Master Rider Blog

Bottom is Near, Very Near!

admin — Thu, 09 Oct 2008 08:29:08 +0000

Yes! I think at yesterday’s close (8 Oct 2008), regional stock markets are very near to their bottom (if not already at the bottom).

If you also share with my view, we should start to accumulate value stocks from today onwards! Please note I did not say that economy or the financial system in US, Europe are out of the wood, I merely guestimate that stock markets are very near to their bottom based on my very own analysis (both fundamental and charts, please refer to my book, “Essence of Stock Investment” if you are interested to know the analysis process). Please also note that stock markets are like the leading indicators for the economies, hence they are always 3-6 months ahead of the real economy. As I am writing this blog, I guess I am being very bold to call a bottom to the stock markets. I have yet to see any one predict this in the media.

However, as I mentioned in my last blog “Foggy Zone”, I will again advise concerned investors to look at the markets only after the anniversary of the Black Monday. For those who can take the risk, now is the time to start accumulate. However, keep a watchful eye on the Black Monday.

Should the markets continue to go lower, I feel that the downside risk is about 5% which is bearable in view of a potential rebound of at least 20%!

Again, the above is purely my own personal view and you are investing at your own risk.

Good luck!

Cheers!

Master “The Essence of Stock Investment” and ride towards the journey of your financial freedom to be the “Master of Your Own Destiny”! Welcome to visit the #1 value-added stock and option investment education website in the world, www.master-rider.com!Disclaimer: Investors are investing at your own risk. Please read full disclaimer at the end of the blog or from the main page of the website.

Foggy Zone!

NW Teong — Thu, 04 Sep 2008 02:26:30 +0000

Looking back at my last blog posted on 1^st of July, the past two months’s market condition was really very ideal to perform what I coined investrades. While I predicted an imminent technical rebound in my blog of 1 July, markets actually rebounded about two weeks after that (i.e. on around 15 July). So, my call was a bit off mark from a micro level but it was still a credible call from a macro level. Anyway, if we investraded along the way, there were really plenty of good investrade opportunities.

Despite the volatility, I noted that both DOW and NASDAQ have trended up very nicely since 15 July (see chart below). Unfortunately, this is not the case for most regional indices in Asia. While they do have a technical rebound at around the same time, the indices have since resumed their down trend. It is hence even more vital to investrade along in Asia markets. In short, last two months was really a fun time to do investrades

My view forward is that we will be entering what I called a foggy zone. This foggy zone is really referred to a time zone (roughly from September to October in this case), where our view is blurred by multiple factors. In short, markets could continue to be volatile. More importantly, markets could be seeking one of the last lows for the year. This means that we could have a good opportunity to position ourselves once more. My own view at this moment is that if you cannot stand the volatility in the next two months, then you should avoid the markets totally and enter the markets only from 1^st week of November onwards. However, do not regret if markets have rebounded strongly within the next two months!

One point I need to clarify here is that, I am not throwing away the concept of value-investing. You see, at this juncture, we could deploy multiple investment strategies. One is a longer term strategy where we continue to search for good value companies that meet all our investment criterions. For instance, if you could find a blue chip stock that trades at around 5 times its current year earning and is growing at around 15% to 20% in turn of both top line and bottom line growth per annum. To top it off, it still gives you a dividend yield of 5% p.a. Then, I would say, go ahead and buy this stock with a view to hold longer term. [Note: Make sure the earnings are of good quality, i.e. it will not get adversely affected by changes in macro picture]. So, this is a mid to long term investment strategy. The other one is of course is to investrade which is a shorter term strategy. Recall what I said in my book? Yes, we need to learn all these tools and strategies and use them appropriately, be it technical or fundamental. You are only limited to the tools/strategies and of course knowledge that you have mastered.

Before I sign off this blog, please be reminded of the important anniversaries such as 911, and the Black Monday in October 1987. Good luck!

Cheers!

Technical Rebound Soon!

NW Teong — Tue, 01 Jul 2008 03:09:03 +0000

Despite the false break in tech stocks that I talked about in my blog dated 27 June 2008, my own read is that major markets are poised for a good technical rebound very soon. The false break encountered on 26 June was actually an attempt for a rebound but failed (due to many bad news), however the “pressure’ for a rebound remains intact. This time round, the rebound shall include all major indices (not just tech stocks). These include, DOW, Nasdaq, and many regional indices!

