WILL THE STOCK MARKET CRASH ! I have read from one of Uncle Koon's article that you have make your great fortune from previous market crashes. So I believe you are getting nearer to the repeat of your "HOW TO BECOME A MOST SUCCESSFUL INVESTOR" soon. All the best Uncle Koon. I beleive you already have prepared an exit plan in your mind and strike when the opportunities drop by. But your last sentence didnt appear like you are waiting for it soon, instead you are hoping that it won't be soon! So in my opinion you should post a new article like WHY THE STOCK MARKET WON'T CRASH. And from your own oppinion and points and not from others. Because we trust you more than any others. All the best to you Uncle Koon. Thank you.
Feb 17, 2014 MARKETS Stocks Near Records as Caution Recedes
By E.S. BROWNING
Bloomberg News Don’t look now, but after all that January anxiety, investors have pushed the S&P 500 stock index back almost to a record.
Both the Dow Jones Industrial Average and the S&P 500 last week recorded their strongest weekly gains since December, albeit in light trading. The rally left the S&P 0.5% from a record and the Dow 2.6% away.
The reason: All the things people worried about in January, including troubled developing-country economies, uncertain U.S. corporate earnings and cuts in Federal Reserve stimulus, seem less worrisome today.
And as had been widely predicted, some money managers are shifting out of developing-country stocks and into the U.S., Europe and Japan.
“People realized a Lehman event wasn’t coming,” said Jeff Mortimer, director of investment strategy at BNY Mellon Wealth Management, which oversees $185 billion. He was referring to the 2008 collapse of Lehman Brothers Holdings Inc.
“The market is looking through near-term economic softness and looking forward to a stronger second half,” he said.
Investors who feared a 10% stock-market pullback now have decided that the path of least resistance is upward again. They are putting money back into U.S. stocks.
“Concerns about weak Chinese growth and a tighter Fed, which spurred recent volatility, have eased after recent data and statements from central bank officials,” said BarclaysBARC.LN +1.66% economist Michael Gapen in a report last week.
The problem, of course, is that U.S. stocks still haven’t had a 10% pullback since 2011, and many analysts still think one is coming.
As investors become more complacent about the future, they bid stocks higher. The higher stocks rise, the more expensive they look compared to corporate earnings, and the bigger the risk of a sharp drop if there is an unsettling news development. After last year’s gains, the S&P 500 is trading at 18 times its component companies’ earnings of the past year, well above the long-term average of 15 to 16.
But as Mr. Mortimer noted, most of those who expect a decline generally don’t expect anything like what happened in 2008. So as stocks rebound, few are frightened enough to pull back. Their main concern is to be sure they benefit from future gains.
“It is easy to come up with all sorts of scenarios where we would have a 10% correction at any time,” said Seth Masters, chief investment officer for Bernstein Global Wealth Management, which oversees $71 billion in New York.
And yet Mr. Masters’s firm is keeping a higher-than-normal allocation of money to stocks. He expects U.S. stocks to return around 7% or 8% for 2014 when the year is done, including dividends. That is far below last year’s 32% total return for the S&P, but it is better than most people expect from other investment choices, such as bonds.
In fact, Mr. Masters calculates, this kind of modest annual return would take the Dow well past 20000 by this time in 2018, from 16154 today. The one thing that would prevent that, of course, is another crisis. Mr. Masters and many other money managers think the financial system isn’t suffering from the kind of excess that would cause that.
Now that stocks have doubled or tripled off their 2009 lows and no longer look cheap, they are likely to face some nasty, temporary pullbacks, but nothing more, these money managers expect. They see a future of moderate economic growth, low inflation and a still very friendly Federal Reserve.
Mr. Mortimer of BNY Mellon has a similar outlook, foreseeing a 3% to 6% gain before dividends, which means 5% to 8% including dividends.
What keeps these optimistic money managers from foreseeing even stronger stock gains is that there are too many potential stumbling blocks ahead. Earnings are an example.
Eighty percent of the companies in the S&P 500 have reported fourth-quarter profits and two-thirds came in above analyst expectations, according to Thomson Reuters I/B/E/S. That exceeds the post-1994 average of 63% and matches the level of the past four quarters. The average stock rose 0.84% on the trading day following its report, the biggest average gain since the middle of 2009, said a report from Bespoke Investment Group. So after a tentative start in January, earnings-reporting season gave stocks a boost.
But while investors were buying, analysts were chewing their nails. Analysts have cut estimates for 760 public companies in the past four weeks and raised estimates for only 457, Bespoke reported.
The results, in other words, have been strong enough to push stocks higher, but the outlook remains murky, as it so often is. Data from FactSet, a research company, show that 81% of companies that have provided forecasts for the first quarter have warned that earnings will be lower than analysts expect.
I cannot aggree at what you mentioned above as it doesn't reflect your own analysis. We really appreciate it if you can share your own oppinion and not from others.
