HSBC Investment Seminar

King of Shares was invited to a HSBC investment seminar at Singpost today. One of the key speakers (Chief Investment Officer of HSBC) reiterated pointers that other investors have continuously mentioned during the past 1 week. Hence, King of Shares is going to share some pointers.

- Technically, the US Equities Market have already trading in the bear zone since last Thursday (3th July 2008). Most people would define the start a bear market as a 20% drop from the peak.

- A bear market would usually last for 18 months. 9 months have already passed since we first witness the drop, hence from this definition, the bear market would last for another 9 months, hence taking us in the March - April 2009.

- This bearish market will be gradual and prolong but will not be as deep as previous recessions. The main reason is the economic issues are consumer and housing related VS the previous recessions which were corporate issues. Corporate issues affects earning and employment directly and have far reaching consequences. Hence, we are more likely to witness a U-Shaped recession VS a V-Shaped one.

- More write-offs are expected to come from banks and other financial institutes, we have probably seen ard 60% of the write-offs and another 40% will come within the next 12 months. The bright side is, most investors and traders have already price in this write-offs hence prices "should not" be affected. King of Shares begs to differ on the pricing in factor cause it only factored in on the technical aspect and not the sentiments aspect. When investors sees more write-offs, companies earnings will be negatively affected and confidences will be shaken.

There is also this chart, the HSBC CIO presented. It shows the relationship between the GDP growth of US and the rise in DJI. Drool now........

Disclaimer: It is not the intent of the author to advice the readers to purchase any form of investments after reading this article. Any opinions, conclusions or other information expressed here does not constitute any personal advice. Information are given on a general basis and are subjected to change without notice. The author will not be held liable for any losses resulting from any errors, inaccuracies or omitted data or from the use of the published information.