Continue to focus on strong quality businesses and you should prosper.

26 March 2016

 

Dear Fellow Investor,

The KLSE Composite has had a slight correction on low volume closing at a strong weekly support. This is not a concern or a reason to panic.

The background is strengthening.

There has been a change of perception by professionals towards the Malaysian stock market.  Foreign funds have been heavily accumulating blue chip shares in the last 2 weeks. The Ringgit has strengthened testing the 4.00 level to the USD
.  

 

Daily KLSE Composite as of Friday 25 March 2016 trading at a weekly support. The trend is up.

 

Other Asian markets have also slightly corrected including Singapore. The catalyst has been statements by the US Federal Reserve governors that they will raise interest rates in April 2016.  They make these statements just like poker players to trick their opponents into making a wrong decision.

The last time they raised interest rates in December by ¼ point there was a worldwide stock market collapse with the Dow closing down over 2000 points. The KLSE dropped over 150 points while Singapore dropped over 300 points.  These markets have since recovered most of the drops.

Do remember the US Fed is a political organization controlled by Obama and his cronies.  They will not rock the boat and will maintain the status quo which is easy money and low interest rates.  If they cause another stock market collapse, 

Donald Trump could possibly win the November election. 

Trump is on record saying that if he wins he will audit the Fed. This could uncover corruption and secret deals.  Many Federal Reserve officials would lose their heads.

Because of this expect no rate rises for at least 4 more months.

The ultimate winners in stock markets are those with the strongest mental strength. As long as the Asian region has a bright future economically, our stock markets will definitely be looking up in the future.

Continue to focus on strong quality businesses and you should prosper. 

Next Friday we will visit Inari Berhad in Penang and meet the group CEO to understand more about this quality counter and a possible investment.

 

A car adverts from a US car dealer.  US Banks are making subprime auto loans to boost car sales.  Could this end in tears like the 2008 housing collapse? Although car sales are up to record highs in the US, share prices of auto companies are flat and trending down.  

 

Invest well and grow your wealth,

Bill   

 

Thanks for attended my recent CPE course!

19 March 2016

 

Dear Fellow Investors,


I wish to thank all of you who attended our Value Investing Course conducted last Wednesday at the Phillip Damansara office. It was a full house and we had to turn away potential guests.


Moving forward we anticipate value investing in small and mid-caps to have positive expectation with the chance to outperform the blue chips.


We have decided to repeat the course perhaps in May on a Sunday which makes it more convenient for those working or running a business. We will hire a larger hall to accommodate all who wish to attend.



The fee will be very reasonable and a simple lunch will be provided.

Value investing is a method to identify undervalued, unappreciated quality businesses with potential for capital growth.  We buy before the crowd recognizes the value. This reduces our risk but increases the odds of a gain.



We enter the market using volume spread analysis that identifies the smart money who buys before the public.  It identifies exactly when to buy and when to sell for profit or loss in a simple objective way.

We have developed a web based program to identify these opportunities and advise us when to buy and when to sell. We will showcase this program at our talk.



The objective of the course is to give you a road map to operate in an uncertain and volatile environment

My view is that the rest of 2016 will see an upward but limited movement in the Malaysian, US, European, and Asian markets because of the reluctance of the US authorities to raise interest rates .



Raising rates and tightening US monetary policy could collapse world stock markets and hurt Hilary Clinton’s election chances.   The establishment in the US are doing all in their power with the help of the media to get Hillary elected. She is the anointed one.

Trump in the establishment view is the devil.  They will try every way to stop him.



The US establishment has the money, power and control of the media to keep power for their political cronies who will reward the defence industry, the big pharma companies, the too big to fail banks etc. Donald Trump cannot be bought or bribed and the establishment is afraid of him as they cannot bribe him.



No matter who wins and what happens to the market value investing and careful risk management will save us.   If markets go up we will participate.  Our value shares will give us a solid foundation.

Attached is the final parting advice from the Warren Buffet of Malaysia Dr Neoh Soon Kean, a value investor in Malaysian and Singapore shares.



Invest well and grow your wealth,



Bill

 

 



Even dogs and cats can be friends.  The stock market can be your friend if you buy value shares and manage your positions.

 

Expect share markets to be well supported next week.

12 March 2016

Dear Fellow Investor,

There has been a multiyear bear market in commodities which includes metals, grains, oil and soft commodities.

Dry bulk shipping rates are at all-time lows. These are rates shippers charge to ship iron ore, grain and other commodities.

BRIC countries are all suffering from the low commodity prices and have had their currencies drop and their economies under pressure including Malaysia Thailand, Indonesia and to a lesser extent Singapore.

Is there light at the end of the tunnel or is there a gorilla? Is the bear cycle beginning to turn?

View the weekly chart of the CRB, an index representing the major world commodities. It has been dropping for over 7 years almost continuously but is now in stage 1 accumulation.

