Hear Hear! Credit Markets Indicate that the Bear Market Is Over....
This is the first time I'm saying on this blog. I observed that the credit markets, namely the high yield bond indices have turned positive. This means that there is a very high chance, around 70% that the stock markets have turned the corner! However, it is overstretched for stocks. The rally that is up around 20% from Christmas Eve has run into OVERBOUGHT. Therefore I will wait for a pull back before going in. The bond market is occupied by institutional and professional investors. Back in 2007, I saw the bond market fall first and in Dec 2008, it rose first. I was afraid of buying Las Vegas Sands shares in Dec 08 but decided to buy the bond instead because if I can buy the bond at 40ct to a dollar, I can be 90% sure that I can get 150% return in 3 years. If I buy a stock the company might dilute me with rights issues and placements, or convertible bonds. That's why when one is unsure of a company's survival, usually I will buy the bond first. Meanwhile you can watc...