Cao Ren Chao: A stock bottomed out_ but not V-shaped rebound in oil stocks showed a compensatory increase or

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					Cao Ren Chao: A stock bottomed out, but not V-shaped rebound in oil stocks showed
a compensatory increase or
2009-05-05 00:28


"Hong Kong shares God" Cao Ren Chao (data graph)

   In 1996, the financial sector accounted for only 5.5% of UK GDP in 2007, this
proportion has been as high as 10.8%. Today, the United Kingdom all financial items
are no longer hot, employees lose their bonus is not lost revenue. In 2008, the British
government for 12% of GDP, fiscal deficit, to see the prospect of London are very
troublesome. London 2007 will, such as Tokyo in 1990?

Money flow slowed down against conventional wisdom

High school friends all read should be aware of Archimedes (Archimedes). The
ancient Greek scientists have a saying: Give me a lever long enough and a fulcrum
and I will move the whole world! 1980's, the UK and the U.S. Government
has been required to financial leverage and adequate support, the whole increasing the
financial industry, up until October 2007 until the bubble burst. They are detestable
investments (such as Lehman bonds) have trouble, but today there are still many
people who want to reproduce as the days before 2007, looking forward to the stock
market soaring, right?

M2 growth rate over the past six months, the U.S. annual rate of 14%, close to the
maximum growth rate of the past, but money is only 1.77 times the flow rate in the
fourth quarter, fell to 1.67 times estimated this year because of falling asset prices and
rising unemployment. As the money flow slowed down, although the fourth quarter
rose 15.7% last year, but last year's fourth quarter GDP fell 6.3%, just past
the first quarter of this year, GDP fell 6.1%, mean that the situation continued to
deteriorate. Bernanke to the U.S. banking system to invest heavily, I believe it can
prevent the 1930s-style deflation, but they can not stop the money flow has slowed, so
the conventional wisdom that increasing the money supply will lead to failure of CPI
increase.

Two quarters of negative GDP growth in a recession, the only three consecutive
quarters of negative GDP growth in recent quarters have fallen even more rare in the
past 50 years; However, the U.S. consumer is still the first quarter rose 2.2%,
compared to last year's 4.9% decline in fourth quarter Many people think
that is the darkness before dawn, so that U.S. stocks rebound from the March 9, is it?
God bless America! in the 1980s, the United States became a net debtor nation, that is,
less than the value of overseas investment overseas, the United States, liabilities,
beginning of the 1990s, U.S. consumption growth rate has been higher than income
growth. Since 2000, most Americans no longer save the day. From 1982 to 2007
recession every 10 months ago, the Government plans to revive the economy by
stimulating a result, the rising U.S. debt. This time, once the stimulus is invalid, see
how the market outlook?

U.S. Treasury Secretary Timothy Geithner delivered a speech last Friday in the G7
that U.S. consumers should not expect global economic growth. IMF in April this year
published "World Economic Outlook Report" that global
economic activity this year will shrink by 1.3% (which in January was still believed
that a 0.5% increase), while the last is still up 3.75%; and estimated the U.S. economy
this year three quarters before bottoming out; the future of property prices need to fall
18% before bottoming out in 2010. As the pain of ordinary people, today prices are
rising all the necessities, such as supermarket goods; the contrary, but the fall of
non-necessities, such as travel.

