Don’t get stuck with the monkey!Hey people it’s me again!
Rather a long absence from my blog. Was at Kuala Rompin, Johore from 20th – 25th Oct 2009 for a Warrior Camp… anyway it was good and discovers lots of new ideas.
So the 3rd QRT has just passed us by. The market peak and since then corrected to a level still way above the March 2009 lows.
I am looking at this current 4th QRT, and am of the opinion that we all should be cautious over the markets general direction. Either way it will be any one’s guess, upwards or down south. I believe strongly that lots of analysis’, chartist, etc have had their day. They could not foresee the 2008 downturn and your guess is as good as anyone else. They won’t be able to do so now as we move forward.
In all fairness, fatigue will set in and given the long rally from mid march 2009 a breather is long overdue. But the 3rd QRT economy results from US growth is any indication, then the continued uptrend will be intact.
Looking at the charts you will see that the recent correct is a breather of some fatigue whereby investors took a look at what will be their next course of action. For me let us not try to hit the ultimate peak for profits. Reasonable gains and returns should be the trigger for locking up profits. Before the big-boys do their rounds. Why do I say so!
Here is the flow:-
a) Institutional investors gets in first
b) Then sentiments improve on the note that market is raising (institutional, fund managers etc has lock-in)
c) Here comes the retail investor at the uptrend riding the wave as the market raise.
d) Then the so called “punters” who see the market raising will start to buy short, or the day traders trying to take a piece of the action.
e) Once things get rally bullish, then sets in the profit taking etc
f) If this turns and for reason where company will have to explain results that are not meeting targets the markets will start to correct and drop.
g) Next is when one thing leads to another, say for example India starts to raise interest rates.
h) The big-boys starts the migration as it begins to make more sense as people can put money/cash in the banks against the stocks as interest rates raise.
i) This is the opening of the flood gates, they, the big-boys takes out “huge-chunks” of money and it starts the sell-down.
j) The rest will be history repeating itself… joint the bandwagon of a sell down.
k) As always the “punters” and most retail investors will be the hardest hit, and these are the group of people that feeds the big-boys funds.
a) Institutional investors gets in first
b) Then sentiments improve on the note that market is raising (institutional, fund managers etc has lock-in)
c) Here comes the retail investor at the uptrend riding the wave as the market raise.
d) Then the so called “punters” who see the market raising will start to buy short, or the day traders trying to take a piece of the action.
e) Once things get rally bullish, then sets in the profit taking etc
f) If this turns and for reason where company will have to explain results that are not meeting targets the markets will start to correct and drop.
g) Next is when one thing leads to another, say for example India starts to raise interest rates.
h) The big-boys starts the migration as it begins to make more sense as people can put money/cash in the banks against the stocks as interest rates raise.
i) This is the opening of the flood gates, they, the big-boys takes out “huge-chunks” of money and it starts the sell-down.
j) The rest will be history repeating itself… joint the bandwagon of a sell down.
k) As always the “punters” and most retail investors will be the hardest hit, and these are the group of people that feeds the big-boys funds.
So who can be the big-boys? Sure not me or you! But we can team up and buy into the big-boys funds and let them do the “job”. While the big-boys do their job, we as savvy investors must recognize our own responsibilities – when to lock-out?
Work with your consultant (yes if you don’t have one reliable one to turn too, email me at lim1954@pd.jaring.my) to identify the point where you need do so. Most advisers out there are still trying to squeeze the last bit of profits and risk all the little we have, and in most instances missed it. It can be very painful when it is our money. You need to take profit when you make a decent or reasonable returns. Again you need to be guided as to what is a decent or reasonable returns is to your portfolio and be guide with a clear next course of action.
In closing there will always be down turns after downturns, however it will not be as severe as the sub-prime crisis.
Take stock and get in touch with me if there is a need to review yours, it’s never too late. Hey don't get stuck with the money, now we know what this monkey is!
Have a nice day!
Tj
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