The above of course is baring unforeseen circumstances. Assuming if there is no event risk or major bad news, markets are likely to bounce up within the next 5 trading days. If my analysis of the markets were correct, then I shall start to accumulate stocks/indices right NOW! In fact, this is what I will do today. I am a bit “Kia Su”, hence I shall complete all my buying within today!

As this is my short-term trade, I aim to achieve anything between 5% to 10% gain. Always practice good investrade habits in setting your profit target and cut loss level. Please do read the disclaimer and take note that you are investing at your own risk! Good luck!

A False Break!

NW Teong — Fri, 27 Jun 2008 01:31:41 +0000

Both the DOW and Nasdaq indices were being bashed down last night in US due to various bad news. In short, the “W” shape that I spoke about in my blog yesterday was no longer true simply because it will not be a “w” shape any more. The spike up in Nasdaq the day before yesterday was more like a false break on hind sight.

Hence, we shall square off (i.e. lock in profit or cut loss) all our tech trading positions immediately. For those in Singapore, I have noticed that Venture had surged more than 5% yesterday and if you sell now (around S$9.95) you could still make about 3% after netting off the trading expenses. While this is not truly a great trading opportunity on hind sight, we shall be fast to react to new info.

We shall remain at the sideline with zero position and forget about the “W” shape for the time being. Nevertheless, we shall continue to monitor the markets in search for another good trading opportunity.

Watch Out for Tech Stocks!

NW Teong — Thu, 26 Jun 2008 02:16:43 +0000

Despite my bearish view on the macros in my past few blogs, I feel that we should not miss out on short term opportunities (provided we can spot them).

Purely from chart point of view, tech stocks are poised to bounce strongly (from NOW onwards) and could last at least the next 3-5 trading days of course bearing unforeseen circumstances. Please see Nasdaq chart below:-

The Nasdaq has just formed the second base of a nice “W” shape. This is what we called a double bottom in technical analysis and is a strong signal for a reversal. Of course, nothing is 100% sure, what we can say is that the probability for reversal is very high when we see this signal. If we look at the SOXX index (see below chart) which is a leading indicator for tech stocks, it has a similar “W”

While I see this as a good short term trade, it does not indicate anything on the long term outlook. Hence, we shall not be too greedy and always remember to set a target price (set a trailing stop when positions already in profit) and a cut loss price (e.g. event risk). Never let your winning position to become a losing one.

Please note that you are responsible for your own trades and you are reminded to read the disclaimers at the bottom of the home page of www.master-rider.com. Good luck!

Wake-up Call!

NW Teong — Wed, 18 Jun 2008 02:24:36 +0000

I have warned investors on the impact of a high crude price in my blog posted on 9 May 2008. I wonder how many have heeded my advice.

While the macro picture is murky at the moment, it is crystal clear that most bets (on the stock markets) are off if crude is able to stay at current price level (i.e. between US$125 to US$135 per barrel). The logic is simple, if the crude is staying at current price level for a sustainable period of time, it will have a dampening impact on most other industries. In short, it will single handedly drag down the world economy. The worst scenario is GREAT DEPRESSION. However, before we reach great depression, the world economy will slow down fast enough to force the crude price to drop to a more reasonable level (something below US$100 per barrel?). Then a new equilibrium is achieved among various parameters including the crude oil before we experience the global growth again. I do not know when this will be, however in one of my earlier blogs last year, I have “predicted” that the credit crisis triggered off by the US subprime loan will only be over by the end of 3^rd quarter of this year. Thus, I feel that between now and the entire 3^rd quarter, we will still witness a highly volatile stock market!

For those die-hard investors, you have to be very selective and invest only when great opportunities are present. Otherwise, it is better to extend your holiday (as mentioned in my blog on 9 May 2008). Before you do that, make sure you put your money in one of the safest instruments.

I am really surprise that most governments have done so little to help solve this (high crude oil) issue knowing its dire impact on world economy, and thus all mankind. Every one in the world should change our lifestyle IMMEDIATELY, i.e. do everything one can to conserve as much energy as possible. Government can surely help by building the right infrastructure and thus creating a more conducive environment for walking, cycling etc. It will be my dream to see all major cities to have special lane or path which have plenty of trees at both sides for cyclists. If the environment is nice to walk or cycle, I don’t see why people have to take a car ride to travel 300 meters from point A to point B in a city. This will increase the quality of life in a city as the air will be less polluted.

