27 Feb 2016
Dear Fellow Investor,
Driving all Assets Worldwide.
Below is the Brent Crude weekly futures price chart as of Friday 26 February 2016.
Notice how since September 2015 to January 2016 price has been marked down from USD 53 a barrel to as low as 27.30. Since then price has accumulated over the last 7 weeks to 35.43.
This is in the face of extreme fear, ultra-high volume, negative sentiment and an onslaught of bad news.
Based on Dow Theory, expect limited downside from present levels but a potential move to 47.50. There will be gut wrenching volatility so hold on to your stomach.
If a market refuses to go down on bad news, expect an upside surprise.
This should support stock and bond markets around the world as presently stock price correlate positively with oil prices.
On Friday, I attended a program by Sarjit Singh, a Singaporean who was an accountant with PricewaterhouseCoopers for 16 years and the CFO for AIA for 5 years. The program was about playing detective with financial statements and identifying manipulation and fraud.
I was surprised how much manipulation and trickery goes on in our publiclly listed companies and how many executives running companies are no more than hungry wolves in sheeps clothing.
Do take the effort to learn how financial statements are manipulated so you can avoid disasters for yourself, friends and family.
Sarjit is also on the Singapore Gvt committee of the future economy and shared his insights on Singapore going forward. He confirmed my view that the collapse in the SGX was mostly due to the collapse in oil. The collapse was sentiment driven rather than fundamentally driven as presently there are many blue chip dividend payers trading at attractive valuations due to panic and fear selling by the uninformed.
He said Singapore is not in recession and the government is taking fiscal and interest rate measures to ease policy and stabilize the real estate/ stock market.
Visitor arrivals are also increasing.
The KLSE is stuck in a holding pattern waiting for catalysts. Continue to invest in quality companies with low debt, recurring income, increasing earnings and sustainable cash flows.
If you have time we are holding a small cap outlook by Nigel Foo, head of research for CIMB and a company briefing by a director of Eden Sdn Bhd at the UEM convention centre tomorrow, Sunday at starting at 9 30.
If interested please call Darren at 017 333 4333.
Invest well and grow your wealth
Bill
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