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Blogger bantersy said...

hi dali,

what about those sovereign funds that are pumping in billions of dollar. aren't they digging their own grave as well? everything has a price, in midst of difficulty, if valuation is fair, shouldn't some counters be worth buying? talking about palm oil play, some of the counters have racked up 3x the value since 3Q last year. what is deemed fair in valuation? most stocks have came down. using a long term view, the valuation may work out to be quite a good buy. of course, market is sentiment driven and sad to say now it is quite bleak and sell seems to be the only call by everyone. citi has just released yet another set of result with more write down. with more info being released into the market, uncertainty is more certain now than months ago.

Comment: My criticism of the BOA deal is not buying at low prices but that they made an earlier "purchase" just a few months back on Countrywide. On August 23, 2007 BOA announced a US$2 billion dollar repurchase agreement for Countrywide. This purchase of preferred stock is arranged to provide a return on investment of 7.25% per annum and provides the option to purchase common stock at a price of US$18 per share. In just less than 5 months the stock tank below US$5, hence they are buying the whole company now. What I was getting at is that they read the sub prime mess totally wrong just a few months back. Now their hands are dirty and they cannot not buy the whole company at US$5. However, no mention of their previous purchase, why? They must at least explain why they got it wrong, and why they think it is OK now.

remember your call earlier that you believe market will gear up again especially US and HK but what make you reversed your gear and calling an exit on any sign of tumbling. if these few days of wrecking fit your definition of wobble, should investor turn to the exit door now and sooner?

Comment: I was slightly bearish end of December, now I am more bearish, things are fluid. I always try to explain my calls and my change in outlook. I don't think I just make calls and not at least attempt to say why. I already said the article will be in The Star this weekend, so I cannot post it up yet. The least I can do is to haul up a warning sign. At least that is consistent.

not trying to dig out the wrong calls you have made last year but you called for japan and korea market to be top pick for 2H 2007. on hindsight, it turned out otherwise. exactly, in your opinion now, what actually gone wrong.

Comment: For Japan, another change in PM and the failure to open financial markets for foreign M&A. Korea, well, I got that wrong as well.


bantersy said…
Thank You Dali for the prompt response.

Yes, you are right to say that you do indeed explain your calls with easy to understand underlying. Pardon me if I mis-quoted some of issues raised.

You are warning of a stormy ride ahead. What about those who bought stocks at last year peak? Should they sell it too at current level in view of the worsen outlook? I reviewed my portfolio and is in real bad shape with one down a staggering 40%. What do you recommend?

Thank You
Salvatore_Dali said…
u must ask yrself, what were the reasons u bought the stock for, and why did it go down 40% when the mkt is at an all time high ... did the stock go higher but u didnt take profit... if so, it looks like the fundamentals still intact, or the catalysts still coming, or have the catalysts passed (like Petrochina), or are the macro not looking so good... then u should arrive at the conclusion yrself whether to cut or not

if i bot a stock at 10.00 and it went to 6.00, cutting it might be good till the sentiment recovers ... sure after u cut, the stock may go to 4.00 but then rebound swiftly to 7.00... to re enter at 7.00 is not a bad thing cos u r buying when the outlook and sentiment favours yr stock... so cutting at 6.00 is a good thing, even buying later at 7.00 is also a good thing, no point holding when things look bad short term

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