Global Correction

[bingobongo]

U.S. Stock Market Stumble Presaged by S&P 500 Options

Oct. 8 (Bloomberg) -- Skittishness over the U.S. stock market's record-setting rally is reaching a crescendo among options traders who are preparing for a crash.

http://www.bloomberg.com/apps/news?pid=206...&refer=home

Edited October 9, 2007 by bingobongo

[visionary]

There definitely are a lot of markets that are over heated and over priced. In addition far too many workers across the globe are too poorly paid. Corrections must and will occur. The important thing is to not panic when vitallly necessary corrections occur. The day after any market crash the factories are still standing, the workers are ready to work and consumers must spend if only to stay alive. Those who roll up their sleeves and get to work after a crash normally do quite well as they pick up the pieces left behind by those who paniced and ran. If you don't want to get burned by a crash, don't engage in marginal investments unless you can overcome total loss of your investments.

[JonnieB]

humm....my portfolio is up 5 percent for the last quarter (July-Sept)!!! Many of my stocks are at 52 week highs (HP and Oracle just did so last nite). my stake in Cammpanhia Vale do Rio Doce (large Brazilian iron ore miner) is up over 40% for the quarter and just split 2 fo 1 a couple weeks ago

life is good if you are retired and have time to study and invest in the markets

[sonicdragon]

There definitely are a lot of markets that are over heated and over priced. In addition far too many workers across the globe are too poorly paid. Corrections must and will occur. The important thing is to not panic when vitallly necessary corrections occur. The day after any market crash the factories are still standing, the workers are ready to work and consumers must spend if only to stay alive. Those who roll up their sleeves and get to work after a crash normally do quite well as they pick up the pieces left behind by those who paniced and ran. If you don't want to get burned by a crash, don't engage in marginal investments unless you can overcome total loss of your investments.

Good advice ! I will certainly second that.

[fletchsmile]

Bingo

Just curious, are you still missing out on the SET rises this year. Didn't you also start this post middle of August, and recommend we all SELL. Thanks for the tip... ... I BOUGHT extra!

Edited October 10, 2007 by fletchthai68

[fletchsmile]

BTW Bingo: Do you also do UK lotter numbers?

If so could you PM me the 43 numbers out of 49 that you believe definitely won't come up on Saturday

Edited October 10, 2007 by fletchthai68

[AmericanGuy1066]

U.S. Stock Market Stumble Presaged by S&P 500 Options

Oct. 8 (Bloomberg) -- Skittishness over the U.S. stock market's record-setting rally is reaching a crescendo among options traders who are preparing for a crash.

http://www.bloomberg.com/apps/news?pid=206...&refer=home

Dude

Another great thread of irony. You posted your very own thread on "global corrections", and now you're telling us that since then there's been a "US stock market record setting rally"...

I bow to the bingo ball...

[samran]

OK,

even I am prepared to admit now that it is getting a little bit silly. Well it feels silly at least.

Samran SET hand selected fund up 63% since April.

But I'm seeing where this roller coaster ride is taking me. Subprime saw my return fall to a measly 7% (April to August) before it has roared back.

Fundamentals for all my picks are good, still relatively cheap by regional standards. All fun and games though. We aren't talking about big bikkies here, so I can afford to lose it all, though that wouldn't be ideal.

[sonicdragon]

Bingo

Just curious, are you still missing out on the SET rises this year. Didn't you also start this post middle of August, and recommend we all SELL. Thanks for the tip... ... I BOUGHT extra!

It's rather strange that none of your posts earlier in this thread alluded to you buying more - in fact you mentioned that you don't try to buy on dips. Or have I missed something ?

[sonicdragon]

OK,

even I am prepared to admit now that it is getting a little bit silly. Well it feels silly at least.

Samran SET hand selected fund up 63% since April.

But I'm seeing where this roller coaster ride is taking me. Subprime saw my return fall to a measly 7% (April to August) before it has roared back.

Fundamentals for all my picks are good, still relatively cheap by regional standards. All fun and games though. We aren't talking about big bikkies here, so I can afford to lose it all, though that wouldn't be ideal.

