Meeting with Motley Fool Ceo on Facebook

Dear Fellow Investor,

 
Yesterday morning, I attended a Facebook live meeting with Motley Fool CEO David Koh and his team of Singapore analysts.

 

Topics included Singapore Reits and property, Brexit and its impact on Singapore, and  Singapore market valuations.

Valuations are currently about 12 PE which based on earnings is one of cheapest stock markets in the world. This is partly because of   the penny stock market crash last year that wiped out many investors who were burned so badly they are still staying on the side lines earning 1 % in their money market funds.

 

Smart money is buying. 

 

Singapore has a world class market and economy and the selling is more based on sentiment than fundamental valuations – just like the Brexit selling. Dividend yields offer the highest yields of any Asian market.  

The consensus views were that there are signs of demand picking up for quality Reits because of their attractive yields approaching 6 % while money market rates are about 1 %. If you think world growth will continue to slow institutions will continue to support Singapore Reits as a proxy to low worldwide bond yields.

Also tourist and business arrivals are picking up and institutional money managers want to re allocate assets from Europe to Asia as well as shift more of their operations to Singapore, Singapore being the financial hub of Asia. 

Singapore is also very attractive due to a business and tax friendly environment compared to Europe and developed markets.

This catalyst is Brexit which will now place a fog of economic uncertainty on Europe and the UK   for at least 2 years.  As Brexit is unfolding no one of the Motley Fool group had a view of the impact. Their view was to focus on what we can know: good companies, well managed, strong balance sheets, low debt and growing sales and earnings.  

I personally feel that capital flows will move towards Asia. Money always goes to where it is respected best.  

 

Growth in Asian countries is robust, taxes low and regulations that are business friendly.  Demographics also favour Asia as there are more young people than in Japan and developed markets.    They will contribute to growth.

 

There are some very attractive Malaysian/ Hong Kong and Singapore companies that fit our model and we have found a scientific way to identify and profit with them.

 

We have adjusted our trading plan to take into account the changing dynamics of markets. We have developed with our team of programmers’ proprietary software which identifies high quality fundamental shares with accurate buy and sell signals. 

In my years in markets I have never seen any software or method to equal this. It is based on volume spread analysis.   

We will begin to allocate client assets based on this model.  This will incur more of a trading approach.

 

For our Malay friends and clients we wish you a safe,  and happy Hari Raya

Bill