In fact, I am sad to notice that most governments are still being boxed down by own domestic affairs so much so that they have lost focus on these urgent issues such as preservation of environment, food crisis, energy issue etc. Current situation (earth quakes, heavy floods, etc) really warrants a top most attention from governments of major economies. If I have to use the color code to describe the degree of crisis now, it should be a RED ALERT now. At the moment, some people in different part of the world have died due to environmental havoc such as earth quakes, floods etc and many more are dying due to impending food crisis. Do we want to wait till the lives of half of the world population are being threatened before we take serious actions?

With the rate that we, human beings are destroying the environment, I wonder how long can we continue to breath in fresh air, drink clean water and eat un-polluted food. All of a sudden, an image of Martian with head gear and oxygen tank flashes across my mind……… This really sends a shiver down my spine!

Someone is going to get hurt!

NW Teong — Fri, 06 Jun 2008 01:24:04 +0000

In fact, most of us are going to get hurt if the inflation rate is carry on at the current rate of 4-5% per annum in most countries in Asia. We blame it on commodities which include both food and non-food commodities, but the real culprits are truly ourselves, the human beings.

I for one, am really surprise that no concerted effort have been made by the governments of influential economies to address the following global issues: food shortage which could cause severe famine, environmental issues due to massive de-forestation, and other abuses as well as general hardship for all mankind due to severe price hike in crude which translates to higher transportation cost. If there are actions already being taken, they are simply too little. If we do not take these issues seriously, we would face very dire consequences in the not too distant future. The key question here is that do the governments of the influential economies have the wisdom to realize these (potential) calamities and have the resolute to address these ultimate urgent issues? Do they have the wisdom to decide wealth (i.e. economy as well as political interests) over morality as well as humanity issues? More importantly address these issues with top most urgency?

We will surely see more natural calamities such as earth quakes, cyclone, tsunamis, floods and other erratic weather going forward. We all know that our only planet mother Earth, just like human beings’ body, need to strike a balance. While we need to eat right, rest and exercise well to stay healthy, the Earth needs to maintain its internal and external balance too. Unfortunately, we human beings have relentlessly abused the Earth in pursue of wealth. This is akin to investors’ psychology: the greed and fear! At the moment, we seem to be more interested in pursuing the wealth with total ignorance of the risks that associated with it. We build more roads, more houses, more cars, more planes etc to cater for our insatiable needs. I am afraid and truly worried that when we realized our silly mistakes, it might be too late to address all the related issues. If we are not at risk now, our future generations surely are. I feel rather helpless when I see people debate over food versus fuel. To me the answer is obvious! Without fuel, we can still survive but without food we will surely die, full stop!

There is huge amount of wealth being transferred due to high crude oil prices. While the rich ones continue to enjoy their luxury lifestyle, the poor ones are made even poorer. The rich ones can afford to cruise in personal jet plane, eat at the most expensive restaurant, the poor ones can only survive one day at a time. Let’s face it, we all accept the fact that life is never fair. However, I feel that we should have the basic morality to help our fellow earthlings who might be struggling to survive elsewhere. The very least we could do is to become a responsible earthling where we are mindful of fellow human beings (both current and future generations) and take good care of the only earth that we live in. If by giving up driving (or at least drive less) you can save some lives some where, then why not?

For a start, I feel that we should all (governments, private sectors and individuals) make a serious effort to save energy and be environmental friendly. I wonder, why can’t we have special lane for bicycles in major cities in the world? I think it is high time to encourage cycling as an alternative to driving. Governments can surely help by having a bicycle friendly transport system in place, such as special lane for bicycles on every road, sufficient parking facilities for bicycles and so on. Perhaps, governments can even consider giving out bonus or incentives (just like carbon credit) for cyclists who have traveled certain kilometers within a certain specified period of time. We may also allocate some R&D funds to develop “cycling cars”, i.e. cars that are light enough to be powered by human legs. Such cars should have rechargeable batteries that could be re-charged by our legs, These batteries can then be used to power the car for certain distance when our legs are taking a break. Obviously, there are many efforts going on to look for alternative energy sources. While the obvious choice is the solar energy, personally I feel that a combination of a mechanical (e.g. bicycle, better still a weather friendly bicycle!) and a human system will be a perfect combination. This can also help to solve the obese problem in many major cities!

Of course, we still need a good public transport system. However, we truly need multiple approaches to ease this problem.

Human beings use to have sharp common sense and great instincts; however these instincts are being blunted by our greed and fear, just like the way they have blunted our ability to make wise investment decisions!

