If you noticed, I stopped posting blogs the day the US and European market turned on Oct 4th. Prior to this date, global high yield assets slumped for more than two months. The US dollar rose as a safe haven!
Since then, high yield assets rose on hopes and speculation from variety of events. Markets had been volatile (and will continue to be volatile). This means that if you could not stomach the volatility, you would be slapped left and right. However, though the volatility is at its extremes, the trend was and is currently trending upwards.
The US dollar was testing a very strong resistance at 80, broke it on a daily basis. BUT, it did not close above 80 on a weekly basis. Since then, the US dollar reversed and nose dived till this current day. The high yield assets (equities in US and Europe), commodity currencies (Aussie and NZ dollar) and commodities like Gold, rose as a result of a weaker dollar or vice versa.
Uncertainty generates high volatility which we had experience for the past three weeks. However, the certainty of the growing of a better US GDP data, a better US economy, at least has minimized the uncertainty of a double dip recession.
Coupled with the fact that the Greece haircut is 50%, leveraging of the ESFS rescue fund and capitalization of European banks, financial markets rose very strongly globally. Currencies like the Aussie, Euro and other high yield assets experienced the strongest daily gain to my knowledge.
In conclusion, the concerns with a
· Weak global economy
· US economy
· Global growth concerns
· Europe sovereign debts
had certainly diminished overnight.
Credit rating companies will interfere with the rally by downgrading one or two European countries because of the haircut, austerity and spending cuts. But it is RISK ON.
Based on the Chinese Art of War, the financial climate is attractive, terrain is conducive, and I understand myself as well as the investment risks. We are ready to go and win the war.
Are we out of the bear market? What’s your opinion?
By the time there are concrete evidence that bear market is over, stocks will be too expensive to buy.
ReplyDeleteI had bought undervalued stocks for the past weeks:
1. Stocks that have growing revenue, growing earnings, growing free cash flow and holding low debt.
2. Stocks that have insider buying and fund manager buying.
Don't hesitate too long. Market don't wait for you.
Congratulations! You've done well. You deserve your winnings from a well calculated risk. Thanks for sharing.
ReplyDeleteApart from rumours, nothing is guaranteed until the results are published, that is the situation in Europe and the US GDP!
As for myself, i don't take 'uncalculated' investment risk with a few million AUM.
Thank you very much for the information,well !
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