Up or Down?

Nobody knows. But I am sure it will flutuate between up and down.

People are getting impatient to make money nowadays. It is not a good sign as impatient traders are not long term investors. Imagine everyone is short term players in the stock market, what if everyone is selling? It is the long term investors that keep the stock market from crashing. There should always be someone who is holding the stock, right? The CEO? If CEO or board of directors or the companies themselves are supposed to pick up the stocks left by others, the company doesn't even need to be listed the first place as the directors or the companies are rich enough to fund their operations and projects.

For a healthy stock market, it is better to have more long term investors than the short term type. The lack of it will become another 1998 in KLSE. Someone likes to see the stock market crash as stocks are cheap at that time. But it can affect the economy very badly which results in high unemployment rate followed by crime rate (in third world countries only). Even if you are rich, your money and life are not safe. What is the point?

Back to today's stock market. Chinese shoe makers are getting a good comeback this morning session but it seems to be losing steam. My Xinquan is inviting a lots of sellers whom I believe got the shares for free as they are selling without looking at the price. If they are not getting those shares for free, they must be making big losses while the company is making big money. Nobody is as this unintelligent.

While rubber stocks are retreating its charm with the declining CPO, the chip stocks are getting cheaper as well. Year end is always a good time for Intel as companies are stocking up computers to sell. We can only see the true picture of PC market on 1Q of 2010. Those shipped computers may not end up in consumer's possesion. They may end up being displayed on the showrooms only or in the warehouse. We will see how the inventory posts any warning sign in Q1 2010 earnings report in April. Many pros may sell their shares in March in that case just to lower their risks in equity.

With rubber and chips less focused, woods and metals are having small party in the back yard and shoemakers are having their own small party as well today in KLSE:

KLSE is losing steam due to JAL announcement of bankruptcy that send Nikkei to drain. We will see more of this decline in the afternoon session. What's the worst thing that can happen to a company? Yes, bankcruptcy.

US will be resuming its trading tonight (MYT) after a president's day that is not supposed to be happy about as the Haiti's condition is getting worse. But there is no major economic bad news around the world except this JAL problem. Softness is to be expected next. US may have good earnings in the line-up but so are the expectations. If expectations are being set too high, dissapointment can send the trading mood lower.

Have a nice day!