Category: Equity

Bold Calls: Jan 2021

On By Chen Yu YanIn Bitcoin, Equity, Fundamental Analysis, Technology, Trading1 Comment

Dear Uninformed Readers,

I’m back! After a long hiatus that’s caused by study and being lazy in general, I am back to being able to focus on what I enjoy best, Netflix and chill. And also studying the random, dark, untouched areas of the market. Anyways, this new bold call update will signify my return and hopefully (New Year Resolution time) I will be able to update regularly this year (aiming for weekly but will be happy if my update frequencies can average fortnightly).

So before I start, I’ll have a quick summary of the results. My previous bold calls pretty much all came true. Property prices peaked in 2017 in Australia and equities did great (11.46% returns for the ASX 200). China smashed my expectations and increased 21.78% and closed 4030.85. Basically, I’m a lot less rich than what I should be considering how good I am and how right I was… *sigh*

So on a new note, let’s talk 2021. I start by focusing on a few fields this year. China will certainly cause geopolitical chaos with the US this year as RCEP kicks in. The deals they’re making with the EU won’t help either. As geopolitical tension rises, so does Gold and Bitcoin. The relentless QE programs and record low interest rates (that doesn’t look like it’s going anywhere higher anytime soon) will essentially devalue any currency. The thing with trade is that if you lower your currency and gain a competitive edge, it really fucks up the balance. So the current trend is, everybody print money, and we all deflate together, and we all die slowly… together.

First bold call, Bitcoin is going to $100,000 baby!!!! HODL!!!

Second bold call, Gold will hit $2,500.

Last bold call, the S&P500 will hit the 4200 mark.

Now to explain myself. Once again, I’ve pretty much put all my eggs in one basket (the QE basket). The amazing, fabulous, miraculous effect of printing money based on credit is that you can keep doing it. As long as you have more credit. And right now, the US has CREDIT! With Trump out (and I’ll explain what happens should he refuse to leave power later) and Biden in, we can expect more money pouring into the market to make sure the economy doesn’t shit itself (see image below).

This is exactly how the Feds work. True story.

What happens is that this money will end up in the hands of corporations. Even if it’s handed out straight to the public, they will need to spend it somewhere, let’s say paying for their mortgage or buying consumer staples, the corporations are where the money will end up at. The remaining money, will push themselves into whatever looks half decent to invest and drive up their prices as investors, both uninformed and informed rush in because let’s face it, it’s free money! As long as credit holds up, this is inevitable. As money rush in, the corporations make money, the stock markets go up. And because there’s so much money in the markets, given the ratio between the inflow and the size of the economy, money is suddenly worth a lot less (not necessarily inflation, because everyday items may not increase that much in price, just the investment products including real estate).

Oh, that reminds me. Fourth call, real estate is back! I’m thinking 10% in the Australian markets.

Anyways, continuing on with my rambles, as money is worth less relative to these investment products, people rush in natural to attempt to beat the basic devaluing of the currency. Bitcoin prediction is because everyone is crazy! And crazy means it will shoot to the moon. And that’s pretty much it… 2021 will be fairly uneventful (when viewed in this angle).

Ooh, almost forgot, if Trump doesn’t want to leave power, scrap the S&P prediction. Gold and Bitcoin should still go up because duh!

Anyways, after a shitty 2020, I hope you all can have a good 2021. My best regards to you and may you be happy everyday.

Yours Sincerely,

The Uninformed Trader

Bold Calls: Jan 2017

On By Chen Yu YanIn Equity, Fundamental Analysis, Futures, Policy, Retail, Sector, Technical Analysis, TradingLeave a comment

Dear Uninformed Readers,

Wow… what a year. I made two calls last year and both were pretty good. I admit that gold came a bit short but come on, what’s $20 between friends (I don’t actually have friends, that’s why I blog). So to sum up, gold was slightly underwhelming stopping just pass $1380/oz whereas bitcoin did exactly what I anticipated and flew right through the big $1000 mark (I know it collapsed based on selling pressure from mainland China but hey, I never said it wouldn’t come back down).

I am once again aiming to do some decent analysis this year as well so here we go.

For 2016, I called on currencies. This year I’m calling on equity. Actually, equity markets to be precise. Because I live in Australia, I am going to start with the ASX S&P200 index. It is currently trading around 5650 as I write (it’s a Friday and markets closed around 4 hours ago so yeah… it’s 5654.80 to be precise). I am looking out for the big 6000 mark. That’s where it all went wrong early 2015 and I think we’re gonna go tempt fate again by trying to smash that ceiling. My reason is fairly simple. With tightened controls around foreign investment (property in particular), property prices are going to stall. Those seeking returns will be driven to the equity market (I know there are those seeking yield but come on, who seeks yield phft…). The money will flow into the equity space which hopefully drives the market past that 6000 mark.

