The US Dollar continues to strengthen.

18 August 2018

Dear Fellow Investor,

The background:

The US Dollar continues to strengthen.

The US Dollar is strengthening because  US interest rate rises reflect a real inflation adjusted return. Couple this with  a booming US economy, quantitative tightening, and Trump’s tax cuts with massive cutting of business destroying government regulations. 

In contrast, much of the slower growing developed world including Japan and socialist leaning Europe  pay negative interest rates or rates less than inflation so by default investors go to where their money is treated better which is the USD.

Our performance for the last 2 years has been positive because we focus on companies with revenues in Sing Dollar, USD, Euro and Yen. This includes Inari, Kossan Rubber, Uchi and  Nidec  

Nidec headquartered in Kyoto is the world’s largest maker of micro electric motors and 90 % of their revenues are in USD.  

Kossan, a high quality Malaysian  rubber gloves maker earns most of their revenue in USD

Malaysia has been a port in the world stock market storm because it offers many fine export related businesses and runs export surpluses with China as well as many other countries.

Under Dr M,  Malaysia is building a strong foundation for future growth.  Let’s pray to God to give him the strength to complete his agenda.

On the trade war front, a China delegation will meet the US trade officials at the end of August to sort out their differences on tariffs. For Trump there is nothing more important than the stock market so he will bend over backward to accommodate China.

This will boost  markets world wide.

Mid term elections in the US are in less than 75 days and Trump is losing support from the farmers because of the China soybean tariffs.

This is another incentive for Trump to make a deal to get more votes from the farmers.  

Turkey is another issue but our shares have minimal/ zero exposure to Turkey. Unlike the US and European banks, Malaysian and Singapore banks have minimal to zero exposure.

From Motley Fool:

“Many emerging markets, especially those here in South East Asia, are in much better financial shape than in 1997 and 2008. What’s more, Indonesia is not Turkey. Nor are the Philippines, Thailand, Malaysia or Taiwan.”

Invest well and grow you wealth,
Bill

Today’s critter is :

Southern right whale dolphins are the only dolphins without dorsal fins in the Southern Hemisphere. They are smaller than northern right whale dolphins -- and have more white on their heads and sides. They have slim, graceful bodies which are black on the upper side and white underneath. Their flippers are mainly white and are small and curved. Their flukes are small with a notch in the middle and concave trailing edges.  The range and total population have not been estimated or closely studied.