Monday, January 19, 2009

Phillipcaptial Market Watch

I did not really find this video very informative this time round. However it seems like the stimulus package in the US is aiming more at the low to middle income. ( does this remind you of Singapore? )

  • US personal expenditure has been dropping for 5 months ( consumption decrease)
  • US personal savings have been going up since Aug
  • Manufacturing has dropped
  • The new stimulus package is aimed at low to middle income people with an emphasis on tax cuts.

The reason why Singapore was the first to go into a recession in Asia is due to our high dependency on the US economy, hence news of the US economy will ultimately affect us the most.

Now about some other things. If you all have been keeping up with earnings reporting, there is a majority of companies reporting losses. Which is actually a good thing. It is because it is 'performing' up to expectation of the market from 6 months ago. And if you also realized, the market is not really shaken by these reports already. This I feel is a sign that the bottom might be coming.

Also, like in my past posts, I mentioned about an increase in auctions. 'The Edge' Magazine also reported about this finding. It says that there are a lot of people attending these auctions, but most are not buying because they are afraid that the price will drop further. However the article also says that most of the time, people will wait till they miss the bottom and start buying only when the market is already mid way of its bubble. So in general if you think its cheap enough, it should be alright to buy. But in my opinion, wait till the end of the year first. The property market still has MUCH MUCH more to drop.

One more of my gut feel is being reported. Soy beans! The edge magazine has an article on it. Seems like it might start to get more coverage. Next thing before you know it, the price of it will be running like crazy. This is usually how prices of things run. First, people who have been doing their homework finds the good investments and start investing in them. Then there will be more coverage of such investments in order to lure more people into buying it. Hence the price will start running. And when the is about to burst, the people who are first to exit are the same people who entered it first.