High Heeled Traders
  • Contact email: charmel@highheeledtraders.com

Girl Power Trading

Stimulus Now!

February 1, 2016

All my kids got sick last week so after sleep-deprived days, I just had to cut all my holdings by Wednesday morning, moved to cash and put the market out of mind for a few days. Then the much-anticipated statement from the Federal Reserve came and disappointed investors. (I kinda sensed they would!) Then Friday rolled in and Bank of Japan did away with the need to make investors merely “hope” for stimulus – they actually provided the stimulus straight away with “negative rates” so people can borrow and buy. Previous week had the European Central Bank promise more stimulus.

OK so three Central Banks (of the biggest economies) had already made known their answer to the current market situation. Let’s round that up again :

1. Bank of Japan – stimulus implemented with negative rates.
2. US Fed – no commitment – March decision for rate rise
3. European Central Bank – stimulus promised in March

Now I would say the most important Central Bank to really address the issue (China being the originator of current market volatility) – the People’s Bank of China – had only come up with liquidity injections last week, supposedly for the Chinese New Year (CNY) celebration (and so far no help to the stockmarket). There has been no new policy, or no new spectacular rescues of the stockmarket although the last “statement” from Chinese officials in the World Economic Forum was a reassuring “we will take care of investors”. But nothing but silence after that. So I googled a little bit, and hmmm, I’m certainly not the only one noticing the silence from the policy makers. Check out the South China Morning Post article . “If the policymaker knows something, if they have genuine signals, then they should communicate them to the market; if they themselves are confused, they should keep their mouths shut.” The article also points out that while the PBOC Governor Zhou is a seasoned technocrat, it is increasingly likely that the economic decisions is being made by the party. Or that “Zhou’s silence could also reflect a change in China’s policymaking process.”

So I guess it’s another wait in the sidelines week. If they really want to think through the problems, my guess is that any real policy pronouncements will come after the CNY holidays. Although they’ve had a good few weeks after the disastrous start of January, we can’t discount the fact that any “stimulus” program announced this week will have the whole of China buzzing and that is always a good thing for how people view the government. It is highly likely they would announce a “stimulus” but what kind of stimulus is the question. Fingers crossed it helps in the structural change for long-term growth they are aiming for.

Anyway, so there’s still a lot of uncertainty — last Friday’s rally is being followed by another weak China economic report signalling manufacturing contraction. That stimulus better come soon. Serenity now!

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Growing Bargains

January 28, 2016

Just a quick post – the Philippine growth rate came out today – 6.3% from the last quarter ending in December and 5.8% for 2015. Article here. It is important to note that that growth have and will come from within — domestic consumption is strong, the election year will have government spending on infrastructure and it didn’t get mentioned in the article but services segment of the economy is a boost — services that is not only availed of domestically but also internationally earning US dollars, with the business process outsourcing industry – call centers and knowledge industries. Big banks like JP Morgan (US), Deutsche Bank (Germany), Macquarie Bank (Australia) have IT and back-office processing here that serves their global business.

This allows us to understand the transition that China is trying to accomplish.
1. Away from manufacturing which is dependent on other countries (export markets) buying from them
2. Consumption which facilitates the “exchange and circulation” of money / wealth among the locals.

In the case of the Philippines, the falling stockmarket – as a result of the “risk-off” attitude especially by foreign funds – is getting very attractive. This is because the companies that make up the stockmarket is rooted on the domestic consumption and services. None of those mining (of base metals) and oil — commodities that have been on a deep slide given the China and global growth problem. Many sectors like BPO industry, export (agricultural / garments) and Overseas Filipino Workers (OFWs) are also benefitting from the strength of the USD. Tourism sector (again boosting domestic consumption, services like in restaurants and USD) is also growing contributor – who can resist beaches and fun in the great outdoors, people’s hospitality and English widely spoken which are the many attractions of the Philippines.

So, falling stock prices but highly profitable companies make INCREDIBLE buying opportunity in the Philippines, and I’ve created a learning event called “Bear Market Investing with Low-Risk High-Reward Investing Workshop” which will equip you with a structured investing / trading approach, which includes knowledge on developing your business rules to get into the right investments and take profits as well as protecting your capital. We also discuss understanding the market, the strategies available and the risk management ideas – specific, actionable and timely ideas you can easily implement!

