Sunday, November 11, 2007

Some thoughts on the market

I am penning my thoughts here, in case I would want to refer to them a months later. This would prevent me from recalling the wrong thoughts.

First, the market is getting more dual-tracked. While I guess that both the blue chips and the small stocks would dive in coming week (or weeks), I can see some value in the small stocks. So much so that I am currently fully invested in the market. I have tried to see whether I can sell any of my position, but somehow, I find my positions too inexpensive to be sold. Maybe I may sell if I can spot much better bargains in the coming weeks.

Second, I see that some of the high-flying China stocks may be in for a bad time due to poorer than expected results. Hopefully, this does not happen to the China stocks that I hold. Anyway, if it happens to the stocks that I hold, the damage may be contained, given that these tend to be low PE stocks. (Note: A low PE ratio alone may not imply positve expected returns.)

Third, I am guessing that the broader market, STI, is in for more volatile sessions due to the subprime negativity. Up to now, I am still wondering how the subprime can affect non-financial firms (ie China firms).

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