most stocks are recovering from previous low. Those whatsapp group/telegram/i3/forum/fb stock group are heated up for discussion again

... and meanwhile is hit the lalat in this thread...


Trade wars... I seriously think the markets are under estimating its deadly threats... 25% here 25% back... here there and there and everywhere.... nobody gonna get hurt a single bit?

And yet...the markets are moving higher and higher...

err... can ah?

Tariff, or tax, are used to restrict imports. US has been in trade deficit for decades. Donald trump is a business man, he wants to make america great again. So he wants to stop fund outflow from the country by imposing tariffs on china.

22% of US import is from China. By introducing tariff, it can protect domestic industry and jobs. Import goods from China is more expensive(due to tariff) and hence consumer from US may consider may switched back to product made in US. Coupled with tax cut, he wants to make America job market great again. But for those export industries in US might facing job cut. On the other hand, US fiscal deficit is ballooning. If they issuing more and more treasuries to finance government spending, more supply, higher yield; Money from stock market flow to treasuries, bear market starts.

China on the other hand, has export almost 19% of total to US. If US impose tariff on China's product, it will affect China's export industry significantly. May caused Yuan currency devaluation (which already did since Trump's tweet) and less attractive. Hence to protect themself, China have to impose tariff on US Product as well. However, devaluation of Yuan may help to boost china's export to other countries. China is studying how to use "Yuan devaluation" as a tool in trade spat.

Both of them want to protect their own country. Who will win? i dont know. But, i am certain that it has created a massive shock to stock market worldwide due to investor dislike uncertainty.

Not an economic expert, blow water only

Haha... yes we not eperts lah.... just talking chickens and what nots...

I wanna blow more steam on US imports from China, I mean US the consumer and lets talk from a business perspective ...
With the Trump Tariffs, the Chinese goods are some 20-25% higher (are the figures right?).
I would break it into 2 group buyers, ie manufacturers or end users.

For manufacturers (buyers of chinese raw materials or component parts), the buyers are either...

1. Looking for cheaper alternative...

a. buying from a local source or getting someone to produce locally.

I believe the manufacturers bought from the Chinese cause they were cheaper ... now with this new tariff, would the manufacturers be able to source from US itself? Or can it be produced as cheaply? If can, would someone want set up plant to produce these component parts? (this one is tricky... cos the Americans have to account for the risk of Trump reign as a president and once he is out, will the tariffs stay or be removed?)

b. sourcing from another country.

This is logical but then.... I am left scratching my head.. Trump, proclaimed the trade deficit was too high. So when the manufacturers buy component parts from another country, it's just a shifting of source, as the trade deficit still remain high and in fact, it COULD EVEN END UP HIGHER. For example, say US don't buy from China this component part. The next best source (price) is Turkey. But the Turkish part is say 15% higher (15% still cheaper than the tariff imposed) than the price they used to buy from China. So how would it help reduce the Americans trade deficit?

c. the manufacturers buy like normal but with higher prices.

which means, these American factories would have to bear the higher cost or they pass on the American consumers... either way, not a good picture ...

Some links on the impact on Americans itself...

This US TV manufacturer which relied on Chinese component parts...

https://money.cnn.com/2018/08/08/news/compa...cuts/index.html

Other reading links on how things are felt locally...

https://www.10news.com/news/inside-san-dieg...ng-felt-locally

This car part manufacturer,Magna says they will take the tariff hit... quote ""If the tariffs stay the way they are – and who knows if anything more gets ratcheted up in China – it's about a $60 million a year hit,"

https://www.cnbc.com/2018/08/09/magna-inter...pportunity.html


and the story of Pegasus...

https://www.theguardian.com/business/2018/a...ade-war-with-us

BTW the second round of tariffs only starts kicking in Mid Aug. Actual impact yet to be seen...

few companies already lower their earning targets since trade wars.

Now have to wait for things to uncover...

Take the following article...

https://www.cnbc.com/2018/07/23/goldman-tar...ies-to-win.html

But the market in general seemed to had ignore it.....


Now comes Turkey....

Another interesting piece...

https://asia.nikkei.com/Editor-s-Picks/FT-C...ia-to-trade-war

Is there any website i can see top 10 best bursa performer and 10 worst performer year to date ? just curious want to know.

Sorry can't help you as I never use such stats for my trading b4.

https://www.businessinsider.my/trump-tariff...18-8/?r=UK&IR=T

Key points...

1. Higher imported parts
2. Price increases from locally (US) sourced parts/materials
3. Exports difficulties


US winning trade war?

I still believe no one wins!
It's a globalised word... everyone will hurt from Trump stupidity!!!

yes, agreed that the market is overly optimistic...

Yup. Overly optimistic.

The trade tariffs imposed on so many countries questions the relevance of WTO. Say goodbye to free trade.

....and how about inflation? Won't the 25% here, there and everywhere will easily inflate things up fairly fast?

Any interesting stuff?

I saw BRIEFLY klk earnings improved a fair bit. Then I looked at the earnings multiples... I decided to be lazy and decided not to bother reading its earnings notes..

when 2008 happened, i read that the market was optimistic too

Actually it's very good to be optimistic.

Especially when it comes to setting personal goals...
It's without a doubt that we need to set good, optimistic targets on what we want to achieve in life...

But when it comes to stocks...
being a bit cautious and realistic in our risk assessments is always good.



Take for example, today's top volume penny (what else is new.. ) stock...

The stock is hit hard after an obviously poor set of earnings...

Question is ... should we ever be caught in a situation like this in the first place?
Did we evaluate our risk properly?

Take for example, if we compare the earnings trend vs the stock price trend...



As you can see above, the earnings trend HAD BEEN DOWN for quite sometime already...
meaning to say, yesterday shitty earnings WASN'T UNEXPECTED...

BUT look at the 3 month stock trend on the right of the above screenshot...

The stock used to be trading around 20+ sen...
It was above 44 sen yesterday??

Maybe the greater fool theory at play here

Well not so fast, probably until the end of May.

But so far i glance through the earnings are improving.......

Those on my watchlist havent release their QR yet

The best is yet to come.

Maybe...

I think most important we learn how to manage our risks.

Yes, there are a few spots of improvement here and there but then the market is pricing them so optimistically....