Mid Week Pit Stop #25

No black monday. No panic selling. To make things worse, there was a crazy rally. Dow was up more than 10% on monday. There are two interesting things that I will like to share.

1. Donald Trump's comment on cnbc.com

"For the first time in my entire life I was going to go very big into the stock market, hundreds of millions of dollars into the stock market" he said.

"Now it's a little too late," he said.

Well, Donald Trump is a brand himself, at least this is what I have learnt in marketing. I'm just wondering if he will go back to the market now. I mean, he was late on monday. What about today? tomorrow? When the markets drop even further, is he going to back in a VERY BIG manner into the stock market? Never too late isn't it? LOL

But again, he is Donald Trump. I'm a nobody. =)

2. On Tuesday morning, the mailman sent me a mail...

"Should we liquidate?" he said.

In a way, I was quite disappointed because he was carried away by the 10% rally worldwide. Of course, I may be wrong about this. The rally may actually continue. You may argue and say that I may not have the guts to say this if not for yesterday's selling.

Again, I'm also wondering why I'm so calm and cool after the big rally. Honestly speaking, have I really improved from 1 year ago or is intuition at work? I don't know. Time will tell.

Learning Time

Well, I saw someone searching for Jim Rogers talk in Singapore on google.com and he came to my blog. I didn't attend the Jim Rogers talk, but my friend did and managed to write down some pointers.

As always, Jim Rogers like to talk about his adventure and his daughters. Hmm...

1. Rise of China:

Among the best capitalist in the world. Save and invest over 35% of their income. There will be setbacks in China but every powerful nation will have setbacks. Children have to grow up speaking native mandarin and english.

2. State of US dollar:
World's reserve currency. In the last 21 years, American National Debt is 13 Trillion Dollars. Foreign debt increases at a rate of 1 Trillion dollars every 15 months. Head of Central Bank is persistent in debasing the value of US Dollar. It may be efficient in the short term but not in the mid term nor long term.

He quoted that Pound Sterling was the World's Reserve Currency before Dollar overtook its place. Same thing could happen again.

3. Bull market in Bonds 1980s to 1990s. Bond market is over. Not a place to make money. Likewise with stocks in the West. Very expensive and volatile.

4. Bull market in raw materials, natural resources commodities. 2nd largest market in the world to Foreign Currency. Bull markets last around 15-23 years. We're like 8 years into the commodities bull.

The usual Jim Rogers Hot commodities talk.

5. What causes these long cycles? Supply and Demand. Invest in productive capacities in a bear market. Many countries have been big exporters of oil are now importers of oil i.e. China, Indonesia, Malaysia. Bull stock market inversely proportionate with commodities. Don't get rich diversifying. The Saudis say that they have 260 billion barrels of oil every year (no change). Get a job in the commodities market.

6. Opportunities in a downturn. Pursue your passion. Hmm... I believe he is refering to buying commodities.

7. Oil Sands in Alberta is a growing oil market. It's an expensive procedure and it takes a long time.

8. US Government Bonds market is a huge bubble that is gonna burst. US dollar is in a huge rally now in false liquidity. Everybody has been shorting US dollars and they're forced to cover their short-selling.

9. Financial Investment banks fundamentals are impaired. but commodities fundamentals are unimpaired. Supply of commodities are going down as nobody will be able to lend you money to start a farm. Hence supply of commodities will go down after financial stock market goes down. Airlines, water treatment, tourism, are potential prospective growth industries to rise for the next 20-30 years.

10. Women are lacking in China, India and South Korea. Women are going to be in demand, divorce will be high (divorce lawyer). Hmm, I think becoming a lawyer that specialised in divorce sounds good. Wonder why he mentions this?

11. Biofuels have great future, politicians like bio fuels. Not good for the world. Driving up the price of the food, water.

12. Gold ETFs, Gold futures, Gold coins. Uncertain, but safe.

13. Carry trading is huge. Japanese interest rate is near 0 but Australian interest rate is about 5. Hence people sell Yen to buy Australian Dollars to put in Australian Banks. Now is unwinding period, explaining the drop in Australian Dollar.

This is good. I didn't know about the Australian Dollars part.

14. China Central bank started cooling the economy but they can manage they have huge reserves and savings.

Shoutout: Thank you sgdividends.blogspot.com for adding me to your blog list. Hope to talk to you if possible. =D

Maybe: Rate Cut again tonight?