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 watch Adam Khoo's video on stock technicals.

https://www.youtube.com/watch?v=URsGQA3Y7Ck&t=329s

I think in 2019:

1. Asia, Emerging Market equities will rise 20 - 30%. Because the price to book at the trough in Dec 2018 was around 1.4x and it usually is a problem and peaks when it hits 1.8 to 2.0x. It is around 1.6x now so I think there is another 20% to rise at least

2. S&P500, Europe will underperform but be positive. Perhaps a 10 - 20% return.

3. USD will weaken. Gold and silver will rise. 20 - 50% upside.

4. H2O Multibonds may not do as well as in 2018 when it did 33%. Because H2O believes that EM currencies will do poorly and the USD is still strong.

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