Keieo's World

China yuan is going to be appreciated

Zhou Xiaochuan,chief of China’s Central Bank said that the current dollar peg as temporary, striking a more emollient tone after months of tough opposition in Beijing to a shift in exchange rate policy.This talking indicates that an appreciation of China yuan is in a new future. This shows another victory of western.

Will China fall like Japan in 1989? Well, I do not think so, and I think Chinese will be more tragic.Attention! Here I stress on Chinese people, not the government.

There are several reasons to support my view. First of all, in the last century, made in Japan still enjoyed a good reputation, and Japanese products were regarded as high quality, high technology and good life, which allowed them to keep their share of middle and high market. The appreciation of Japanese yuan mainly damaged on their foreign investment which resulted to a high drop of domestic real estate and stock market. But for Japanese people, it was not a total bad thing, at least their living cost has dropped dramatically.

Turn back to China. Made in China were positioned as “cheapest” So appreciation of Chinese yuan will strike Chinese export fatally. This means millions of Chinese workers will lose their jobs. Worse, Chinese government again set an aim of an 8% GDP increase in 2010. The only way now to achieve this aim is to increase the consumption, which means the already sky-high real estate will have to be made higher. This will again raise up the living cost, lower the investment attraction of second industry in China. Inflation is no doubt. Then all the money will go to stock market and real estate, the economy bulb will be bigger. Considering no social welfare to normal Chinese, the living standard will keep dropping.

investment in China

China is a strange country. There are thousands of reasons to support my view. From exporting part, once brought up a new term”China miracle” which refers to exactly the same part, Chinese make it domestically and ship it to the target country, the price is lower than the cost in the target country. Attention, the target market I do not mean the high human cost countries, like Japan, or Norway but to the relatively low salary countries, for example, Iran. On the other hand, China itself is now positioned strangely. As the second largest economy in the world, in the same time Chinese government claims itself as a developing country. Actually, China is a poor country, because 70% of the fortune are commanded by 0.4% extremely rich levels. Meanwhile, they insists that China is a SPECIAL communist country. Thirdly, Chinese average income is less than 3000 dollar/ year in big cities, for example, Shanghai and Beijing but the real estate ranges from 3000-8000dollar/square meter.

All the above are just very little parts of a strange China, and they are not my main point. My aim here is to  tell you a little bit about investment in the strange country. Firstly, foreigners are not allowed to directly invest in domestic Chinese stock,  we call it A market. But, do not be depressed. Because as a foreigner, you can open an account in Hongkong and handle with HK Hengseng.  All the most profitable Chinese mainland companies are listed in Hongkong Hengseng, and more attractively, P/E in Hengseng are lower than China domestically market.

But if you have access to Chinese domestic country, it is less risky and very easy to earn money. Why do  I say less risky when Chinese P/E domestically are much higher than Hong Kong?  The reason is that the stocks in Chinese mainland have no relationship with their quarter report. They are more politically oriented. All you need to do is to check, if the industry develops well, then  the stock will definitely drops, which is opposite of the norms.  Because Chinese use  the word “fry” to describe the way how they handle their stock. When there is no strong market demand, less production will stay there. The output of capital will go towards investment. Then stock goes up, that is why I say invest in China should be opposite the norms.

That is my advice to private investors. For the big fond, I am sure you will definitely have more experience than me but one thing is sure, no fond will invest directly in Chinese mainland stock, Hengseng is a much  better choice.

little tricks in IGE

whenever I saw a recommendation buying signal from Orion or whatever, I have to rush to sell it out the second day, SEVAN, KOA, NAS, REC were all the victims of their “foul mouth”. The lesson is obvious, why should they give free messages for you to earn money? Normally when they give a positive signal, it is the time to sell. IGE is a little bit different, the buttom kursmål is around 0.52 and the top kursmål is 0.69(on the condition that they still have not received the marketing licence from Angola). Normally, I buy and sell every day or every other day, which gives me a 0.02 to 0.04 profit and it can fully compensate for my living expenses here.

why do we invest in stock?

