Why saving money now is the best policy?

Why is it very important to raise cash in 2012?

"Because in the next 12 to 18 months, we can have so much discounted value in equities, bonds... dislocation that could be the best 18 to 20 months in our lives." - Steen Jakobsen, chief economist at Saxo Bank (Tan Teng Boo has the same view, 19/8 post)

His strategy: Have 60 - 70% in cash now, and wait for S&P to break 1,000. Then, over the following 6 to 12 months, invest 5% to 10% every month, once a month.

So what does that mean for now? Yes, go out there and raise lots of of cash, because the best investment opportunities are coming soon.

Reading Company Prospectus

 When reading a company's prospectus, read  

1. Chairman's statement

2. Review of operating and financial performance

3. Board of directors + senior management 

4. And of course...

     Balance Sheet/ Profit and Loss Statement

Profitability Ratio
Gross Profit Margin	Gross Profit/ Revenue
Net Profit Margin	Net Profit/ Revenue
Return on Equity	Net Profit/ Equity
Return on Asset	Net Profit/ Total Asset
Liquidity Ratio
Current Ratio	Current Assets/ Current Liabilities
Quick Ratio	(Cash+ Short Term Investments + Accounts Receivables) / Current Liabilities
Cash Ratio	Cash + Short Term Investments/ Current Liabilities
Solvency Ratio
Debt to Equity Ratio	Total  Debt/ Total Equity
Interest Coverage Ratio	EBIT/ Interest Expense
Solvency Ratio	Net Profit/ Total Debt

Cash Flow Statement

Cash flow from
Operating Activity	Is profit converted to cash?
Investing Activity	Is company too aggressive in investment?
Financing Activity	Is company borrowing to finance investments?

I am back to profitable for the year

After a harrowing past few months, where my portfolio was decimated by more than 50%, I am back to slightly profitable for the year. I intend to continue to hold out for the unfolding year end rally. Seems like these days, I have to short the market in order to maximise the opportunities out there.

New Year's Rally?

I think there will be one this year. Look at the chart below:

In a trendless market like now, RSI is a very good indicator of when to buy/sell. Coupled with news of integrated efforts of both China banks and EU to prop up the economy, the rally, is half way through by now.  
Going forward, my stance is to sell on rally, and buy on dips.


My portfolio now:

China Shares
	Bought (HK$)
Anhui Conch	24.80
ICBC	4.22
Yanzhou	19.50
Singapore Shares	(S$)
Noble	1.15
NOL	1.80
Sembcorp Ind	4.80