Saturday, June 30, 2018

A metaphor for the current market is a large ocean liner

30 June 2018
Dear Fellow Investor,
There was an interesting quote in the latest edition of Money Week, a UK investment publication.
“A trade war, meanwhile remains a danger, but bear in mind that US presidents always like to approach mid-term elections with low unemployment and rising stock prices. Markets shudder when there is bad news on this front. It may soon be in Donald Trump’s political interests to dial it down. All told, the cracks in the global growth story do not look fatal for equities.”
Unlike the US, China is not facing an election in 4 months, perhaps not in at least 5 years.
For this reason, I forecast Trump will strike a deal as China does not have an approaching  election. From a political standpoint China has the upper hand.
One of my clients asked me an excellent question about where is the current support in the KLSE.  My view is that there are 2 markets presently.  One market would be companies under a cloud such as some government linked companies, Najib and 1MBD linked companies.  Until the truth is revealed, I do not see support in this sector.  Our new government is doing a good job in uncovering the truth but it will take time. As they catch one cockroach, others will climb out of the woodwork. We need to wait for more cockroaches to be caught.
On the other hand, quality well managed companies not effected by the change in government are already finding chart support. This is the market I focus on for you our clients.  
A metaphor for the current market is a large ocean liner. The ship was suffering many leaks so the owner of the ship replaced the incompetent captain with a more qualified leader. 
The new leader’s first task was to plug the leaks to prevent the ship from sinking. That’s what is happening in our market now but there are many leaks to plug. At least the ship has stabilized and is not sinking.

Malaysia has a new ship, a new captain and a bright future just like the UK Brexit when it leaves the  mismanagement, corruption  and economic failure of the EU.
Next Saturday 7 July is the Phillip Investment Conference from 9 AM to 6 PM. It is to be held in Berjaya Times Square. Prominent speakers include Mr Ang Kok Heng whose topic is The Game Changer after GE 13. and Dato Nazri Khan whose topic is Chindia Renaissance and US Trade War.
 I will be there if you have any questions. To get a registration code please call our customer service at 03 2783- 0300/200, 10 CPE points will be given to guests. Try this link

Invest well and grow your wealth
Bill
Today's 'critter' turned out to be the great white heron or great egret-- and that's because Australian reader Garry Robinson sent me this excellent photo that he took of one wading in the Warners Bay/Newcastle area of New South Wales. 


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