To Buy or Not to Buy? Part II

When the pros are reducing their stakes in stock market, the new hands or low income individuals are increasing theirs. This is a heartbreaking situation as the weak will be holding the stocks when the prices start to collapse. This is the truth of a stock market. There should always be someone to hold the hot balloon. Anyway, I am not saying the KLSE will be having a correction soon, stocks are just overbought. One can easily tell by looking at the PEs. An orange can cost 10 cents when the demand is low and cost 10 ringgit when the demand is high. Now a KLSE orange costs around 5 ringgit. There are still rooms to grow to 10 ringgit per orange but the risk of dropping back to 2 ringgit is getting higher and higher. (assuming stocks have unlimited supply - there are always sellers for almost any KLSE stock)

Smart or experienced investors know when to buy and when to exit. Novices tend to just follow others to make quick money. Greed is something hard to control.

Intel Thursday good profit news were expected make a good impact on stocks on last Friday but the opposite happened. It was due to the USD problem again. As US economy is improving, the USD will shoot back up which caused the commodity and energy stocks to retreat. Last Friday was plagued with this curse again. The rising USD may once again press the equity down but for how long? It depends again on the next unemployment report. As earnings season in the US has kicked started with mixed result, Alcoa and JP Morgan are showing weakness in the revenue and Intel is showing the opposite. I suppose profit will be less focused in this earnings season and revenue will play a bigger role as it reflects the consumer spending capability. Profit can be easily manipulated but you can lie about revenue. That is what most investors will be paying attention to.

My current holding positions in Bursa is small. There is nothing much to worry about. The question now is again "To Buy or Not To Buy"? I have several picks in my head but I will only reveal after I bought them. I don't want to influence the market or let unscrupulous traders to buy before I buy. They are for short term only. It is dangerous to keep stocks from now until April. Hope they are good buy and not good bye.