I had some time between Steen Jakobsen’s talk and the panel discussion, so I decided to attend one of the talks on trading psychology. It turned out to be a complete waste of time as the speaker seemed to be more interested in impressing on the audience his trading records than sharing any knowledge.
Two-thirds through his presentation, I gave up and proceeded to the room for the panel discussion. The lists of panelists for this round of discussions include:
Johnny Ching from UBS
Ooi Lid Seng from Societe Generale
Song Seng Wun from CIMB-GK Research
Steen Jakobsen from Saxo Capital Markets
Terence Wong from DMG & Partners Securities
Unfortunately, I was very tired for this session and couldn’t really take down a lot of notes. However, there is a good chance you can catch the webcast on the
Invest Fair website if they followed this year’s practice of showing the previous panel discussion online.
Nevertheless, these were some of the comments (in fragmented order) that I managed to capture:
Steen Jakobsen
With the slowdown in growth, there will be lower retained earnings.
Pharmaceuticals are trading at only 17-20 PE instead of the historical 30-32 PE.
Technology and alternative energy are also worth considering.
If you have to buy financials, buy the bond instead of the equity.
Terence Wong
Subprime much bigger and worse than expected.
A lot of volatility in the Singapore market.
S-Reits giving an average of 7% yield and are attractive.
Other possible considerations include the telcos, SPH and ST Eng.
Ooi Lid Seng
There will be earnings contraction.
Construction sector hit.
No clear sign of which sector to go into.
Johnny Ching
Spoke about one their products, the Callable Bull-Bear contract.
The next speaker that I managed to catch at the Invest Fair was Steen Jakobson, the Chief Investment Officer of Saxo Capital Markets.
Steen had a very negative outlook on the state of the US economy, with the falling commodity prices a confirmation sign of the slowdown.
He also heavily critizied the money printing policies (among others) of Ben Bernanke and Alan Greenspan. Trichet, president of the European Central Bank, was not spared as well.
For the future, some of Steen’s views and predictions include:
Asia to outperform.
EUR/USD to drop to 1.45 before continuing the upward movement to 1.75.
Bearish on USD and GBP, bullish on SGD, CHF, NOK and SEK.
US housing bottoms around 1H2009.
Fed to further cut rates before hiking.
Europe to enter recession in 2H2008.
S & P to touch 1100 again.
Prefer bonds to equities.
Buy bonds in countries with inflation fighting credentials. Some of these countries include Sweden, Denmark adn Switzerland.
Oil stays in US$100-130 in 2008 and rises to US$200 in 2009.
Solar energy to take on a greater importance.
(Note: These points are shown for the benefit of sharing with you the views of Steen. Please DO NOT treat them as “sure right” or even “high probability” buy or sell calls.)
Overall, I found Steen Jakobsen’s talk highly entertaining as well as insightful. He held nothing back in giving us his views of the current state of market affairs. It was impactful without any type of “window-dressing“.
I had a good chuckle as I watched Ron Paul asks Ben Bernanke questions pertaining to the devaluation of the dollar and trying to expose the
ugly truth behind inflation.
On both accounts, Ben evades answering the question. Note that the sessions were recorded quite a few months ago.
I saw this article in the newspaper yesterday. The headline reads:
Bond insurers want $171b of risk cover written off.
The story is that banks have purchased (from bond insurers) quite a large sum of credit default swaps (CDS) to protect themselves against collateralised debt obligations (CDOs) defaults.
Faced with downgrades and heavy financial pressures, the bond insurers are talking to banks about writting off the CDS they have sold to the banks.
Many companies with exposure to such insurance deals have already wrriten down the value of such deals.
Merrill Lynch has one of the largest exposures, with US$18.8b in asset-backed CDOs as at 28th March 2008.
Some US$1.34b was written down in the fourth quarter of last year and the first quarter of this year.
Citigroup has an exposure of US$10.5b and US$1.5b was written down in this first quarter.
Some pointers (and views of Marc) from this short Marc Faber interview.
What’s your outlook from here?The cyclicals, energy and the material stocks, like steel and iron ore companies will come under pressure. The downside in banks is running out. There are other sectors that are more vulnerable.
What would you be buying?
We should be asking what are the sectors to be sold. He doesn’t see value in equities, commodities and real estate.
Are you saying we should be in cash?
Cash is not good as it is losing its purchasing power due to the “money printing” policy of the Fed.
On the surge in oil prices
He is not sure whether oil at US$140 is justified. There will be corrections along the way, but if the supply of money is being increased, the price will go up if supply is constant. The big upside is gone. Be careful about blindly buying commodities.
On the one investment if he had to make a pick
There was no commitment from Marc. His reply was that he would go for a holiday.
