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6/04/2009

Long term investment turning short term

In the stockbroking industry, many short term traders who punted in the market often ended with their short term positions becoming long term. This happens when their positions turn bad and they have to pick up the shares or face immediate losses. Temasek is adopting a different strategy. From long term to short term in their investments. Bad long term investments will be cut. Yesterday it announced another cut, selling its long term stake in Barclay Bank barely a year or two after putting a few billions into it. Here the loss is between 500-600 million pounds or more than a billion $S. This is the second cut loss by Temasek after pulling selling out its Merrill Lynch stake in Bank of America. Wonder how much was the total loss in Merrill Lynch? Now which one will be next to be cut? At the rate it is going, all its long term investments will become short term. What is left? UBS, Citigroup, Morgan Stanley? Will they be cut as well? I don't think any MP will be raising questions on these investments. Probably they will be busy lecturing Low Thia Khiang how to rebuild his Workers Party to fight the next GE.

7 comments:

Anonymous said...

In short term trading, you cut loss when your loss hits a predetermined price target. never mind the loss because you can fight another day. No one can be right all the time. You win some, you lose some. The trick is, overall, you win. Discipline is the keyword.

Having a long term view and then suddenly losing your nerves and bailing out is probably the worst strategy you can bestow upon yourself. Then, you lose big time because it is no longer a paper loss.

To be fair, there was probably a fear that Barclays could be nationalized thus rendering the shares with a much much more diminished value.

Don't put too much blame on Temasek because what they do, is not an easy job. Let's hope that this is a good lesson, albeit a very expensive one.

Barclays, has, since Temasek's sale rebounded to a respectable level. The Arabs recently sold their shares at this current level, losing very little relatively or even making a tidy profit.

Wally Buffet.

Anonymous said...

Someone very senior always mentioned to come-out clean. however, after BOA and then now the Barclay debacles, i am wondering is there anymore skeletons in the cupboard.
These two cases had also revealed that the team in-charge thought to be the best in world c/with one of the highest price-tag developed cracks under the intense heat in the invesment furnace. Similar to the vases that cracked under the heat,we discard them. However,there are still no news on the cracked vases in charge of the investment.

Arthur Hitler said...

No MP will dare raise this issue in Parliament due to its sensitive nature. Those MPs include the two PAP-sanctioned 'opposition' members as well. Oh, the things one can get away with when one has absolute power :-)

Anonymous said...

We ought to get Chee in because only he would dare to ask 'Where is the money?'

But, too late lah folks, because they have given Chee a bad name in the eyes of the people. They are only one step short of hanging him.

Oh yes, talking about the next GE, I seem to be hearing frequent shouts of 'Merdeka, Merdeka' on TV the last few days. The brainwashing has obviously started. They will be showing the old tapes of the historical Hock Lee Bus workers' riot soon.

Lost Citizen

Matilah_Singapura said...

First of all the govt has no place "playing the market" whether for short or long term.

Playing it short term is akin to gambling. Free big-time gambling for the "elite" funded by the citizens.

How to lose?

Kaffein said...

And someone got some May Day award some more. Leaves lots to imagination about who always get rewards.

Don't you think it's too flippant the way they say it - long-term then short-term, then got reserve check, then we have profits... huh?

Not sure if I buy those flip-flop words.

Kaffein

redbean said...

in the days of emperors and warlords, a servant that made a big mistake would be immediately executed. today we have progressed and less brutal. no more execution or else all the supertalents would run away.