday was a US holiday you see, and STI drop 6% on Monday and about 5% on Tuesday but recovered to about 1.5%.
Well, helicopter Bernake in the early morning cut interest rate by 75 basis points to 3.5%, limiting losses to Dow. The next 1-2 weeks Dow rebounded to 12800, having 4 out of 5 days positive. STI also rebounded to 3100.
I tried to enter UOB the next day as I expected limited downside. little expect as the banks staged a late rally the day before, UOB after 1 hour + dropped into the red. I panicked and quickly cut of, sustaining losses (17.06 to 16.86). This shows that emotions is still running and affecting me. I should just wait out at least 1 week. It rebounded to a high of 18.6+...sigh.
Lesson learnt, control emotions , wait for 1 week at least. (Short covering, + oversold position. Any stable news will surge upwards)
Portfolio down by 1.3 % as compared to STI down more than 10 %.
But the last day I saw Dow dropping heavy. Jia Luk, looks like it was a foreboding warning for me. I quickly pared down my holdings on the opening of 2008 to 14%. Looks like my hand itchy is getting me into trouble.
As expected, Dow continued dropping the next 2-3 weeks from 13200 to 11800+.
STI dropped from 3400+ to 2780+ about a drop of 20+%. I was already itching to go in, but I was waiting for Dow to drop before buying the next day. Monday was a US holiday you see, and STI drop 6% on Monday and about 5% on Tuesday but recovered to about 1.5%.
Well, helicopter Bernake in the early morning cut interest rate by 75 basis points to 3.5%, limiting losses to Dow. The next 1-2 weeks Dow rebounded to 12800, having 4 out of 5 days positive. STI also rebounded to 3100.
I tried to enter UOB the next day as I expected limited downside. little expect as the banks staged a late rally the day before, UOB after 1 hour + dropped into the red. I panicked and quickly cut of, sustaining losses (17.06 to 16.86). This shows that emotions is still running and affecting me. I should just wait out at least 1 week. It rebounded to a high of 18.6+...sigh.
Lesson learnt, control emotions , wait for 1 week at least. (Short covering, + oversold position. Any stable news will surge upwards)
Portfolio down by 1.3 % as compared to STI down more than 10 %.
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