Time to bet on stocks, says guru

News item from The Standard.

Victor Cheung
Friday, November 23, 2007

It's time to bet on, says Hong Kong's stock guru Lee Shau-kee, who is ready to throw HK$10 billion into the market when everything has cleared up.

Lee, dubbed "Asia's Warren Buffett,"said he sees the silver lining in the gloomy sentiment. "I'll split the lump of money into two shots, that is HK$5 billion each," he told a media conference announcing his donation of HK$500 million to the University of Hong Kong.

The first half, he said, will be used in a couple of days, "I already spent between HK$1 billion and HK$2 billion to buy stocks in the market today [Thursday], and will splash out the rest tomorrow [Friday]." He said he still has to see when to spend the other HK$5 billion.

Lee recalled he pulled the siren last week that the market may go very volatile; it did, as the Hang Seng Index dropped some 3,000 points this week.

"But today it's not at all the same," Asia's second richest man said.

The negative news, he explained, has at least been partly exposed, like the huge losses brought about by the subprime crisis in Europe and North America, and the mainland's cooling measures to contain an overheating economy.

"Now seize your chance to buy low," he said.

A self-proclaimed analyst, Lee said all stocks have their elemental - metal, water, wood, fire and earth.

"I always have a preference over the metal or gold, which represents the financial sector such as insurance companies and banks," he said.

The 79-year-old new age geomancist recommended Hong Kong Exchange and Clearing (0388) and Chinese Merchants Bank (3968), "but I currently hold just a little of HKEx."

While having "little feeling" over water and wood elements, Lee also liked fire, the energy industry. "That means something burnable."

He endorsed CNOOC (0883) for the first time as a good choice of investment.

Earth element, representing real estate, is a little complicated, according to Lee.

"They are also good in the long term, but as I said last month, we should be cautious about those stocks."

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Well, if my neighbor selects his stocks based on fengshui, I will say bullshit and laugh at his face. But when Mr. Lee does that, I need to take notice and look up the charts. It's not only because he is rich (and got lots of bullets) and a pro in the stock market, but also many people take his advice seriously.

HSI Weekly Chart

The HSI weekly chart shows that breakout occurs on Sept 14 (25,000). The brown color line shows that the correction should halt at around 26,000. If this happens, then the bulls have a chance of pushing it to 32,000 (and above?). If not, then next strong support is at 23,000 (everyone will cry red tears if this happens).

So, keep an eye on those metal and fire stocks. It will be your Christmas present and hopefully CNY ang pow.