Satuki @ Home

I can day trade anything that moves. I become somewhat picky when I look for swing trading targets. As a matter of fact, I do look at the fundamentals of a possible swing trading target albeit 75% of the decision making is still based on technical analysis.   When it comes to picking a stock for my retirement account, I become extremely picky. I can not or do not want to short the market (buy inverse ETFs) in my retirement account. Naturally, all my stocks are long.

What I look for in this type of investment grade stocks

1: Minimal Risk
2: Growth

To meet the 2 criteria above, I normally look at very large and well known companies such as Apple, Research In Motion, China Mobile and etc..  I will never buy small cap speculative growth stocks.  They are too volatile and risky.  I do not expect crazy returns from these stocks.  A 15-20% annual return with minimal draw-downs will make me very happy.

We had a bull run from 2003 to late 2007. That bull-run was propped by the housing bubble. And here we are at the 2002 level again today.  I believe it is worse than 2002 since we have added so many stocks since then.   Today’s 1800 is definitely not the same as the 1800 7 years ago.   The US market is too mature. There is no manufacturing left in the US thanks to outsourcing.  The banking industry has crumbled too.   There is nothing here left to grow.   Oh one thing that certainly grows fantastically is the money supply.  The Feds just prints it.  What I see in the US market for the next few years is that it is going to be a very boring market that chops around inside a big trading range.  It is actually fine for day trading and short term swing trading. But it will not be good for my retirement account for which I do use the buy and hold strategy.

Currently I am very interested in the Chinese stock market.  The whole country is growing. Their first stock market bubble has burst in 2007.  It crashed all the way from 6000 to 1700 within a year.  This reminds us of NASDAQ in 2001.  Although the crashes are similar I believe their recoveries will be different.  I think the SSEC (Shanghai Stock Exchange Composite) will reach 6000 again in the near future since they have real growth. Anyone who thinks that China is still communism is misinformed.  It is cutting-throat capitalism.  See the SSEC chart below.

 
The Chinese stock market is closed to the foreigners.  But we can still invest in the Chinese stocks listed here on the US market.

Here are the1st tier guys, which are monopolistic, massive, and still growing.  

China Mobile (CHL)
China Life Insurance (LFC)
Aluminum Corp of China (ACH)
China Petro and Chem Corp (SNP)
Baidu Inc(Bidu)

Here are the 2nd tier guys, who are smaller but with better growth.

Sohu.com (sohu)
Shanda Interactive Entertainment (SNDA)
Oriental Educ and Tech Group (EDU)
SunTech Power Holdings (STP)

STP is a little bit distressed now.  But it is the best solar company in China.