Musings about Life and Investments

https://www.schwab.com/resource-center/insights/content/how-do-stocks-perform-during-presidential-election-cycle This is a good article. The first two years of the US presidential cycle is usually so-so as the new President tries to carry out his pre-election promises. This usually comes with painful reforms. Years 2 and 3 are usually when the President tries to pump prime the economy to get re-elected. I feel that the fourth year of the US Presidential cycle, which is also the election year of 2020, will not be good. Remember 2008? Then US president George Bush pumped the economy so much that it collapsed in 2008, and Obama had to rescue the country. 2012 coincided with the European Crisis and a stock correction. 2016 was a good year for the stock markets that just recovered from a correction in 2015. 2019 should be a good one for stocks. The correction we are seeing should be a mild one. How Do Stocks Perform During the Presidential Election Cycle? Let’s...

The correction that we have been waiting for has arrived. Those who missed out on the rally that started on Christmas Eve will have a chance to enter at January's levels. It will require "balls of steel". Lots of mindfulness meditation. Watch the show, "Billions". Bobby Axelrod meditates every morning for 16 to 20 minutes before he starts the day. This allows him to make calm decisions. Stocks will end the year higher.

We have been warning of this pull back of stock markets. Please do not read financial news to guide you. They will write stuff like “stocks plunge due to failure of trade talks”. It doesn’t matter. The rally from 24 Dec 18 to now is nearly 25% and it needs a pause. Anything can be a trigger: China trade talks collapse, black swan, earthquake. A pull back has to happen after such a long rally. Financial journalists, TV just like to find a reason for the rally or the crash. We have been advising clients to dollar cost average into equity funds like UBS China A Opportunity and First State Dividend Advantage. We never advised to do a lump sum. The rally for MSCI World since Christmas Eve was 22.9% and a retracement of half of this rally should be seen as a great reset of the clock to allow you to buy stocks cheaper. The retracement can be 11.5% in other words. We have been focusing on uncorrelated plays like H2O Multibonds, gold and silver. We will also be bringing in Feng He, a C...

Arsenal's decline since 2005 coincided with the winding down of previous owners looking for a big payout on exit, and the emergence of an American called Kroenke who's a money grabbing entrepreneur who has no passion for the club. The stadium debt was paid off aggressively when it could have been spread out longer. It was to boost the share price before the sale to Kroenke. After Kroenke put his grubby hands on the club, the budget shrank even further. The club stuck with Wenger for 10 years too long. we could see that it had stagnated. The final three seasons of Wenger's reign was particularly difficult to watch. Emery's reign put some life into the team. But the rot which set in for the last 10 seasons was difficult to reverse when the budget given was only £60m in the summer. We missed Aaron Ramsey. The decline of Arsenal's league form coincided with his injury. The midfield machine fell off. We missed a box to box, physical player who will put in tackles a...

This is a good video. It is likely  a pause or a profit taking time before it rises again. https://www.youtube.com/watch?v=_jdPadv8zDg&t=2s Last week, I wrote an email about selling the leaders, buying the laggards. Some of the stock markets, e.g. Chinese mainland A market index has hit the very lagging but important indicator. The monthly MACD has finally triggered the “Golden Cross”. At this stage, the bull rally is confirmed but there may be a pause of a few weeks to a month or two where those who bought in January / Feb take some profits. We may see a small pull back of 5 to 10%. But the bull rally should resume from here. It could be another 10 to 40% upside even if there is no rally. A recap of what we have done: 1.        January 2019, continued to buy into H2O Multibonds. It is up 15% year to date. 2.        March 2019, dollar cost average into UBS China A Opport...

So the rally started on 24 Dec 18. That was the point of maximum pessimism. The MSCI World has rallied 21% in slightly over 3 months! Many traders who returned from Christmas holidays could not believe their eyes. Many sat out this rally and did nothing, wishing it to come down so that they can buy again. I believe the rally occurred simply because the sellers were exhausted or finished what they had to sell. January rally was probably a short covering. The smart money began coming in from February onwards. The hedge funds probably piled on the long positions in March onwards. I turned positive from Feb 19 onwards and advised to dollar cost average. We are now approaching the top for MSCI World, last seen in Sep 18. Will it be the dreaded double top and then decline. My technical take is this: I can’t even see a small correction at this stage. The weekly chart is still bullish. There is a slightly over 50% chance that the Sep 18 high will be taken out. At this stag...

Life ain't fair. I got over that fact. But as a human being, I need to do my part in the universe to treat others fairly. How I conduct my life, is reflected in my philosophy in football. I think Video Refereeing or VAR should come asap to the English Premiership. The league is too rough, and the referees let physicality get in the way of skills. Lionel Messi would not have survived in EPL without major injuries. Weaker teams like Watford, Birmingham, will try to injure, maim skilful players in better teams. It's no wonder that Hazard and Pogba want to leave England for Spain. Good players just get injured too frequently in English football. They will never realise their potential. That's why VAR can reduce misbehaviours. World Cup 2018 was one of the best I've seen. I attribute a lot of the beautiful football to VAR. Mistakes may still be made with video assistance, but players know there is a higher chance that the referee can pick up a nasty foul, an elbow to the...