Close friends have seen and know there was going to be a bear rally in Apr, and indeed it has. Dutch analyst Charles Nenner has predicted S&P hitting 1000 before a new bottom. We all knew it but we know not to bet on greed.
So I have missed the boat, so the stocks I was monitoring have easily doubled, and regrettably my funds did not arrive in time to buy in those shares to take advantage of it. But I know that greed and not purely investment strategies are what kills off savings; because fundamentally it is all greed and just senseless betting.
Nobody could catch the right moment to buy or sell and recent revelations showed losses in Barclays and BoA by our "elite" investment local arms. The figures are just horrendous and I am speechless on why no heads are rolling for this. Perhaps it was just a few individuals who made those decisions and those individuals are not mere mortals who are accountable to nobody.
Anyway, I have recently lambasted friends who have asked me where is the doomsday scenario as we previously thought and discussed about; is it coming? It is obviously sheer anger that the fear created resulted in less money making opportunities. Quite often when the opposite happen, I do not get thanks. Well let's just see how things go about, but for now the right thing to move on from here is just observations from an inexperienced engineer, your judgment calls and courage should be purely your decision.
Observations
1)Billions if not trillions have been wiped out from the financial markets, where have they gone to?
2)Millions globally have lost their jobs, is there employment rising or just a slower rate of unemployment?
3)Many are still stuck with their high stock prices which many are still holding on to, for eg. Google back at > $700 vs now $400+, so have they even out or make back those losses?
4)Who is playing the market now? - it is perhaps those who have survived the previous onslaught to pour forth their well guarded savings, or perhaps take on additional loans or mortgages to take a chance on the recent unpredicted run in the stock markets? We all know that institutional firms have already taken flight with retail taking up 80% right now, so when will the retail run out of funds to fuel this run?
5)Companies are cashing in on their stocks; or raising cash by selling rights, etc to merge or buy up competitors, invest in new equipments etc. Is there real demand to sustain this buying, investments?
6)Is there real growth? Countries all over the world were giving out cash incentives to spend, adopting monetary policies, creating demand - is it all sustainable?
7)Technically speaking, if this was a recession, it probably would be sustainable. But before this "bear" rally, we were all comparing this mess to be the same or bigger magnitude than the Great Depression and now openly known to be only the Great Recession. What has changed? Is there more employment now? Does every household in USA, UK fully paid up their overpriced homes? Or are they still stuck with huge mortgage payments? Is the number of companies filing for bankruptcies stopped? What are the retrenched workers doing to sustain living?
8)Most companies have been squeezed off their profit margins to help with their clients to sustain their businesses - same logic as us seeing huge massive sales 30-70% off their usual prices. Housing as well 20-40% off, everywhere in the world. But hasn't jobs been lost and many expats all over going back home? Is there rental to sustain the buying? Do we need more that 5 pairs of shoes for this year? Would then companies' earnings drop further? The spiraling effect is still there. To maintain profit margins, staff has to be cut, pay has to be cut and that indirectly cuts demand.
9)In October last year, almost every company cut production to a near halt in the manufacturing line, prompting huge job cuts and eventually inventories were reduced, thereby making business financial reports looks better. Right now from March onwards, there was a inventory correction as orders came in, but sustainable? Most manufacturing companies have no forecast beyond Q3/4.
Should people then take opportunity now to cut losses or to allow normal market corrections? Perhaps this is all sustainable, that people make money from stocks can fuel the growth. Ask yourself if it is possible to have real growth now? How many people actually made money from equities? How about the retrenched manufacturing worker who now barely can make ends meet; will she be indulging in playing the market? Will she benefit from the recent run up? Are companies starting to hire? The unemployment numbers have slowed - not recovered. Yet people seem to analyze it as a recovery. The recent run up has most certainly slowed down the inevitable if there is no real value created soon.
Like an Abu Dhabi SWF who recently reaped a $2.5 billion profit from selling Barclays, they are taking on a different stance of our local "elite" boys' favorite business strategy "to buy high sell low"? Where will these billions go to? And how about those billions lost, where have they gone to?
Real value like Obama's great vision to invest in education, green programmes will lead to job creation and in turn lead to real value being create, that is the way to go, but it will take time. Not from the mere past 6 months...the worst is definitely not here yet. But I do recognize greed when I see one...and I still believe in saving what we have for a rainy day. Perhaps Singapore with the enbloc-millionaires and high savings citizens, we might avoid such happenings, with sufficient funds moving around and the absence of Shitty Times warning but more often publishing news of recovery in the horizon, giving the false pretext that our largely exposed economy is now on track to recovery. But do note that right now, besides jobs credit, there is no real creation of value and jobs besides offering Filipinos thousands of jobs in our upcoming casino. We might actually live in this delusion and spend our way out of this mess! Let's just see if our billions wiped out from our investment funds, might actually be channeled to save the crisis! The world should perhaps say a thank you to us Sillyporeans instead of mocking us as idiots throwing away 30-50 billion dollars to Australia, US, UK and now we are buying into Asia, China stocks when the local bourses have already risen 40% since Jan?
Buy high, sell low - new slogan for Temasek and GIC?!!!!!!!!!!
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