Tuesday, May 18, 2021

Rotate back to technology stocks, gold, says DBS

DBS is advising investors to rotate back to pandemic-proof assets, particularly technology stocks and gold. The switch to a recovery play in anticipation of vaccine discoveries, it says, is showing signs of “fatigue”.

According to DBS, the technology-heavy Nasdaq Composite Index over US small caps had peaked on Aug 26 last year. The index had subsequently undergone a sharp relative underperformance as global portfolio allocators jumped onto the bandwagon of piling into domestic plays in anticipation of vaccine discovery.

“Covid-19 cases are rising while vaccination among developing countries remains slow. A delay in the return to normalcy for businesses will weigh on global growth,” say Hou and Cheang.

The momentum in positive macro data is also approaching a peak, according to the bank. At 64.7, the US ISM Manufacturing Index is looking “toppish”, it says. In fact, a retracement in the index has historically coincided with a moderation in the rally on S&P 500 Index, it adds.

Thirdly, the US Treasury (UST) bond yields are retracing despite strong macro data. This suggests rising caution on the economic growth assumptions in 2021, says DBS.

Adapted from 

Sunday, May 9, 2021

Time to Prepare for a Stock Market Correction

Let’s take a look back at the 2008 Global Financial Crisis bear market for a good example. 

When the bull market started in March 2009, the S&P 500 rallied +63% from the bottom through the end of the year – very close to the +68% rally following the Covid-19 bear. In 2010, which was the second year of that bull market, the S&P 500 endured an intra-year correction of -16%. 

The correction was scary at the time, but also healthy – the market finished up +13% in 2010. We have seen this very regularly throughout history, where the second year of a bull market is choppy but also finishes positive. I could see a similar outcome in 2021.

So, how should investors prepare for market volatility or a double-digit correction? Using history as a guide, it is time to mentally prepare for a correction now, so when it arrives, you expect it and can avoid making any knee-jerk, reactive decisions.

Adapted from Zacks "Mitch on The Markets" on 8 May 2021

Thursday, April 29, 2021

Clean Energy’s Sell-Off Is the Best Buy-the-Dip Opportunity

The clean energy sector has been a noisy group to watch this year. Many of the stocks posted 50%, 70%, even 100% gains during the month of January.

But that was all dashed when the clean energy trade got crowded and hit its highs in February.

Crowded trades tend to see exaggerated moves to the downside as “the crowd” starts to exit, which results in a snowball effect of selling. That’s exactly what has taken this group of stocks down by 35-50% over the last two months.

Now, I’ve been watching the technicals on this group extremely closely. And I believe that this pullback will result in one of the strongest “buy-the-dip” opportunities that we may see in the next year, or maybe even two.

And if the technicals are right, we may be at the turning point for this “new technology” sector.

That’s why this week’s watchlist focuses on the two ETFs that represent the clean energy sector, along with a select few stocks that I’m eyeing from the industry.

Each are poised to start doubling or tripling some timely investments over the next few months – so, let’s get to it.

Adapted from Chris Johnson 25 Apr 2021

Mark his words....


Tuesday, December 22, 2020

Buy equities? Nah, not now

Although I am 40% invested in the equities markets, I will not be adding fresh capital until a bigger correction comes along. When will that be? Like what Mark Wilson says, can be weeks or even months...


Wednesday, December 9, 2020

Do not buy now.... Wait

Markets have been stubbornly high, but surely, it has to come down.

The thing to do now is wait.

Source https://www.morganstanley.com/ideas/thoughts-on-the-market-wilson

Saturday, November 28, 2020

Portfolio Update _ Frencken

 I bought Frencken in Sep at 0.95 to ride on the 5G boom.

So far, it has done very well for me. Glad to read about the coverage on the counter.

For more info: https://www.theedgesingapore.com/issuepdfviewer?issue_id=41299

Thursday, November 26, 2020

Market is ripe for a correction

 According to Morgan Stanley, a correction could be round the corner.

What to do then? Wait... then pick up bargains with both hands.

For more info:

'Ripe for another correction': US stocks could tumble 12% by year-end as the vaccine-driven rally gets exhausted, Morgan Stanley's investment chief says