An opportunity to make more profit with less risk.

Dear Fellow Investor,

Before becoming a fund manager, I was very active trading commodities. My specialty was meat and grain futures. This background has helped me in share investing.

One takeaway from grain markets  is there is a trading advantage of buying a lagging but related market. For example, if corn, wheat, oats, soybeans, rice are trending up while  palm oil is congesting in a trading range, it is a good bet to buy palm oil. Chances are palm oil will join the other up trending grain markets.

This will give you an opportunity to make more profit with less risk.

A similar opportunity is presenting itself in the KLSE.

Most Asian markets are beginning to trend up while the KLSE is lagging.  Taiwan, Hong Kong, Singapore, Korea, Thailand and Vietnam are moving higher while the KLSE continues to congest.
My view is that risk is low buying high quality KLSE shares beaten down by foreign fund selling. Malaysia should in time catch up with the other Asian markets.

Another dynamic occurring in the US markets which affect all markets is a shift from growth to value stocks. Smart money is taking profits on their high flying technology shares and switching into boring consumer stocks that pay  dividends and trade at attractive valuations. Examples in the US markets include Wallgreen Boots Alliance, Campbell Soup, and Kraft Heinz.

 

Weekly chart of the EWM which is an ETF traded on the NYSE representing a basket of high quality blue chip Malaysian shares.

In our Malaysian portfolios we hold such shares and they have diverged from the down trending main KLSE index.  An example is United Plantations, a high quality plantation company which has been well supported and pays a solid dividend. .

Invest well and grow your wealth,

Bill

Critter of the week is a Sabah sun bear, the world's smallest bear. These are highly endangered but can be found in most Malaysian zoos.