Congressional Budget Office estimates that the U.S. government debt in 2013 after
four years, will rise to 72% of GDP, for 1950, the highest since the war. High debt
ratio will not only failed to stimulate economic prosperity, has become the future
economic rise of resistance. Japan's government debt ratio from 19 years
ago, the equivalent of GDP in 1990 rose 50% to 170% of the current anti-enable the
Nikkei average fell 77% in 19 years, while Japanese government bonds now yield
only 1.5 per cent. U.S. government debt by the equivalent of GDP in 1930-1941 to
16% to 50%, in 1941 the U.S. bond yield is only 1.95 PCT, but the economy is still
unable to recover until 1942, participated in World War II the U.S. government
announced the same period S & P 500 from 1929 to 1941, down 62%. In
other words, an increase in debt not only failed to stimulate economic prosperity, but
hinder its emergence as the Government takes up resources so that the private sector
can not be sufficient resources development. Good intentions do not necessarily
produce good consequences, I hope it does not mean the facts. 1950
China's "Great Leap Forward", the outcome is
doomed to; the U.S. economy strong government intervention can flourish? Probably
just the opposite. How many times have economic disaster from the politicians of the
"ideal" result? 1930, the U.S. President Hoover in 1990, Japan,
Hong Kong in 1997 ... ... U.S. President Barack Obama took office, there are too
many "ideal" .

Showed a compensatory increase in oil stocks or

Two weeks ago I Tsao opened in Shanghai, seminars, there are 1,400 people attended,
I Tsao very surprised, little thought that I Tsao in Shanghai has so many
"fans." Participants were asked in May last year, I Tsao made
"Sell in May and walk away" (which sold in May to leave)
subsequently proved correct, this sentence is still in force this year? I promised to
return after Tsao answer these questions, because at that time do not have any.
Let us refer to the Dow chart, the Dow is still formed in September last year, a decline
in channel activity, technical point of view, in March began pumping up only once,
even if the index can rise through the channel resistance is decreased near 8100, and
the other resistance zone, which formed in May last year downtrend resistance
between the points in 8700, is still not easy to break. Follow the trend rather than
forecasting market trends, is the character I Tsao. Shanghai fans questions ︰ May
2009 whether to sell and leave? Although there is no sure answers, but in May 2009 is
certainly not into the cargo months, moderate reduction is the advice I Tsao. As for
individual stocks may often appear in the bear market two individual development.
Briefly speaking, the stock market in May is the month to find the top, but individual
shares can be exceptions.

Over the past five months, oil prices rebounded from 35 dollars a barrel to 50 dollars
a barrel, but still significant increase in world oil stocks. In December 2008 increased
by 48% since oil prices, but by the end of April this year, with the Amex Oil Index is
December 1, 2008 close, it is rather strange thing. BP's Christof Ruhl
analysts believe that the above reflects the investment community believe that only
because of OPEC cut oil prices caused by increased demand rather than the cause, so
there will be no rise in oil prices and oil stocks rise phenomenon. However, if oil
prices rise further, for example, by 50 U.S. dollars rose to 60 dollars, will stimulate
the oil stocks, "compensatory up", you can see in the future than
the oil sector have the opportunity to increase prices.

According to IEA 2008 report This quarter of the world's oil comes from
20 major oil fields, most of the oil has more than 50 years, and entered a period of
recession; addition more than 100 oil field 50% of global oil production, the future
increasingly dependent on oil supply small oil field. Since oil prices down from the
147 U.S. dollars a barrel, the oil exploration industry plummeted, in this case, since
2012, another shortage of oil supply have been foreseeable. In January of this year so
far, China has quietly increased 1720 million barrels of strategic oil deposits! Analysts
estimate that oil prices this year can be seen from 60 to 70 U.S. dollars a barrel. In the
harsh economic environment, and they can make money, mainly to see you have no
vision and courage. IEA estimates that 2010 global oil demand will resume
development, since 2013, oil supply will enter a zero-growth ... ...

As interest rates fell, in February this year, the United States to stabilize them,
rebounded slightly in March, April, unpublished data, it seems only a little spring.
Over the past year, property prices fell 19% in the United States, after a slight rebound
in property prices in February is not surprising, as the U.S. unemployment rate rose
further, fearing a new round of fall in property prices surge again in the second half
there, because the toxic assets have changed American spending habits. These
changes with "9.11 tragedy" did not do more stock market crash
of 1987 or even not to mention the oil crisis in 1974. The change is like Japan in 1990,
so that real estate is no longer a bank ATM, but is a destroyer of wealth, people in this
respect the third quarter of 1997 to the third quarter of 2003 has been fully experience
this time.