Take actions now before some one is going to get hurt, really very hurt!

Master “The Essence of Stock Investment” and ride towards the journey of your financial freedom to be the “Master of Your Own Destiny”!Disclaimer: Investors are investing at your own risk. Please read full disclaimer at the end of the blog or from the main page of the website.

Beware of the Crude!

NW Teong — Fri, 09 May 2008 07:38:15 +0000

I have some interesting finds when I look back at some of my earlier blogs posted on this website. For instance, on 4 Dec 2007 I have posted a blog “Santa Claus Rally?”. In this blog, I have used the Fibonacci series (in a light hearted way) to predict that the next major market correction will begin at around end Jan or early Feb of 2008. On hind side, the market indeed had a severe correction but not from end Jan, instead it started to correct heavily since the beginning of Jan this year. However, we will still be able to avoid this pain if we have taken action on 4 Dec 2007 (the day I posted the blog).

Some of my past blogs worth mentioning are blogs “Market Outlook” and “FOMC” which I posted on 29 Oct and 30 Oct 2007 respectively. In these blogs, I have predicted that the crude will test the US100 per barrel soon! In another blog “A Tale of Two Markets (II)” on 7 Nov 2007, I have mentioned about some triggering events which investors should be mindful of, these are a big blow up of US subprime loan, crude oil shoots pass US$120 per barrel, etc. Yes, indeed we need to be careful as the crude has just surged pass US120 per barrel and is trading at about US$124 per barrel currently!

Everything seems to look good at this moment. The Baltic dry index has continued to surge after it had corrected to reach its recent bottom on 31 Jan 2008. It has surged so much that it seems to re-test its historical high soon. The transport sector index in US is also surging with similar ferocity. The semiconductor index (^SOXX) also creeps up gradually since the beginning of April 2008. Interestingly, the yield of 10 year Treasury bill (^TNX) has started to rise since the middle of March 08. This indicates some stability in the debt markets (at least this seems to be the case). Little wonder that the stock markets have surged in tandem with all these indicators.

What to expect now? With the crude at historical high of US$124 per barrel, it is the single best excuse to lock in the profits in the stock markets. In short, the markets are poised for what I called a mid-term or mid-year corrections, this is especially so if crude maintain at around US$120 per barrel. Do not under-estimate the impact of the crude. There is simply no good replacement for crude at this moment! Again, caution is needed in this volatile market.

If you care to join me, lock in the profits and go for a short holiday while markets consolidate. However, continue to monitor the markets and use strategies that I talked before and wait for another opportunity to build up your portfolio again. Cheers!

Note: From the overwhelming queries on my e-publication that I received, I wish to use this opportunity to say that while the samples used in the e-materials might be from certain market, the theory, framework, valuation model, portfolio spreadsheets, investment / trading /investrade strategies and so on are applicable in almost all stock markets in the world. Hence, whether you are from China, India, England, Singapore and so on, these investment educational materials on stocks and options shall be useful to you. As always, please do read the disclaimer too! One more point to share is that, the e-seminar on

US Options is getting very popular. In fact, more buy orders are coming for this e-material. The choice is really obvious if you compare this e-seminar on US options to those that are available (through creative advertisement) via live seminars!Master “The Essence of Stock Investment” and ride towards the journey of your financial freedom to be the “Master of Your Own Destiny”!Disclaimer: Investors are investing at your own risk. Please read full disclaimer at the end of the blog or from the main page of the website.

Up-Trend?

NW Teong — Wed, 09 Apr 2008 07:27:03 +0000

Nasdaq and STI index (see charts below) have both surged between 8% to 10% since the recent low registered on 17 March. A very decent gain in slightly more than two weeks’ time, or about 200% gain in annualized term. This is impressive under a bearish backdrop. For those who have attended my Investment Seminar on 22 Oct or have read my last blog on 25 March, I hope you have made some good profits.

However, I must warn all investors that the down-trend of the markets (be it Nasdaq or STI index) has not been broken. In short, as far as charts are concern, the down-trend is still intact! As I mentioned in my last blog, market would still be volatile in the next few months (please refer to point 5 in previous blog) and I urge investors to invest with great caution, especially in the next few weeks!

