Straits Times Index   

STI to cross 3000 boosted by long-term investors

Volume is low.All the mice scare and still hiding. Tak takut?...lol

 

Penny stocks are outrageously risky

 

what are your favourites? can share share?

risktaker      ( Date: 14-Jun-2013 07:29) Posted: We still favour penny :)

 

I give STI 3 days to turn around, if not sayonara!

 

Stock-Market Crashes Through the Ages – Part II – 19th Century

Stock-market crashes saw the light of day more and more as the world became industrialized. The 19th  century saw a rapid increase in their numbers.

There’s money to be had at any time, whether the market is going up or down. But, it’s avoiding the downs and pulling out before the things start to go haywire that is important. Or, at least, investing in what’s good and what’s going to take a hike. But, how can you believe what people have to say? The only ones who are any good at selling a rise when in actually fact it’s a fall coming are the marketing gurus themselves. They are more common than we might think. It’s no modern invention either. We are past masters of selling what doesn’t exist. Selling make-believe is what makes people happy, until it takes a turn for the worse.

Some might say that predicting the downturn in the market can be done. You can develop algorithms and have sophisticated math, analyzing stock movements in multiple countries at the same time with split-second data churning out.  You can use whacky ways to predict what’s happening  if you can’t tot up the equations and come to a decision, like seeing how many toothbrushes are sold in the economy (as people tend to stop going to the dentist when there is a crisis). Although they are more likely to reveal what’s actually taking place, than what is going to happen just round the next corner.

Use as much economic forecasting as you like but the market won’t react always how you expect it to. We all know that. If it were an exact science, nobody would be poor. If it were a science at all, we would all be damn wealthy, wouldn’t we?

But, looking at what happened in the past sometimes helps us see what we are still doing today. We didn’t invent everything and we might think that we are high-flyers. But, somebody’s been there, done it and seen it all before. The 19th  century was the industrialized world at its first beginnings. Trade, transport, better communication and money-making were high up on the agenda.

Here are the best (or the worst, depending on which side of the fence you are sitting) examples of stock-market crashes of the 19th  century from the mammoth list that could be mentioned. The majority took place in the USA, which was at the heart of industrialized prowess at the time a place where money could be made hand over fist, but where it could be lost twice as quickly. The John-Dos-Pasos world of disillusion and hope of classes in the race to become rich and somebody, a household name:

Panic of 1819

If you were told that the Panic of 1819 was due to the issuing of paper money and over-speculation of land, then you might have the impression that we are back in 2008-2012 and the financial crisis and the quantitative easing methods of today. But, no! The Panic of 1819 was due to the fact that Britain and France had been at war for decades, even centuries. They both had a need for US-produced goods and in particular agricultural products were very much in demand. Thanks to the warring between these two countries, the United States was able to become a major supplier and it prospered. However, when war ended things took a dive for the US. Europe was no longer in need and there was a bumper crop in 1817 in Europe leaving the USA in the lurch.

• Americans had been buying up land at rates that had never been seen so as to produce in what looked like a booming industry.
• In 1815, 1 million acres of land were sold off to the people.
• By 1819 that had increased to 3.5 million acres.
• All of it, of course, was purchased via loans. As things took a nose-dive, the people were unable to pay back their loans.  Sounds like the credit crunch and the sub-prime crisis.

You would have thought that we would have learnt our lesson back then, wouldn’t you? But, no, we did the same thing: lending to people in times of economic boom, even to those that are going to be unable to pay it all back.   The banks ended up demanding immediate repayment so they didn’t end up losing out. Sound familiar?

• Prices of agricultural products were plummeting while the plantation owners were over-producing due to having bought up too much land.
• Land prices fell and brought the economy down as the banks called in those loans.
• Bank credit was restricted, loans were cancelled and the Bank of the United States started printing money to deal with the lack of funds.

The printing presses went into action and the rest is history. Almost exactly what has happened today, isn’t it? Didn’t the people who decide study the Panic of 1819?