Why do we invest in stock? Because we want to make a higher profits than the bank interest, fond bonus ect. There is one rule in the stock, which is no stock keep rising every day, drop and rise, rise and drop (unless the company is going to be bankrupt or find a gold mine) The easiest way for amateurs is to follow the trend. When the trend is to up, it is more possible to rise, when it is on the trend of drop, better to run away, preventing from losing more. Of course if you are a fond manager, controlling billions of dollar, there is another game rule. There are people, they blind their eyes, deaf their ears and hold the believes that their stock will rise, although there is obvious evidence that it is going to drop. Of course, they have the ir rights to lose their money but they are stupid enough not just to listen others suggestions and they do not want to see any negative comments on the stock as if it will prevent it from dropping. Ridiculous people, properly that is why Swedish always say that in Norway there is just one king and rest are all farmers.

Financial war between two sides of Atlantic

I am not sensitive towards politics, but this time I smell a strong smoke of gunpowder. A broke news is that another 15 suspected mosads’ pictures were exposed by Dubai’s police. Together with the previous exposed 11, now 26 expected mosads have come up. The expected mosads were suspicious by killing a Hamas high official in Dubai. The reason I talk here is that they were accused by using fake European and Australian passports, which result to a broad of denounces by the involved countries’ governments.

The reactions are abnormal, fist of all, it is not the first time that Mosads murder abroad and before none talks. Secondly, it is an unpublished rule that spies have several fake passports. Actually, fake passports are not so unaccessible. Every year, some North Koreans fly to Europe to seek for asylum with fake travelling passport.Thirdly, the murdered is a high official of Hamas, which is regarded as terrorist in Europe as well. So there is no reason that they fight because of a terrorist was murdered.

So what is the reason behind the abnormal reaction? First, we all know who is behind and by Israel. Fighting with Israel is actually challenging U.S. Now U.S. have been released a little bit from the financial crisis and need more cash flow to increase employment and subsidy for medical services ect. Worse, China is trying to sell U.S. bonds in the market. Although Japan has bought but with Toyota event, the help is limited. So they need to get investment from europe,that is why all the bad news about E.U. comes out.These bad news will drive the hot money, fonds urges to U.S. for a safer return. But on the other side, E.U. is having problems. E.U. countries like Greece, Spain, Portugal all having big problems and they need the money too. That is why they are fighting over.

update on KOA

Fom KOA, I draw a lesson, which is, when everyone say it is a good buy or buying candidate, it is actually time to sell tomt.

Kongsberg Automotive Holding (KOA)
Kjøper Selger Høyt Lavt Antall Oms. Oppdatert
4,90 -0,05 -1,01% 4,89 4,90 5,04 4,88 4,06M 20 118 481 18:00

IGE, disappointed everyone

Today is the presentation day of IGE and the result did NOT turn to be as good as we expected. First of all, the revenue of 4.quarter 2009 was minus still. Secondly, the marketing licence of diamond luxinge, Angloa is still “shortly “on the way. I can totally understand how corrupted in Angola and how low efficient they work but I can not understand why IGE thinks “several milestones has been reached”. From their presentation, I just see negative news and personally I hold negative opinion towards IGE at least,”shortly”. Near closure, IGE has droped from 0.64 to 0.61 in the last half hour and tomorrow I think there will be a down way as well.

Int. Gold Exploration (IGE)
Kjøper Selger Høyt Lavt Antall Oms. Oppdatert
0,61 0,04 +7,02% 0,60 0,61 0,70 0,60 93,9M 60 165 738 18:00

KOA, the biggest bløff!

Every day, almost every single trading day, KOA is on the recommend list, but the price has never been up. Acutally, if we use our brain a little bit, we can understand,

1.the investing company does not have the interest or responsibility to recommend you profitable stocks for free. It is like you ask American President to consider Norwegian peoples welfare first.

2.Toyota has showed a lot of safty problems since they expend their market too fast.This brings not just the loss of taking back the sold cars, also a bad fame, a negative gainment in confidence. Japanese cars are not safe, which is the biggest loss.

IGE

I regret a lot that I didnt buy in at 0.29 last Friday.

Exactly

Aker BioMarine (AKBM)	Kjøper	Selger	Høyt	Lavt	Antall	Oms.	Oppdatert
11,95  -4,05 -25,31%	11,80	12,00	15,60	11,70	1,62M	22 252 513	15:53

Exactly as what I wrote in my previous article, there is no long way to go. Today Aker BioMarine has droped over 25%