11 OCTOBER 2013
Shares Investment Conference 2013: “We Are Way Due For A Correction!”
By Louis Kent Lee
We know it’s hard to know what to invest in, and of course, we know that it’s even harder to know when, to invest. That’s why we invited the best of the best, to give their invaluable insights on investments at Shares Investment Conference 2013. Read on to find out what you missed, when the best time to invest in is, the best strategy that they’ve all agreed upon.
It was raining. The foyer at Kallang Theatre continues to be filled up with an enthusiastic crowd as they waited eagerly in line to listen to investment experts gracing the Shares Investment Conference 2013. The heavy weight speakers for the event were, Dr Chan Yan Chong, Hu Li Yang and Dar Wong.
The speakers present were armed with an arsenal of investment knowledge, and are widely known and featured across many financial medias. The event was well timed as well because in the same week prior to the conference, the US government shut down and caused panic among many investors.
For those who couldn’t make it for the event itself, the following are significant round ups and insights shed by the experts during the conference.
Dr Chan: Invest With No Emotional Attachments
A lot of talk has circled around the topic of the government shutdown seen in the US, Chan, however, felt that the government shutdown in the US is aggravated too much by the media and everyone needs to calm down. The professor opined that the US government will be forced to solve this problem, and comparing this to the magnitude of tapering, this really is insignificant.
On the tapering front, the professor shared that he is confident that there will not be any tapering this year, but if the economy is in a better shape next year, the tapering will start seeping in slowly, which is very likely to be seen in 2014.
When asked about the recent performance of speculative stocks, largely seen in the volatility of shares such as Blumont and Asiasons, Chan stressed that the investor needs to really know the reason for the stock’s rise. “There’s nothing wrong with speculation, but you need to know your stop loss limit, and keep your cool like a cucumber. That’s how winners and losers are separated in the speculation world. ” Still, Chan advised that speculation should only make up a slight portion of a portfolio, with the blue chips as heavy anchors instead.
In our backstage interview that Shares Investment did with Chan, we asked him where does one spot a bottom in the market, Chan replied:
“A 60 percent fall from the peak warrants a good spotting opportunity for you to pick discounted plays, so I use this as a barometer to ascertain if it’s a good overall bargain based on such percentage reduction, but the essential point despite this is that you’ve got to have excellent holding power, and patience. It doesn’t mean that even after getting the stock at 60 percent discount from its peak, it will not fall any further, because it could, but you have to have patience, and know that what goes down, will need to come up, and you wait and let the stock run. Because that’s the law of nature.”
Hu Li Yang: We’re In Trouble Officially
Hu Li Yang floored the audience with his charm, wit and in depth market knowledge. He, however felt that the markets are way over due for a correction. Hu quoted many times that the market run up we’ve seen in the past few years were bummed up by unsustainable methods, such as quantitative easing, and that the longer this fake run up exists, the greater, and more painful the fall will be.
Hu cautioned investors that many investment instruments, especially gold, is starting to witness a gradual swing backwards, Hu said that the technical point for such fall back to stabilise upon would be its equilibrium price, which is technically taking the highest point seen and divide that amount by two.
In our back stage interview with Hu, we asked him how does an investor know when is a market turning up from its bottom. He specifically mentioned that there are a number of key things an investor will need to see before confirming that he or she can ride this upside wave with confidence. Firstly, one will need to see the 10-day moving average (MA) ticking upwards, coupled with three large green candles on the daily chart. Then, this needs to be decked with two green candles on the weekly chart. Finally, the monthly chart will need to have a large green candle that shows a gain of more than 12 percent.
In his afternoon segment that saw many attentive listeners upgrading their tickets to full day just to gain more insightful takeaways from Hu, he revealed that the best months to get into the stock markets are November, December and January. Hu also cautioned that if a red candle appears on the monthly chart that reflects more than a 12 percent decline, this means that it is a very bad omen, and downside movement might ensue.
Panel Discussion: The Best Asset To Have Is “Patience”
In the panel discussion, we heard a wide range of views from the experts. Chan highlighted his thoughts on China’s change of leadership, and how the Chinese government will constantly find it tough to clamp down the lid on property prices in China. On Singapore’s property front, Chan expressed that he does not expect resale flats’ prices to rise next year as the Singapore government is under pressure to prevent property prices from rising that much, and opined that if given a choice between parking cash in stocks or property, he would choose to do so in a property, as the recurring revenue generated from rental income is much more feasible and economical than that of stocks.
Hu felt that the markets will see a downward shift in 2014, and that investors need to be extremely wary. As he mentioned that one of the worst months to be into equities is that of October, he cautioned the participants to wait for opportunities before buying into anything. “90 percent of people in the stock market lose money, be the 10 percent that doesn’t lose money, by being patient.”
Dar Wong, although largely in sync with the tone that the markets will see a slowdown in 2014, doesn’t expect this draw-back to be that quick and that it should probably happen after next June, 2014. Wong also thinks that gold and other commodities face a bearish pressure moving forward. On the front where such instrument purchase can be done, event sponsor Bursa Malaysia, was also timely to introduce its gold futures product, which could allow retail investors to trade on the yellow metal.
By and large, all three experts agreed on the part where cash is king right now, and when the market slides and everything falls bad enough, that is when you strike. The best asset right now, is patience. And you strike when it’s hot.
The event concluded with a loud bang and many waves of applause from the enthusiastic crowd. Shares Investment Conference 2013 was great, we shall see you next year.
Publish date: 11/10/13