It was all down to a chain of events, the war between two countries, the reliance on another and suddenly when they are no longer at war they do a runner leaving the country that helped them out to do their own thing. But, isn’t all fair in love and war?

Perhaps the only good thing that came out of the panic was the understanding that there had to be some sort of poor relief for the people that were left destitute and the US education system was also created.

Panic of 1837

It was the USA’s trading relations with Great Britain that caused the panic of 1837 to take place in the US once again. Those Brits have a lot to answer for, I hear you say. They were economic leaders in the world (back then) and what they did had a great effect on what the rest of the world either did or what happened to others. Secondly, there were few trade barriers and that meant that the effects of liberal economics with little restraint based purely on supply and demand meant that changes were made almost immediately and put into effect.

The story goes like this.

• Britain was suffering from a slump in its agricultural production and ended up relying heavily on the USA, especially in terms of cotton and crops.
• The US agricultural industry was booming and so British investors placed their money where they were going to get the best returns.
• However, they didn’t bank on the fact that the  Bank of England  would increase interest rates (from 3% to 5%), in an attempt to replenish their diminishing reserves.
• The money that had been invested in the US by the British investors suddenly flowed back into the coffers of the Bank of England.
• The US was left only with the choice to do exactly the self-same thing in a copy-cat scenario.

A bit like bailing out the banks in the financial crisis. You start one and then everybody has to do it, don’t they? Or if you start baling out one country suffering from financial instability and the consequences of rising debt, then you can never let up and you can’t say no to the others. Then you are really done. Isn’t that where we are at now?

The US raised interest rates and there were restrictive credit policies. Money was in short supply and printing presses started up again to inject money into the economy. Politicians and Bank of the United States’ officials refused to make public addresses and people buried their heads in the sand thinking it would blow over.

Cotton prices shot through the roof and so did land prices. The effect was almost the same as in the 1819 panic: land prices and inflation in general. The result was catastrophic for the USA and ended up going well into the mid-1840s.

Panic of 1857

The 1857 panic is commonly known as the world’s first global financial crisis. By the 1850s, travel had gone through great changes. Railroads were already at their height of use and transport in trade was faster and better than it had ever been before.

Once again, it started in Britain at the time. Looks like Britain was the USA of yesterday, the financial-crisis instigator of the world at the time. Tough to carry that burden on your shoulders, but one saving grace is that people forget who, why and when very quickly just as soon as the next crisis comes along. Otherwise we wouldn’t be repeating history over and over, would we?

• The British government in 1857 did (and succeeded) everything in their power to get around the  Peel Banking Act of 1844, requiring that gold and silver back up the money that was in circulation.
• The panic that ensued in Great Britain spread rapidly to the US and it was the Ohio Life Insurance and Trust Company that caused the triggering of the panic in 1857 in the US.
• It was all down to fraudulent activities of the bank’s executives that there was a bank-run in 1857.
• The bank suspended activities after incurring losses of $7 million.
• They had lent too much money to railroads in the conquest of the west.
• However, it was in 1857 that the flow of people to the west had considerably slowed down.
• They had over-lent to railroad companies and they didn’t have enough gold or silver to back it up, just like in Britain.
• The value of land fell, the railroad securities disappeared.
• The banks went into meltdown.

Once again, the banking system had lent too much in times of economic prosperity, and they didn’t have enough to back it up. The railroads also went into meltdown and so did the farmers. Land prices depreciated and crops became almost worthless (grain hit the floor at $0.80 a bushel, spiraling from the dizzy heights of $2.19).

It was the Panic of 1857 that partly resulted in the American Civil War a few years later. The north had suffered immensely from the drop in prices. The south had not suffered quite so much.  The south became stronger in the relationship between the two parts of the USA, but tensions grew to the widening disparity between the wealth and the problem of slavery that was central to their dispute.

Panic of 1873

This time it was another world recession that became the first one that was known as the  ‘Great Depression’  until an even greater one came along in the 1929 and then it was relegated to the back-burner, forgotten. It was a depression that was triggered by Germany this time and their decision to get rid of the silver standard. It put an end to Great Britain’s hegemony in the world.

