Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : News Links and Chart Links -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (9348)	12/8/2003 11:05:14 PM
From: Les H	Respond to of 29595

Implications of US dollar’s decline on equities By MICHAEL AUYEUNG ASSESSED against the fundamentals of growth, inflation and valuations, equities could be assumed to be on a long steady upward climb, terrorism, et al, notwithstanding. However, several overriding macro-economic events are clouding the equities investment environment. Arguably, at the top of that list is the widespread concern over the US dollar’s slide and the underlying currents governing the dollar’s movements. Needless to say, the default currency of stored value for most central banks has long been the US dollar. The lack of substitutes, except for a brief stint of yen dominance, has been but one of the driving factors. Of late, it has become evident that alternate storage media have found their way into the hearts of central bankers and skittish investors alike. The much-written-about US twin deficits (current account and budget) have been a rallying cry for market bears for some time. But ultimately, as long as foreign interests were happily funding these deficits by snapping up US assets and the strong dollar policy was uncompromising, the shortfalls were sustainable. For far too long, many have cried wolf on the impending dangers of poor fiscal management, and the markets have learned to turn a deaf ear. The movement of the US dollar of late suggests that one should pay closer heed to those warnings. The vicious circle of low yields on US treasuries, combined with a flood of new papers and the prospect of the dollar's continued slide, has apparently seen more foreign governments move into euro land assets — foreign purchases of US issues in recent months have shown a drastic decline. This helps to explain why the dollar is now at historic lows versus the euro. That the major economies of the European Union (EU) are sputtering back to life, and the EU central bank has given a prolonged grace period for some of the major EU economies to reign in budget deficits (hence allowing growth time to muster greater traction), also lends healthy support to the euro. The prevailing view that US equities are at toppish valuations (Dow 10,000 around the corner yet again) also diminishes that appetite. Add to that the option of rising commodity prices, largely on China’s demand, and the plethora of natural US dollar hedges and alternatives are plenty appealing. Even the maestro of investing, Warren Buffet, has started to move his Berkshire Hathaway funds into offshore assets, starting in early 2002 — amazing given that this is the first time he has acquired foreign currency assets since he began investing! With the US presidential election not until November 2004, belt-tightening to rectify any balance sheet impairments is not likely to happen soon. The US Federal Reserve is also not apt to move in a decisive manner to raise interest rates, lest there be accusations of derailing the US President’s re-election by smothering the nascent economic recovery. Out of this heap of uncertainty, there may be an upshot for Malaysian assets and stocks in particular. Already seen as an undervalued currency, the ringgit will be further devalued with the decline of the dollar. This relative currency advantage should yield some economic benefits in terms of export competitiveness and boosts to corporate bottom lines from repatriation of non-dollar foreign earnings. For investors holding foreign currencies, acquiring ringgit-denominated assets would become increasingly cheaper, be it stocks or properties or other domestic assets. Such a scenario implies that there would be an inflexion point in the near future whereby exposure to grossly undervalued ringgit assets and their potential recovery, outweighs the prospects for further diminishing of the currency’s value. It’s no secret that foreign investments in Malaysia are way off peak levels, no See B4, Col. 4 less so for the stock market. If luck prevails, that inflexion point on Malaysian assets being too cheap to ignore may coincide with another critical event, that of the new Malaysian Prime Minister getting a direct mandate from the people. A new Prime Minister with a fresh mandate may re-examine the issues of capital controls and the ringgit peg. Export earnings are picking up and the reserves are rising to substantive levels. The economy's reviving vigour and the healthy capital accounts suggest some adjustments may be warranted. The fundamentals would argue that the ringgit be re-valued upwards by 15% or more, depending on how much further the USD sinks. Such prospects, in tandem with an undervalued and under-owned equities market (both by foreigners and retail participants), suggests that the floodgates could be blown wide open at the first signs that such a re-examination may be undertaken. The smart money may want to move in well in advance, given just the status quo fundamentals. Interestingly enough, Warren Buffet has made some of his biggest foreign investments in assets in China. That currency, the reminbi, also offers substantial revaluation prospects in due course…smart money. The writer is the chief executive officer of Pacific Mutual Fund Bhd. He can be contacted at e-mail ceo@pacificmutual.com.my nst.com.my

To: Les H who wrote (9348)	12/8/2003 11:15:09 PM
From: Les H	Read Replies (2) \| Respond to of 29595

The Bear's Lair: Can they be dumb again?-I upi.com

To: Les H who wrote (9348)	12/8/2003 11:27:07 PM
From: Les H	Read Replies (1) \| Respond to of 29595

