26 Jan 2019
Dear Fellow Investor,
From a cup half empty to a cup half full.
In the last 2 weeks the cloud of doom that has been overhanging the KLSE/ Singapore and world markets has been pierced by some rays of sun.
Our shares which were under pressure in the last quarter are recovering.
Maybank has caught a bid. Dialog is recovering. Wellcall has held support and shows positive price action. Even Genting Malaysia after a massive panic sell down has stabilized. Our rubber glove holdings are attracting investors
In Singapore OCBC has been congesting for 7 months and is now challenging the long term weekly resistance. High dividend paying Singapore REITS are moving up
We bought Maybank after the 14th GE anticipating positive change moving forward. Where Maybank goes so goes Malaysia. My timing was off as I bought in the RM 10 range. In 3 months the price dropped to 9.10. and has now recovered to 9.66.
However; in the meantime Maybank has paid 57 sen in dividends. Counting the dividends we are slightly in the money despite the volatility, doom and gloom negative sentiment and extreme fear by many investors.
Had we been caught up by the crowd’s negative sentiment we might have sold at a loss and with the problem: what to do with the cash realized ?
That is why as an investor I carefully examine the business, how they make their profits, the customer traffic and the management.
I deal with Maybank in the KLCC branch. Their service is very efficient and there is always a crowd. Every customer contributes to their profits and cash flows They are open 7 days a week which is very convenient as I can do my banking business on Sunday.
My point is I do not think those who run the bank are much concerned with the daily fluctuations of stock prices . As long as business and profit growth continue up, the directors are happy.
When selecting shares for you, I look at the business first. I am not smart enough to pick the low but I attempt to buy value at a discount. When I bought Maybank the book value was at a 15 year low but it went lower by about 8 % . A low below book value according to Warren Buffet gives a margin of safety so I was not worried and could sleep at night.
World news flows are becoming less negative. Trump has reopened the US government. Trade talks move along and most important of all : the Federal Reserve has slowed the pace of interest rate hikes.
Invest well and grow your wealth,
Bill
We intend to revive our Investment club after Chinese New Year which will meet once a month on Saturday at my office in Phillip Capital. For over 10 years we ran the club and had many distinguished speakers to answer your questions, share market outlooks and address your investment concerns. There will be no charge and we meet from 10 to 12 in the morning. If interested please let me know.
Critters of the week are 3 African wild dogs. They are vicious killers but the pups are cute. Notice they are playing with the leg of an impala.
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