Event : “Bear Market Investing with Low-Risk High-Reward Investing Strategies Workshop”
February 6, 2016 830am-12nn
Ortigas Building, Ortigas Ave. Pasig City
Early-Bird Rate : 1,500 pesos (Regular rate : 3,000 pesos)
Freebies : Full eBook of “High Heeled Traders (worth 800 pesos), Trading Kit (priceless!), two one-on-one structured consultation sessions for 30 minutes each. We will hold your hand as you start to invest to help you achieve added security and confidence!

To learn more about the workshop topics – visit this link :

http://highheeledtraders.com/2015/11/20/current-workshops/

Email charmel@highheeledtraders.com to register ! We want to focus on helping our investors so slots are limited and filling up fast. See you at the workshops.

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Bouncing and Checking

January 26, 2016

The talk of stimulus last week from the ECB and Chinese officials  fuelled a big rally late last week, which I couldn’t believe. I thought, I’d wait a little bit more to confirm whether this is already, as they say the “bottom”.   Well, yesterday there was more fun in the morning following the US, rally, but the evening session with the EU and US brought I guess the “reality check” if this stimulus is really coming — no firm announcement yet — from Chinese officials over the weekend and until today — so, you guess it right, another down day! So down actually, Chinese stocks haven’t been at this level for 13 months. Article here.

Ahhhhh when will this end?!   Have we reached the point of despair –  the “bottom of the bottom” — the “I’m not buying even if you pay me” stage? Do we dare test the strength of this bear market?    I had written an article about “testing the market strength” for a bull market in this link . Do you want to find out how far this bear will go? It’s not hard! Modern technology makes it easy – 2 taps in an app taking up only 2 seconds of your time that is well-spent Software solutions in commodity trading have made it easier for the public to trade anywhere, anytime.

So, go on, keep checking. My observation is that there will be some bear market rallies and an eventual turn around after some policy adjustments the Chinese government is cooking up. The stockmarket rescue efforts have not succeeded so far, and has been very expensive. However, as governments have done before, somehow they have to stimulate the economy, which revives growth and risk appetite. I’ve some “numbers” put out as key “Support” levels. I don’t really rely on those, I think like in bull markets, bear markets sentiment or “fear” is going to drive the trend. So yes, we will bounce around until they come out with that stimulus policy.
Keep calm under pressure and watch the market.

http://www.bloomberg.com/news/articles/2016-01-26/china-s-stocks-fall-amid-concern-capital-outflows-may-accelerate

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China’s GDP came out today — and surprise surprise!  There’s no surprise :)   I think we all know all-along that it will be a slower growth, manufacturing and investments are going to be lower.  The positives being highlighted is that there is growth in consumption (from retail sales) and services (and non-manufacturing).  There is also broad expectation that the Chinese government will continue to have stimulus measures to help the economy grow at the pace to still sustain the population.

So do I predict a move up from here?  Most are expecting that the Chinese and other  governments will counter the slowing global growth with more stimulus.  That’s always  happened before. So there’s definitely room for a move up.

Incidentally, I was asked in another forum what timeframe do I choose for Options because they do expire. I said given this volatile market, I choose between 1-2 weeks.   To which, the fellow said I have to have mad predicting skills in such a short time frame to be profitable.

No, I don’t have mad predicting skills.  I just enter when the risk – reward is attractive (3X what I risk), set my stop, when I am right, I enjoy the profitable run as much as I can. If I am wrong, I just get out as  quickly as it hits my stop which makes investors become profitable.

So there are times that I don’t enter the market when I think the risk is too big – rather than thinking alone that I am right or  wrong.

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Money On The Move

January 18, 2016

It would seem that 2016 would come without warning that our investments are at risk. But actually there is. With much volatility happening last year, given the slowdown in China and US interest rate rising I have been warning about it in my blog and workshops. China slid into bear market territory and government money supporting the stockmarket to the tune of $500 Billion dollars went kaput. For those who have moved their money out of equities – where are they? In a bank account with the highest interest — which, coupled with lifestyle costs is still next to nothing. So yes, you can plan to get out of the stockmarket and park your cash and then put it back to work with investing strategies in the safest and highest-income paying stocks.