Up 52% in 2 months ! Not bad ! And I thought I'd been doing well in HK

[samran]

OK,

even I am prepared to admit now that it is getting a little bit silly. Well it feels silly at least.

Samran SET hand selected fund up 63% since April.

But I'm seeing where this roller coaster ride is taking me. Subprime saw my return fall to a measly 7% (April to August) before it has roared back.

Fundamentals for all my picks are good, still relatively cheap by regional standards. All fun and games though. We aren't talking about big bikkies here, so I can afford to lose it all, though that wouldn't be ideal.

Up 52% in 2 months ! Not bad ! And I thought I'd been doing well in HK

Totally beginners luck on my behalf, and access to some good research and smart people which helped me make up my mind. I'm not taking any credit here, I was pointed in the right direction.

[wasabi]

I am way up this year too and do not attribute it to skill, just riding the tide. I don't want to sell yet though. It's hard to find the exact top but with bubbles like this there is usually a blow out top and the blow out can be quite impressive, some of the best gains can be made in the waning days of the bull. For now I'm sitting tight there still could be some year end buying to window dress various funds. I'm going to hold til mid December unless signs indicate the blow out is over or isn't going to happen. What are those signs? Haha how am I supposed t know?

[fletchsmile]

Bingo

Just curious, are you still missing out on the SET rises this year. Didn't you also start this post middle of August, and recommend we all SELL. Thanks for the tip... ... I BOUGHT extra!

It's rather strange that none of your posts earlier in this thread alluded to you buying more - in fact you mentioned that you don't try to buy on dips. Or have I missed something ?

Sonic,

Key word is extra. In a year I'm usually always a net buyer. The other bit I think you misinterpreted is that I said I hold my equity investments as a portfolio long term. i.e from a selling aspect I rarely time net sales and rarely reduce the value of my overall equity portfolio. I'm in the markets overall, tho I do switch weightings between them.

I sometimes also time my buys a little. Given the monthly addition is a small % compared to portflio value it's mainly tweaking allocations, and still consistent with time in the market approach. Occasionally I do take a short term view on a particular market. Even then tho' it is with a small % compared to overall amount. In August, I felt the corrections that had happened were over done, so I bought "extra" in Thailand by using up spare cash in SGD. I'll then reduce amounts of future months investments a little to restore the equity/cash ratio. Of course ever strategy needs a little flexibility.

BTW My expectation was for SET to be around 900 just before y/e and then go even higher on a successful election. At the point of buying extra it was around 800, which was undervalued and seemed too good an opportunity to miss a small punt. Then Bingo said sell, so I had to go for it...

Edited October 12, 2007 by fletchthai68

[AlexLah]

Just wondering reading on the return of investement and some people being so succefull.

How much do you give to charity?

Hmmmm?

[fletchsmile]

Just wondering reading on the return of investement and some people being so succefull.

How much do you give to charity?

Hmmmm?

enough... in line with my conscience... and you?

Edited October 12, 2007 by fletchthai68

[sonicdragon]

Bingo

Just curious, are you still missing out on the SET rises this year. Didn't you also start this post middle of August, and recommend we all SELL. Thanks for the tip... ... I BOUGHT extra!

It's rather strange that none of your posts earlier in this thread alluded to you buying more - in fact you mentioned that you don't try to buy on dips. Or have I missed something ?

Sonic,

Key word is extra. In a year I'm usually always a net buyer. The other bit I think you misinterpreted is that I said I hold my equity investments as a portfolio long term. i.e from a selling aspect I rarely time net sales and rarely reduce the value of my overall equity portfolio. I'm in the markets overall, tho I do switch weightings between them.

I sometimes also time my buys a little. Given the monthly addition is a small % compared to portflio value it's mainly tweaking allocations, and still consistent with time in the market approach. Occasionally I do take a short term view on a particular market. Even then tho' it is with a small % compared to overall amount. In August, I felt the corrections that had happened were over done, so I bought "extra" in Thailand by using up spare cash in SGD. I'll then reduce amounts of future months investments a little to restore the equity/cash ratio. Of course ever strategy needs a little flexibility.

