Saturday, February 21, 2009

To Nationalize or Not To Nationalize

KLCI Daily Chart

So, will the US government nationalize Citibank and Bank of America in this weekend? Whatever that is going to happen, it looks like KLCI will be testing its lower boundary of the rising wedge next week. I expect it to break and a test of 800 in this month or early next month.

Finance, construction, plantation and property have been downgraded based on this week's action:
Malaysia Longterm Midterm Shorterm
KLCI Down Neutral Neutral (-)
Finance Down Neutral Neutral (-)
Construction Down Neutral Neutral (-)
Plantation Down Neutral Neutral (-)
Property Down Neutral Neutral (-)
Mesdaq Down Down Down
2nd Board Down Down Neutral

For the world, SSEC is still strong, but an analysis estimates that 1/3 of the loan in January has been diverted into the stock market! No wonder SSEC has such a good performance. For Europe and US, they are still going down. Be prepared for the next wave of financial crisis where western Europe banks have overlend the eastern Europe countries which may default on their loan.

The summary of my analysis:
World Longterm Midterm Shorterm
S&P500 Down Down Down
DJI Down Down Down
NasdaqComp Down Down Down (-)
Nikkei 225 Down Down Down
Kospi Down Down (-) Down (-)
SSECI Down Neutral Neutral (-)
HSI Down Down Down (-)
TWII Down Down Neutral
STI Down Down Down
SENSEX Down Down (-) Down (-)
FTSE Down Down Down
DAX Down Down Down

So, I will stay away from going long in any market. Do not believe in any analyst that suggest to you to buy "defensive" stocks. When the market goes down, everything will go down. It is just a matter of percentage. Of course, "defensive" stock may go down less, but why should you lose your hard earn money? Put your money in the bank better, but don't be greedy for the high interest rate fixed deposit ;)


Nazri said...

I say invest in NEstle. I have analyse the stock. It's business fundamental remains strong. Nestle's customer are loyal to it's brand. People who drinks Milo every morning will continue to drink Milo every morning.

Because the price of each of its' product are not expensive, the customer continue to buy Nestle's product.

This is one of the company where it's net worth/ share has grown from Rm1.30 from year 1990 to 2.84, year 2007. Nestle's earning compounding annual growth rate is 9% since year 1990.

Dividend per share has been growing from 0.52, year 1991 to 1.545, year 2007. Earning per share has been growing from 0.42, year 1991 to 1.25, year 2007. Operating cash flow per share and net total asset per share has been growing since year 1991.

There is no company that has a stronger business and financial fundamental than Nestle. Nestle stand the test of time.

swifz said...

This is not my kind of stock. Moving like tortoise. I prefer capital appreciation than dividend.