What i see, What i do, What i feel.


Economy in my mind

Look at the market as a whole. These are my 2 cents. AUD should continue to drop, china recovery will not come before 1H 2014. There might be a stimulus package come at the end of July. However, it will not affect the market much as the package is mainly focus on Railway construction which is already anticipated by the market long ago and priced into the stocks. As long as the china economy outlook remind gloomy, Australia is not heading anywhere better. Despite budget cuts kind of effort has been made, Australia’s economy is really heavy commodities dependent thus it will correlated to china market a lot.

As for china, reform is going on, the government is unlikely to ruin it. However, it is a very tough road for many industries. This is because, banks will try to save themselves 1st and many company would have to heavily depends on shadow banking (due to uneasy funding from banks) which china government is trying very hard to crash. Contradict huh? Yes, that’s the fact of china now. Shadow banking just don’t seems to reduce much but SMEs continue to suffer. State-owns go on to monopoly. Will there be recession? I doubt so. China are very good at control and I doubt that this time will be different (or Out of control). Banks? I think they are good investment now, most banks in china now are very cheap (equity) especially the state-own. They are unlikely to go out of business in the next 5-10 years and they will continue to generate good profits and dividends.

Japan is definitely re-raising. To what extend? Well, it is hard to say now. However, it is going out of deflation in few years. Try not to buy those heavy leverage REITs for Japan. Interest is picking up soon and your return will gets erode, also the price of the REITs should be dropping. So if you bought, good luck. It is not the right time for REITs yet I think.

Western is under a strong recovery, especially America, I’m kind of like Goldmen Sache, I don’t know why it is so cheap now and nobody is buying it. I just like it, I think it is cheap.

Europe? Well slowly recovery, yes it is recovering and do not underestimate it. It is coming back soon but slower than US.

Well just my 2 cents.

bank stockschina cash crunchglobal economyhow to investinvestmentjapan recoveryportfolio management

Alex .D. • July 10, 2013

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