Monday, July 09, 2007

Heavy obstacles end

Since the last entry on the KLSE on June 26 2007, the stock market fell for the rest of that week. During the span of the last fortnight, the Shanghai stock market went up to 4,100+ before tumbling to 3,500+ a drop of about 600 points and ended last Friday with small rebound to 3,700+. Amateur bombers tried and failed to terrorize England and then Scotland with their car bombs filled with gas canisters and nails. (Think Yi chart timing)

I understand that some Malaysian investors lost out on some opportunities when the KLSE rebounded last week. There were rumors swirling around in the market that the KLCI would fall by 200 points or more, therefore these investors had sold all their investments to hold cash. Heck, they were probably listening to the so called ‘ShenXian’ again!

Regular readers would probably have noted that one has given several hints in the previous entry which include revealing my own investment strategy, rarely revealed beforehand, not to sell all their stockholdings. And that the Yi had only given two mild warnings. In fact one reminded investors to look at the laggard second boarders.

If investors have bought into certain second board counters – companies that have good fundamentals and paying dividends – over the past two weeks with part of their spare cash, they could be making money. Some of their shares prices have already gone up by a third, the past week. Volume is also picking up, probably retailers are bottom picking these laggards – some were ‘darlings’ of house wives and the ‘man on the street’ so to speak during the bull runs of 1993 and 1996. (Their share prices often ‘sky rocket’ when trade volume picked up because of their small capital outstanding.)

If momentum builds up this week, the second board counters could be in for a good run. In case you think that there is a conflict of interest, I am still accumulating one of my favorite counters which had hardly moved the past fortnight and bought a small amount of shares in two or three others for punting out of the total 240+ counters listed in the second board. To avoid conflict of interest is one of the reasons why I do not recommend or name a particular stock to buy which also allows me to remain blameless.

Since the recent heavy obstacles depicted in the Yi chart for 2007 will end by tomorrow, one will buy more of the favorite counters (which include low liners) that I have been holding onto, once their particular trade volume builds up.

This July run up could probably take me across the thresholds* of a 100 % return on investments for 2007 to date and the twenty fold return on capital since early 2006. All thanks to my teacher, the remarkable and inscrutable Zhouyi!

Happy returns every one!

(Both *thresholds could have been crossed earlier if not for those uncalled for remarks in May on the Chinese stock market.)

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