SOS Precious Metals going thru the ROOF!

Gold touch historical high at USD1452 per oz

Silver is on 31 year high at USD39.21 per oz

Marc Faber, Jim Rogers, even Michael Shedlock is bull on gold and silver (in the long run) but expect correction before the next up cycle.

Even Charles Nenner is bull on gold, but also expected a correction before it goes to USD2500 per oz in the long run.

Long run (definition: between 5-10 years)

On a fundamental perspective, demand < supply, so fundamentally, the price should fall. HOWEVER, as we are aware, financial market price is decided by price actions of investors and speculators, which is not the genuine buyers who use the metal or genuine sellers, who produce the metal.

In other word, financial market price for gold or silver is based on the behaviour of the participants, what they understand and what they are fed. The simple deduction is MONEY PRINTING = INFLATION = GOLD & SILVER price will go up in the long term (investors and speculators long term is 1-2 years)

MyView

It is the fact that price action WILL never equate to the fundamental of the stocks or commodities, if that is the case, everyone will make money. Price action normally discount the future expectations (as normally fed by the media). So, one can conclude that the financial market price does not correlate (100%) with the fundamentals.

According to Prechter and Nenner, there are many case proven that even the quarterly results improve or better than analysts expectation, the price goes down, mainly because the market is in a DOWN cycle, period. Similarly, sometimes you find that a stock has lousy fundamentals, but keep on going up, so, it is based on the perception or interpretation of the crowd. That is why a few ways are used (not perfect) to study the price action, such as candle stick, technical analysis, elliote wave, cycles analysts, pivot point, demograhy cycles, and many more tools around, but none is perfect because human behaviour is not easy to measure.

So, depends how you look at the long term cycle, if I think it is very uncertain and a long term DOWN cycle, I go for the low beta, high dividend stocks and solid fundamental stocks. If you think it is a UP cycle, you can go for high beta stocks or even penny stocks. Like what Buffett said, only when the tides is down, you will know who is swimming naked.

So, both fundamental analysis and technical analysis tools are useful in their own manner, there is no perfect tools, but there are good and not so good tools, just use and make the most of it. Remember, even CLSA uses feng shui for the market prediction, like tossing a coin, but with different basis.

In the long run, the conclusion is the same, it is always the BANKER (as to casino) wins. If the majority wins, then, everyone is rich, no one will be poor. Everyone plays their own role, some advisors cannot be the kings, and some kings cannot be the advisors period. IN the very long run, everythings will balance itself.

SOS Australia Property Crash!!

Even a dead clock is correct twice a day.

The day is here, Australia property is going to be roasted. Get out while you can. Then the Australian dollar will follow to move down. This is not what I said, this is what the economic cycle guru said, Dr Charles Nanner.

Well, Steve Keen was 2 years early. But Nanner, will be right on the SPOT based on his track record. It will be unfortunate for those who enter the market over the last few years, especially for the speculators. It will be like US of A all over again.

Watch out! Take cover.

MyView

Over the years, we have seen a many crisis all around the world. The usual response is Australia is different or this time is different, its partner China will support her. You wish, when your own house is on fire, do you think they have time for you.

Get out while you can. Stay in cash at least for a while, the upside is not worth the risk.

SOS Fundamentals and Cycle

Well, if we are lucky, we are born in the cycle that no one has seen that property market actually comes down. That is why, it depends which cycle you are in.

That is why, the different between fundamentalist and investment cycle. No matter how you evaluate and select the best undervalue stocks, if the investment cycle is going down, you will not do any better. Like swimming against the current.

So, it is important to know the bigger cycle. Or you may be fighting against the current, which will not yield much.

The medium cycle a few said was a deflation cycle, by Charles Nenner, i.e. stocks will continue to go down to 5000 in a 2-3 years. Meanwhile, it may go sideway.

MyView

Well, if you read the cycle wrongly (the smaller cycle), you miss the opportunity (S&P went up 100% since 2009), even if your bigger cycle is correct i.e. deflation scenerio.

If you look at Japanese Yen, almost every year after the bust in 1989, high and low of yen is about 20% different. But in the long run i.e. 1989 to 2011 (march), Yen actually appreciated against US dollar.

In short, one cannot beat the MAJOR CYCLE but can take advantage of the minor cycles.

SOS Who is Charles Nanner, Part 2?

Most important point I omitted about this man, he is a 5000 DOW man by end of mid 2013.

He reads cycles, economic cycles and sunspots, huh? sunspots? Yes, although he is not a scientist.

He cycle reading has been on the target for the last 5 years, ranging from the housing collapse in 2006, peak in stocks in 2007, drop in 2008, rebound in early 2009, and a flat year in 2010. He accumulated gold since 400 an ounce and sold around 1224 per oz, and says that it will likely to correct to around 1000 before further surge.

So, you can call him Mr Sunspots, but an accurate one.

SOS Who is Charles Nanner?

He specialize in economic cycles.

All sign looks like a Japan repeat (worldwide), not only USA or Europe.

We keep the economy going for 150 years (all type of liquidity), it is reaching its end.

Cycle shows that a major war is coming by end of 2012.

Part of the Deflationary side, expect US dollar will appreciate.

Expect Dow will drop to 5000 in 2 years time, will see by end of 2013 March.

Felt gold will go to 2500, but will correct first (to maybe a thousand) before going there in the long run.

MyView

Look at the Japan tsunami, I don't think man can fight nature. So is cycle. Especially Supercycle.

USA is heading the Japanese deflationary way, so is Europe.

SOS Horror Movie, Stocks Crash?

This time it's different, the most expensive 4 words in English languague.

There is a saying, the chicken is home for roast. No kidding. This is refering to the Australia property bubble.

SOS Is Malaysian Wealth Destroyed over TIME?

Wealth actually is relative (in USD, in GOLD, in CRB, in Property). As you can see, one's wealth in RM will change and it is not within its control. In US dollar terms, since 1997 to March 2011, market capitalization in USD term has dropped 11% although the index has increased. In gold terms, RM has dropped 80% (meaning, on 1997, Malaysian can buy 11.28 oz of gold with RM10,000 and today, we can buy about 2.33 oz of gold with RM10,000). The point here is to say, after the Asian crisis, Malaysia, did not grow in terms of USD or Gold. It would be interesting to know how Malaysian did in terms of AUD dollar and SGD dollar, which a lot of Malaysians seem to migrate there. Based on 10 years (available data 2001-2010), Malaysia currency had dropped 38% against Australia and about 14% in Singapore dollars. Suprisingly, against sterling, ringgit has improved 11%. Bear in mind, this is all based on a time 10 yrs ago and today, not the average. MyView The above is not the absolute comparison (which non is in existence), cost of living of each country is different at different point of time as well. One can always argue, should I keep my money in Malaysia, my fixed deposit compounding return may be better than Australia over the last 10 years, so I may have more RM today than 10 yrs ago. One of the best way is to compare with hard assets instead of fiat money, perhaps against CRB Index. That means, how much each ringgit can buy in term of CRB Index. Yet again, this is also not absolute measurement, it is just an indication of fiat money against hard asset price over a period of time. Should you be not be travelling or using other currency at all, than the best measurement of your wealth is simple, with the same amount of money, how much food can you buy, how much more petrol can you buy, how much more property can you buy, how much more education cost increase. I think, an average range would be around 8-10% (JUST GUESSING).