• Bank reserves had been put under a great deal of strain from money that had been lost in the construction of railways as well as due to speculative investments and property-sector losses that hit hard. The railways were the dot com bubbles of the 1990s and 2000s. Massive investment, euphoria, then a pin prick, and it all deflated.
• The German decision to stop using silver to mint coins resulted in a fall in prices in the USA, where most of the silver was exported from at the time. Due to the fall in demand, the Coinage Act was passed and meant that the US used the gold standard. Silver lost even more in price.

The Germans instigated the move away from liberal free-market policies towards ones that were more conservative.

Bismarck as Chancellor nationalized industries and even created the social security system to provide workers with pensions so that they state wouldn’t have to pay for them at retirement age (which was later exported all around the world, until it became too much for us to finance).

Conclusions

The panics happened every twenty years and then towards the end of the 19th  century they accelerated closing the gap between each panic as we became more industrialized, more dependent on travel, transport and communication became faster and faster. There were other panics that occurred in 1884, then again in 1893 and 1896. Panic was synonymous with the world that the 19thcentury had wafted in on the railroads that they were building. But, it wasn’t a patch on what the 20th  century had in store as the panics and crashes became more and more recurrent.

So, are there reasons why the stock markets created so many bubbles that bust in the faces of our 19th-century ancestors? That was probably because there was a major rise of the middle-class in the 19th  century. It wasn’t just the select very few that were from the higher echelons of society that were going into business. Making money, rather than inheriting it was the order of the day for the first time in the 19th  century. The Industrial Revolution had brought entrepreneurship into the living rooms of the middle classes on a steam train. It had opened doors in communication, transport and energy. There were opportunities to be had in every sector and there were at last more than just that select few who were ready to make a buck.  There was also reduced interference by the state and the beginnings of the forging of the system in which we live today. Risks were taken. Whether they were calculated risks or not is entirely another matter? But, it was the 19th  century when industrialization meant opportunity and yet still at the same time a working class that was not adequately organized to defend itself or demand more than the entrepreneurs allowed them to.

Very interesting article for sharing thoughts.

 

IMF: It Ain’t Over Till The Fat Lady Sings

‘It ain’t over till the fat lady sings’. No, I'm not referring to Mrs. Lagarde and no, I don’t want a law suit on my hands. I’m just saying. The expression is commonly used to infer that people shouldn’t be presuming the final outcome of a situation, until we all get there. It’s not because we are nearing the end of quantitative easing and Mr. Bernanke is probably preparing to take flight, as the heavens open and it doesn’t just rain, but it pours on all of us that we should be saying it’s all done and dusted. The International Monetary Fund made an announcement today that they strongly urged the USA not to backtrack too quickly on quantitative easing that has been set up. It also went on to state that repealing budget cuts (sequestration, which is across the board in the USA due to the inability to come to a decision in Congress) as it would be nothing other than damaging to the US economy. The budget cuts known as sequestration began on March 1^st 2013 in line with austerity fiscal policies of the USA., bringing about $1.2 trillion in debt reduction (through cuts up to $995 billion and reduction of $228 billion in interest savings).

The International Monetary Fund analysts believe that if budgetary cuts are taken away, then it could trim a substantial slice off economic growth in the US. Forecasts could be lower by as much as 1.75%, meaning that growth prospects would be no better than 1.9% in total for this year. That would drag the US economy down or at least keep it from making good gains that might have shown through in recent weeks with unemployment figures falling. Previously in April, the IMF had estimated economic growth for next year to be at the 3%-mark, but they have also revised that, dropping their estimate to 2.7% for the moment.

The IMF reported that " The deficit reduction in 2013 has been excessively rapid and ill-designed" . ‘Hear! Hear!’ some might well retort. Cuts will be made in education and infrastructure spending notably and it’s those areas that might lead to better recovery of the economy in the long-term. Payroll tax cuts that will come to an end will also have a knock-on effect on the economy in adverse terms.

