I watch a Taiwanese show on Cable last night and following is a recap :-
1) A head of institutional fund said stock market typically follow a pattern yearly :-
i) Feb-March - Consolidation
ii) Apr - May - Rally
iii) June - Increased Volume but sideway market
iv) July - Aug - Correction
v) Sept - Rally All the way till Jan.
2) They attribute the current Taiwan Market rally to the increase in MFG demand from China (mainly arising from demand for the China山寨products). However, some manufacturers have noted that orders for April till June have decreased significantly.
3) All are optimistic that the US Economy will survive this crisis but global growth will be driven by Asia from now on.
4) The Taiwan yield curve has turn positive and a contrarian indicator of investor risk appetite is the increase of insurance endowment that matures in a few years and pays pathetic interest spiked up sharply during Nov - Jan. The Contrarian means that most who want to leave the market have already left.. so from now on, it will be serious buyers ..
So, my conclusion is the same before I watch the programme, Buy When Dip or Buy when I spot undervalued stocks(according to my own estimation). Focus more on Bluechips for me.. and set aside a little for small caps.
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