BRACING FOR HARDSHIP III

 

“B L A S H”

Well, now that we have treaded into equity trading, just “BLASH” by itself is meaningless to us as we still need to be ascertained what and which stocks to invest in. To do this, we need to be equiped with the various know-how especially the tools and instruments of investment like Fundamental Analysis and Technical Analysis but hang on, didn’t I said that I’ll not be going into these jargons else it’ll bored everyone who reads in !

Ok,Ok !

How about using our good judgement instead ? Wisdom, if one may want to call it ! Yes, so let’s just use our own wisdom to select some stocks with good potential to invest and/or trade and try to make some sensible income, ok ? So with the magical word “B L A S H”, it’ll be naïve to think that we can make some sensible income just like that hoh ! What we need to do now is to as a first step, forecast when is the next equity market rally. Then we need to identify which stock to invest in and when to exit the market should there be a reversal of trend.

Will there be a rally and when ?

A meaningful rally will only be effective and successful when we have all the correct factors or parameters in place at the right period of time. To check out these factors, we need to look first at the Global Factors and then zoom in on the Local Front Issues.

At the International front, we will be witnessing the exit of the ever unpopular President George Bush, who before going out of office encouraged the seizing of the Palestinian Gaza Strip Settlement by the Israeli troops by blocking a truce call on both the warring countries and later on, we will see the installation of the New President of the United States, Mr Obama. The war in the middle eastern countries had inadvertently provided the impetus to expedite the intended hike in oil price by OPEC much more effective than the cut itself to reduce production of Crude Oil thus fitting the intention of OPEC and this is a very strong and contributing positive factor required to JUMP START Worldwide Commodities and Equities Markets and the beauty here is that these events are all happening in the month of January and so the usual January Effect represent another positive factor. It has been the intention of OPEC members, especially those from the Middle Eastern Arab States whose wish was to pump up the price of crude oil to stabilize between the US50 to US60 per barrel range to order fuel and substain the on going growth and development in their respective economies !

Back home on the Local scene we first have the by Election in KT coming up very soon and recalling the results of the last election where the BN won the parliamentary seat by just a slim margin and having been routed in the March Election of year 2008, they need to redeem themselves and to do this, the government must start it’s proposed Stimulus Package I soon and what best time to do it is now, yes, January Effect remember ? So it’s PumpPriming coming up next ! To be more effective and forceful, PumpPriming must involves the Private Sectors too and not the government alone ! With all these in place only can a PumpPriming be successful ! As crude oil prices rose, so commodities like palm oil too follow suit !

Now that we have the January Effect, By Election, PumpPriming and last but not least, CNY Effect all in place for a successful play on the Malaysian Equity Market, all that is left for us to do is just to select those Potential Stocks to put our money into, as simple as that, right ?

So what and which sector(s) are year marked for PumpPriming ?

Government will most definitely PumpPrime the GLCs to start with followed by Performance Stocks that are considered to be recession proofed. These sectors are Health Care, Utilities, Education, Oil and Gas, Infrastructure and to a certain extent Construction. Later on it may be broad based but for now till CNY, there should be a rally !

As for now, the most prominent play by the government should be concentrated on those so called development corridors play and especially, the “ISKANDAR THEME PLAY”. The much awaited and touted “White Knight“, “Valuecap” should have been activated by now and together with the Khazanah led Funds, they should at least be creating some kind of ripples or robust run up amid intermittent profit taking !

As the month of march is fast approaching and with the impending exit of PM PakLah by march end, his time and work to do the many things that he talked so much about has been cut short if not out. Like the previous PM Dr. M who have found comfort at Petronas so too has our latest out going PM PakLah, he too has found a nesting place at Khazanah. So make no mistake, the lead theme of play must be at least a successful Corridor Play otherwise the legacy of PakLah being remembered as “Father of Development Corridor” will instead be the “First PM booted out the door by UMNO” !

Hope this possible and likely rally will bring back some “SEASON’S GREETINGS” cheers to us all to celebrate and usher in the new year and it’s “SPRING IS IN THE AIR” time and let’s party through the market till the Coming in of the “EARTH OX” !

So for now, it’s Happy Trading guys and let’s make plenty of $$$ together !
P/s :  Please excercise caution when trading in a volatile market as most people are vulnerable.
         Always remember that “GREED” is the downfall of mankind ! While some traders likes jumping and
         swinging in, out and between trades , others must always be awared of the “Monkey Story” ? Just in case
         we’re not, here it is : Here is how the story goes,
“Once upon a time in a village, a man appeared and announced to the villagers that he would buy monkeys for $10 each. The villagers seeing that there were many monkeys around, went out to the forest, and started catching them. The man bought thousands at $10 and as supply started to diminish, the villagers stopped their effort.

He further announced that he would now buy at $20. This renewed the efforts of the villagers and they started catching monkeys again. Soon the supply diminished even further and people started going back to their farms.

The offer increased to $25 each and the supply of monkeys became so little that it was an effort to even see a monkey, let alone catch it !

The man now announced that he would buy monkeys at $50 !

However, since he had to go to the city on some business, his assistant would now buy on behalf of him. In the absence of the man, the assistant told the villagers. “Look at all these monkeys in the big cage that the man has collected. I will sell them to you at $35 and when the man returns from the city, you can sell them to him for $50 each.” The villagers rounded up with all their savings and bought all the monkeys.

Then they never saw the man nor his assistant, only monkeys everywhere ! “

Now you have a better understanding of how the stock market works.

   

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