Wednesday, June 22, 2011

What stock to buy? (2)

Wow! Everyone must have missed yesterday's tremendous rally which saw the STI surge close to 40 points albeit on thin volumes. I have been doing my sums and looking at the charts and assessing the global situation. My sums look a bit precarious, as I intend to go overseas for one more trip as well as get a big item for my hobby. The charts tell me that there is a higher possibility of downside (2,900 - 3,000) but as we have witnessed, sinking below 3,000 seems like a hard task to accomplish. And the global situation tells me that yes, the financial stimulus are ending and debt fears are rising, but overall economies look firm (less China)- any financial apocalypse should be priced in.

So the question is, if I believe what I have said earlier, that there will be short term weaknesses but by the year's end all will be well, which stock should I buy? As MusicWhiz had posted earlier, it has been a time for contemplation and step up research since the markets are offering stocks on sale. Unfortunately for me, I have been a bit tight travelling and busy and work. On one hand, i am spared the gut wrenching market plunges but on the other, I am not attuned to which stocks hold value.

Tentatively, I will look through the stocks that I have covered before before making my move. What about you? What stock will you buy this time?


  1. What stocks are you looking at?

    Pennies or blue chips?


  2. i will look at the holdings that I have. I cannot load up on Etika as it is forming disproportionate big a holding....

    i will be looking at pennies for sure... thats my style and also due to money limitations

  3. hi,

    Do post your analysis and why you chose the counter. New people like me can learn.


  4. Hi Jason,

    There is not really much analysis for the case of Etika. One, the overall market is weak, so it is a good time to accumulate. Secondly, Etika seems to have gotten over the margin compressions due to high food prices, but I am guessing this is partly due to the acquisition of the Vietnamese company.

    Overall, there are plenty of stocks you can buy but blue chips offer lesser upside. S-Chips are just playing the musical chairs of who is next to go.

    Privatisation candidates? That's a tough one to call because those that are likely to be taken private are those cash rich and cash generating ones - few and far between each passing day.

    I did on a separate note thought of looking at EDMI and SMB since they are trading at low PEs relative to their growth. But I know nothing about their switchboard business, whether their growth was one-off. So I missed that boat.

    I hope it helps