This is not meant to be a long analysis article. At the point of writing, Dow is down 134 for the Friday trading. If not surprise or bargain hunting, it would most likely ended the week at the lowest point. After the relief rally, the stock market is again focusing on the bad news. Credit crunch seems to be over but the inflation worry persist.
At this point, these are the most prominent worries:
- High inflation or stagflation which erode the spending power
- High oil price and commodities price which have cascading negative effect on the overall economy
- The falling US dollar which could magnify the effect of above two
This is definitely not the situation that we are hoping for. But, now is also one of the moment where you can pick stock bargain. Look at CMT, the largest REIT in Singapore, it has acquired the Atrium at Orchard to be linked with Plaza Singapura. This would certainly enhance the rental return even more.
So, don't worry too much, just focus on evaluating the company fundamental to pick winning stock. In my opinion, there aren't many more downside risks, and the reward is favorable for the long term investor. I am definitely looking at picking up stock in my watch list when they are on sale again.
In the second half of 2008, there is only 50% chance that market would start to recover strongly. We shall see better time into year 2009.
Saturday, 24 May 2008
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5 comments:
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I think long term investors should start buying slowly.
Apart from the financial sector, the other sectors are not doing that bad.
Oil and gas are still doing extremely well.
Gold has been lagging, presents good buying oppt!
Hi bk,
Welcome for any comment.
Hi brendan,
Yes, at the current level, there are many bargains out there selling at low valuation. I would suggest to look at the company fundamental closely to identify the potential winner.
Yes, I had identified them.
Here are my top picks:
http://investment-news-update.blogspot.com/2008/05/stocks-that-have-potential-to-double.html
What do you think of them?
Visa should be a good stock for long term, I am not sure about the current valuation whether it is attractive.
I am more familiar with Swiber and China Sports. These are good picks. Swiber like the next winner. China Sports looks good from the past few result announcement. However, it is still a relatively new player. Although selling at cheap valuation, I like China Hongxing more.
For others, as I am not familiar with the business, I shall not comment.
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