BTW My expectation was for SET to be around 900 just before y/e and then go even higher on a successful election. At the point of buying extra it was around 800, which was undervalued and seemed too good an opportunity to miss a small punt. Then Bingo said sell, so I had to go for it...

There isn't any value is saying these things when it's in hindsight. Why didn't you say so at the time instead of after the market has rallied ? If it had fallen further maybe you would have turned out to have been a seller instead ?

[fletchsmile]

There isn't any value is saying these things when it's in hindsight. Why didn't you say so at the time instead of after the market has rallied ? If it had fallen further maybe you would have turned out to have been a seller instead ?

Sonic

Not sure what your issue is. You take out of a post what you want to. I think there's value in highlightling the doom and gloom merchants have been losing out all year, and that time in the market is more important than overall than timing the market, for people with strategies like my own. This is a consistent trend in my posts. If you trade volatilities or are a day trader, my posts are not really going to be of much interest.

The post accurately describes part of my investment strategy. If you don't think that's useful no problem - each to their own.

As for your last question - not worthy of an answer.

I'm rarely into short term tips, and sorry you won't be getting a blow by blow account of my positions if that's what youre hoping for. There aren't many posters on here really into investments to make it worthwhile, as shown by the fact these threads can go a couple of days with no new posts. Look elsewhere and you may see my personal view on a few things, eg SET up to mid-2008, BKK property markets, one thread on investing for retirement. However, this is just when someone asks a specific market I'm interested in. Usually I just quietly get on with my own strategy, until we get a specific topic that interests me. With the exception of a few extremists, like OP, I think most people do the same

Edited October 13, 2007 by fletchthai68

[fletchsmile]

Sonic

BTW Would it make you feel better if I said I've been using a similar strategy for years. Yes I did get caught by corrections in 1987 and 1997. Very few if any people predicted these, which is my main point. If you get into trying to predict the dips as your main focus of your strategy, you risk being out of the market when rises occur.

For me you just accept them as temporary blips. Thailand is another great example: I believe the medium-long term story holds up well and suits my circumstances. 2004 I lost around 5% in Thailand, but 2003 I made >100%. On average since the turn of the millenium I'm up >20% p.a.for Thailand. If I'd been trying to time the markets as my main focus like you and BingoBongo, I would probably have missed out on the rises and the falls.

Short term trading is not my strength, but there's no harm tho' in taking a small punt now and again, when the short term picture is really out of synch with the long term one - every strategy should have its exceptions.

[sonicdragon]

Fletch, I certainly don't have any issue with your last 3 posts and I consider them to be welcome additions to the thread. My issue is with lambasting another poster for their opinion rather than engaging in constructive discussion about it, and then 2 months later announcing that you had taken the opposite position. I know that you did try to engate the OP and he didn't offer anything worthwhile to the discussion, and that is regrettable.

[fletchsmile]

Fletch, I certainly don't have any issue with your last 3 posts and I consider them to be welcome additions to the thread. My issue is with lambasting another poster for their opinion rather than engaging in constructive discussion about it, and then 2 months later announcing that you had taken the opposite position. I know that you did try to engate the OP and he didn't offer anything worthwhile to the discussion, and that is regrettable.

Sonic,

Appreciate the constructive feedback. Think it's perhaps also, as I'm less vocal than many, and average around 3 posts a day in all categories, so I'd also fall under your radar. I also try and refrain from giving any specific financial advice, but don't mind giving my personal view sometimes if interested. This cut and paste from another thread dated 20 Sep, should illustrate it isn't something I dreamed up overnight, with the benefit of hindsight. (slight typo in last sentence shoud read "anyone")

Thanks for the replys guys

I was thinking along the lines of leaving 40k in the high interest savings account

The other 40k i was thinking of maybe managed funds or something like that.

As far as risk goes i don't want to lose it all but i don't mind the possibility of losing 10k if there is a greater chance of making more than that.

If anybody has any experience or recommendations on funds or something similar i would be glad to hear it.

