U.S. stocks erased a week’s worth of losses, surging after Federal Reserve Chairman Ben Bernanke signaled the central bank is committed to a policy that’s helped stocks rally for three years.

The Dow Jones Industrial Average rose 160.90 points, or 1.2%, to 13,241.63, gathering momentum throughout the day to more than recoup its 152-point loss, or 1.2%, last week — its worst week of the year.

Done deal, finally! But Greece is not going to be the same again, with all those austerity measures it might just be a half-dead patient for many years.
 
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BRUSSELS, Feb 21 (Reuters) - Euro zone finance ministers approved on Tuesday a second bailout for debt-laden Greece that will resolve Athens' immediate repayment needs but seems unlikely to revive the nation's shattered economy.

 After a marathon 12 hours of talks through the night, euro zone officials said ministers had agreed measures to cut Greece's debt to around 121 percent of gross domestic product by  2020,  close to their original target of 120, after negotiators for private bondholders offered to accept a bigger loss to help plug the funding gap.

Agreement on a 130-billion-euro rescue package with strict conditions attached will   help draw a line under months of uncertainty that has shaken the currency bloc, and avert an imminent bankruptcy.
 
 "The financial volume (of the Greek package) is 130 billion euros and debt-to-GDP (will be) 121 percent. Now it's down to work on the statement," one official involved in the negotiations told Reuters. Another confirmed the two figures.

Here comes another potential disruptor: The Iran oil cutoff being a cause for spike in  oil prices

As at the close of trading on 17 Feb 2012, the STI looks quite certain to form a Golden Cross over the next few trading days.

Below is a definition of the Golden Cross -

“The Golden Cross represents a major shift from the bears to the bulls. It triggers when the 50-day average breaks above the 200-day average. Conversely, the Death Cross restores bear power when the 50-day falls back beneath the 200-day. The 200-day average becomes major resistance after the 50-day average drops below it, and major support after breaking above it. When price gets trapped between the 50-day and 200-day averages, it can whipsaw repeatedly between their price extremes. This pinball action marks a zone of opportunity for swing trades.” –

From:  http://www.tradingday.com/c/tatuto/movingaveragecrossovers.html

Loud cars and loud lifestyles are often the key reason for the downfall of people who made illicit money. Look at the Singapore Land Authority guy’s case. It’s the same in Italy – read how they catch tax evaders.


Bloomberg ----  Police fanned out across Milan in late January halting more than 350 vehicles, mostly luxury SUVs and Porsches.

At checkpoints, including one adjacent to the fashionable Corso Como, the police got the driver’s license and registration, which they passed on to the national tax agency. The tax authorities will use the data to check if the cars’ owners had declared enough income -- and of course paid the right amount of income taxes -- to justify their lifestyles.

It was at least the fifth raid targeting wealthy Italians since a Dec. 30 sweep at the posh Cortina d’Ampezzo ski resort, where 251 high-end cars were stopped, including Ferrari and Lamborghini supercars, Bloomberg Businessweek reports in its Feb. 13 issue. Rome, Portofino on the Italian Riviera and Florence have also been targeted.

“I’ve been stopped three times in the last few weeks by authorities because I’m driving a luxury SUV,” says Andrea, a Range Rover owner and entrepreneur in Italy's wealthy northeast. “It seems like the McCarthy era in America. You’re guilty by suspicion.”

The 43-year-old, who declined to give his last name for fear of attracting the attention of Italy’s tax agency, now plans to sell the SUV he bought last May. He expects to get at most 40,000 euros ($52,400) for a car that cost him more than 100,000 euros. “Dealers are full of luxury cars. No one wants to buy them now,” the businessman said.

Super Mario is gonna unleash a bigger backdoor bazooka end this mth and the new EU ageement is expected to be signed in Mar which could lead to Eurobonds later. With improving US economy, the 1Q2012 results in April should be okay hence the market is safe at least until then , with minor corrections along the way. Stick to stocks with low PE /strong fundamentals and enjoy the ride. 

http://online.wsj.com/article/SB10001424052970203824904577212763546615878.html?mod=googlenews_wsj

Just now, I slurped my fishball noodle soup at Tampines. Very tasty -- like the stocks I like.
Hope you all huat ah!

Minzhong now $1.09.

Sino Grandness: 48 c.

Utd Enviro -- er, where are you ? Still zzzzzzzzzzzz.?

Fully agreed Yeh, 

I am very bullish on China Minzhong and Sino Grandness in the long run. 

