Friday, September 21, 2007

The Long & Short Of It

Magazines like to capture the trends of the day. To go long is to really like something, its worth accumulating, hoarding or holding. To go short is the opposite - don't like it, waiting to implode, basically the risk of downside are magnified compared to the upside. These long and short calls are basically for the near term outlook, less than 6-12 months.

US Dollar - Very Short

Malaysian Ringgit - Long

US Stocks - Long

China A-Shares - Long

China H-Shares - Very Long

Bernanke - Long

Greenspan - Short

Giant Casinos Operating In Macau - Very Short*

Singapore IR Casinos - Long

Malaysia High End Properties (more than RM1.5m) - Short (pls refer to my blog on why Malaysian real estate will under perform)

Malaysia Mid-High End Properties (between RM700k-RM1.49m) - Very Short (its a long term affordability view)

IDR - Long

The Other "Corridors" - Short (for now)

Heroes - Very Long

Who Wants To Be A Superhero - Very, very Short (Monkeywoman???)
Hedge Funds - Short

Soft Commodities - Long

US Housing - Short

UK Housing - Very Short

People With Dogs - Long

People Who Are Dogs - Short

Jose Mourinho Going To Spurs - Specky Long

Jose Mourinho Going To AC Milan - Very Genuine Long

Jose Mourinho Going To MU - Very, very "Sell Your Grandma" Short

All Blacks To Win Rugby World Cup - Very Long

Wallabies To Win The Rugby World Cup - Long

Springboks To Win The Rugby World Cup - Short

England To Win The Rugby World Cup - Very, very Short

Kilkenneys - Short

Guinness Draft - Long

Blended Whiskey - Short

Single Malts - Long

Oil & Gas - Very Long

China Covered Warrants On Bursa - Very Long

Property Stocks In Bursa - Start To Short

Palm Oil Stocks In Bursa - Long Again

Leslie Cheung - Always Long

Britney Spears - Pretty Short

* I am pretty negative on the gaming giants operating in Macau. Sure, you get a mega number of visitors, esp from mainland to Macau. Three things why I am very bearish:

a) The average length of stay per vistor was less than 2 days - does not tally with the number of hotel rooms being built.

b) The cost incurred and the expected returns are geared towards the gaming returns - unlike Vegas or other casinos in the world, the Macau casinos see 90% of their revenue from one game type i.e. baccarat. This skewing of revenue streams from a game which has a very low house favouring odds spells danger. The aggressive competition among the operators results in high-comp and high-commissions to junkets, which further reduces the net take on baccarat games. Watch the smaller casinos fall first, followed by a couple of big ones reporting losses in 2008. You want your revenue base to be well diversified, not concentrated on one game. The competition to lure the high rollers will be enormous, and will cut into earnings no matter how you see it. Sands did very well last year because it was the first of the big boys. Bye bye Mr Ho.

c) The big gaming companies have over-invested into Macau. Over-investment results in low-capacity or low utilisation, which brings down IRRs. Over-investment = over-crowded = heavy competition = discounting and under-cutting = tears.


tcg82 said...

Good one, and here's my take on the RWC2007;

All Blacks to win -long
Springboks to win -long
Wallabies to win -very long
Lions to lose defense of RWC -yes!


rask3 said...

No neutral expectations or positions? Hmm

Zamil said...

good post.first time reading your blog and i think it`s resourceful. do you mind to write a post, guide malaysian on how to buy/sell shares iin HK market?


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