Thanks

Leaving 40k in the bank is reasonably low risk for that part. Also covers you to an extent if something happens so that the bank fails - The first 35k or so is reasonably protected for compensation. On 80k in a UK bank that's around 55k "unprotected" if the bank fails.

Personally I'd say accepting 10k loss on 80k is high risk (12.5%). On a remaining 40k, 10k loss is definitely high risk (25%). If you're comfortable with that though, a mutual fund is reasonable. Even a single country mutual fund like Thailand as we're on Thai Visa. Many people think the Thai stockmarket is undervalued at the moment relative to other markets. Particularly if you adjust for the political risk. eg One year from now there should be a democratically elected govt which will be a boost, removing some of the uncertainty/discount factored in the market.

Again personally, I just increased my Thai mutual fund weighting, but that is not advice to anyway else.

Edited October 13, 2007 by fletchthai68

[fletchsmile]

Sonic

Just checked back. At 19/9 (day before my post showing my view) SET was around 802. Now 887. Hope that clarifies. Looked undervalued end Aug/ early Sep. Rise has been quicker than I expected, as I posted yesterday on 12 Oct on another thread.

This shows me in a good light in terms of timing, but it isn't really about timing for me - for time I just got lucky. The theme was always there, tho', which as a mid-long termer, is what I'm interested in. All it means is I just got the bonus that the 10-12% rise I expected came a couple of months earlier. I expect to be treading water a little with this part of my portfolio until elections. If I really believed I could time the markets I'd sell now put my money somewhere else for 2 months and come back at the optimum point. Short term timing is not my strength tho', which is the thrust of all my posts above, and I'd be worried about the timing of the next wave.

Hence I'll sit in for a couple of months knowing I might not make much, but waiting for the rise from 900 thru 1100. I expect somewhere within mid next year. Eventually the 6month to say 2 year time frame will not look attractive and I'll switch weightings somewhere else a little.

BTW Another reason I don't usually post so much is I think the level of initerest for myself, other posters, plus some of the replies you get means it's often not worth bothering. There's quite a few flamers and extremists it's just not worth rising to.

As someone who posts a lot of sense yourself sometimes, your posts did prompt me to explain a bit more - just wonder wheher it's worth it tho' in the great scheme of life. Have a good weekend .

Edited October 13, 2007 by fletchthai68

[sonicdragon]

Thanks for the explanations. I can definitely see where you are coming from now. And good luck with your call for 1100 SET next year - if everything comes together it could very well happen. But for me, I see the potential for various derailments in Thailand. When push comes to shove, I have always been wary of most Thai stocks because of the inherent political risks, poor corporate governance that tends to work against the small investor, and general lack of transparency. That's not to say that you can't make money in the market here. Obviously you can - but I just favour other markets. It's a relative thing. I'm also quite underweight in equities generally, though the exposure I do have is in mainly in domestic consumption-oriented asian stocks.

[Mobaan]

For the past month or so I am riding comfortably on the upswing of the SET with money in Siam Commercial Asset Management SET Mutual Fund .

I got into this twith the help of the branch office in the provinces. The people there can not supply me with prospectus of the fund ,at the website the prospectus is not openeing up etc etc . I took my risk -so far so good .

What I am intersted to learn is :

The bank people tell me ,since this is a mutual fund ,I would not have to pay taxes on profits if and when I sell . Is that indeed the case .? I was burned by the same people earlier this year after I had money in fixed deposit account -and they sure deducted taxes every time interest was paid.

[lannarebirth]

Reeks of moral hazard to me..

"Rescue Readied

By Banks Is Bet

To Spur Market

By CARRICK MOLLENKAMP, DEBORAH SOLOMON and ROBIN SIDEL

October 15, 2007; Page A1

The high-stakes plan to rescue banks from losses on mortgage securities amounts to a big bet that a consortium of financial giants -- at the prodding of the U.S. government -- can persuade investors to pour more money into the troubled credit market.

