Trigger-shy for now

I have not followed through with the Wilmar trade as Dow closed 100+ points down, and I fear there could be more downside to come. Although I think this is a correction, I am also of the opinion that the best days of many stocks could well be over by the the middle of this year, after a rebound from this correction. Therefore, Chua and Marc Faber could be right in predicting that this will be "the last autumn of golden yellow" and stock markets could end the year 20% down from 1 Jan 2010.

To align myself with this viewpoint, I will trade with a downside bias, i.e. short stocks after they retrace upwards. The banks and property counters certainly look very vulnerable, and would be my prime shorting targets. On the other hand, there are a handful of counters which could rise this year as money flees to the defensives. The defensives, which will likely do well in a volatile year like this are:

1. Singpost
2. SPH
3. ST Engineeing
4. Starhub
5. A-REIT
6. Suntec REIT
7. CapitaRetail China Trust
8. Frasers Centrepoint Trust
9. Great Eastern
10. Hyflux Water Trust
11. M1
12. Pertama
13. Sembcorp Ind
14. SIA Engineering
15. SMRT
16. Wheelock

As for my long-term portfolio, I will also seriously consider selling when this market rebounds, usually during the traditionally strong Mar-Apr period, and replace them with stocks as mentioned above.

As for currencies, the policy is still to long on the commodities currencies, but perhaps not against the US$, but against the JPY. (Aaron Gurwitz, Barclays)