Economist Gary Shilling accept the "Business Week" interview
that the future in ten dollars, the United States are faced with low inflation, so there is
no investment value of U.S. property! The U.S. economy were highly dependent on
the consumer market, I do not see Tsao to the consumer market, the bull market in
stocks how to be born? New York Stock Exchange Euronext CEO Duncan
Niederaurer ability to question the rise in U.S. stocks. S & P 500 index on
March 9 has rebounded 28%, but also increased the number? In April from March
with turnover of view, unlike the bull market began, just like a bear market rally. This
is just a "trading market" rather than "investment
market"!

In 1978, the Chinese economy from a planned economic system is not free to the free
market mechanism, triggered over the past three years China's economic
boom, the future Zhiyaojianchi reform policy, Zhang Qi Qushirengji of optimism.
October 2007, the U.S. economy is the economy towards a free system of government
intervention, in this principle, how the birth of the U.S. stock market bull market?!
Now the U.S. unemployment rate reached 8.5% in the first quarter, GDP contracted
6.1%, eventually has evolved into a depression by the recession, or as the Japanese
economic recession a never-ending? I Tsao little chance of the latter believe. Because
the U.S. government are doing today as the 1990s, the Japanese government, which is
heavily absorbed toxic assets. This practice can only slow down the pace of GDP
contraction, but can not change the direction of economic recession.

A stock bottomed out, but not V-shaped rebound

A more optimistic that the mainland stock market has bottomed out signals, but did
not find a reason to support economic recovery. A stock 50-day moving average has
been higher than 250 antennas, on behalf of a bear market as early as the end of
October 2008, but in the global environment, such an adverse situation, how to make
recovery appear? May therefore be a "bottom has yet to
recover," the trend , which remain low. The stock market will not occur
and large rose gold cross; simple point about the emergence of W-shaped trend, rather
than the V-shaped rebound. In addition to Shanghai and Shenzhen A shares reasons,
only very few cross-country gold stocks also occur.

Another reason is that the extensive economic growth mode of the past to have been
the end of 2007, companies have already begun price war, even from winning, only
small profits at all. How the Chinese economy from the "Made in
China" to "China brand"? Road is still very far away.

April 7 media reported that Beijing has agreed to invest 125 billion U.S. dollars the
next three years to build clinics and hospitals, so that 90% of the mainland people get
health insurance! Also announced pricing for the 300-400 drugs, so drug companies
can only puerile to make money rather than raise prices. The plan to make every
Chinese national health subsidies received by the 12 U.S. dollars per year up to 18
dollars, rose 50%; similar measures introduced in Thailand in 2001, also a result, the
Thai people to change consumption habits, so that the Thai stock market in 2002,
2003 increase of 143%. A similar situation will repeat itself in China?

2008, the Chinese savings rate close to 50%, Korea 20%, lower savings rate, as in
China, China's economic boom immediately accessible.

Tsao returned to China last week, I introduce the mainland version of "On
the Power", the mainland media deification of my Tsao, and what
"grassroots Tycoon," "Hong Kong shares
God" ... ... I Tsao stress again that I am just a very, very ordinary Tsao
investors, a person who means to do as I Tsao, can earn 100 million dollar fortune!

First, save 1,000 yuan per month, taking the double deposit the month to 3,000 yuan.
These requirements are not high, right?

Second, the use of principal, each year in the stock market, real estate, gold or foreign
exchange market to earn 20% return, it demands not high.

Third, patience. Follow the practice of maintaining four years, starting from the
2-year-old to six-year-old will be successful.

Formula is as follows: 1.4 million (1 +20%) by 40 th power, total principal and
interest is 1.0281 billion. You can, I can, anyone can. Why Hong Kong today is still
only a small number of people with 1 million or more? Reasons: First, there is no
strategy to speak of investment; with refuse stop, so soon to lose principal. Second,
impatient spare four years. In other words, is not difficult to earn 100 million yuan,
the challenge is willing to give a clear understanding of your situation, prudent
financial management and not emotional.