Over the weekend, the Treasury hosted talks to help a group of banks set up a $100 billion fund to buy troubled assets in exchange for new short-term debt. The banks hope to have the fund up and running within 90 days.

According to people familiar with the matter, the Treasury hopes the plan, which could be announced as early as this morning, will jump-start demand for commercial paper, which froze up this summer amid the credit crunch that roiled global financial markets.

Companies depend on commercial paper to finance day-to-day expenses like payroll and rent. Some financial commercial paper -- known as asset-backed paper -- has been able to find buyers in recent weeks. But investors have remained skeptical of other types, including paper issued by certain bank-affiliated investment funds

The lack of buying signaled that the markets weren't working properly, despite the efforts of central banks, and that investor confidence was low, since commercial paper typically is considered a safe investment.

Some influential investors think the Treasury-backed strategy might work. Other object to the Treasury's role in seeking to help banks avoid a big financial hit for making bad bets...."

http://online.wsj.com/article/SB1192405801...p_us_whats_news

[Bizz]

Reeks of moral hazard to me..

"Rescue Readied

By Banks Is Bet

To Spur Market

By CARRICK MOLLENKAMP, DEBORAH SOLOMON and ROBIN SIDEL

October 15, 2007; Page A1

The high-stakes plan to rescue banks from losses on mortgage securities amounts to a big bet that a consortium of financial giants -- at the prodding of the U.S. government -- can persuade investors to pour more money into the troubled credit market.

Over the weekend, the Treasury hosted talks to help a group of banks set up a $100 billion fund to buy troubled assets in exchange for new short-term debt. The banks hope to have the fund up and running within 90 days.

According to people familiar with the matter, the Treasury hopes the plan, which could be announced as early as this morning, will jump-start demand for commercial paper, which froze up this summer amid the credit crunch that roiled global financial markets.

Companies depend on commercial paper to finance day-to-day expenses like payroll and rent. Some financial commercial paper -- known as asset-backed paper -- has been able to find buyers in recent weeks. But investors have remained skeptical of other types, including paper issued by certain bank-affiliated investment funds

The lack of buying signaled that the markets weren't working properly, despite the efforts of central banks, and that investor confidence was low, since commercial paper typically is considered a safe investment.

Some influential investors think the Treasury-backed strategy might work. Other object to the Treasury's role in seeking to help banks avoid a big financial hit for making bad bets...."

http://online.wsj.com/article/SB1192405801...p_us_whats_news

Banks plan huge emergency fund

Monday, 15 October 2007 11:25

There are reports that big banks including Citigroup are looking at setting up a fund of around $80 billion to buy ailing mortgage-linked securities and other assets, in a bid to prevent the credit crunch from further hurting the global economy.

Sources quoted by Reuters said representatives from the US Treasury had organised talks among top global banks.

Financial institutions are increasingly concerned that a certain type of investment fund linked to banks may have to dump billions of dollars of repackaged loans onto financial markets.

A fire-sale of assets could lift borrowing costs globally, trigger big losses from investors and force banks to further write down some holdings on their balance sheets. Such sales could trigger huge losses for banks.

The fund is the latest response to a global credit hangover after at least three years of easy credit that fuelled massive mortgage lending in the US and spurred record levels of highly-borrowed buy-outs.

Citigroup, JPMorgan Chase and Bank of America are involved in the discussions, according to people familiar with the situation. The three banks declined to comment.

Banks including Citigroup, Merrill Lynch and UBS have in recent weeks announced billions of dollars in asset write-offs and are still struggling to sell off billions of dollars in loans that financed acquisitions globally.

Looks like we all are going to pay more very soon for borrowed funds

[fletchsmile]

Thought the following was interesting given the Oct 1987, Oct 1997 crashes. Now we're in Oct 2007 (Source:Citywire)

1987's 'Black Monday' remembered: Veteran manager Taube urges market to learn lessons 15 Oct, 2007

Close to 20 years ago when the stockmarket experienced a market crash worse than that which triggered the Great Depression veteran fund manager Nils Taube was sitting in the sunshine in a Paris avenue.Taube, who has the distinguished honour of being the longest-serving fund manager of any UK-based fund was running investments for the Rothschild Group, including what is today the RIT Capital Partners investment trust.

