Tan Teng Boo is one of the investment advisers that is highly respected by many. I personally ranked him No. 1 in his stock market analysis. In today's The Star Business, he revealed that the closed-end fund under him is holding Rm 200 million or about 50% of its net asset value in cash. He has been maintaining a high cash position for the last 9 to 10 months, waiting for the right moment to enter the market.
In other words, sometimes in 2012, he has turned bearish and has started to sell down his stocks to hold more cash, waiting for the market to drop from its current 17 times price-earning (PE) to about 12 times PE, which is about 30% drop for FBMKLCI from its current level. So far, he has waited 10 months. He is a big fish, he has to sell his stocks well before the tide turned, when there is still buyers offering good prices.
Similarly when he started to buy, it is not possible for him to buy all his stocks right at the bottom. He may started to buy when FBMKLCI has dropped 30% and he may buy in stages as the index dropped further and further by 40%, 50% and until the market hits bottom.
Being a small fish, I can sell all my stocks within a day or two, the strategy can be different even though I am also aware of the impending financial implosion.
To go by the chart, first of all, Dow must be OK, then FBMKLCI must be OK too.
As long as Dow don't drop below 14776, I will assume that it is forming its wave (ix).
If Dow drops below 14776, Then it is having its major wave (6) correction.
FBMKLCI closed at 1799 level yesterday, it is forming its mini wave 3, new record highs are expected in the coming weeks for it to complete its wave (v). The market won't collapse so soon as long as Bernanke is still around.
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