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Lazyhorse, Agree that it is all sentiments that calls the day. For longer term, it is the facts that wins the battle. For Construction companies, even the government wants a share of their profits as Mr Mah puts it last year "It is us the government that creates the scenario (and the business of course) for you and therefore it is only right for us to get a share of the pie". It is about time to buy them now.
See this :
Paulsen Says Recession Concerns Are Overblown, Buy U.S. Stocks
By Robert Dieterich
Jan. 30 (Bloomberg) -- James Paulsen, chief investment strategist at Wells Capital Management, which oversees $200 billion, is more bullish on stocks than he's been for most of the past decade.
Rising delinquencies of U.S. subprime mortgages, the turmoil they've caused on Wall Street and falling stock prices worldwide haven't changed his stance. The investment-management committee Paulsen oversees at Minneapolis-based Wells Capital recommends clients hold 80 percent of their money in equities and the rest in bonds. Paulsen favors so-called cyclical shares that tend to rise or fall in concert with the economy.
``There's this chronic sense of pessimism in this country that's emerged since the dot-com meltdown and the terror attack,'' Paulsen said in an interview, referring to Sept. 11. ``Jobs have not gone away. The consumer is still spending. Most corporations are still making money.''
Paulsen, whose bearishness during the stock-market bubble in 1999 and 2000 was vindicated when share prices collapsed in 2001 and 2002, said he's willing to be contrarian. His view on stocks is more bullish than any of the strategists at 15 banks and brokerages surveyed by Bloomberg News.
Goldman Sachs Group Inc. chief strategist Abby Joseph Cohen has the second-highest recommended stock allocation, at 75 percent. Tom McManus of Bank of America Corp. raised his equity weighting to 65 percent on Jan. 22, arguing the selloff that pulled down the Standard & Poor's 500 Index as much as 19 percent from its peak may signal it's time to buy.
Iowa Trained
Decisive evidence that weakness in home prices and sales may spill over to other parts of the economy has yet to show up in economic data, said Paulsen, who received a doctorate in economics from Iowa State University in Ames.
Foreign trade, helped by a falling dollar, entirely offset the drag exerted by the housing industry in 2007, according to Paulsen. Americans should be happy about the dollar's decline instead of worrying over a currency ``crisis,'' he said.
``Trade for the first time in 15 years is adding to real GDP growth in this country,'' he said.
Paulsen, 50, was born, raised, educated and married and took his first job in Iowa. After college, he joined SCI Financial Group, a family-owned financial-services firm in Cedar Rapids.
At age 25, having traveled by plane just once, Paulsen was sent to visit New York by John Knapp, son of SCI Financial's founder. Knapp wanted Paulsen to see firsthand where Wall Street investment advice came from.
``He wanted me to come to the conclusion that you might as well make up your own darned mind,'' Paulsen said.
Contrarian Stance
The lesson stuck. Paulsen, little swayed by the weight of opinion among Wall Street forecasters, has gone against the crowd in bullish and bearish markets. He remained skeptical as technology stocks roared to a peak in 2000. By that time, he was with Wells Capital, having joined Norwest Investment Management in 1997 and moving to Minneapolis before the 1998 merger of Norwest's parent bank and San Francisco-based Wells Fargo & Co.
Paulsen appeared prescient when the U.S. went into a recession in 2001. Business Week said in December 2001 that he was the most accurate among 54 economic forecasters the magazine tracked. Paulsen turned bullish in late June 2002.
With the S&P 500 at about 1,000, he declared that valuations had become more reasonable and recommended that his clients overweight stocks. His investment committee shifted its asset allocation to 70 percent stocks and 30 percent bonds, compared with a neutral weighting of 65 percent equities.
Market Calls
On July 23, 2002, the S&P 500 hit a low of 797, about 20 percent below the level at which Paulsen turned bullish. The troubling signs for investors ranged from declining consumer confidence to new revelations of corporate accounting frauds. Starting in October 2002, the market took off.
The S&P 500 got back to 1,000 in June 2003 and touched 1,500 last year. So Paulsen was off by a month in calling the end of a two-year bear market and the beginning of a five-year bull run. The S&P 500 closed at 1,362.30 yesterday.
Paulsen said on Jan. 22 that the U.S. will avoid a recession or that any recession will be mild. Goldman Sachs Group Inc., Morgan Stanley and Merrill Lynch & Co. are forecasting a recession. That prospect prompted the Federal Reserve to cut its benchmark interest rate by 75 basis points to 3.5 percent in an emergency move last week.
There's growing pressure to address the advantages emerging economies have exploited to capture part of U.S. consumer spending. He said currency pegs may disappear, and manufacturers in developing economies will be forced to improve the quality and safety of products and the conditions for their workers, helping to level the playing field.
Moments of Doubt
Paulsen said his goal is to accurately forecast economic trends and summon the conviction to stick to his views when short-term sentiment goes against him. Being bullish as the market bottomed in 2002 caused him the worst moments of doubt in his career, and recent weeks have been almost as bad.
Paulsen is aware that the recent decline in stocks is ``a big market move that I just missed.'' Still, he is sticking to his view that the economy in 2008 will be stronger than people expect.
``When everyone's prepared for the worst, you're setting up the economy and the markets for the best,'' he said.
| ET88888 Member |
Posted: 16-Jan-2008 17:33 |
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It has been reported in our Newspapers that the Construction Industry has been booming for the last 3 years and expected to continue for at least the next 2 years. The orders for FY2007 was $27 billion and projected for another $24 billion in FY 2008. However when these Construction Companies reported their quarterly & yearly financial statements, their profits were extremely small (mostly ranging from $1million to less than $20 million). Worst still, most did not even give dividends. A mere 1% profitability would have reap $.27billion for FY 2007. Could anyone advise if there is any ways to make them account for their "reporting". |
Personally, can't comment much as I am not an expert in construction field. However, as far to my knowledge, things don't work so simple.
The billion S$ awarded does not goes to 1 or few companys. It is a big piece of cake shared. It is a summarize of the full projects in the industry.
Just talking about a Construction project alone involves many parties. Many of these steps are performed by independent crews known as subcontractors.
For example, the framing is generally done by one subcontractor specializing in framing, while the roofing is done by a completely different subcontractor specializing in roofing. Each subcontractor is an independent business. All of the subcontractors are coordinated by a contractor who oversees the job and is responsible for completing the house on time and on budget. Etc. Etc.
And the cost is pay out progressively and to many parties; so not all the earning margin would go to one company.
Will stop here, since it goes beyond my knowledge from here.