Saturday 26 January 2013

Questions by a friend on Apple and Singapore Market and Interest Rates


1) Maybe give example of why Apple shares collapse despite so many buy calls from analysts. 

Apple I feel will be back this year when it is going to release a new product which they have every year. If it manage to have I-TV, this stock will be back up. I did not know that a lot of analysts issue buy calls. But i guess now, one by one they will lower the expectations, starting form Goldman yesterday, which is perfect for Apple!

Apple I actually predict it to gap up yesterday. This goes to show that earnings is a dangerous game, you are more often wrong than right. Yesterday the market choose to focus on the poor i-phone sales not reaching the expected target even thought the EPS exceeded the expected figures.

2) Maybe discuss how resilient the Singapore market will be going forward and why it will stay that way. 

Singapore follows US stock market closely, and i believe if US drops, which I predict in the next 2 months, singapore should follow. 

3) Maybe discuss what happen if interest rate start to rise as predicted by Soros recently.

I feel interest rate will only rise when unemployment rate falls to 6.5%, as that is the target FED lays. And I dont think it will happen until next year. But if it happens, the stock market will panic a bit, but it will be a tremendous chance to enter as it means that economy is doing well. A little interest increase dont hurt, but will stimulate the stock market. 

Having said that, we predict Asia will be the next region to suffer from an economy collapse if interest rate goes to a high point, as our inflation problem is more severe than US or Europe

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