Hang Seng Index

Joining the 'experts' on the downhill trail

PUBLISHED : Saturday, 06 June, 1998, 12:00am
UPDATED : Saturday, 06 June, 1998, 12:00am

A few weeks back, your correspondent revealed his determination to be a 'paragon of positivity', in defiance of all the gloomy economic news that seemed just around the corner.

Sure, economies were collapsing, unemployment was all around us and Hong Kong businesses were shutting down left, right and centre - but the resolve of this column was as unsinkable as revenues from the movie Titanic.

Not even the Dr Dooms of the world were supposed to be able to halt the course of your correspondent's positive thinking - particularly after he had studied the words of motivational experts such as Tom Peters.

But two weeks of watching Hong Kong analysts, politicians and journalists has been enough to turn even those with the outlook of Shirley Temple into manic depressives.

When lifetime members of the Optimists' Association start to display symptoms of despair, it's time for an unrelenting wallow.

Among lifetime bulls, there are few who would go close to rivalling Worldsec International's market strategist Carlton Poon for a sunny outlook.

Marc Faber may be well established as Hong Kong's Dr Doom - but Mr Poon was his polar opposite, Dr Boom, before Mr Faber was even thinking of spinning his tales of woe.

In the early 1970s, he was derisively dubbed 'Poon 3,000' - a reference to his then-startling prediction that the Hang Seng Index would hit 3,000 points.

This name was gradually updated through the years in line with the upward mobility of the blue-chip index.

'Poon 3,000' was soon renamed 'Poon 10,000', and, eventually, 'Poon 20,000'.

Journalists looking for a bullish call needed only to call Mr Poon, the Oracle of Optimists, who was always sure to be that much more positive about the market's prospects than anyone else.

He was at it right up to this year. Even after the initial market crash late last year, he was calling a 20,000-point market by the end of this year.

Then something happened. Somewhere in recent weeks, Mr Poon lost his nerve.

His crisis of confidence came to a head on Monday, when he told a media briefing that 5,000 points was a likely level for the Hang Seng Index within the next year.

That's right, a quarter of the figure he predicted for the market only just over six months ago.

'No matter how I look at it, I can't find a silver lining,' he confided.

Great. Just when we need a bit of a pick-up, Dr Boom has become indecipherable from Dr Doom.

We trust Marc Faber can find a deeper vein of self-flagellation to differentiate himself from his suddenly multiplying crop of imitators.

This crop, incongruously, suddenly includes other traditional boom merchants such as Morgan Stanley's Peter Churchouse, he of the famous 28,000-point Hang Seng Index prediction by the middle of next year.

Mr Churchouse's latest tip is that the market will sink to 7,000 points before recovering.

Isn't it wonderful being a market strategist? If one tip turns out to be wildly optimistic, you simply release a revised market call and pretend you never made the initial call.

You're bound to be right sooner or later.

The market has a new name for these pundits who keep plugging away till they get their calls right: the Teflon tipsters.

Lai See has decided to do his bit to be in keeping with the times.

The way the wind seems to be blowing, we've decided the best option is to be, in the words of one well-known strategist, 'maximum bearish' about anything remotely resembling a market.

To trump everyone, we're going to go where no tipster on the Hong Kong market has gone before: into negative territory.

That's right, we think the Hang Seng Index will go to negative 3,000 points by the end of the year.

'It can't go negative,' we hear you cry - but who says? After the humungous turnarounds in predictions by 'superbulls' such as Messrs Churchouse and Poon, anything is possible.

And that's not all.

We also predict that not only the peg will go, but with it, the very concept of a currency.

A return to the monetary equivalent of the horse and cart is nigh, we believe, and that means the return of the barter system.

Look, newfangled concepts such as dollars, baht and rupiah clearly just aren't working. Some of these currencies are worth more as wallpaper than as hard cash.

The only alternative should be a world where Octopus cards get traded for petrol, cake coupons get traded for video vouchers and Rolexes are swapped for Xeroxes.

That's our tip, and we're sticking to it.

But rest assured: if the Hong Kong economy is booming again in six months, we'll be there with bells and whistles - tipping the market to hit something like 50,000 by the end of the year.

When you're a 'market strategist', no tip for the Hang Seng Index is set in stone. If you get it wrong, simply have another spin of the roulette wheel.