Goldman Sach's predictions for 2011

Goldman Sachs is the bank that survived the financial crisis very well, so it is good to pay attention when they just released their surprisingly bullish 2011 Forecast.

In it, the banking giant predicts that oil futures will climb to $105 a barrel and that the S&P 500 will continue its uptrend a further 25% next year.

Not surprisingly, Goldman strongly recommended investing in the U.S. large cap commercial banking sector.

But perhaps most shocking is Goldman's prediction that gold prices will climb to $1,690 an ounce by the end of 2011 - and that prices will continue to rise to $1,750 sometime in 2012.

That's an additional 25% upside for the yellow metal in a decade that's already seen 266% gains in the price of gold.

I have welcome Noble back into my portfolio

As I believe that equity prices should recover for the Jan rally, I have made further purchases in Noble and Olam today. This is despite the stock market continuing to weaken. However, I will be looking to dispose Wilmar, as its immediate prospects are not eactly exciting. I should have researched the stock more thoroughly before purchasing it. Therefore, my portfolio going into 2011 will be:


Singapore counters
Genting
Olam
Noble
STX OSV

HK counter
China Construction Bank

US counter
Bank of America

Commodity
SPDR Gold

I will not be looking to add any more positions, unless there is drastic declines in the market.

Will emerging markets falter soon?

Many analysts are now saying that emerging markets are the place to be in. However, this is exactly why it is so worrying to be investing in emerging markets now - for the sole reason that there is a lack of bears.

Individual investors are pouring money into emerging market stocks at the fastest pace since 2007. The last time investors were this bullish - the MSCI Emerging Markets Index sank 11%. The index now trades at 2 times net assets, within 4% of the most expensive level on record versus MSCI World Index. Non-conformist fund managers such as Harris Associates' David Herro and Jack Ablin are busily reducing their exposure to these markets. They are instead turning to US companies with strong exposure to emerging markets.

The implication: A more meaningful correction for Asian markets may be round the corner. In fact, the Hang Seng is now in the process of breaking down from its head and shoulders pattern, a bearish sign.

But I am still a believer in the Asian growth story, and will be keeping cash in reserves to take advantage of just such an opportunity, if emerging maket stocks falter.

Dow may hit new record in 2011?

With the Dow just 23 per cent away from its all-time high, it is not surprising if it hits a new record next year, even though many analysts do not expect it to be so soon. This article explains why. But after that, stocks may not stay that high for long.

Global stocks to rally as much as 15% in 2011?

Just like Brown, Udo Frank is equally optimistic on stocks next year, predicting stocks to rally as much as 15 percent, outperforming bonds and precious metals. Frank is chief executive officer of RCM Capital Management LLC.

In a Bloomberg interview on Dec 1, Udo Frank said that "2011 will be a positive year for the global economy and equities as an asset class," Frank predicts "balanced" gains for equities in the U.S., Europe and the emerging markets as world economic growth quickens from this year's levels and corporate earnings grow at a "double-digit" pace. Stocks will also outperform other asset classes as investors turn away from gold and other precious metals after they surged to record highs this year, he said.

So, should I sell my gold? Nah, I will wait till $2,000.

Rig Builders, Plantations and Tourism stocks are DBS Vickers' picks for Jan rally

Janice Chua, senior vice-president and head of research at DBS Vickers has swept numerous awards for picking the right stocks and making accurate forecasts. So, I listen with great intent when she announces her buy list for the Jan 2011 rally. She will be buying rig builders, plantations and tourism related stocks. Chua sees the current Korean tension as temporary, and is recommending buying stocks during this current market lull.

She recommends rig builders because she sees the upward cycle for newbuild jack-up rigs continuing, as oil majors are spending again in view of high oil price. Stocks: Keppel Corp and SembMar in that order. Plantation stocks are also recommended because "we are entering into an inflationary boom cycle and a period of high liquidity means that commodities like palm oil willl be going up. Stocks: Indofood, First, Noble and Olam. Finally, go for tourism because there will be a rise in holidaymakers during December and new junkets expected next year. Stocks: Genting, CDL Hospitality, SIA and UOL.

I have instituted fresh positions

The much awaited correction either have not arrived, or will not arrive. Anyway, since stocks have refused to budge from their support levels, but instead reversing direction, I have decided to replenish my portfolio with the following stocks:

China Construction Bank
Genting
Wilmar
STX OSV

I also have Bank of America, which is now becoming a "long-term investment". My target is to hold on to these stocks till the next peak in March/ April or when my price target is reached. If the market falls further before then, I will continue to load more shares.