Trend followers do not predict the future

Investors on stock assessment methods, there have been several major changes. 1958
years ago, Americans invest in stocks of the most important reason is that dividends,
so when the company announced the dividend increase or decrease in dividends on
the shares greatly. Hong Kong in 1970, the same year that the decision by the value of
the stock dividend rate. Since the abolition of the gold standard in 1971 dollars, the
currency system has changed, leading to stock market rules of the game and the
estimated change in evaluation criteria. PE to replace the dividend yield, a tool for
evaluating the value of the company, raised from 1971 to 1973 3 Hong Kong stock
market boom of the month. After years of soaring 1971-1973 and 1973-1974, after
years of slump, Peter Lynch, PEG theory into the mainstream of the future of industry,
namely, high and low price-earnings ratio should be to balance the growth of
corporate profits. The higher net profit growth of companies more able to support
high PE; the other hand if only a single-digit net profit increase, PE, only the number
of units. PEG 1975, became a theoretical assessment of the mainstream of shares, also
contributed to the spiraling stock market and the main cause of collapse due to
changes in growth rate per year is big.

"Trend" followers with the "trend"
followers of the biggest difference is the trend of school are often predictive of which
the most representative as a wave theory, not actually believe that the predictability of
the market outlook is very low. Trend analysis is the mindset of "the past
predict the future." Many universities have done studies have shown that
when the time trend are not allowed. "Technical analysis and
pseudo-science is almost indistinguishable, their prediction, or worthless, or is the
best, taking into account transaction costs, opportunism is almost as better
use." Trend with the trend of the maximum were not predictive, but follow
the trend, that trend after the join form, the trend after the end of leave, do not
consider themselves more sophisticated than others. 2008 Buffett mistake is to think
its more comprehensive than others. To study the trend, we must first train yourself to
have a normal, smart people recognize that they better than to understand things
change and to achieve without my realm.
?Annex: Hong Kong "stock god" Cao Ren Chao: I think A stock
bull market has begun
    Zhang Zhibin First Financial Daily 2009-05-09 02:42
  ?Hong Kong dollar investment from 5000 started, 40 years after 2nd defeat, the
current net worth of more than 200 million Hong Kong dollars, Mr. Cao Renchao
known as Hong Kong's "God of the civilian sector."
Cao Ren Chao Kong Economic Journal is now executive director in charge of Hong
Kong Economic Journal Investment Analysis, its every Monday to Saturday in the
"Economic           Journal,"         write      "Investors
Diary" over 30 years, is the most popular newspaper One of the authors is
also investments in Hong Kong's most authoritative critics. Recently, CBN
reporter had an exclusive interview on Cao Ren Chao, shared his unique investment
philosophy and views on the A shares.

A share is most likely "W" Bottom

CBN: As a senior Hong Kong stock market who do not know what the recent trend of
A shares of view?

Cao Ren Chao: I believe the bull market has begun to A shares, recently I saw some of
the major indices (Note: refer to Shenzhen Component Index and the CSI 300 Index)
of 50-day moving average has stood on average 250 days to form a golden cross, that
the bear market has been death, the bull market has begun, in October 2008 is the
lowest level of A shares.

From a technical analysis term bull market has begun. If this situation in Hong Kong
or the United States market, it no doubt. Appear in A shares, in Hong Kong and U.S.
markets are not there, so I'm not entirely sure. Since the Government to
relax credit and 4 trillion yuan economic stimulus package, making A bull market in
stocks may occur earlier. While I believe the bull market there, but on the other hand
do not want investors into the stock market is too crazy, because if Hong Kong, the
United States do not match, then, A shares may also fall down.

