Monday, October 08, 2007
Sell all you want and all you can?
I don't have an answer of course, but my gut feeling is the 1st part may very well be the right thing to do.
It's not my principle to comment on daily movement or the general market. Because for those you get plenty from the press, Internet, and everywhere else, including but not limited to anybody on the street. Since nobody can foretell short term trend in a consistent manner, why bother giving out tips and forecasts which are at best 50% right?
But now is one of the rare moments I think worth being called a total fool by telling people to sell.
I'm not giving out hard facts and figures here because I don't need to prove the market is expensive, that is well acknowledged by the market. But I do observe there is an emerging belief or consensus that the market is infallible. And with this pace of rise continuing most people will not need a job soon. You can sense that from the way people work and talk.
Expensive stocks get more expensive by each day and cheap stocks, including HSBC, get nowhere. People are only interested in momentum stocks. For me, there's little need to find new performers when old performers aren't moving. On defense I did pick up this trend of polarization and recommended holding a H-share index fund back in July. And its performance has been more than respectable.
This may not be the top but it's getting close. If you have stocks you want to sell but are waiting for a good price, wait no more. On the other hand if selling hasn't come to your mind, because you are holding either cheap stocks or for really long term, then there's nothing to be worried about.
It's not my principle to comment on daily movement or the general market. Because for those you get plenty from the press, Internet, and everywhere else, including but not limited to anybody on the street. Since nobody can foretell short term trend in a consistent manner, why bother giving out tips and forecasts which are at best 50% right?
But now is one of the rare moments I think worth being called a total fool by telling people to sell.
I'm not giving out hard facts and figures here because I don't need to prove the market is expensive, that is well acknowledged by the market. But I do observe there is an emerging belief or consensus that the market is infallible. And with this pace of rise continuing most people will not need a job soon. You can sense that from the way people work and talk.
Expensive stocks get more expensive by each day and cheap stocks, including HSBC, get nowhere. People are only interested in momentum stocks. For me, there's little need to find new performers when old performers aren't moving. On defense I did pick up this trend of polarization and recommended holding a H-share index fund back in July. And its performance has been more than respectable.
This may not be the top but it's getting close. If you have stocks you want to sell but are waiting for a good price, wait no more. On the other hand if selling hasn't come to your mind, because you are holding either cheap stocks or for really long term, then there's nothing to be worried about.
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Hi Abacus, recently discovered your blog, and I like it. I'm a "Tony-student" as well, but am not doing research myself.
I've been selling of stuff already since June. Missed some nice gains there, but I've had a good sleep.
Sold already 1/3 of my China Mobile's on the way up, am hoping for a little more "market-madness" before I sell more.
Huaneng started to look sellable, but it has dipped somewhat again. This share does not have some crazy P/E, so I think it's okay to be stuck with it, even in a crash.
I've been selling of stuff already since June. Missed some nice gains there, but I've had a good sleep.
Sold already 1/3 of my China Mobile's on the way up, am hoping for a little more "market-madness" before I sell more.
Huaneng started to look sellable, but it has dipped somewhat again. This share does not have some crazy P/E, so I think it's okay to be stuck with it, even in a crash.
# posted by 
: 1:25 PM, October 09, 2007
: 1:25 PM, October 09, 2007
In my view the power stocks in general (except perhaps CR power) are reasonably priced, as there's one big negative capping the price movement, being the delay in pricing reform because of the inflation problem. This likely won't get resolved in a short time and so power stocks pretty much are left out in the current rally, making them pretty safe and perhaps good speculation because of their laggard status.
China Mobile too is likely remain strong because it's highly protected by the government. It will be the quickest to recover in case of a fallout. But if you foresee a correction like I do then there's a chance to buy it back at a cheaper price. BUT, compared to a lot of other H-chips it hasn't risen a lot, so my suggestion is don't wait for too long.
China Mobile too is likely remain strong because it's highly protected by the government. It will be the quickest to recover in case of a fallout. But if you foresee a correction like I do then there's a chance to buy it back at a cheaper price. BUT, compared to a lot of other H-chips it hasn't risen a lot, so my suggestion is don't wait for too long.
Thanks for your reply. I also consider China Mobile a good company, but according to Tony's numbers it's running now at a P/E of 20 prospective for 2009 or even 2010. I don't really like to buy for that far into the future.
In case of a downturn, I would not be sad to have them still in my portfolio, and I'm sure I will snap up more then.
I think currently, without looking at the overpriced market, a price of $80 to 90 seems fair to me.
Suppose the market crashes... China severe, and HK gets a big shocker as well... Which stocks are on your hotlist to buy once the prices are really dirt-cheap?
In case of a downturn, I would not be sad to have them still in my portfolio, and I'm sure I will snap up more then.
I think currently, without looking at the overpriced market, a price of $80 to 90 seems fair to me.
Suppose the market crashes... China severe, and HK gets a big shocker as well... Which stocks are on your hotlist to buy once the prices are really dirt-cheap?
# posted by : 2:06 PM, October 10, 2007
: 2:06 PM, October 10, 2007
My view remains that the best and safest investment in china shares is H-share index (2828 or 2801), mainly because of the unpredictability of all the M&A activities. On top you can pick a few of your favorite h-shares. There shouldn't be much difference between our performances.
Hi Abacus1,
You recalled that we had a brief exchange of views about Henderson Investment (HI)and HK China Gas when you last speculated on Uncle 4's possible move about HI's China Gas holding. The latest development indicates that Uncle 4's determination to strip the Gas holding off HI and put it into his own company. It's another way of privatisation. Would you care to comment on Uncle 4's move from a minority shareholder's perspective as I guess you may be still holding HI. Also, if Uncle 4 is so keen to take the Gas holding into his own company, would that mean that there is hidden value within China Gas that we as small investor may not know and that it is time to get some more Gas shares ?
I am holding both 3 and 97 at the time of writing.
You recalled that we had a brief exchange of views about Henderson Investment (HI)and HK China Gas when you last speculated on Uncle 4's possible move about HI's China Gas holding. The latest development indicates that Uncle 4's determination to strip the Gas holding off HI and put it into his own company. It's another way of privatisation. Would you care to comment on Uncle 4's move from a minority shareholder's perspective as I guess you may be still holding HI. Also, if Uncle 4 is so keen to take the Gas holding into his own company, would that mean that there is hidden value within China Gas that we as small investor may not know and that it is time to get some more Gas shares ?
I am holding both 3 and 97 at the time of writing.
my guess is lee didn't really think about this share swap much, not until henderson share price went up really high while that of hk gas moved little. then he couldn't resist the temptation and did what he said - short one share and buy another! note that this deal doesn't involve much cash on a net basis. i'd say this is an opportunistic move.
there's definitely a lot of value in lee's eyes if he had to do it 3 times to grab more shares in hkg. but as an outsider who has to buy in cash, there's a lot of alternatives to pick as well, unless of course you are strictly interested in the gas business.
i swapped my 97 holdng for something else during the august correction so my interest in it is lesser now, esp after this latest swap move.
but i think it's worthwhile to look at it again after the next report is due, so far the disclosure about the china gas business has been kept to very little, maybe intentionally.
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there's definitely a lot of value in lee's eyes if he had to do it 3 times to grab more shares in hkg. but as an outsider who has to buy in cash, there's a lot of alternatives to pick as well, unless of course you are strictly interested in the gas business.
i swapped my 97 holdng for something else during the august correction so my interest in it is lesser now, esp after this latest swap move.
but i think it's worthwhile to look at it again after the next report is due, so far the disclosure about the china gas business has been kept to very little, maybe intentionally.
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