Mid Week Pit Stop #24

Characteristics of various markets

I will like to expose you to various markets. Yesterday, someone came to me and told me to focus on local (singapore) market when I was about to give a presentation on stocks basically. It struck me and I was thinking why only on singapore market? Honestly speaking, STI is not a good index to some extent. How can you have 3 big banks that have about 40% weightage on the index? Not a very good index isn't it? Worse still, STI is a funny market that doesn't have a mind of its own and this is something I will like to talk about later on.

Personally, I think you should be opened to various markets, not only to various asset class as well. Please, don't get stuck in just singapore market for the locals. Opening your mind is what I hope to achieve in this post.

1. The biggest market of all - US market. I like this market a lot. It is a pretty straightforward market that has a mind of its own. At least all markets look at the US markets and follow it to a large extent. Bluechips fall and rise with great swings and the gains are much more respectable compared to those found in Singapore. It is more reflective to some extent. There are tons of companies to choose from, though sometimes, too many choices aren't that great to begin with. Nonetheless, you have a true market that makes sense and is logical.

2. Local market - Singapore. No mindset of its own. Bluechips are really bluechips that make me feel blue looking at them. Follows japan opening at 9am, looks at hongkong at 10am. Sleeps all the way till 1230pm. Opens at 2pm and adjust to japan. Wait for Europe to open at 3pm. Yup, that's all. Intra day trading is boring. I don't like this market but in a way because it is so controlled and Singapore's future is relatively bright, it is a good market to park your money in.

3. The rising dragon - China. I like this market. I like the fact that Jim Rogers (a caucasian) likes a chinese market. I like the fact that they are removing the short selling ban and adding in the margin trade. I think they are freeing up and like Jim Rogers, I think China will be the next greatest economy. Hongkong is tied to China to some extent so I shall not talk about HK.

4. The rising (falling?) sun - Japan. Hmm... 18 years running and yup, it is at 9000 from a peak of 38000. What to say, when yen goes up, the market goes down. Quite a simple market to some extent.

5. Unknowns - Europe. Hmm, I don't know much about europe. LOL.

6. Latino Heat - Brazil. Actually, I think brazil is an interesting story. Growth is kept constant and much more sustainable. Lots of resources. Amazing emerging market in the past and maybe for the future as well. Nonetheless, I know more about soccer than the market in Brazil.

Alright I will just touch on a few markets. Basically, I think it is very important to know about China market. Though I'm a chinese, I'm not biased towards them to some extent. I just like the fact that maybe, or rather, finally, they have some talents that do know what to do. I think they will overtake US and is a force to be reckoned with.

Please See...

Well, I made a presentation yesterday on my outlook for the markets. Someone came to me and said confidently, "You can't really let the banks fail. You will have great implications!"

I was like, of course you will have great implications. Markets will crash, we will probably suffer, lots and lots of horror stories that you can think of. But all these will at least be over soon. This person is definitely lacking in foresight isn't it and to some extent, hindsight. So what if you save all banks? Alright, you probably prevent huge catastrophe from happening TODAY but what about TOMORROW? Look at Japan. 18 years!!! Global growth has been at the expense of US because of the dollar and now it is the time to pay back because they have messed up with the system. I'm not so smart after all, maybe this person is right. Save all the banks, print all the money. Let's drag this whole problem and hope for a better tomorrow. Maybe a miracle will happen. This is not a free market and is certainly not capitalism. Who knows? Let's hope he is right and let's hope we don't follow Japan's footstep. Save the zombie banks and yeah~!


Bottoms in the investment world don't end with four-year lows; they end with 10- or 15-year lows.
Jim Rogers