In fact if you look at Sino Grandness's price performance since its listing in late 2009, it has easily outperformed to the vast majority of s-chips due to its impressive fundamentals, soaring profits and growth potential. 

I too am interested in seeing the effect that all the money that will no longer be flowing into property speculation in the medium term will have on the stock market. This applies to both Singapore and China. 

Also, Chinese stocks have been in a bear market ever since the peak in 2007 where most people seem to have forgotten that the Shanghai Composite actually hit as high as close to 6k (currently only 2.3k) while the FT ST China Index exceeded 1k (currently merely just over 250). Record highs in indexes will eventually be broken one day in future and I believe that when the next bull market in Chinese stocks occurs, the likes of China Minzhong and Sino Grandness could become real multi-baggers. 

The stock market is rocketing up and I observe the following:

1. Investors are getting more daring (less risk averse) and very sure they can make money.

2. House dealers and remisiers are moving lots of stock -- lots of rotational play. They are the ones making the cream of the profits currently.

3. It's the S-chips that are gaining double digit % gains a day. Shows that sentiment can be a powerful force.

4. Many retail investors have yet to fully cheong into the market.

5. What I am curious about is : how much of the tidal wave of money from property speculators will find its way into SG stsocks.

Lastly, a short commercial: Good stocks like United Envirotech (38 cents), Sino Grandness (45.5 cents) & China Minzhong ($1.01) have not yet stepped on the accelerator for their full potential.

Dear MacGyver, 

thank you for your valuables and accurate tips and comments .

by the way, how you train yoursef to become a guru ?

by  a sincere follower.

csltay8033: thank u. Can u share what stocks you like currently?

U guys (mac, greenrookie, james) are serious? U must be nuts! There is still so much value in the market and you say bye bye? I am looking at 50% gain on a portfolio basis!

Dear Forummers,

I counted my lucky stars about the recent market rally. The comments that I made on 25 and 26 December still stand. 2012 may turn out to be a really good equity market year.

Having said that, I have decided to take profit on the recent rally. My portfolio which comprises of blue chips, s-chips and micro-cap stocks have hit my target returns of more than 25% returns.

Profit made during these 40 days of 2012 will allow me to pay for a small apartment in the east side of Singapore and collect some nice rental income.

Good luck and make sure you do your homework before you take on Mr Market.

Mobius bullish in Europe.

http://www.cnbc.com/id/46247455

Negative for Fujian Zhenyun is the tighter credit controls have resulted in lower business vol in 2H2011. They have already given profit guidance/warning.

Positive is .....Quote observer2 in an earlier posting >>>>

According to the company’s announcement to SGX, the chairman bought 1,600,000 shares at 17.5 cts through married deals on 4 January 2012. The purchase price is about 16% of Fujian’s NAV and 28% of its IPO price of 62 cts. It is only in a very depressed market like now, that one can get stocks of viable company at such tremendous discount.


Wild card is..... final dividend. Will it be as good as last year at about 1 cent Singapore?
Intriguing  thing is, they gave an interim dividend last year. First time ever they gave interim. Which is hugely positive, unless it means they will give less in final dividend.

The fear of accounting fraud, poor corporate governance, bankruptcies, etc has caused the majority of investors to have a phobia for S-chips regardless of their fundamentals or the reliability of their accounts – playing safe; hence, the current very depressed stock prices and ultra low valuation of many S-chips as compared to non S-chips. In the case of Fujian Zhenyun, its Special Audit also did not uncover any serious misdeeds or missing cash pile. As a matter of fact, one of the Independent Directors told shareholders at an AGM that when news of accounting problems surfaced, he flew over to Fujian to arrange a transfer of money from one bank to another in order to satisfy himself that the cash in the bank was really there. [Some Chinese companies were known to collude with bankers to show auditors “cash pile” that would just vanish as soon as the auditors left the bank].

The question now is – Is Fujian Zhenyun worth a bet?  My answer is:

YES – for those willing to take calculated risks and to wait for the bull market to return and for sentiments towards S-chips to improve. History has shown that the herd in the stock market is always fearful of losing money, especially in a bear market with plenty of bad news. When the market shows sign of recovery (like now), the fear is that the recovery is only temporary and that a pull back would soon bring down prices again. In the event the recovery were to continue with the market scaling new heights, the fear of losing money would slowly be transformed to fear of missing out on opportunities to make money. If the economy recovers and inflation is a factor, the market would always surpass its last record high like before. When such a bull market started to mature, fundamentals started to lose its importance as half-bankrupt stocks could also rise to incredible heights. Many undervalued and out-of-favour stocks could give returns of 2 or more times provided they have not vanished or go into demise by then.