The silver-lining is that the IMF believes that US debt will reach 110% of GDP. It will then be at the peak and will decline after 2015. It’s presently at 101.6% (2012) of GDP. So, we still have more to spend? Or rather we still have more to spend of what we don’t have.

The other good piece of news is that the IMF urged the Federal Reserve to maintain quantitative easing until at least the end of 2013. That might put investors in a more peaceful state of mind. But, for how long. The end has got to come sometime. But, just not now, maybe, while the economy is still not doing well enough. Delaying it will only perhaps make the market even more difficult when it comes to weaning it off the cash-pile being thrown at them. The way markets have reacted by off-loading bonds and the volatility of the reactions that have taken place over the past few days, means that crossing that bridge will have to be way before the Federal Reserve actually gets to it.

Whatever happens, it looks like the fat lady has indeed sung. But, it’s not over yet. What was it that someone else said? It ain’t over till it’s over. But, then it’ll probably be far too late. So, this time, it’s probably a good thing that we had to sit through the warbling of Ms. Lagarde at the International Monetary Fund. Now, the question is, will the US federal government and Mr. Bernanke take head from the soprano singer over withdrawing both QE4 and budget cuts? Is that the sound of glass breaking?

 

I may be new to SJ, but i have been investing for a long time. Never have i lost any money, except when i just started. I don't consider myself a trader, but rather an investor. I look at long term, and not short term. I don't ask to reap profits in a short time, but just seek to continually grow my money. And never once i consider myself a greedy mouse, as much as you would like to think everyone who " play" in the stock market is. I shall not comment on your views about the stock market and your philosophy for investing or trading.

Precisely because i am new to SJ, and from so many posts here in SJ, I am pretty shocked to see so many people has such a distorted view of the stock market and how much they want to earn in so short a time. What really is the essence and function of a stock market and what's the purpose of them serving the economy? Why do companies get listed? I am afraid many people here will just think of the stock market as a giant casino, which dictates what they are doing here and how they trade. Mice or pipers or sharks, whether for BBs or small-time retail investors, one's philosophy in life and views of the stock market will determine the kind of " game" u play in the stock market, and with it therefore comes certain rules for playing that game.

Your rules may probably be right for the game you are playing, but that's your game, and not mine. So don't try to see me the way you see yourself. Shall say no further. Lastly, you do post some unbiased and nice facts and updates about indices and the market. I do appreciate because from all the information here, from you and others, I can spend less time sourcing for them. Good luck in your game!! =)

kelvinLim123      ( Date: 16-Jun-2013 14:27) Posted: Retailer are mice, BB are the piper. It is the BB that move mkt, it s the greedy retailer like u and me that go for it and take their bait. U must follow the trend, the trend is your friend, thus follow smart money, not anyone here. All here are like u and me, small timer, u think all those so call sifu are really tofu. they are as good as zero, u want to trade, u go learn, not form here. not from asking me or anyone. u will pay a price for this,   SFGuyRuleZ      ( Date: 15-Jun-2013 04:28) Posted: A person's values, beliefs, morals and principles will determine his own investment philosophy and strategy while investing or trading in the stock market. Everyone also have different time horizons as well as their own target price, stop loss, price to enter,etc... In short, everyone have their own style of investing/trading in the market, and there really is no right or wrong if your style works very well for you and in line with your values or principles. But from a particular someone in SJ and from his many posts in other forums, he seems to only believe his style and method is the holy grail of investing/trading and can't wait to bring down anyone who deviates from his. It irks me so much that I have to post this because he is getting too loud and in your face. I respect many people in SJ, people like octavia, ozone, guoyanyunyan, peter_pan, etc..., who shares facts, updates and reports in an unbiased manner, so that readers in this forum can benefit and decide what they want to do without feeling being " influenced" . I always believe in this market and in the economy, everyone has an important part and role to play. Not everyone is a BB bootlicker and likes to smell their fart. Without retail investors' money also, fat hope that any stocks can rise to whatever value. Just my 2 cents worth..

 

Dik, ya betul betul takut....baru cancelled Q buy order for tomolo....lol.