When do we get back in? I am asked — there are some ways I mentioned to my FB friends, like looking at the Resistance level, and check for retracement and that Resistance level is breached again, it is a signal for an upward climb. However, the current market is ruled more by sentiment than any kind of technical / fundamental basis. The fear is just strong right now (though it shouldn’t be because we’ve gotten fair warning before) and it is also spreading from market to market ie. from oil / mining industries to the creditors (financial companies) that have made their expansions possible. So, people tend to just move away from risk-taking.

But here’s the thing, money moves to where it is treated best. (Kind of like a relationship, will you stay if you are not happy? You move on!)  Where is it being treated the best right now?! The place where it can grow.

So I’ve pointed out in lots of places in this blog, principally, you can put cash in the bank, but how much do we get for it? Just look at Australia which has one of the highest paying interest rates among safest credit rated economies – the term deposit rate is at 1.5% per year. Who lives on 1.5% income a year ?  Retirees would have to dip / use their savings to support their expenses.  The other thing though with cash,  if you’re not in USD (the only country raising rates) your local currency will lose value and could increase your grocery / clothing costs if they are imported. (Which is the case with Australia, Canada, EU. many Asian and merging market countries).

The  stockmarket offers an alternative — what sectors / stocks pay the highest dividend, what we can’t live without (that will still enjoy robust sales), plus also those with cash hoards that they can deploy to lessen debt, or grow with new products or buy companies.   For example there are 52 of these “Dividend-Aristocrats” … some familiar names like Walmart pays 3.17 % or  AT & T  which pays 5.65%  and because they pay these kinds of dividends, few would let them go and less prone to be sold-off – just lost less than 59 cents  or .017%  when all this selling started whereas others with no dividends paid  like FB would lose  $8 or  7.7%    (Got the idea?!) .    Do be careful as some high-dividend paying companies might have to cut their dividends if growth is slowing down which might be the case with some oil companies.

So I’d suggest, you stay cool and keep watching the market so you can put your cash to work.  I will be speaking at some events so stay tuned.

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Unbreakable China

January 8, 2016

Yesterday I said, the Chinese government would have to step in and support the stockmarket. Which it did today. And markets see-sawed some more but at the end it rallied to a close. So, is the crisis over? Maybe, it’s just a break? Hmmm,,, a lot of notable investors like George Soros and Mark Mobius have been saying this smells like a crisis and sure I would agree on some parts, but to say this will be a full-on crisis year, I don’t think so. The governments are not supposed to let that happen, or they risk getting thrown out, and China, is well, China. Let’s just say they still have lots of means to manage this “disturbance” as pointed out by Mohamed El-Arian in his article. They have money to spend for such rescues and they are working through policy fairly quickly.

So how’s the outlook next week – let’s go through a checklist.
stock market crash – done
currency market crash – done
oil market crash – done

They said there might still be after-shocks but after those “big events” already happened, and US corporate earnings rolling in, I think there’s a good chance we can have a rest from all the drama.

It seems like everything else, crisis and calm is made in China.

http://www.bloomberg.com/news/videos/2016-01-08/market-turmoil-a-reflection-of-confused-policies-darda

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All Those Bargains

January 7, 2016

China dropped 7% early in the day, which caused their market to close for a day. It’s a new thing they are trying this year. I believe tomorrow might repeat, we’ll see, if the government does not step in to rescue its stockmarket. Why didn’t they do so today I don’t know but maybe they are still deliberating and looking at all possible options. I mentioned sometime before that it’s a very expensive exercise to prop up the market but my guess is –from the government’s perspective it is even more expensive – politically – to let the market fall. I did read people are puzzled – why devalue the currency at the same time and shock the market? We do have to understand that Chinese economy is export-oriented which employs massive amount of people and their factories would make cheaper goods for buyers, could win back market share of manufactured goods (from the Euro area whose manufacturing is helped by cheaper Euro as I mentioned yesterday) – so that’s the more longer-lasting and desired effect for the economy.