 

Weekly Spot CRB Index

Notice the major stage turn from a markdown stage 4 to an accumulation stage 1. Notice the springs and tests and the lifting of the lows at the right edge of the chart.  This chart looks similar to the crude oil futures chart as oil has recovered over 10 USD a barrel in the last few weeks.

Combine this with QE, negative interest rates and loose monetary policies in Europe/ Japan/ China and the US expect higher stock prices at least in the near term.

Gold knows what other’s done and is like a canary in the coal mine. Gold is one of the best performing assets in 2016 with a massive 18 % return. There are physical delivery delays for those who bought gold futures contracts on the CME in Chicago and are standing for delivery.

Where is all the gold going? Some is going to Central Banks of China and Russia. Some is going to billionaire investors. Some is going to small investors afraid of the money printing and currency debasement

High demand for physical gold reflects ultra-loose central bank policies and increases the demand for physical assets such as gold and commodities.

Expect share markets to be well supported next week.

Invest well and grow your wealth,

Bill

 



This fat cat is a good hunter and has just enjoyed his dinner! A good investor is like a hungry cat that pounces on opportunity.  Cats are survivors.

Highlights of 16 March Value Investing Program

10 March 2016

 

Dear Readers,

We focus on growing wealth and preserving capital via Value Investing.  It is a method to focus on quality companies which evidence growing earnings and reasonable valuations, These companies must be run by seasoned managers with proven track records.  We also look for rising dividends and retained earnings to maintain growth. Preferably these companies have little to no debt. 

 

Topics of the program include portfolio structure and management, your investment goals and how to achieve them, how to construct your investment pyramid,  how to accumulate insight into companies by knowing intrinsic value. This gives you a margin of safety

 

Know when to  buy and when to sell and how to manage risk by using Dow Theory.

 

Know how to filter for shares that meet our criteria. We use easily available filters which we will share,

 

This program models principles of Warren Buffet, the world's greatest investor as applied to our local markets. The instructor is Bill Wermine, a licensed Fund Manager with Phillip Capital Mgt. who uses these methods to successfully invest for his clients. 

 

Date for the program is Wednesday 16 March, 9 to 5 PM . Venue is Phillip Investor Center. Damansara, No 12A Jalan PJU 5/8 Dataran Sunway, Kota Damansara.

 

The fee is only RM 190 +GST, lunch included  which is a super deal. Others charge over RM 1000 for similar material. The course offers 10 CPE SIDC points as well 7 PPD points for industry professionals.

 

If interested please call Tan Tze Mee @ 03 2783 0206, for more info: email tzemee@poems.com.my. 

 

At this low price+ quality content, the course is fast filling and it is first come, first served. Just like in the market do not hesitate when opportunity comes knocking at your door.

 

Below are  the first 14 of the main course slides to give you an idea of the content.

 

  

Regards, Bill

CPO Plantation Shares benefited by weak grain prices

6 March 2016

Dear Fellow Investor,

The Singapore dragon woke up last week from its long slumber. It roared ahead from 2539 on 2 December 2015 to 2837 as of Friday 4 March 2016 a powerful move of 298 points. The Hang Seng has done likewise while the KLSE remains in congestion.

I congratulate those who held your course and did not get caught up in the panic.  You sat there unemotional and collected your dividends.   We are now recovering.

Singapore is not in recession as it was in the 1998 and 2008 collapses.  The authorities are easing credit and instituting policies to stabilize housing prices according to Prof Singh who is a friend of mine and is a member of the Singapore Economic Council.

The other catalyst has been the crude oil recovery.  One of the most powerful technical signals is when a market refuses to go down on bearish news. Never has news been so bearish:  Increasing supply, reduced demand, lack of agreement among the producers such as US, Russia and OPEC Members, bankruptcy among fracking companies, energy loan and bond defaults etc…

What affected Singapore sentiment is that Singapore is the shipment hub for crude oil to Asia so even such solid banks such as OCBC/ DBS were affected. When there is a mad panic investors sell everything. Upon examination Singapore banks have virtually no exposure to crude oil companies/ energy bonds but they were sold anyway.

Another trigger for the China/ HK and Singapore rallies was the drop in reserve requirements by the Bank of China.  This also favoured the gold bulls.

Gold prices are up 17 % this year after wakening from a 5 year bear.  In a world of zero interest rates where 40 % of countries in Europe have this policy where else to put your money?

Commodities are also recovering as the CRB index which represents a basket of 22 world commodities has also pulled away from a multiyear floor.

This may benefit CPO/ plantation shares which have been affected by weak grain prices.

If you wish to add to your PGWA Singapore accounts, please inform me. There are some good bargains on offer offering high dividends and the chance for capital gain.

Invest well and grow your wealth,

Bill

 

 

 This smart cat has found a warm spot to take his rest.