GorgeousOng      ( Date: 16-Jun-2013 15:50) Posted: Every day Uncle Kelvin talks like that I am very scare scare.....must drink more chang beer ...n drunk arh!!! Octavia      ( Date: 16-Jun-2013 15:12) Posted: Cute analogy.

 

Yes bro, sweat it out n enjoy to the fullest cos is yr day....Happy Father's Day!!

Octavia      ( Date: 16-Jun-2013 15:01) Posted: Guess we men deserve it sometimes ... Sistas not included...lol GorgeousOng      ( Date: 16-Jun-2013 05:55) Posted: Happy Father's Day to all daddy n papa!

 

Every day Uncle Kelvin talks like that I am very scare scare.....must drink more chang beer ...n drunk arh!!!

Octavia      ( Date: 16-Jun-2013 15:12) Posted: Cute analogy. kelvinLim123      ( Date: 16-Jun-2013 14:27) Posted: Retailer are mice, BB are the piper. It is the BB that move mkt, it s the greedy retailer like u and me that go for it and take their bait. U must follow the trend, the trend is your friend, thus follow smart money, not anyone here. All here are like u and me, small timer, u think all those so call sifu are really tofu. they are as good as zero, u want to trade, u go learn, not form here. not from asking me or anyone. u will pay a price for this,

 

Good time don't come often...so "behave" yourself.....enjoy n have fun just for today only hor!!!!Hahahaaa!!!

Octavia      ( Date: 16-Jun-2013 15:01) Posted: Guess we men deserve it sometimes ... Sistas not included...lol GorgeousOng      ( Date: 16-Jun-2013 05:55) Posted: Happy Father's Day to all daddy n papa!

 

Cute analogy.

kelvinLim123      ( Date: 16-Jun-2013 14:27) Posted: Retailer are mice, BB are the piper. It is the BB that move mkt, it s the greedy retailer like u and me that go for it and take their bait. U must follow the trend, the trend is your friend, thus follow smart money, not anyone here. All here are like u and me, small timer, u think all those so call sifu are really tofu. they are as good as zero, u want to trade, u go learn, not form here. not from asking me or anyone. u will pay a price for this,   SFGuyRuleZ      ( Date: 15-Jun-2013 04:28) Posted: A person's values, beliefs, morals and principles will determine his own investment philosophy and strategy while investing or trading in the stock market. Everyone also have different time horizons as well as their own target price, stop loss, price to enter,etc... In short, everyone have their own style of investing/trading in the market, and there really is no right or wrong if your style works very well for you and in line with your values or principles. But from a particular someone in SJ and from his many posts in other forums, he seems to only believe his style and method is the holy grail of investing/trading and can't wait to bring down anyone who deviates from his. It irks me so much that I have to post this because he is getting too loud and in your face. I respect many people in SJ, people like octavia, ozone, guoyanyunyan, peter_pan, etc..., who shares facts, updates and reports in an unbiased manner, so that readers in this forum can benefit and decide what they want to do without feeling being " influenced" . I always believe in this market and in the economy, everyone has an important part and role to play. Not everyone is a BB bootlicker and likes to smell their fart. Without retail investors' money also, fat hope that any stocks can rise to whatever value. Just my 2 cents worth..

 

Guess we men deserve it sometimes ...

Sistas not included...lol

GorgeousOng      ( Date: 16-Jun-2013 05:55) Posted: Happy Father's Day to all daddy n papa!

 

It is true that China is on the down, look at the revenue of some s-chip. down 60 to 90%,


if over the next 2 to 3 Q , thing get worse, they will go belly up,

if you got s-chip, time to be careful. if your losses is small, just move them to the side and to our small cap or mid cap later when mkt have more or less bottom to our small cap or mid cap.

