Weekly Trading Strategy : 9-11-2009

Long-term View :
Bullish with HSI target 24,000 in 2009
USD is fading away in the next decade.. Gold hits USD2,000 in 2011
Hot money triple LONG HK markets(FX, Stock, Real Estate)

Weekly Review and Comments
Joseph Stiglitz views on US:
1. Unemployment rate stay high
2. Inventory level goes up means nothing, as the problem is in the demand side !
3. The default rate of US commerical building will be in bad shape.
4. US recovery, what recovery ?

China Economic Outlook 2010 (By HSBC China chief economist)
1. High growth sector shift to Medical and Education (Which stock ?)
2. Stock up 20%-30% ( HSI will hit 30,000)
3. No bubble in Real Estate market (hold on #272)
4. Inflation is moderate
5. CYN appreciates slowly

Stock Review (2318)
1. Switch from product-oriented(Insurance) to customer-oriented. (Y-generation)
2. 360% cross selling (insurance, banking services, invesetment services etc..)
3. interest rate up -> better interest margins.
4. Rapid growth in Banking sector.
Conclusion : BUY for long term (5-yr)

Weekly Trading Plan
LONG
2318中國平安

Investing Strategy
2009 : panic market -> focus on Beta.
2010 : normal market -> focus on Alpha.
Long H-share, gold and commodity, Short USD/HKD.
Treynor-Black Model (anchor 2828 : ETF H-share) with portfolio monthly balancing
Stay away from China over-capacity industries.

Focus
HSI 23,000 -> 5% cash
HSI 24,000 -> 20% cash
Speculate
83 : 信和 for its focus on luxury sector and its land reserves. Company buy back
2343 : cyclical stock - steady for recovery in 2010.
2823 : speculate A-Share rebound Vs H-Share
Core Holding
868 : cyclical commodity for auto industry. (2009/09/27 Chairman buy back at $5.03)
2899, 1818 : embrace the explosion of Gold price in 2010 when inflation comes.
272 : P/B @1.2 vs industrial avg 2.0+ Boss buy 4.6M shares at $5.00 Oct 2009.
2318 : huge growth potential. (Grow at 37%, PEG = 0.34)
SHORT
2837 : Taiwan stock market from China's policy.