And because I like the Shanghai market, I’m gonna go with the Shanghai composite on the next prediction. Shanghai stalled at 3123.14 and I honestly don’t see it moving much this year. However, I just have a good feeling about the technical patterns. On the fundamental side, we have a similar situation as in Australia. P2P lending has gone way too big in China to yield anything generous these days. Real estate is a big joke in all the major cities as things are simply getting too expensive for people to invest. Hence I anticipate a near 20% increase to the 3500-3600 level. This also happens to be a resistance level (technically) from 2015 so my eggs are certainly all in one basket this year.

To sum up for 2017, equity UP! Property not so much (in Australia and China at least).

Yours sincerely,

The Uninformed Trader

Bold Calls: Jan 2016

On By Chen Yu YanIn Bitcoin, Equity, Fundamental Analysis, Futures, Policy, Technical Analysis, TradingLeave a comment

In private, I’ve made some bold calls. This affects my trading and I see it as a way for me to exercise my ability to predict long term movements based on an unique style of analysis. I won’t bore you with specifics as that isn’t the point of this entry.

In 2015, over a ramen lunch with close friends, I made a bold call to say that the US equity market will fall 30% from the peak, the Aussie will fall 40%, and China 50%. This was around June 2015. So far, China is looking to have almost hit my target as it is almost touching that magical 2600 mark. Honestly, being a massive Chinese hedge fund, the Australian markets is gonna tank a little as well. I guess we’ll see some results by mid year. The US markets are probably the most difficult to predict. I believe it will be heavily affected by who gets elected for presidency this year.

My new bold call for 2016 is Gold (gold vs US to be precise). I am fairly bullish on gold and I expect an initial target of $1200/oz followed by a rally to $1400/oz (it is currently $1100 as I am writing this). This is based on increasing volatility, the distrust in the growing Chinese/other emerging economies, a beautiful technical bottom plus reversal patterns emerging.

My second call would be for bitcoins. As mentioned in my very first post here, the block chain technology is worth a lot of money. The ability to decentralize the settlement system alone is enough to save enough money to make Scrooge McDuck drool. This along with the fact that we’re half way to mining everything out means that suddenly there is a supply squeeze that can raise the prices faster than twitch chat raising dongers (a very specific reference so kudos if you got this one). My personal target is $1000/coin but I believe we have to wait for around the end of the year for that to come about.

To sum up, bitcoin and gold will be the best performing currencies in 2016 (I’m counting gold as a currency because it pretty much is) and your phone is ringing because I’m calling it!

The unfortunate tale of shopping for Christmas Presents on Christmas Eve

On By Chen Yu YanIn Equity, Fundamental Analysis, Retail, Sector, TradingLeave a comment

Santa Claus doesn’t even count for small talk nowadays… is how I’d like to begin this segment. Unfortunately, I am almost sure that there will be copyright issues on the horizon if I did that so I’ll stop it there. I don’t plan on doing anything too heavy for this particular entry. Nor do I intend for this entry to have a point. I am just lamenting the fact that I have yet to buy Christmas gifts as life has been slightly busy lately. Somehow, the Christmas holiday atmosphere has made my days all the more hectic. As the title can possibly allow one to gather, I plan on ranting a bit about the retail sector today.

The fall of Lehman Brothers was so magnificent that it made me question whether I shall ever open a business with a sibling. What I want to say is, there are many factors and risks that are out of your control. One moment, the market is good, the next, your balance blows up in a fashion reminiscent of the 4th of July. It has always been my thoughts that the Australian retail sector is undergoing something similar. People are so desperate for profits that I feel that they are pushing sales for the sake of sales. It reminds of me an old retail joke that I heard while I was selling mattresses.

Sales A: “We’re making a loss on each unit we sell, what do we do?”

Sales Manager: “Don’t worry, we’ll make up for it with volume.”

The only thing I see saving this year’s Christmas figures is Star Wars. Hopefully, the ticket sales will be enough to create a positive effect and get people not only going out to watch the movies but also out shopping while they’re at it (and if you consider the drinks and popcorn sold, that’s just a bonus!).

Looking at the department stores, Westfields and Chases has never been so quiet so close to Christmas. I recall a few summers ago (I live in Australia) when I could barely move about while shopping. The perfume section at David Jones and Myers are full of eager sales people who are more than willing to spray and puff the latest scents and sell things while giving up gift bags, vouchers, future discounts, free samples, a foot massage, a tractor, a flamethrower etc. Along with the traditional Boxing Day sale where everybody everywhere simultaneously teleports to their nearest shopping center credit card in hand, it makes the pre Christmas season anything but festive.

I personally believe that there is a move away from giving Christmas presents on Christmas Day. As mentioned earlier, a fat man dressed in red who works very specific hours is too hard to believe even before you see your kindergarten teacher kissing him. So we intuitively understand that the presents are store bought and not made by elves captured and put to slave labor (unless by elves are what you call the Chinese). Delaying the purchases a bit can yield serious savings. If it’s possible to short the market value of goods, shorting between the 24th and the 27th would definitely yield profits higher than students at a college party. And they get pretty high.

This is it for now. I’ll probably have something for new years so look forward to that.

Merry Christmas,

The Uninformed Trader