 

You have to keep our losses small, dont stubbornly hope against hope and hold till px come down too much that cut loss is useless.

it is not how many losses u make, it is how big your lose, in any trade.

this is not my own invention, this you can google abt trading and they tell u that.All trader will tell u the same thing.

but human being are hopeful animal, thus that is the weak point.

novice_trader      ( Date: 15-Jun-2013 02:10) Posted: As we speak now bro kelvinlim123, Dow -0.78%, S&P -0.61%, Russell 2000 -0.98% (980.81)... I'm not breathing now, maybe if possible wake up 2 weeks later as u said to be safe. kelvinLim123      ( Date: 15-Jun-2013 02:05) Posted: If these figure cannot hold, you better hold your breath !!! i hope it does, but if it do not, then good luck everyone. we will know soon, over the 2 wks

 

Next week and the wk after , we will be clear where mkt will be heading.

But i see mkt will be push up once more time as usual to suck in more blood. Hope so. so i can sell to strength.

Look last week u sell to strength , never wrong.


Then u see those sifu come and tell u abt CMZ, sinograndness happily,

then later they will be sad and speechless as usual.

 

Retailer are mice, BB are the piper.

It is the BB that move mkt, it s the greedy retailer like u and me that go for it and take their bait.

U must follow the trend, the trend is your friend, thus follow smart money, not anyone here.

All here are like u and me, small timer,

u think all those so call sifu are really tofu. they are as good as zero,

u want to trade, u go learn, not form here. not from asking me or anyone.

u will pay a price for this,


 

SFGuyRuleZ      ( Date: 15-Jun-2013 04:28) Posted: A person's values, beliefs, morals and principles will determine his own investment philosophy and strategy while investing or trading in the stock market. Everyone also have different time horizons as well as their own target price, stop loss, price to enter,etc... In short, everyone have their own style of investing/trading in the market, and there really is no right or wrong if your style works very well for you and in line with your values or principles. But from a particular someone in SJ and from his many posts in other forums, he seems to only believe his style and method is the holy grail of investing/trading and can't wait to bring down anyone who deviates from his. It irks me so much that I have to post this because he is getting too loud and in your face. I respect many people in SJ, people like octavia, ozone, guoyanyunyan, peter_pan, etc..., who shares facts, updates and reports in an unbiased manner, so that readers in this forum can benefit and decide what they want to do without feeling being " influenced" . I always believe in this market and in the economy, everyone has an important part and role to play. Not everyone is a BB bootlicker and likes to smell their fart. Without retail investors' money also, fat hope that any stocks can rise to whatever value. Just my 2 cents worth..

 

I am not saying these are sure thing, there is no sure thing, absolute right or wrong,

There could be chance that good news may lift dow higher, thus also russell 2000 higher. and void the downtrend.

This is the best we can hope for, but what wrong with preparing with the worse outcome.

Japan is real, if their bond crash, this will be the end of all rally,

just have a stop loss for all vestment is what we can do, and take profit for what we have however small,

before they are gone, yes, u may miss out some if mkt turn, but at this point in time, chances are in favour of bear,.

dont try to cheery pick on every dip, it is not buy the dip, when fund leave, they wouldn t be back so soon,

and when big blue tuen down, sentiment will be bad for small and mid cap as well, 


unless the counter is play by BB, that is what i am on the lookout to profit.

WB said, " you never go broke taking profit."

novice_trader      ( Date: 15-Jun-2013 02:10) Posted: As we speak now bro kelvinlim123, Dow -0.78%, S&P -0.61%, Russell 2000 -0.98% (980.81)... I'm not breathing now, maybe if possible wake up 2 weeks later as u said to be safe. kelvinLim123      ( Date: 15-Jun-2013 02:05) Posted: If these figure cannot hold, you better hold your breath !!! i hope it does, but if it do not, then good luck everyone. we will know soon, over the 2 wks

 

http://www.cnbc.com/id/100809053

Easy come, easy go. Hot money, or speculative capital flows, triggered by the U.S. Federal Reserve's ultra-loose monetary policy, is fast exiting emerging market equities, confirming worries over the negative consequences of such policies.........from this.

(Read More: Emerging Market Funds See Biggest Exodus Since 2011)

to this...Read More: Wild Swings? Emerging Currencies Have It the Worst)

 

Happy father's day to all!