Today Taube, now 79, runs a global portfolio of his family's money at Nils Taube Investments after a long period as a founder of Taube Hodson Stonex.Taube remembers the Friday before the market crashed: 'I was in Paris for a board meeting and there was beautiful sunshine. In the afternoon I rang up the office to see how the market was doing but nobody had been able to get in because of train problems.'

The trains were the least of the nation's problems that month. A famed hurricane had ripped through Southern England creating a perfect storm.Taube eventually reached his colleague Nick Roditi, now the legendary and highly secretive manager of funds for billionaire George Soros.

Taube said: 'He made it clear that Wall Street was collapsing and that was the most frightening thing because London had closed so there was no market. On the Sunday I called up a colleague and had all our Australian shares sold as much as I could. When the market opened I increased our short on the FTSE from £50 million to £75 million and left it open until December.'That monday the FTSE 30 index dropped 10%, wiping £50 billion off the price of UK stock.

Taube does see comparisons between today's volatile markets and the turbulent days in autumn 1987. 'Today's market is better than it was in 1987. The first day of this volatility I thought "maybe it will catch" but we have actually been able to pick good performing stocks in this market. Mostly in the oil sector.'

Although Taube believes that today's market should learn the lessons of 1987, principally that fear can not be allowed to perpetuate he believes that the market can in fact coast forward for some time.Nevertheless, he has responded to the crisis today in much the same way he did in 1987, that is buying plenty of gold and oil.

He said: 'In those days the only thing going up was gold. Our portfolio today is around 30% energy and 20% gold. So today I am optimistic to the extent that I have gold shares. Back then I could do that but also buy bonds on quite high yields, today that is not possible.'

Taube believes that today there is not the same 'fear in his belly' as there was after the volatility of 1987 but he does see parallels, quoting Mark Twain: 'History does not repeat itself, but it does rhyme, and today it is rhyming.'

Edited October 17, 2007 by fletchthai68

[bingobongo]

nothing to see here.......move along.......

Indian Stocks, Rupee Slump; Regulator Proposes Investment Curbs

India's stocks tumbled, shutting down the Bombay Stock Exchange for an hour, and the rupee fell the most in two months after regulators proposed restrictions on investments favored by global hedge funds.

The benchmark Sensex index dropped as much as 9.2 percent after the Securities & Exchange Board of India said late yesterday it plans to limit trading by investors who buy shares anonymously, using derivatives known as participatory notes.

http://www.bloomberg.com/apps/news?pid=206...&refer=home

[fletchsmile]

nothing to see here.......move along.......

Indian Stocks, Rupee Slump; Regulator Proposes Investment Curbs

India's stocks tumbled, shutting down the Bombay Stock Exchange for an hour, and the rupee fell the most in two months after regulators proposed restrictions on investments favored by global hedge funds.

The benchmark Sensex index dropped as much as 9.2 percent after the Securities & Exchange Board of India said late yesterday it plans to limit trading by investors who buy shares anonymously, using derivatives known as participatory notes.

http://www.bloomberg.com/apps/news?pid=206...&refer=home

Took a late lunch and guess I missed the fun. The 5 main indices for India are showing losses of only 2% now. Europe has opened with small gains. Asia looks mixed, with a few more losers than gainers. Interesting article tho'

Edited October 17, 2007 by fletchthai68

[bingobongo]

what is that song by Don Ho? oh i remember now......."tiny bubbles"

[samran]

what is that song by Don Ho? oh i remember now......."tiny bubbles"

With China gobbling up resources like there is no tomorrow, and becoming a net importer of goods it used to export, it shouldn't be unexpected that share prices are going crazy there and companies are able to charge more.

Prices are being pushed up not only because of Chinese demand, but also independently increasing demand from India and the middle east. Everything is becoming more sought after, and prices rise.

But a stock market does not make an economy, and I'd personally be more worried about inflationay pressures and infrastructure bottlenecks in china rather than an upward pointing stock market index...