Monday, August 25, 2008
12:37 pm - KLSE Market Outlook from Bill Wermine.
Dear Traders,
Last Wednesday I attended a talk by Robert Miles, "Unravelling the Genius of Warren Buffet" at the securities commission. Less than 80 guests attended and many were employees of the SC and executives of local stockbrokers. Robert Miles has written several books about Buffet and travels the world educating investors.
He shared some powerful insights of becoming wealthy which could be applied to the KLSE. He appears to be a very wealthy man as he is a close friend of Buffet and it would make sense that some of Buffet's wealth and recommendations has rubbed off on him.
In my opinion when so few investors attend a talk of this quality we are close to a bottom in the KLSE. It means investors and traders have given up. Many are going to options,currency and get rich on the internet seminars or MLM. Low volume on the KLSE supports this opinion. Not many sellers left.
Remember it is always darkest before the dawn.
Consumer sentiment in Malaysia is at an all time low- even lower than the 1997 crises according to PNB Parabas. Current PE is at 9.8 which is at the 3rd Standard Deviation of value.
I do not think the political turmoil has much to do with world wide demand for semiconductors and palm oil but scared investors are caught up in the panic and even dumping quality issues.
Smart money is buying these issues at bargain levels. Just read the insider buying report in the weekly Edge
Come to our next traders Club on Saturday 30 August at 10 AM to 12 AM at the Phillip Office and let us discuss these issues even if you disagree, I will share a few of his insights that I took away from his talk. We also plan a video clip from an interview Warren Buffet gave to CNBC. (Hopefully the clip will arrive from Amazon Books by next Friday. I ordered last Wednesday and am having them ship by Fedex) As of today the package has reached Japan when I checked the shipping tracker number)
If any of you have anything to share with the group next Saturday please let me or Martin know. We are short of speakers. Let me know if you wish to attend. No matter how bad is the sentiment the show must go on. We will hold our traders club even if only one trader shows up.
Martins number is 03 2084 9999 ext 3533 and email is martin_tf_wong@hotmail.com.
Below is a price/ volume chart of FXI. It is an exchange traded fund listed on the NYSE which holds quality China shares. It is bottoming after repeated tests and shakeouts. There is evidence of hidden potential buying by smart money. Should China recover that is bullish commodities/ crude oil and palm oil and that will benefit certain KLSE shares. At this level the fear, doom and gloom is the greatest but guess what the risk is low at this level with a high potential reward. Once the crowd jumps in and the news is good again- guess what ? the risk becomes high and reward is small . For you who trade US markets buy at this level- risk to USD 39 and target USD 47. This is a 2 dollar risk for an 8 dollar profit.
Last Wednesday I attended a talk by Robert Miles, "Unravelling the Genius of Warren Buffet" at the securities commission. Less than 80 guests attended and many were employees of the SC and executives of local stockbrokers. Robert Miles has written several books about Buffet and travels the world educating investors.
He shared some powerful insights of becoming wealthy which could be applied to the KLSE. He appears to be a very wealthy man as he is a close friend of Buffet and it would make sense that some of Buffet's wealth and recommendations has rubbed off on him.
In my opinion when so few investors attend a talk of this quality we are close to a bottom in the KLSE. It means investors and traders have given up. Many are going to options,currency and get rich on the internet seminars or MLM. Low volume on the KLSE supports this opinion. Not many sellers left.
Remember it is always darkest before the dawn.
Consumer sentiment in Malaysia is at an all time low- even lower than the 1997 crises according to PNB Parabas. Current PE is at 9.8 which is at the 3rd Standard Deviation of value.
I do not think the political turmoil has much to do with world wide demand for semiconductors and palm oil but scared investors are caught up in the panic and even dumping quality issues.
Smart money is buying these issues at bargain levels. Just read the insider buying report in the weekly Edge
Come to our next traders Club on Saturday 30 August at 10 AM to 12 AM at the Phillip Office and let us discuss these issues even if you disagree, I will share a few of his insights that I took away from his talk. We also plan a video clip from an interview Warren Buffet gave to CNBC. (Hopefully the clip will arrive from Amazon Books by next Friday. I ordered last Wednesday and am having them ship by Fedex) As of today the package has reached Japan when I checked the shipping tracker number)
If any of you have anything to share with the group next Saturday please let me or Martin know. We are short of speakers. Let me know if you wish to attend. No matter how bad is the sentiment the show must go on. We will hold our traders club even if only one trader shows up.
Martins number is 03 2084 9999 ext 3533 and email is martin_tf_wong@hotmail.com.
Below is a price/ volume chart of FXI. It is an exchange traded fund listed on the NYSE which holds quality China shares. It is bottoming after repeated tests and shakeouts. There is evidence of hidden potential buying by smart money. Should China recover that is bullish commodities/ crude oil and palm oil and that will benefit certain KLSE shares. At this level the fear, doom and gloom is the greatest but guess what the risk is low at this level with a high potential reward. Once the crowd jumps in and the news is good again- guess what ? the risk becomes high and reward is small . For you who trade US markets buy at this level- risk to USD 39 and target USD 47. This is a 2 dollar risk for an 8 dollar profit.
Have a profitable week ahead
Bill
9:15 am - KLCI had to break higher above 1087 to resume its uptrend
Else I am seeing a reversal very soon !
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