Tuesday, April 17, 2007


High Anxiety

One of my favourite movies by Mel Brooks, and that's an apt heading for today's markets. The climb up was easier but not when you reached the peak, what now? To be cautious as the market tries to stay above the peak is good but also silly as the ones unwinding their positions are not blue chip buyers/holders or index stock holders/buyers but rather speculative trading type of shares. Geez, you are playing with half-rubbish and you like to think and trade like a blue chip investor??

Just remember how we got here, we were here before until the scary movie part 1, 2 and 3... read previous blogs please. So we have reconsidered the gravity of those so called risk and have basically brushed them aside, we have been here before. Scaling this further is not a big problem at all. China meltdown, brushed aside after looking at reality. Yen carry trade, over-exaggeration. Sub-prime, bears on a drunken rampage. These 3 were much bigger and real risks. Breaching all time highs, profit taking activity will be there but they will also be shallow and swift this time around. If the 3 tenors already came and did not conquer, the road ahead is relatively clear. Even Greenspan said yesterday that his fears of a recession has receded.

Though I think we are moving into the 3rd stage of a 4 stages bull run, I have to admit that the bulk of the bullishness is part money supply excessive growth in many countries - which brings down overall quality of this bull run but makes the current bull more sure-footed also. Sure-footed in that things like liquidity is there; silly premises such as shrinking scrip supply due to buybacks and private equity buyouts as not really productivity enhancing - so quality is not there but the surefootedness of this bull is there.

So,,guys, buyback those shares cause the blues ain't gonna fall. If the good guys are not going down, why are the little ones running for cover? Come out to play.

7 comments:

mj said...

Dali,
Have you got your hooks on EPIC yet? EPIC is a steal now - 2.38.
Second interim dividend of RM0.035 gross per ordinary share less 28% Income Tax. Ex-dividend coming Thursday 19 April.

rask3 said...

Only fools rush in where angels fear to tread. Don't play play aah, if the game is not up your alley. Sorry to prick your over optimism.

Rask

keehoo said...

Dali...My dislike about the current rally is the fact that it is very index linked centered and not broad based. So unlike the rally in the early 90's. E/thing looks so artificial to me... Maybe the govn just trying to paint a rosy picture and camourflage the real scenario... your view on this is appreciated.

to.dare.is.to.win said...

Salvatore,
I am a regular follower on your blog. I must say that you have been pushing all the right buttons and coming out with good calls on the market. if I may comment on keehoo statement, the rally may not be broad based as in the 90s. Why? because there is not much depth in the market. And as history is anything to go by, when optimism and prices are high, there is a deluge of deal making going on right now. Artificial? I think not when the funds flow are so global right now..

Having said that, I sitting back and waiting for my time to come out and play!

cin said...

Salvatore

Again,you've proven the reliability of your information.

Would you tell us now which are the companies that are likely to benefit from the pipline project in the north?

Salvatore_Dali said...

broadbase - mkt run diff than the 90s cos in the 90s at least 70% or more of volume is "false", syndicates and people gearing on T+7 and contango deals.

as in any bull run, the big caps have to move first, then stay at a certain level before the speckies come out to play

kedah - too early, main leader taking key role is Syed Mokhtar, so can buy some of his companies if u wish

Salvatore_Dali said...

rask3 - don't pour cold water and not explain why, no value add la... its ok to be wrong but must say reasons la.. see, now u r wrong and i don't even know the reason why