Monday, October 3, 2011

Is the bottom near or far?

I have not been following the market very closely because most of the news coming out is the same - America, China and Europe (ACE) is crashing or landing softly.

I would like to buy some stock soon, as my position in C&O will most likely be liquidated due to the 95%-threshold being crossed eventually. Also, I have not invested much this year. This is not helped by the fact that the market does look attractive.

In terms of valuations, most of the Singapore blue chips are trading close to the GFC levels.

Personally, I will shore up my stake in an FMCG company or those stocks that have high sustainable dividend yield. This is because my view is that all will come to pass eventually, and picking these stocks does not cause much grief. Furthermore, I do not see how the existing problems will lower the revenue of companies selling basic food stuff.

For the readers, if you have the money, I will suggest global oil services companies listed anywhere, but the holding period will only be 1-2 years from today. Oil is a necessity still and as I have often said, if it were not for the takeover offer, I would be holding on to the shares of SPC.

I have taken a look at the STI charts and identified the start of August as the turning point of the market. My own investment rules tells me to wait at least 18 months before increasing positions. This is usually how long a bear market last. I do not mind buying stocks in the next one month as I will still have at least 10 more months to shore up my money for one big purchase. So to summarise, I am aiming short and long, but not in the middle.

That is of course not taking into consideration, the cost of doing my Masters or preparing for Marriage. Things that start with M.

I cannot wait for the year to end. The past twelve months has been very fruitful.

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