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