I appreciate this thread but it's copied from someone else analysis. Please share your thoughts. It maybe useful to me and to all members. Yes your own thoughts.
Uncle Koon, I totally agreed with my brother mc121534 & my sis Christine Goh that we love to hear from your personal view on why the stock market won't crash, instead of having copied from the extract of Joel Kurtzman's interview.
You hv concluded with great confidence that the US stock market will not crash so soon & also our market will also not crash so soon too.
As a successful investor, we would appreciate that u could share with us yr foresight on the facts that the market will truly not crash so soon. In addition, every investors would like to hear fr yr prediction on when the market will crash, to enlighten us to protect our hard earned money from vanishing.
Yr personal view is highly appreciated. Thank you.
As you know I am not an economist or an accountant. I am just a businessman and as an entrepreneur, I look at the stock market or any business proposal optimistically. I am always bullish. I naturally want to find out how I can take advantage of the situation to make some profit.
In this case, after reading what the expert said, I believe what I read. Of course there will always be some disbelievers, some believers, some have no opinion of their own, some naïve people who would accept any thing, some opinionated people who would only believe in his or her own opinion and disagree with whatever he or she reads, and finally there some with shit in their heard who would radical every thing they read.
A entrepreneur means a person organised a business , a businessman means industrialist, manufacturer, dealer , trader and deal maker. Now you mentioned that you are actually a businessman and entrepreneur too. I dont believe that as a well respected figures in our soil as everybody said, instead you send me the posting as below. I am very disappointed as you are misleading me and you show me your real intention is to fulfill your own intentions. Anyway this is my last comment in your blog that divert and confusing from you saying "noble intention" it totally different from your intention to help and guide the younger generation. Thats's all.
Thank you.
Posted by Koon Yew Yin > Feb 16, 2014 11:40 PM | Report Abuse
Christine, what business are you doing? What kind of business that requires your attention even on week ends? You seem to know so much about share investment, why don't you stop doing business and invest in shares?
In share investment you are not required to work on week ends, you will not have bad debts, you will have no management and tax problem problem. Moreover, you do not need to deal with people especially the hard nuts.
Christine what uncle mean is what I can creating money making machines. Property rentals or publishing a book are some examples. I am not sure if shares investments creates passive income.
The current high volume traded in bursa esp on penny stock or lower liners are signs that market might reverse soon. This has been proven a couple of times already. Keep a good watch out.
Christine, please write to me directly koonyewyin@gmail.com so that we can communicate outside this public forum. I believe I have the necessary experience in helping people and I genuinely want to see how I can help you. Among the outstanding people I have helped are multi millionaires such as Lin Yun Ling, CEO of Gamuda, Ng Ying long, former CEO of Mudajaya, Fong Loong Tuck Dy Chairman of Glomac.
l believe, I can learn from you as you are a very experience entrepreneur. That's the reason why I posted my own experience to share in your posting. Now that you understand my sincere view I feel we have much to share. Tonight I will meet a group of Public Listed Company Ceo .I will write to you at your said email about one good listed undervalue company to share with you. Hopefully we can share our view and exchange our ideas to be a successful trader. My long term invested stock is GHL Systems bhd.
Dear Mr Koon, I missed out your JT when you highlighted it at range of RM2.20. Now the price has lifted to RM2.4. Is the current trend justifed entry, or I should hold my breath first for lower entry? Thank you.
Dear Mr Koon,I think I should rephrase my Q: what are the factors you always have in mind when deciding for entry or increase holding for a specific shares for a mid to long term holding? Thank you.
Kitty28, it is difficult to answer your question because it involves human psychology and your financial position. Supposing you have just discovered a really good share but it has already gone up 10 or 20%, would you still buy it? As you know no one can predict whether the share will go up or down in the near future. To buy or not to buy depends on your financial position and your appetite for venture.
Supposing after you have bought a good share, its price went down, what would you do? Would you sell, hold or buy some more?
Supposing after you have bought a good share, its price went up, what would you do? Would sell, hold or buy some more?
Thank you for your kind response. Financial Position Scenario:- Suppose I have a spare cash of only RM10K for share investment purpose on behalf of my child, which I may need to realize it in about 10-15 years later, is JT a good choice for my purpose? Whatever decision I made is absolutely at my own risk..:)
Kitty28, please write to me directly koonyewyin@gmail.com so that I can advice you privately. If I write on this forum, there will be so many people giving you unsolicited advice and you will be more confused.
A lot trying to stay being too defensive and missing a rally can have just as much long-term impact on your portfolio
Making a market-timing call requires good timing — not perfect, but good — at both ends of the deal, because if you buy in late, after the rise has started, or sell out only after a decline becomes apparent, you’re not achieving the classic “buy low, sell high” paradigm
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Posted by eric8168 > 2014-02-18 18:07 | Report Abuse
agree