The contrarian approach to trading in the stocks market.

There are traps even when market is up. In one typical case of Star Cruise SCP.SG, this article explain how Short players manipulate the market when volume is still relatively thin amidst some good news.

Stock Pick for Singapore stocks market:

1) Star Cruise
Recent good news of billion dollar deal and current sell down (on news) presents opportunity.
Here is the analysis by DBS bank with target at US$0.57
Read Official Report

On the contrary, some say that the billion dollar injection from Apollo is used to pay up debts rather than expansion. Price is good but caution!
Current Price: US$0.435

2) BakerTech
Good fundamentals and support at current level. SSH leads with confidence.

Target: S$0.40

Caveat Emptor

There are 5 different time frames for trading stocks. In general, we can classify the following:

- Momentum Trades (aka Scalping): Stock will be traded within minutes or seconds, or in some case hours.

- Day Trade: Stock may be held and traded within same day.

- Swing Trade: Stock may be held and traded within 2 to 5 days.

- Position Trade - Stock may be held for weeks to months

The 5th trade is a long position where investors buy a stock for long term, due to fundamentals and valuation of the stocks.

Warren Buffet unveils the portfolio of shares purchased by his company Bershire Hathaway. It includes the following company:

• Wells Fargo
• US Bancorp
• Bank of America
• Nike
• Proctor & Gamble
• Johnson & Johnson

They also reduced their stake in Ameriprise Financial, a spin-off from American Express. We opine that his style of value investing is great for the long term, but these stocks could still subjected to the turmoil in the current crisis. Perhaps not quite great for day trading.

Checkout this article for the full list and comments.

Cosan Ltd., is the top sugar producer in Brazil. There are several reasons why they are optimistic about the sugar business. Other than the large market in China developing a "sweet tooth", Cosan also ferments sugar into ethanol which could be used as an alternative fuel.

The outlook for the company seems great with demand likely to outstrip supply. In the coming IPO, this is the plan for their proceeds:

"Cosan expects to raise $1.6 billion from the sale of 100 million shares, or almost $1.9 billion if the underwriters exercise their options. It plans to spend more than $1 billion of that on two massive projects that will expand its cane-crushing capacity and ethanol output.

About $325 million will go for developing power plants for five of its mills. Another $100 million will fund the purchase of mechanical harvesters for its sugar cane. About $50 million will be used to increase crop yields and reduce production costs. About $25 million will go into field stations to identify sugarcane varieties suited to different regions of Brazil. The rest will go toward general corporate uses."

(note: this is not a call to buy shares, just sharing this info and for records).

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This is just a log of my habit of how I select shares, monitor the movement, and finally sell off. Some of these are based on the books that I have read. Currently, I am making some money from the recent turmoil in the stocks market.

Whenever the stock market crash, we will only hear the bad news and people getting burned. However, it is a time of greatest opportunity even though there is a question of recovery and time. By saying "greatest opportunity", I mean that it is a time to start looking at the price again and perhaps getting involved once again.

The recent decline of DJIA has caused worldwide stocks to fall. This has present a real opportunity for bargain buy because most of the companies are doing well, and not badly.

In the article link below, we noted and agreed that the jitters in the credit loan market does not affect the company performance which is heading upwards rather than down.

The raging bullish (greedy) market is undergoing correction after all the profits had been taken. Now fear is running in the bear market - a great time for bargain hunting for some weaken animal. The question is when, and the answers are either in the charts and hot news, or both.

Caveat Emptor

Some points from Rex Moore to ponder regarding stocks selection and making a list.

"If I told you I would hand you some money to buy a few shares of a stock, but only if you could tell me which company was at the top of your buy list, could you do it? Most folks probably could do no more than toss out a random name, because few keep an up-to-date short list of their best investing ideas.

Yet such a list is crucial -- and for more than the obvious reason of knowing which stocks to buy when opportunities arise. The very act of diligently keeping up with such a list will sharpen your investing skills; you are forced to develop a thesis for every company, and you'll constantly be reassessing the business to make sure your thesis still holds. You'll also be in better tune with valuation, especially relative to other companies in the industry....

And

That said, don't think that you need to limit yourself to just four or five stocks. In fact, the less experienced you are as an investor, the more diversity you need in your portfolio. This is simply to keep one or two bad mistakes from torpedoing your net worth.