This came through my email from my friend and broker.
Read it and judge for yourself if it is time to quit the market now.
As you are aware that the Singapore market, along with other markets in the world, have repeatedly hit new highs. Some old stories may has also been forgotten and I would like to bring your attention and urge you to be more careful when you trade.
- Many people in the street are now talking about shares, many has made good money and invited many more people to try to get something from the market.
- Most of the investors are too bullish about the market, including those who are bearish previously, probably because they saw the market never come down and thus also turned bullish.
- Many counters see major shareholders selling off their holdings, especially when the share price moved up to new high.
You may still remember this old fork telling you that the market maybe at the peak.
There are a few points that investors are always forget:
- When market (or a single counter) is moving up too fast without fundamental support, there is one more risk factor, that any broking house may come out and restrict the counter. They may restrict their house trader to buy the share, at the same time asking investor to pay money first before they buy, this will make the share price dropping in a very fast manner, because there will be very little buyers, and those who already bought the share will need to sell out, cause the share price to fall.
- Shares which move up without fundamentals will have to come down eventually.
- Counters that are ‘in boardroom dispute’ – like CEO or directors resign or quit. If they are major shareholders, they may want to sell off their shares since they are no longer sitting on the board, especially when the share price move up.
- Shares are moving up without fundamental support, construction sector may see some recovery with their order books improved, but how much should the price move? 100~200% will be a lot, 400~500%? does it worth this price?
- Markets move up with huge liquility, what will happen when the liquility dry put?
- Many are expecting some ang-pow money for the new year. Will you be receiving, or giving?
For your info, some broking houses already issued some warning to their dealers to control their clients limit.
My Portfolio now? – ZERO shares.
Call me a chicken but I’ll rather be safe than sorry. After all, only money in my pocket is real.