Thursday 25 June 2015

Greece will still plague the headlines for these few days!

Dear Friends,

It seems like a 5 year old novel talking about Greece debt problems. So what is the real problem and opportunity now?

Euro group are now in negotiations with Greece to see if they want to lend money to Greece to prevent it from defaulting on its payment due on 30th June 2015 to IMF, International Monetary Fund.

Even if there is an agreement, Wallstreet is also worried if there is enough time for Greece to receive payments to pay the IMF on 30 June.

Greece must either get a program extension, which requires approval by the involved institutions as well as several European parliaments, or agree on a new program that would include or replace the remaining funds from the old program.

My trading plan (2 scenarios) :

1) If there is an agreement reached this week, the stock market will finally be clear of any economic uncertainties on Greece for these few weeks! For me I would start to buy up some fundamentally strong earnings stocks!

2) If there is no agreement reached this week, meaning Greece might default on IMF payment, the stock market might tumble because of panic. (IMF will give only 30 days grace period to pay up)

This is one chance to buy up stocks at very cheap price! I believe even if Greece defaulting, it won't hurt the European banks like in the past as a lot of European banks have already minimize their risk exposure to Greece holdings.

Wait for one to two weeks after the tumble to buy up the stock.

In summary, in the LONG run, I don't think any Greece episodes will cause a big dent in the stock market! The whole world is already prepared for a default!

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