Musings about Life and Investments

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

Incredible rally that overstretched. Since this email, stock markets have stretched another 2.6% in terms of the MSCI World. Just sharing. I cannot be right all the time. I can be early, for example, I spoke about a Christmas Rally in Dec 2018. It did not occur until AFTER Christmas. That’s 3 weeks late. Similarly, the pullback has not happened as the MSCI World continued to inch upwards. Earnings growth in the US were above expectations, up 16% thereabouts, revenue up 7% YOY for the quarter. Not bad. There’s no slow down in corporate America and it seems trade war doesn’t affect them. In the west, consumption takes up 70% of GDP and they are not export dependent. But in Asia, we are the factories of the world. Export is our lifeblood and I think we will be hit. Chronology of how I viewed the markets Let me set the record straight. 1.         I was bullish on EM stocks since March 2016. Those of you who followed this call made between 20 – 30% from the last ral