Anyway, the trader’s way is to “follow the market”, and this downtrend may have a few more days to go ,,, or not! Yeah, one can’t be too sure predicting which way the market will go, it is very volatile. Anyway, I decided to do a covered call / bearish strategy last night on AAPL, when I saw that it had recovered from the early plunge, and then started to move down. After a while the market ran against me – the loss already at 2x my Initial Risk, but I was thinking with the long day ahead and selling pressure still strong, the stock is likely to decline again by lunchtime, which it did. There was that FOMC Minutes Release at the afternoon too, which invites a lot of volatility. So the day ended with the Covered Call being in profit just a little bit. I am projecting that with the time value expiring I can still buy it back cheaper today (and even cheaper with the China plunge sure to make stocks dive again at open).

I’ve been talking about bargain-hunting and I hope investors have exercised due care in their buying decisions. I haven’t bought anything to ride price recovery yet. I thought I’d wait until the corporate reporting has rolled in with good profits that will cheer up investors and lighten up the sentiment. I can see valuations which are really attractive — some already at single digits. Investors and the media will certainly talk about “oversold” conditions again in no time. So there is no hurry, you can keep looking for the best stock for you to invest in. You don’t pick up the first bargains you see in the shops don’t you — you go far and wide to inspect the merchandise. You do your research. If you think there isn’t a lot of competition for something you want, you can afford to wait some more as it could go cheaper. Like you can pick some of the high-dividend paying ones that will be growing also. Truth be told, the best bargains are those that nobody wants! Like when it feels utterly hopeless (another investing gem of Warren Buffett – be bold when others are fearful).

Since I mentioned my shoe-buying bargain-hunting yesterday, I tried again my super-bargain purchases – light pink pumps that I picked up at $9 and retails over $100, that I have only worn once so far — but I walked on it good — that a star is born! hahaha

http://www.bloomberg.com/news/articles/2016-01-07/it-s-all-bad-news-for-markets-buckling-under-china-fed-economy

http://www.bloomberg.com/news/articles/2016-01-07/china-markets-in-turmoil-as-weak-yuan-fixing-sparks-stock-tumble

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Remember Last Year?

January 6, 2016

China selloff killing your mood to invest?! Think of it as bargain-hunting. If you’ve already bought before the fall, relax. I think about my sale shopping. I’ve bought shoes for 50% off, then when 70% off came around, I was hoping I could have gotten that extra discount, but hey, I was still happy! Because I know I would still enjoy wearing those shoes and greatly beneficial to me. Bargains are still bargains. Why did you buy your stocks in the first place? Was it for growth? income? That’s why investing should be done with careful study.

In this blog and in my investing workshops, I talk about what stocks I think are best and shown resilience in these volatile markets. To put it simply — things that people can live without. And so far we haven’t gotten to that point of the world being destroyed by asteroid or some other kind of global scare. So people still need more than just food, sleep and shelter. And people being social creatures – we all still got to travel or communicate in various ways. So relax. It is the start of the new year, new quarter, and in a few days company earnings are going to be rolling in. We just had a holiday quarter so many companies are bound to bring good cheer to investors. Even this quarter stands to be better than last year *when we had harsh winter and now we are getting reports of a “warm” winter.

Remember last year? (It was just a few days ago…) This kind of selloff already happened before. The US economy still maintained solid jobs growth, GDP was still in-line with strong consumer spending, some EU economies registered stronger manufacturing (with the cheaper Euro they were able to capture more market share from the Chinese — so that bad factory data is not too bad overall!). Amid lack of growth, governments still maintained support (otherwise known as stimulus). This is the way of the world.

What I suggest we should be doing right now is to protect holdings / profit from downside where strategies are available to you, while looking out for a change to an upward trend, remember the market is “volatile” which means the current trend could reverse sooner than you think. Plus, there are always those defensive stocks that do well in this kind of market. There are profits in investments, you just have to know what to look for.

Like us on Facebook for more actionable ideas and timely tips!

https://www.facebook.com/highheeledtraders/

I am relaxing with this video … enjoy!