A-share market trend most likely is a "W"-shaped, built the top
month 4,5, 5 to 7 months down the line, the second half up to form a W end of the
trend, A Unit of the trend is expected to be so. In October 2008 should be the
minimum point, will not be low, but stock go up or the need to face resistance, so will
fall down, and the other low should appear in the third quarter, then start a long-term
bull market run upward track.

A share is unlikely to be out of the "L"-shaped trend, but most
likely the United States down "L" shape. Most of the property
in the United States 500 000 to 100 million dollars, wealth, even if the growth can no
longer live. The earlier "baby boom" period of more than 60
years of age who have, and the retirement of the population has increased gradually to
reduce the working population, which means that the pension and investment income
to rely on more people of life, need to continue to sell assets through a living
Therefore, the United States appears "L"-shaped trend is great.

CBN: You most bullish A-share market which industry or hot plate?

Cao Ren Chao: This is a bit difficult, because I know A shares is not deep enough. It
is only really true of people living in the Mainland to better understand what the
industry. But overall, China's economy has entered a steady upward course.
This time I believe over the next decade. Is from 2009, in the future two decades the
Chinese economy is still up running. When the stock market is the lowest point can
not say, but this year if you buy stocks, long-term view of the general direction you
are right. I believe that over the next decade you look back today, every dollar is put
to earn twenty times more than a dozen, and perhaps beyond. I believe 2009 will be a
good resource stocks, because the whole of China's resources is not enough,
copper, oil, coal, China is still not enough, I believe that the performance of resources
stocks will be very good this year. As for the consumer goods industry is not yet clear
who the best, because I did not study, I have a deep understanding of the Hong Kong
stock, but I focus on the A shares only 3 years, awareness is not deep enough, so
inconvenient for advice.
Stimulate increased welfare spending

CBN: We all know the economy is the basis of the stock market, you are on
China's economy is how to see?

Cao Ren Chao: The Chinese economy from 1978 to 2008, started 30 years
"industrialization", a process that took 200 years the United
Kingdom, the United States took 100 years, the Japanese 60 years, China is 30 years.
Now the advantage of China's past began to disappear, before the
"three low and one high", the land is very cheap, very cheap
wages, taxes are a lot of benefits, and resource supplies are abundant, this is a good
environment for industrial development . However, in 2006, these conditions have
become "three high and one low" wages up, and land costs go
up, fewer tax concessions, and resources are not enough, so from 2006 the investment
environment changes into "three high and one low", there is a
lean period. Hong Kong temporary shortage period is 3 years and 5 years in some
places, I believe the mainland would not lean on more than 3 years, the economy in
2010 will certainly go higher. Usually after 30 years of industrial development, to
enter the period of the tertiary industry. Is the development of service industries, but
China's service industry is not encouraged in the past, and they share in
GDP is also small. Services is still less than the benefits of rising exports down
benefits. I believe that from 2008 to 2010 facing a lean period. Is that bad things will
go bad, but the good thing not to get better. So this year is very painful, but in 2010
the economy should go higher.

CBN: from China's current economic situation and spur economic growth
were exports of car due to fall soon affect the external environment, and the
Government has substantially increased investment on private investment has a strong
crowding-out effect, national social security imperfect system have made it very
difficult to start the consumer, how do you see?

Cao Ren Chao: start spending actually still need the government to continue reform
and opening up. Little difference between China and the American people, why the
Americans and the Chinese people can not dare to consumer spending, the reason is
that sick go to the hospital in China is very expensive, very expensive cost of a child
to college, while another post-retirement pension is not enough. If the government
really wants people to spend, then go to the hospital should be free or very cheap; the
cost of college kids are cheap to lend you money to the government; retirement make
money, government has given you subsidies, which three issues of a settlement,
consumption will go up.

