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Sunday, 29 June 2008

Courtesy of CNA forummer - Topsage

I made 5 phone calls to friends who are in the "investment management" line. At least those who I know are somewhat successful ( > 7 yrs, live in private housing).

These is the consensus view (not necessarily the correct view):

1. US slowdown will span 3 quarters starting from beginning of 2008 until Sep 2008.

2. Even after Sep 2008, recover will be slow.

3. Asian markets always follow US stock market down. EVEN when the actual economy is decoupled. One of my friends did an analysis - there are many US recession that did not affect certain Asian economies much, yet the stock market fell.

4. When Asian market rebounds, for economies not in recession, it is expected to be sharp.

5. The market is in grind down mood. "Finding the bottom" mood. This is a slow process and can take weeks if not months and nobody not even the greatest expert can tell you when it is over.

6. Expected markets that will show some decoupling are Taiwan & Thailand (remember Thailand missed out on a large part of 2007 bull due to politics).

7. Commodities like Gold, Oil, Copper will probably rise further but do not buy because the best entry point is behind us.

8. US economy is in big trouble. The best scenario is a shallow weakening with exports sustained by Asian economic strength. Such a scenario will cause investors to switch to Asian which is pulling the US along. But the most likely scenario is not as nice as this, the US can potentially go into an L shape recession because the economy has a very large debt and the implosive effects are potentially damaging.

Whatever it is becareful & defensive but not too pessimistic. Be selective.
Oil may be the wild card. ....a plunge in oil price might help the market along and end the gloom. But still, this may a market with a few bottoms to go through.

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