Bear Market Rally Ahead – Stock Picks 4

Did you read 2 very interesting articles which appeared in yesterday's Business Times? Read my comments in blue.

First Article - Asian markets to see 2009 rebound: S&P

"We suspect that first-quarter 2009 is likely to reveal ugly corporate performances and this may dampen sentiment in first-half 2009. With economic growth anticipated to rebound in second-half 2009, we believe that equities are likely to have a strong fourth-quarter 2009 as the recovery becomes apparent and investors begin to re-rate stocks upward.”

Hey, Mr Market always look ahead about 6-9 months, so how would the stock market perform in the first half of 2009? And if later the economy is not expected to recover so soon, what would happen to the stock market in the second half? Read my Stock Market Forecast 2009 - Yin Earth Ox!

Second Article: What might 2009 hold for Stocks?

Summary of key points and my comments:

1. If most experts agree that a recovery will occur in second half of 2009, the writer say buy stocks before end of first half. Hmm... if you believe him, then you might be catching the falling knives! Read my Stock Market Forecast 2009 – Yin Earth Ox. Never believe these experts or analysts after what happened to 2008.
2. "China stocks are high on the list of what to avoid. There's good reason why these counters have lost 70-80 per cent in 2008 and it isn't just earnings worries that will continue to plague the sector, but also credibility, governance and survival issues.” Hmm.. I agree.
3. "Avoiding property stocks for the first six months at least. Like China, the sector benefited from overblown expectations, lax analyst recommendations, easy credit and insufficient consideration of risk. Moreover, the physical market has not even begun to correct meaningfully yet and it could be years before prices find a bottom.” Hmm.. I suggest to put it high on avoid list.
4. "Between banks and conglomerates, the latter are probably better positioned to ride out the global downturn. Local banks have been too reliant on the domestic property market for their loans and lack a diversified revenue base within the region, let alone further afield. Their numbers can only worsen with time and so it would be best to avoid the sector for now. Government-linked conglomerates offer much better exposure to an overseas upturn, so these stocks would be worth keeping an eye on.” Hmm.. I agree
5. "For now, though, it would be wise to keep in mind that cash is king and patience is a virtue - at least for the next 5-6 months.” Hmm.. I agree but after possible Bear Market Rally Ahead is over!
   

Some more tips and considerations?

Read Stock Picks 1, Stock Picks 2, Stock Picks 3, Stock Picks 5