The latest crisis from Freddie Mac and Fannie Mae highlighted the crisis in US is still long from over - the US market continues to struggle, which enters inth 7th straight week of retreat - many believed this could be the deep recession - and hopefully it does not repeat of what it had experienced back in 1930s.
It is scary that after 70 years of financial revolution, we are still facing the same issues. Oil price had surged over $147 a barrell, and we have positoned ourselves further with addition of few more oil stocks, although, I still wonder if the oil price can indeed sustain for that long.
For investors and traders, the choices are few - shorting the index is the quickest way but obviously that can also turned around very quickly, oil stocks are sensitive to oil price and each stock also has own issues such as the recent gas crisis in WA.
Choices are of few now for trader - what I have been doing is adding short options - and accumulate on index funds, the index funds are still doing OK - and dividends are still there. There is no prediction how far the market can go down, it looks like the next level could be 4,500 for ASX and 10,000 for Dow Jones.
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Smart Fund: Thomas, Oil price has taken some tumble lately, what sectors would benefit the most?
Thomas: It is not a surprise to me really, I have long suspected oil price was way overpriced and manipulated, when oil price was around $150, I have seen people panic buying them with a firm belief that it will reach US$200, and many traders have started so-called “Oil Opportunities Fund”, majority of them would have now suffered 60%+ loss just in 2 months.
To answer your question - transportation is the sector that is heavily dependent on oil, and this is the sector I think will benefit the most from the falling oil price. Other sectors such as agriculture is also set to benefit.
Smart Fund: Does that mean good time ahead for Australian transportation companies?
Thomas: The problem we are facing here is AUD has fallen at even faster pace than oil price, so in real terms, falling oil price would deliver less impact to Australian corporates - the same can be said about rising oil price, while petrol price had gone up, we are somewhat insulated compared to other markets.
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Thomas Su
An erratic trading days last few days with the market once again volatile, the post-Obama election effect was there, with the markets retreated once again as the reality and harsh economic conditions remain as a major challenge.

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As mentioned in many instances, the biggest challenge is unemployment rate, the call-off of GM-Chrysler merger is now a major concern with GM likely to file for bankruptcy with more than 100,000 employees losing job and another 100,000 in affiliated businesses.
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This is a real concern - and to be honest, there are not a lot of positive news out there.
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Thomas Su - Trading Highlights - 10 Dec 2008
As expected, no such thing as chasing high in current gloomy market - and stall in US Auto Industry bailout have seen Dow Jones retreating. Did a good day-trade in S&P 500 and walked away with profit, but failied to close a short position on Nasdaq. Will be looking to close short positions entered yesterday, mainly Nikkei. AUD also fell almost fell 1c, we bought some USD last night at around 66.6 mark, if they go below 65c today - may transfer some back to AUD.
Plenty of actions and news coming out:
1. QBE: SPP arrived, will take up their SPP offer at $20.50 per share
2. M&A: Looking at few more M&A opportunities - Devine and FKP
3. Mixed Day on Property Sectors - we had GPT as one of the top 10 performers but GMG and Mirvac as bottom 10 performers - Mirvac is becoming interesting - of the 2 big property groups - Stockland and Mirvac - I think Stockland is now taking the lead.
4. Obama’s “Pro Renewable” Energy policy will create a lot of opportunities - again, I am looking mostly overseas - Australia is only a tiny market in the world - why limiting opportunities here? Having said that, there are selective interesting companies listed in Australia which may benefit: I am looking at Energy Developments, Silex, Dyesol and Transpacific. But as a global portfolio, I think I will add Veolia Environment and Waste Management into my portfolio.

Common Investment Mistakes
One of our members have asked about my personal experience - do you make mistakes? If you do, what do you do.
I have told him - if I can stay above 60% winning ration, I will be ranked along legend investors such as Warren Buffett.
Here are 4 common mistakes which can be avoided, but I have to say, even I still make these mistakes.
1. Emotional - Chase High or Chase Low
This means you just follow the “Crowd”, in Australia, last 3 years were about resources, investors jumped into any stock with resources, uranium. Ask yourself the followng 2 questions:
1. Did you believe Oil Price was going to hit US$200 a barrel earlier this year?
2. Did you believe BHP will go all the way to $100 a share?
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What a busy day, running around chasing new deals. Finally back at home in the afternoon.
I have opened a new CFD trading platform using Tricom Trader, and bought a number of shares and building up some diverisifcation index.
First, I have bought into Babcock & Brown - this was a stock I was really worried about, but since its restructure, the company is now back on track. Hopefully the share will rebound once again.
As for oil stocks, I have added Santos into portfolio - oil is a funny game, I am one of the few analysts who actually think it is overpriced, it is becoming a safe haven for trading, but if the economy returns, even slightly, the funds will very likely to switch back to market - but geopolitical factors are certainly the rising factor. That means, I now have Woodside, Santos and Oil Search in the portfolio
Gold is another one, but the news from India is not promising - that the demand has fallen by 50% because of the rising gold price. India is the world’s largest gold consumption market, with consumption dwindling, the rising gold price is more likely to be used as a hedging tool. In Australia, Lihir is the one that is unhedged and set to benefit from rising gold price. Although, I also like Sino Gold and the one I mentioned yesterday, Dragon Gold. Oxiana is also producing gold, the company has been really under a lot of selling pressure lately.
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Money Cat: Thomas Su, a great week for you?
Thomas Su: Yes and No, my short positions are really running away! (Laughing..), no, overall, it has been good - yes, I was sitting on quite a few short positions which I was forced to close to minimize the losses. ASX has done well, so was the US market.
Money Cat: Can you tell us the highlights of your portfolio movements?
Thomas Su: Sure, in Australia, the highlights were my Sunland Group, which did very well, as well as ING Industrial Fund (IIF), the REIT sector had performed well in general. The gold stocks, led by both Newcrest Mining and Lihir also performed well.
Our new addition - Photon Group which was invested because of the dividend held up at our purchase price even after ex-dividend date. Also bought into Westpac as our first entry into the banking stocks in Australia. I am also reading with a lot of interest regarding ANZ’s expansion into Asia - I think it is the right thing to do.
Global Mining Investments (GMI) continues to be my investment in the rebounding mining shares - and that has picked up 10c to 86c this week.
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