something to thank before i sleep and strategies  

Posted by Book Eater

Thank you Mr. Buffett for rescuing and putting a sizeable $5 Bil to save the $800 Bil worth of bond insurance houses.

Thank you US market for responding well in the pre-market open. I hope when I sleep tonight, I don't exactly wake up tomorrow seeing red lines.

I know hoping is for dopes but......hey, we're humans haha.
Btw, I read a short summary of ING. I respect this bank very well especially their analysts and the people in private banking. niwei,tama na segway ko.

here's a short summary and some comments of mine on their regional investment meeting report.

- ING is of the view that a recession, if materializes, should be fairly shallow as there is no massive labor retrenchment. With aggressive monetary easing, the US economy could bottom out by mid year and recover in the second half. ING Wholesale maintains its relatively upbeat 1.6% pa growth for 2008 compared with its bearish counterparts (GS: 0.9%, ML: 0.7%)

- The typical peak-to-trough in the S&P 500 during past recessions averages 20%, and at current level of the S&P 500 represented a 15% retracement, suggesting that a large part of recession risk has been discounted. From a timing perspective, an average recession lasts 11 months and stocks bottomed around 4 months prior to the end. Arguably, stocks could bottom around 2Q this year given our shallow recession view.

As a portfolio strategy, DPM reaffirms anchoring approximately 70% of the portfolio in low market-directional assets, such as short-duration emerging market bonds, structured notes and hedge funds, given unclear market trend and high volatilities. The 30% equities could be actively invested through range trading or thematic investment ideas.


- What I've been reading from ING reflects a lot of what other brokers have been saying in their strategies. I was able to read from Morgan Stanley that they have these 3 bucket strategies with the first bucket largely on the china demand (thematic play), the commodity bucket and the least profitable of all is the asset price sensitive bucket (properties, energy etc.). I think it was Citigroup that mentioned that typically it takes around 26% declines from peak to trough on the average for stocks to be good for bottom fishing although they mentioned that around march-may (when earnings results are out) would be better timing. Most are optimistic about the second half of the year. Also , most recessions happen on the average at 13 months. we started october. usually stocks bottom out 4 months before the end. this is historically. a really great tool to read is brett's site., very very useful. he uses historical results + psychology+ technicals andfundamentals. very good. See my earlier post "Don't rush to buy in, don't bargain hunt."

Also, a number of strategies will tell you that we're better off betting our money through a flight to quality stance. that means large cap stocks will be the best performers. This is very similar with Citiseconline's strategy to play defensive stocks. time ur entry with the double test of support. That hasnt happened yet.. and go long with all that volatility.

Prices have discounted recession....but there's more downside... i think it was merrill lynch that i read who is most bearish...when it comes to bottom fishing. Will try to write up on what I've read. byee.


1 takes

hi lone voice. very interesting. over at's moneysmarts, i asked people yesterday if they can play bull in a bear market. some treasury officials i talk to make it seem like bargain hunting is a breeze. but i tend to think if you do it without a strategy, you could lose money. i hope i had seen your post before i wrote my article as this was the quote i was looking for. anyway, will check regularly for new updates. regards.

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