Even on the macro picture, this calls for more monitoring and careful analysis and of course utmost prudence in investments. Yes, the macro picture is likely to deteriorate, and this is going to continue to reflect in the employment data, then in the revenue and P&L of the corporate (especially in US). The only positive out of US, perhaps is the likelihood of both positive fiscal and monetary policy. We shall continue to see interest rates falling, albeit at a smaller drop, we shall continue to see more jobless numbers….. All these would be played out in the next few months. Things would be clearer (hopefully) by end of third quarter of this year.

While Asia is more immune to US sub-prime loan saga, Asia economies are not totally immune to slow down in US economies. As I said many times before, it is not a matter of Asia economies de-coupling from US or not (don’t ever waste time argue on this!). Common sense would tell you that the impact from US on Asia is diminishing, however, US economy still exerts considerable impact on Asia economies. It is like you are being shifted further from the epic center and whether you get impacted or not really depend on the degree of the earth quake. Hence, if US has a big economy earth quake (like current situation), we in Asia would surely feel the impact. Of course, if US is only catching a minor cold, then we are alright. Despite the big earth quake in US, Asia economies are still expecting some decent economic growth. However, we should know that investors never like slow growth, especially one that comes from a higher growth before. Remember what I said about earnings and multiple expansions during high growth period? We have to watch out on earnings and multiple contractions during the small or no growth period.

In summary, I urge investors to exercise great caution in the next few weeks! Oh yes, on commodities, I have urged investors to be caution in my previous blog. I am cautious on my short-term (three-six) view on commodities, but remain bullish on my long-term view. By the way, I have just come back from Japan last week, the cherry blossom and Ryokan onsen at Hakone are superb. Please visit Japan on the 1st week of April, it is simply marvellous! Cheers!

Market View 25 Mar 2008

NW Teong — Tue, 25 Mar 2008 03:26:16 +0000

Thank you very much for attending my seminar on 22 March 2008 organised by SGX. The response was indeed overwhelming and was much better than my expectation despite the bearish mood in the market as well as a holiday one day before the event. During the seminar, I have made some comments with regard to market view which I briefly listed down as follows:

1) I have said this in Oct 2007 that stock markets in 2008 will be more volatile than in 2007. I reiterated this again. I also said that there might be some true value to pick through out this year.

2) Base on some of the macro indicators that I monitored, stock markets are at or near the bottom already. Look at the 10-year Treasury yield (you can see this chart at yahoo finance, ^TNX), at 3.35% on 10 March, it was very near to its 5-year low of 3.1% registered on 9 June 2003. This tells me that the US Fed will have little room to play as far as interest rate policy is concern. Caution note: never just look at one indicator to make decision, one should learn to use multiple of indicators to reinforce one’s view!

3) Investors should monitor value stocks very closely now and with the intention to buy decisively whenever the target buy level is being breached. Do not panic if you have done your proper study and all indicators pointed to a screaming buy! For instance, I have always used Venture Corp as an example, I had urged investors to buy immediately when it was being bashed down to around S$7.50 on 3 of Jan 2008 (A rare chance indeed!). Please read my blog on Value Buy?

4) Short-term, commodities investment will pose very high risk. As explained in the seminar, investors are likely to lock in their huge positive gains in their commodities positions in view of huge losses in other asset classes, namely fixed income (most bonds, especially those linked to subprime loans), equities, properties (especially in US) and so on. It is all about asset allocation and portfolio restructuring that I mentioned in the seminar.

5) Markets would still be volatile in the next few months, tread with care please! Macro picture is vital at this stage.

6) Monitor China economy and stock markets closely, both before and after the Olympic game. It will have huge impact on regional markets.

In short, I urged all potential investors to continue to enrich your investment knowledge, to apply such knowledge on your investments. Always have a good system in place, be as conservative as you can (at least for beginners) and with a right mind set…..etc

I know I am a bit long-winded, but it is all for your own good! After the seminar on 22 Mar 08, many of you have emailed to enquire about my own investment seminar. I would like to use this opportunity to inform everyone that I do not conduct my own investment seminar more than two years ago. However, in order to still share my years of investment experience and knowledge, especially those proprietary worksheets such as valuation model, portfolio sheet and Master Rider System etc that I have created, I have converted all these into e-publications and are available via this web site: www.master-rider.com, including my investment seminars (both in English and Chinese). For those who are also interested in US option, the e-seminar on US option is considered the BEST value that you can ever get. Instead of paying thousands of dollars to attend other live seminars, getting the e-seminar (a fraction in terms of price) is surely a wise option to take. You would be surprised on the end result!