Thursday, 11 October 2012

Dow down triple digit today, what do you do now?

Dear Friends,

Market cannot go up without a pause. Dow Jones has gone from 13662, an all time high reached 4 days ago to about 13356 now. A fall of 300 points in 3 swift days. Thud!

What is the reason? Some of you might have known it, just by studying our articles and website. It is because of a change in the market sentiment of tech sector in US.

See our article below:
http://www.danielloh.com/2012/10/no-thanks-to-apple-us-technological.html

Everything started with Apple peaking at $700. Of course, market also price in the negative expectations of the 3rd quarter earnings results. Today indeed some US companies earnings did not fare that well. Alcoa, a aluminium producer company did not post a good forecast about its future earnings results even though it beats expectations. Cummings, a diversified machinery company and Chevron, an oil and gas company, also posted a warning of poorer earnings results.

It does seem like Wall Street got what they wanted today. A POOR EARNINGS scenario.

The thing is I have been through enough of earnings seasons to know. Earnings season is a month long activity. There will be days where some influential companies report better results and some who didn't. Do not ever TRUST a single day result to determine if it is good or bad.

I have been through earnings season whereby results have been so bad that, after 2 weeks of reporting, the rest of the 2 weeks, stock prices actually gone up. Why????

Because every reports is deemed BAD. Until a point that some results that meet analysts' expectations are enough to push the market forward. There will come a time this month when, the market sudddenly thinks, "Things might not be so bad afterall! We are going into the festive holiday soon! Why don't we look forward to the next quarter earnings?! Come on, the stocks have dropped enough, let us do some year end window dressing and buy some stocks that are cheap now!"

The time will come... trust me!  SOON...

So what do we do now?

WAIT! Patience is the key.

Wait for Wall street to tell you to start buying. Christmas is round the corner. Let us wait for some confidence to come back into US stock market. You probably do not need to study too much into Straits Times Index STI. It won't tell you much about where the market is heading. Look at US market. You can probably attribute the recent fall in singapore stocks to US market.

In the meantime, find the stocks that are resistant to drop! Now is the time to identify the winners from the losers! You should do more homework than lazing around. Once the market turns, these are the stocks to watch out for.

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Btw, I will be travelling to Malaysia this weekend to hold some seminars. Probably we need to ask you a favor. We are trying to work with an existing event company in South East Asia (it can be any investment training school or event management company in SEA) to hold investment events. If you happen to know any, kindly email us at rafflesbusiness@gmail.com. Thank you!

Regards
Daniel

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