Attended Hu Li Yang (HLY) seminar last weekend. He think the market will be bullish within the next 3 years. Here are the reasons:
1) The world is full of liquidity, all the govt is pumping money to the financial system. Interest rate is at a record low worldwide. Every country is lowering her interest rate, including Australia. This is the first time in his whole life that he sees such event happening.
2) Crude, gold and commodities are officially in bear market. Reason: As long as the asset class dropped more than 20% from its peak and cannot recover within 3 months, it will be stepping into bear territory.
It is not that gold is not good. It is in fact too good already. Everybody who wants to buy gold has bought. The only way now is to go down. (exact words from HLY based on my translation) Demand will decrease. Even there is a QE3, Gold will have a spike lasting for a short while and will start to turn down again.
There are plenty of crude oil available, he believe can last 100-200 years. Just the salesman (OPEC) trying to convince the customer that supply is low/limited – to induce scarcity to raise price
Property markets will pull back slightly (10-20%) at later stage due to increase in interest rate. That result in return may not be that attractive. Owner may sell and return to stock markets. The pullback will last between 5 to 8 years. Again, he feels that those who want to invest in properties has already all invested.
3) Europe will recover in a very slow pace in 2nd half of 2012 which will be reflected in stock markets. Despite all these issues, Europe most stock markets are recovering pretty well not as bad as Lehman crisis period. He stressed that the EURO issue is not an issue at all. We are just scaring ourselves. At most in time to come, those weaker countries (Greece etc) will just leave the euro zone.
It will not collapse. All those “economists in the media” are just trying to scare people to portray a doom day. His analogy: This euro issue is just like a mosquito buzzing around you. It can keep stinging you but you cannot die from the stings. Just very annoying only.
4) Europe and some Asia markets are at relatively bottom levels. Not high to begin with.
My personal views:
I am also bullish personally.
A) This year is an US election year. Market has traditionally gone up in election years. Obama is going to make the stock market and economy looks “good” if he wants to get re-elected.
B) From what I gather from most people I talked to and from guru’s articles I read, majority them are bearish for year 2013-2014. If most people are bearish, somehow I feel the market will not crash, cos’ most people will be prepared for it. The opposite might occur instead which is a bull market.
C) The US and the Euro problems are known issues. They are not unexpected. When the problems are known, it will not cause a crash.
Be it you are bullish or bearish… just invest within your own limits. There are no right or wrong. Stick to your own views.
This is what makes the market cos’ we are the market. If everybody has the same view, there will be NO MEAT left and you will not be able to profit from the market.