Last Vacation

1 April 2018

Dear Fellow Investors,

We just returned from a brief visit  to Penang and Pattaya in Southern Thailand.

Tropical garden tour in Pattaya

Pattaya although a small island the size of Singapore with a population of less than 200,000 attracts over 4,000,000 tourists a year. There are 7 flight arriving every day as well as 4 cruise liners a week . A high percentage of visitors are from Europe, Malaysia, Russia and China and they like to spend money. 

The property market is booming. Shops are filled with customers and it is a challenge to get a taxi. Cashew nuts and local honey are a good bargain. Seafood and fresh fish are plentiful and offered at reasonable prices.

In Penang we visited the Public Gold Museum and our guide showed how gold and silver  are discovered, mined and refined into bars and coins.   Public Gold deals in physical gold and silver and have outlets throughout Malaysia. They offer a fully secure and insured safe deposit box service at only  RM 99 per year in contrast to banks which charge upwards of RM 300 per year.

The museum guide shared with us that they have large demand for physical silver at this time as now physical silver is selling for less than the cost of production. Gold bars are also selling well.

Markets world wide are consolidating. Volatility has increased as retailers sell the imaginary fear. Insiders/ smart money are taking the opposite side and continue to buy.

I would like to share with you some comments from David Kuo CEO of Motley Fool  Singapore

“ The quick thought this week has nothing to do with the legal shenanigans between the buxom actress and the temporary resident at 1600 Pennsylvania Avenue. Instead, it is to do with the stormy conditions in the markets right now.

If you haven’t already noticed, the market can swing from uncontrolled euphoria to deep despondency from one day to the next. It just depends on what catches the attention of traders.

One morning, it could be the ongoing trade dispute between the US and China that sends traders scurrying for cover. But as soon as the market gets wind of promising high-level negotiation between the US Trade Secretary and his counterpart in China, then the market can jump with delight.

On Wednesday, a report from the World Trade Organisation claimed that a trade war between the world’s two largest economies could hurt global growth. It sent Singapore shares markedly lower. But any signs of a thaw in the dispute could send shares back up again.

Experience tells me that jumping in and out of the market is no way to invest. Instead, investors should take full advantage of times like these.

We just need to be roughly right. That’s infinitely better than being totally wrong, which is what we would be doing if we try to time the market.

Those intrinsic-value calculations are my friend in times of turbulence. Together with a decent margin of safety, I can, and often do, acquire stocks in the comfort of knowing I am buying something worth a dollar for a less.

We need to remember that the market is not always efficient. Quite often it isn’t. And it is the short-term inefficiency of the market that provides us with the kicker to turbocharge our long-term gains.”

This applies to the KLSE. Sentiment has turned bearish but  solid well managed companies continue to perform. Focus on these.

Invest well and grow your wealth

Bill 

Critter of the week is a Thai jungle cat. Thais love cats and they keep exotic breeds in their homes to control the mice and rats. This one seems to have eaten his share.