Who to trust?

I know I'm not that good at reading company financial reports yet. Hence I've since learned to rely on some indicators, namely the acclaimed research analysts to help me. Often companies listed on the US stock exchange would be given ratings. Some prestigious analysts rating include Morningstar, Standard & Poor and Moody's. Companies are graded on their financial performances, such as profit, future outlook, financial health.

Back in the good old days not that long, these ratings are really popular as part of an indicator for investors especially those who favours fundamentalism. But it seems things are changing very quickly.

http://www.bloomberg.com/apps/news?pid=20601039&sid=at5FqZ7Gr0nw&refer=home

The few companies mentioned in the article, including GM (yah, the almighty auto company) is given the highest rating by Moody's despite the hugely proportionally imbalance liability to asset ratio. Now, this really puzzled me. How can a source of analysis actually giving unrealistic ratings? I mean, am I assuming now those analysts are now basing their conclusions on the setting of the good old times? Are they still out of touch with the frantic, panic of the market? It's just unbelievable!!

Stop giving misleading info at this crucial moments!! Or I'm just paranoid? Do I still trust those guys with Zagna suits to provide insightful info anymore?

Technical Rebound..... or is it?

Human is such suspicious organism. We're skeptical of things we see, feel. Why don't we trust our senses? Afterall, it's how we've evolved. If that is the case, the share market will be a very boring place. People will just buy and sell with honest intentions, and at fair prices too. But, the human factor always preside the prices.

The central banks around the globe (and I really mean most of the countries) had responded to the recent credit crunch and taken actions deemed necessary. The players in the market still hesitate. The West, with all their efforts including huge interest rate cuts, billion-dollars-bail-out-plan, still can't convince the market. It seems like the market was still waiting on something else..... the emerging markets.

The East, especially the emerging markets like China who had survived the slump last decade seems to be in better position now. Some financial institutions are still affected, including DBS in Singapore whose investment products like High Note 2 & 5. Yet, most who's not exposed to the US financial jargon has good foundation, and cleaner ledger. That leads to the general view where the Asian markets will recover sooner than the West.

Hence, the market finally responded when China announced its economic stimulus package. The relevant sectors had gained on the hope that China, who's the major consumer of development will continue to grow. It seems ironic that China who used to depend so much on US consumers now is leading the consumption. Power of the people?

Nevertheless, suspicious human nature is still in play. I wonder how long can this euphoria sustain. And, I'm not the only one. Sir Howard Davies of London School of Economics and Political Science shared the same view in his recent talk.

http://www.straitstimes.com/Breaking%2BNews/Money/Story/STIStory_300640.html

Panicky people making rash decisions. That is what the market is at the moment. Great opportunities in the market, but definately not the faint hearted ones.

Some crucial timing

Sorry, looks like I've abandoned the blog for awhile... But I actually still monitor the market from a distance!! Yeah, given the crazy movements recently, good time to stay away from the market now... or is it really?

I'm a strong believer in trends. To me, the downtrend has not broken yet. Hence, we'll continue to see some downward movements across the global markets. And I'm not the only one. Charting master, Daryl Guppy said so too in his blog...

http://www.cnbc.com/id/27526911?__source=RSS*blog*&par=RSS

But the last few days we witnesses some very strong bull run, admittedly. It's most likely due to some investors doing bottom fishing, particularly when analysing the volume of trades involved. If so, is it a good time to buy in?

Right.... now, it depends on what your view is for the near future. With the global slow down, consumer spending will shrink too. But looking across the countries too, the interest rates are pretty low. So, if you're thinking of building some retirement nest or amassing some wealth, parking money in the bank is definately not the option. Besides, some are losing trust in banking sector, not surprised. Then, maybe parking money in the equity market will earn something. Now, that's just my 2 cents' worth of thought, everyone does have different appetite for risk too.

Of course, can't finish without mentioning the very 'hot' topic of the Obama-phenomenon. I guess the market has already expected for him to win, hence his official endorsement by the US public doesn't have a great impact on the market. It'll be interesting to see how he handle the crisis when he's inaugurated in Jan 2009. Personally, I've not seen him come up with a sound or different approach than the current administration. So, I'm still unsure how he will preside the ride.....