NO – for those who are risk-averse or have negative mindset.

Financial results & annual reports are readily available at the SGX website. Below is a sample -

http://www.sgx.com/wps/portal/sgxweb/home/company_disclosure/annual_financial

The link below shows the ST Index component stocks comprising mostly blue chips.

http://www.sharesinv.com/prices/index-sti/

As the STI is an indicator tracking market movement, it therefore follows that a recovery of the STI is also indicative of most blue chips leading the market up in a recovery phase. Don’t you think so, Yeh?

Yes, many penny stocks do participate (but not always) in a market rally and these are often confined to  “situational” stocks & sometimes stocks that syndicates “pump & dump”. As I have stated earlier, the risks of investing in penny stocks is much higher during the bear market than in a bull market

Hi Observer 2 – Your views are candid and balanced. I agree that blue chips will lead a market recovery as penny stocks are usually held by weak retail investors, some even buy on margin . In a  market downturn, these investors do not have the holding power and are forced to sell at substantial losses.  Quite often you’d need to wait for the selling to stop but it’s difficult to know when ?  Hence investors who buy  beaten down undervalued penny stocks must have the holding power to ride out the storm and hopefully collect some dividends along the way.

is PRC consumer fashion apparel a good sector to be in?

The good sector - China govt now want to support

1. agriculture technology

2.  the arts (such as media companies and publishers)

3. logistics (tax exemption benefits)

The bad

1. real estate govt want to curb speculation

2. companies will find it hard to obtain credit financing, min wages will rise, also got power shortage

3. Rmb appreciation is a long term reality that will eventually slow down export growth

4. white goods no more subsidy for rural people

The Internet has made all the difference, observer2. It's probably less true now that blue chips will lead the market up in a recovery phase. In the past, as institutional investors rushed back into the market, newspaper headlines would report the progress of the market -- and then gradually, retail investors would come in to buy the small + mid-caps.

With the Internet, the retail investors are fast to latch on to a nascent recovery market -- like in the past few weeks. U see in the top vol today are lots of small caps. Anecdotally, we all know many of our favourite small caps which have made double digit % gains.

Hi, Ethan999,

I have not given up on Eratat but would not recommend anyone to buy Eratat or any other penny stocks, especially S-chips, in a severe bear market like the past many months. The reason being that most blue chips and good second liners are always the first movers and the best performers in any market turnaround following a severe bear market. Penny stocks, unless they are special situation stocks, generally performed poorly until rotational interests spill over to them. The latest New Year Rally again testifies to this fact.

Eratat is expected to report a full year EPS of about 8 cents (S). It is extremely undervalued and mispriced; so are many of the other S-chips. My perception is that the fear of investing in S-chips has now reached a tremendously high level causing the share prices of most of them to sink to an incredibly low level – opportunity for discerning, longer-term investors to accumulate potential great winners as not all S-chips are rotten. Unfortunately, I ended up holding some Eratat shares in the current bear market (which I normally would not do). I am not bothered or perturbed by the endless debates over Eratat’s high receivables I consider this as just part of the nature of its business and should be viewed as a risk factor similar to poor corporate governance, etc. What is of more concern to me is economic recession and deterioration of business environment in China affecting the profitability & survival of S-chips. The risk of penny stocks, especially S-chips, being mismanaged or getting into all sort of trouble, greatly increases in a bear market environment and in an economic recession. Investments entail taking calculated risks. Each of us has different risk appetite and it is for each individual to take risks that he/she is comfortable with. The bottom line is still “High Risks High Gains”.

Stock market moves in cycle. When the current bear market (regardless of its severity) comes to an end, a new bull market is certain to start. To me, the easiest way of profiting from stock investment is to invest at the low end of the market and to divest completely at the high end [NB: “Defensive” stocks also die (in defending position) in a bear market]. Doing homework is a “must”. Good growth stocks, especially out-of-favour stocks, are still among the best choice for superior capital gains.

Hi Observer 2, 

I see that you're no longer recommending Eratat Lifestyle either? 

Boy am I glad to have sold this one back in November. Even at that time it was more than 30% higher than what is is now. 

Unlike the likes of much stronger companies like Sino Grandness, China Minzhong and Yangzijiang, Eratat has completely failed to participate in the recent market rally and I would be pretty worried if I was a shareholder.  Things could change of course but right now I'm not willing to bet on it.

Sometimes it's just better to let the share price do the talking in the long run instead of getting into endless debates.