◆ Indices keep climbing ◆ Automobiles sector led the market “If you are a risk taker, it’s time to put your every cent into the stock market.” By Joseph Lau MARKET RECAP After the holiday, Hong Kong’s equity market kept climbing due to the steady up- ward trend of the US stock market. The Mainland mar- kets will open on the coming Monday. It is expected that stimulating policies will be re- leased in the coming weeks. Market atmosphere will keep improving. What now? Two weeks ago, index con- stituents’ performance im- proved but the situation is now changing. Individual stocks are going to lead the market. Industries like gold mining, communication and automobiles showed a strong move. As market focus is switching to small cap stocks, investors should immediately adopt relevant plans to ride on the wave and maximize their profit. Our market timing model for both HSI and HSCEI shows an ‘Uptrend’ signal. The trend of individual stocks and the mar- ket is now consistent. The chance of advent of a brand new bull market is reaching to 80%. A smart investors should try his very best to find out the leading sectors and build position on the strongest stocks. If you are a risk taker, it is time to put your every cents into the market since the winning probability and expected return are continu- ously increasing. HSCEI outperforms Hang Seng Index Hang Seng Index keeps breaking new highs 4 What is expected return? Expected return is a measure of the relative balance of win or loss weighted by their chances of occurring. For example, if a fair die is thrown and numbers 1 and 2 win $1, but 3 to 6 lose $0.5, then the expected gain per throw is E(R) = 1/3 × 1 - 2/3 × 0.5 = 0 Borizon Market Update Issue 7 October 2012 This article is intended for any students with interest in stock market. With 9 years of trading experience, our writer is an investor. He is currently managing 500k of equity.