People are worrying about things they do not fully understand.

1 September 2018

Dear Fellow Investor,

“Everyone is worried,-the fear among investors is contagious, people are worrying about things they do not fully understand . That’s an opportunity, I believe the worst is over. “  

Chen Yu, fund manager of Bejing Capital Asset Mgt Co, who manages over 2 billion Yuan and has over 360,000 social media followers. 

Although Yu’s comment applies to the China stock markets  which are down on average over 26 %  year on year it applies to other markets.  Many quality individual Asian and Chinese companies have underperformed.

For example Genting Malaysia Bhd, who operate the casino and resort has  been flat for the last few months.  It seems stuck in a range. Volume has decreased as few are interested. It shows that investors are worried about what they do not understand.

I have been following this stock for the last few years and my research confirms most of  the important fundamentals are long term bullish.  They have solid  financials,  multiple streams of recurring  revenue, increasing cash flow and are growing with a new theme park in the pipeline.  It is a simple and easy to understand business.

I took a position two weeks ago for all our non Sharia managed accounts.  Our dividend of 3.3 % will give us some income while we wait. In my opinion our risk is low and Genting offers a good space to be in as Malaysia recovers.

As this is a long term position, I am not worried by the day to day fluctuation .

That is why, having detailed knowledge of what you are investing in and the patience to wait for a reasonable price puts the odds in your favour and allows you to sleep at night.

As Warren Buffet said, “ money flows from the impatient to the patient.”

Do not expect instant returns. You need to wait for the herd to be converted and you will be in before them. Your profits will be larger.

Expect volatility in the near term. If you are holding quality assets do not get caught up in the onslaught of negative news and the fear mongering. Rest easily knowing you are getting dividend income and growth potential by owning quality businesses that have stood the test of time.

Invest well and grow your wealth
Bill

Critter of the week is a katydid and are one of more than 6,400 known species in the insect family Tettigoniidae.  Primarily nocturnal in habit, with strident mating calls, many katydids exhibit mimicry and camouflage, commonly with shapes and colors similar to leaves.