stock market sharing (October 2008)

After all these droppings( I know...I am sad too), you can see cash flow maintainability is very very important. ( I was going to sell all JASO but realize it's a good example to show everyone cash flow maintainability is important)
1. JASO@ 10.3, JASO @ 6.7, -> JASO @3.7 , no cash flow left
2. YGE @4.95 , YGE sell @ 5.3 -> YGE @ 3.7, 100 % cash flow left + $100 earning

In Bear market, maintaining cash flow is important because I can keep increasing more stock position in the future. and earn more for next bull market while keeping my profit. In this case, stock chart, currency flow, Oil market flow becomes a factor to consider to see when to buy and when to sell.

Okay, that's the end of looking at history of investment. Now back to stock :)

Today is Oct 26. So what will happen in the future?
Some facts we need to know from October:
1. US dollar inflation
2. JPN dollar to US : 94: 1
3. Oil barrel -> US %65
4. Gold -> $730
5. Dow support line at 7800

you can see all the markets are down. That's because of de-leveraging. It's very horrible because no matter how the company value is, the price still has to drop. In order to compete with it, put option on high debt companies can be used for profit. Buy and sell will require lots of skills.

As all countries reduce their interest rate, the market should still keep going down. The bear market is not ended until the interest rate decreasing period slowed down. Holding Euro, AUS, newzealand, Cdn are very bad as money flows back to US. Hedge fund cut their investment and thus JPN keep going up. Now carry trade doesn't happen anymore because people can borrow money from US now instead of JPN. It's understandable that US will maintain the interest rate for half a year to make the economy recover.

Gold's bull market is ended for now because US dollar has built a confidence with people now. (still keep going up in bear market). I'd say ( good job, US FED >_<). The reason of buying Gold is only when US dollars starts to lose its confidence. However, this will not be happened now. But well, next bull market, US dollar may lose its condifence :). Depends how Asia RMB can freely trade or not.

Asia RMB is a long term investment and stable investment. US gov't really wants RMB to go up and up. So if you want stable non-risky income, buy RMB's bond is a better choice compared to US bond. (however, most US investors in the world don't realize it and still buying US bond. they are stilll keeping tricked by US gov't, coz US bond can't compete with inflation).

Dow support line is @ 7800 and a big plunge is needed to break this support line. If it's not broken next week the end of October, you can expect market will go up in Nov and Dec.

Here are some questions we need to answer at this point.

1. When is de-leveraging ended?
2. Any signals if the crisis is ended?
3. When is the end of bear market?
4. What do we need to prepare for next bull market?

1. De-leveraging is still going and is expected to continue. It's an effect of credit crunch. So you have to see when the credit crunch is ended.

2. The crisis is from subprime mortgage to credit crunch and lead to a bunch of problems.
So signals like: final bomb (credit card problem) exploded and solved, your consuming power is hugely affected. US starts to increase the interest rate because economy is stable. These are the signals you can look for when crisis is ended. However it doesn't mean bear market is ended. It just means the market is trying to recover itself. Usually this is the time for long term investors to come in and holds for maybe 1-5 years. (my guess is around mid 2009)

3. If you see US dollar depreciate again, that's the end of bear market. It will be the time for mid-term and short term investment to come in. (my guess is around Dec 2010)

4. Find the bubbles for next bull market, it can be bio-medical, alternative energy, environment saving companies.....Realize that???...These bubbles are what Buffett is buying these days, (bio-medical -> SNY, GSK), Alternative energy -> GE, chinese companies that produces battery, (I also read a news that buffett is interested in solarworld AG, environement saving companies ->BNI (less car, more railway), IR (energy-saving companies)). Also, after this financial crisis, the remaining banks will be getting stronger and stronger. That's why Buffett still has Wells fargo, Bank of America and Goldman Sach. All about market share in the future. Others like KO, YUM, MCD, are still good for investment as they have good china market. (The fact that China and India have billions of people is still existed. so these good managed US companies that have good asia exposure are good for investment)

side note: To be a professional investor, An example like Buffett is good to learn from. (but just trust all of what he says. a self-analysis is still needed)

OKAY, Sharing up to now.
However, just one last point to note, don't think solar stocks are at the bottom. Be skeptical.

sell 500 YGE @ 5.3

earn gradually , 1 time after 1 time

buy below 4.95 again
keep earn little by little to increase cash flow

add 500 YGE @ 4.95

time for them to cover the short sell
good luck to everyone...
http://stockcharts.com/h-sc/ui?s=yge

http://stockcharts.com/h-sc/ui?s=jaso

buy JASO@ 6.7

500 stocks

reason:
1. rsi <30,
2. after panic sell
3. next year revenue is the same as the market cap
4. holding enough cash

some thoughts to pass the darkest moment

clear high P/E stocks: FSLR drops to bring down the whole solar market

in this sale, STP is the strongest....it's seen that STP is the king....

again...be careful of bank run in US or Europe or even in the world (Australia)

keep your deposit in big banks, e.g HSBC, Wells fargo, STD, BAC..

wait longer to buy solar stocks...
wrong decision to buy JASO @ 10.2, will consider buying JASO below 7.2