“ The crypto currency bubble will not end well.”

20 January 2018

Dear Fellow Investors,

The bulls continue to charge:

From CNBC Friday.

Some of these fellows will get horned by the bulls.

I ask these fellows is it worth the thrill of showing you are brave  by outrunning a charging bull ?

It is like dealing in high flying penny stocks or even worse dealing in crypto currencies such as bitcoin.

As Warren Buffet remarked to Betty Quick last week on CNBC . “ The crypto currency bubble  will not end well.” The same goes for high flying stocks making new highs every day.

My first goal is to preserve client’s capital and earn a reasonable return. In 2017 we met our goal and outperformed our benchmarks: the KLSE and SGX.

We are on course to do the same in 2018.

Security by Obscurity

This is the same strategy we employed in 2017 and will employ in 2018.
In business as in nature, the ability to keep out of sight of predators is an advantage.

Who cares about coffee machine micro processors made by Uchi or cooking gas supplied by Gas Malaysia ? They are important but they occupy humble boring corporate niches. 

The same goes for Wellcal who make custom rubber hoses for the oil industry. These businesses are relatively small or boring, not experiencing hyper growth or offering  a technology revolution. I believe that this obscurity can offer a layer of protection from competitive disruption.

Hot fields such as electric cars, renewable energy, disease prevention, robotics attract too much attention like the charging bulls in our above illustration. There is nothing wrong with these technologies but they are like charging bulls as their shares  gain momentum and attract the investment crowd.

Our recent investments in Nidec are one step removed from the charging bulls  as they supply to the hot industries  Nidec is like the seller of shovels to the gold miners. A gold mine can easily go bust but there are always customers for shovels.

It was just announced that the US Government will shut down. At least business will not shut down so I would not be too concerned. 

We will continue our search for obscure companies with company visits, on the ground research and our industry contacts to put the odds in our favour moving forward

Invest well and grow your wealth
Bill

For bird lovers today’s critter is a striking seagull from Iceland