Quest for the Next Big Tradable Trend

[Cutten]

Quote from lynx2004:

I agree with your analysis but my problem is finding the so called hidden gems in Japan......haven't got a clue where to begin...may have to rely on someone who knows and follows Japanese small caps closely?

Yes, I agree this is a problem. You could just buy a small cap growth fund. An alternative method is to look at the 52 week highs list. Any future multi-year winners are, by definition, going to appear on that list time after time. I used the 52 week highs list from 95 onwards to find some of my stock picks during the western bull market, and it threw up some great multi-year winners.

Overall though, I agree that it is harder to stockpick with Japanese or Asian stocks in general, so the fund approach does have some merit. One I quite like is http://www.apolloinvestment.com/index.html - they have had excellent outperformance, including during the Asia crisis. The fund is a pan-Asia fund, but I have a similar view on Asian stocks as I do on Japanese stocks, so that's not really a problem.

 

[lynx2004]

Quote from lynx2004:



12-17-04 01:17 PM

As the year 2004 is coming to an end (time sure moves fast when you are having fun!), I thought to start a discussion on finding emerging trends in the various markets. I think this is no easy task but thought a collective discussion might benefit us all.

I remember, for example, at the end of 1998, crude oil was below $10 (that was the bottom after a bear market in oil) ...

Also look at the USD/Euro exchange rate .... wish I was in on that trend from the start...

What about the US 30-yr Bonds..

Which country stock markets are just starting to rise (or fall)?

I'd like to leave the discussion open to all asset classes, but at the same time would like to discuss how and what financial instruments/vehicles to use. After all, this is a trading site!

I'd like to thank all participants in advance.

Above is the first post from Dec 2004...

I started this thread at the end of 2004 to have a discussion on what the next trends are that we can get in for the new year. Now that 2005 is almost over, I thought it might be time to think what might be the opportunities opening up for 2006.

There were some good calls from a year ago for 2005-- I most notably remember some predicted it was time for the dollar to rally...and also for a continued rally in oil...they were so right.

So what trends are starting or will emerge for 2006 ?

Again, I'd like to leave the discussion open to all asset classes, but at the same time would like to discuss how and what financial instruments/vehicles to use. After all, this is a trading site!

Again, thanks in advance for your contribution.

 

[BlueHorseshoe]

Oil hits a near-term low sometime around end of December and then rallies to new highs as retailers stockpile ahead of summer driving season, and specs/hedgers buy protection ahead of '06 hurricane season. Barring recession, oil & gas have much scope to be the trade of '06, despite all the progress these markets made this year.

Fed raises rates further than any expect in order to pop the asset bubble almost exclusively manifest in real estate, oil, copper, etc. These bubbles will, at minimum, sustain well into '06. Bond and T-note yields will fall further, contributing much to the inversion - Fed only needs a few (3-6) more hikes to get us there.

Curve, flattens, inverts, recession perhaps in H2 '06 or even as late as 2007. (I believe Fed sees recession as an overdue requisite for long-term price stability - they believe it is needed and will make it happen.)

As such, dollar could rally back to par w/ Euro, though could be choppy now through year-end. By Jan USD strength should become more firmly entrenched.

UK budget worries and collapse of Pound could become a larger concern as UK became net oil/gas importer this (?) year and their depletion rate of N Sea reserves,which is already frightening, begins to raise concerns.

 

[lynx2004]

BlueHorseshoe,
only you have posted views for 2006 so far...I guess not many want to talk about 2006 yet....

let's see....

It seems the U.S. equities are making the final push in this bull -- Look for a top in Feb/March.

 

[kowboy]

Quote from BlueHorseshoe:

.......Fed raises rates further than any expect in order to pop the asset bubble almost exclusively manifest in real estate, oil, copper, etc. These bubbles will, at minimum, sustain well into '06. Bond and T-note yields will fall further, contributing much to the inversion - Fed only needs a few (3-6) more hikes to get us there.

Curve, flattens, inverts, recession perhaps in H2 '06 or even as late as 2007. (I believe Fed sees recession as an overdue requisite for long-term price stability - they believe it is needed and will make it happen.).......

Thank you Bluehorshoe for your projections.

One thing that puzzles me is that when I read much of Ben Bernanke's, the new Fed chairman, previous speeches I get the feeling he would rather inflate the money supply than have the alternative recession or economic slowdown.

When you put the pieces of the puzzle together, such as the plan not to publish M3 anymore, and the emphasis to concentrate on inflation targets, I would conclude that Bernanke and the Fed would rather inflate without us really knowing what's happening. That is, inflate the money supply and only give lip service to controlling inflation, which btw is a falsely low number anyhow. Politically it's easier to inflate than to slow down the economy.

So the alternative to what you have suggested could be more of the same of what we have now, with perhaps only a few more interest rate hikes.

Comments?