<font size=2> Selected tech groups Semiconductors (127 stocks) _ percent stocks over MA Trend Price Phase _ market SOX 10 d 21 d 50 d 200d Score Phase Change _----------------- ---- ---- ---- ---- ----- ----- ------ _Dec 8 499 13 21 56 90 -93 2.75 _Dec 5 499 14 25 61 90 -63 3.34 _Dec 4 515 41 45 69 92 51 4.08 _Dec 3 519 53 52 73 92 81 4.43 _Dec 2 527 84 69 76 94 97 4.70 DOWN _Dec 1 532 90 80 80 95 97 4.73 _Nov 28 529 86 70 77 95 98 4.53 _Nov 26 523 77 66 76 94 98 4.33 _Nov 25 521 72 66 73 95 96 4.22 _Nov 24 521 73 61 72 95 84 4.11 UP _Nov 21 503 28 42 64 94 68 3.92 _Nov 20 495 16 38 63 94 59 4.25 _Nov 19 506 21 50 70 94 60 4.86 _Nov 18 497 16 38 67 94 74 5.23 _Nov 17 507 19 49 68 94 84 5.94 Networking (93 stocks) _ percent stocks over MA Trend Price Phase _ market NWX 10 d 21 d 50 d 200d Score Phase Change _----------------- ---- ---- ---- ---- ----- ----- ------ _Dec 8 251 30 43 52 86 -99 3.03 _Dec 5 249 34 43 57 87 -94 3.17 _Dec 4 253 46 51 70 88 -61 3.42 _Dec 3 252 53 56 72 90 67 3.45 DOWN _Dec 2 253 74 71 73 90 69 3.50 _Dec 1 256 90 81 78 92 -47 3.43 _Nov 28 253 87 71 73 92 -51 3.16 _Nov 26 252 80 68 69 91 56 2.97 _Nov 25 249 68 61 65 91 62 2.74 _Nov 24 248 69 61 62 93 53 2.63 UP _Nov 21 241 29 30 54 90 -38 2.49 _Nov 20 240 23 36 55 90 -38 2.82 _Nov 19 243 29 39 57 90 -60 3.29 _Nov 18 239 23 36 56 88 -33 3.60 _Nov 17 242 27 45 56 89 34 4.27 Biotechnology (104 stocks) _ percent stocks over MA Trend Price Phase _ market BTK 10 d 21 d 50 d 200d Score Phase Change _----------------- ---- ---- ---- ---- ----- ----- ------ _Dec 8 473 48 67 51 75 67 1.24 _Dec 5 471 59 64 53 79 87 1.13 _Dec 4 472 70 68 56 79 99 1.03 _Dec 3 473 74 66 56 80 99 0.85 _Dec 2 480 89 75 63 82 80 0.60 _Dec 1 480 87 73 60 82 50 0.00 _Nov 28 460 80 59 48 80 41 -0.77 _Nov 26 459 75 59 43 80 51 -1.03 _Nov 25 459 66 50 41 80 50 -1.29 _Nov 24 461 68 50 41 79 -59 -1.60 UP _Nov 21 444 37 29 31 74 -87 -2.09 _Nov 20 443 22 25 28 73 -90 -2.04 _Nov 19 444 22 24 27 72 -84 -1.92 _Nov 18 439 18 18 27 74 -53 -1.78 _Nov 17 449 21 28 29 78 -42 -1.41 Software (123 stocks) _ percent stocks over MA Trend Price Phase _ market GSO 10 d 21 d 50 d 200d Score Phase Change _----------------- ---- ---- ---- ---- ----- ----- ------ _Dec 8 146 42 46 54 84 52 0.46 _Dec 5 145 36 40 51 82 70 0.51 DOWN _Dec 4 147 52 50 63 85 90 0.70 _Dec 3 147 63 52 59 81 92 0.67 _Dec 2 147 79 58 65 84 79 0.57 _Dec 1 149 89 64 72 86 71 0.48 _Nov 28 147 75 54 61 84 56 0.08 _Nov 26 146 63 50 60 85 52 -0.11 _Nov 25 145 60 48 61 83 -36 -0.30 _Nov 24 145 65 46 58 84 -68 -0.36 UP _Nov 21 141 23 28 42 81 -100 -0.53 _Nov 20 139 20 25 42 80 -100 -0.19 _Nov 19 140 20 26 46 79 -100 0.38 _Nov 18 140 15 24 44 79 -86 1.00 _Nov 17 144 19 33 50 82 -53 1.80 Internet (119 stocks) _ percent stocks over MA Trend Price Phase _ market INX 10 d 21 d 50 d 200d Score Phase Change _----------------- ---- ---- ---- ---- ----- ----- ------ _Dec 8 158 23 34 42 82 34 -0.10 _Dec 5 158 22 34 45 81 45 0.18 _Dec 4 160 52 43 48 82 66 0.48 _Dec 3 161 61 49 49 83 78 0.64 DOWN _Dec 2 164 84 61 59 85 95 0.78 _Dec 1 166 85 61 57 84 95 0.60 _Nov 28 165 80 48 54 84 92 0.16 _Nov 26 163 71 45 48 82 82 -0.26 _Nov 25 162 64 41 46 83 55 -0.64 _Nov 24 161 49 37 45 82 -39 -0.97 UP _Nov 21 155 21 21 35 81 -69 -1.27 _Nov 20 154 19 21 34 82 -100 -1.04 _Nov 19 156 19 25 35 82 -94 -0.61 _Nov 18 152 15 21 35 81 -66 -0.24 _Nov 17 156 16 26 40 83 -66 0.65 link to November data Message 19544456 </font>