As the extent of social security in these areas is not enough, the Central Government
should take the lead to increase welfare, of course, not all of a sudden increase, but
every year a little more welfare, I believe there will be a tipping point, minimum 3
years up to 5 years should be consumed detonated . Once the consumer has been
detonated, it would be scary consumption, consumption of the United States 300
million people have been very powerful, and the Chinese consumer market of 1.3
billion people, once up, domestic demand can only support economic development,
but that does not rely on exported.

CBN: Your property market in China is how to see it?

Cao Ren Chao: the property market is "half a glass of water", is
not no better too bad, up from three factors to stimulate the property market, first of
all look to have a high rate of inflation, but China is now very low CPI; the interest
rate from the second factor see, now the global interest rates fall down, U.S. interest
rates to 0.25%, which makes up the property market since 1980, the reason is not
because interest rates have no room to continue to decline; the third factor is the
process of urbanization different stages of the U.S. population is now aging and began
to switch to the villages from the cities because the population over 60 years of age to
rural life more comfortable, and China on the contrary, now in the process of
urbanization. From the above three factors, the U.S. is three all bad, bad a good China
2. Make big money investing in China property market, the time should have passed,
and price changes up or Change has not too much.

But the property market in Shanghai and other Chinese cities may be different,
because it is the only finance-oriented city, the city finance in the process of house
prices would rise drastically. The Hong Kong Monetary in the process of being
pushed very high on the property market, London, New York, Tokyo, are also so. I
just said does not include the Chinese property market in Shanghai,
Shanghai's property market, the better the future will be more expensive lot,
lot worse the more expensive, polarization would be more serious, if you want to
invest in Shanghai property market, then you should buy the best.

Stock trading tips: stop more than profit

CBN: As Hong Kong stocks expert, you see now how the Hong Kong stock market?

Cao Ren Chao: Hong Kong peak has been seen as the highest property prices in Hong
Kong in 1997, 2007, the highest financial market in Hong Kong, Hong
Kong's best period is over, is now declining, so is also the first time I came
to the Mainland .

CBN: Insiders believe that, as the crisis Debeijingxia, as Yu Qi Chinese economy may
be the first to pick benefited in Touzizijin the Quanqiu allocation adjustments and the
Chinese economy to recover first spillover effects, the effective, Hong Kong stocks
may 会有 new investment opportunities , which do you think?
Cao Ren Chao: in the past, relied on the U.S. market, why the Hong Kong market in
October 2008, but dropping down in March 2009 but did not go out? This is the China
factor in the support, so the Hong Kong market in the face of the U.S. factor and the
double impact of the China factor. If you invest in the Hong Kong Bank, then sorry, it
is mainly influenced by the United States, fell down, and this year in March the share
price is much lower in October 2008; if you invest in the Industrial and Commercial
Bank of China, and today has more than 10, 2008 On much higher, because the bank
is mainly influenced by China, which see the stock you choose which factor is mainly
influenced by.

CBN: starting from 5,000 Hong Kong dollar Hong Kong dollar to the current
investment return billions of dollars, talk about some of your personal financial
management experience.

Cao Ren Chao: My financial experience is actually very simple things that keep
making money, losing money in the selling, which is the so-called "stop
loss than profit." Investment in the stock market in the most important
thing is to follow the trend to follow. "The trend is your friend, to follow
the trend until it ends," maxim to keep in mind. In a rising trend in place,
do not make a 20% or 30% to throw away, as long as the money should have been
held until the trend changes, usually a good stock can rise more than 5 times, the only
way to make big money.

In addition, in general, investors can not buy the cheapest, nor sold to the highest
price, in fact, as long as the second best you can buy, and sell the same. October 2008
Congratulations, you buy shares, in October 2008 Congratulations, you did not buy
more stock, because in October 2008 you buy a stock, you are guessing at the casino,
is the courage to mindless, this time you guessed it does not mean you have to guess
right, you guessed one day be learned. And if you are always in the trends established
before buying, the probability of success is no doubt that much larger, so do not
always think about buying low.


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market next year
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10 million other

  Cao Ren Chao: 2009 in the investment market is looking for a fool

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