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I was thinking it would be easy to write this one, just get last year’s Best Investment for 2015 and be done! I say that because I think 2015 and 2016 is going to carry the same themes – US interest rate rise and USD strength, China weakness, oil weakness. Those three certainly moved the markets and everything else just seem to be “ripples”. Yes the S & P 500 ended lower this year, and if you were the “long-term investor” just waking up to take a peek at your investment, you would say, what a sleepy year! But it was not… there were steady climbs, dramatic declines and some I believe, if you know the concept you are investing, like when to do your bargain-hunting, there are still pretty good profits to be made.

So how to invest this 2016 — I think like what I said prior to 2015, we should be prepared for the volatility. This year’s rate rise will be still “data-dependent” so we have that element of suspense in the air. As a starting point on where to invest — I do have good news for people who are happy to sit back not chasing spectacular returns but want to receive steady income : utilities were top performers for 2015 – which pays roughly 4.5% in dividends per year, that would definitely be ahead of inflation (OR income from bank interest on savings) which is still not desirable anywhere in the world.

Not to forget also – those sectors I mentioned that are great for bargain-hunting in my last post. You could get income stocks, growth stocks, rate-rise-happy stocks. Article here.

My personal investing experience was greatly helped last year with having the correct mental strategies. I mean, it’s hard not to be fearful when markets drop off, it is also hard not to be fearful when it’s time to pick up beaten down stocks (lest they continue to fall) and having kids to care for while having full-on house-hunting-renovation-relocation, the right mental strategy allowed me to take the necessary action when they were needed. Yes, it’s a skill to be mastered so I am excited to be able to share more about the mental strategies that are critical for investors. So my recommended investment for 2016 is importantly on investment on ourselves, how to strengthen mental skills that would keep us focused and profitable for 2016 and beyond! Watch out for my free webinars and upcoming events. See you all soon!

http://www.bloomberg.com/news/articles/2015-12-31/here-are-the-best-and-worst-performing-assets-of-2015

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Year-End Bargain-Hunting

December 30, 2015

We were having dinner with friends who came over at our house and I was also having a bout of bad colds so I was not able to get to the market open. It’s a good thing that I already planned this sort of holiday schedule last week, before Christmas. When many people are off for holidays or know before hand that there’s going to be some distractions. (Like Year-End Sales and all the food!) So there it was, my go-to strategy the Covered Call made me some nifty profits while I am having time off, time value is also expiring on the option . It’s a fantastic strategy, not too demanding on your time, gives you risk management because you profit when the stock goes down…best time to close it out (with a buy transactions) is when the stock price is recovering.

The day started off slow but as the day progressed stocks shook off its worries and headed for the heavens! This year-end rally started early and I am looking to 2 more days of continued move by bargain hunters in this unseasonably warm winter in the Northern Hemisphere. So if you are trying to get into some bargains now is the time! Next week is already New Year and you know how many people try and start off afresh that time of the year, for us my dear investors, we can jump ahead and get in now. Most investors were buying Energy stocks the last few days, which is understandable as oil is really at terrible lows, but not to rain on the oil party I think it’s temporary with the supply and demand picture looking much as it did for 2015 — maybe even worse with Iran supply coming into the world market.

Technology led the charge as yes, it’s all about the future with 2016 coming in. As of now, I am personally having mixed feelings. Like when we take pictures, the phone software already recognizes the people in the picture and can actually send it for you with one click. There is intelligent life on Earth, yes there is. How much more intelligent? Driverless cars, drone delivery, robots… are we all going to see these “in-store” in 2016? If you think there will be more and more buyers and users of these technology then now is a good time to buy and get in position. There’s AMZN using this drone delivery and their stock has also been on a tear due to the shopping-happy consumer. So it’s looking like the best bets for consumer products like Nike (which just became more affordable by the way!), and high-dividend paying Procter and Gamble, Unilever. Among really undervalued stocks I got my eyes on AAPL, JP Morgan, Citibank, Wells Fargo (these banks pay high dividends also) plus they stand to benefit with rising interest rates.

So enjoy the sales in the shops and stocks.

Happy bargain-hunting!

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