Malaysia is returning to normal

 22  August  2020

Dear Fellow Investor,

Last week a group  from our Phillip office took a short break to Kota Kinabalu for a diving holiday. Their flight via Air Asia was full both ways showing demand for this sector is strong. They stayed at a 5 star hotel for a  very reasonable price as there are many empty rooms and no tourists competing for those rooms.

Business in KK is picking up and life is returning to normal.   

Malaysia is returning to normal. For the first time in 24 weeks foreign funds were buying beaten down value shares in the KLSE.  Foreign funds  are also buying MGS (Malaysian Gvt Securities) to lock in  relatively attractive interest rates.   

Warren Buffet shocked markets last week by selling a large part of his Apple shares and Wells Fargo Bank. He used some of the proceeds to buy a stake in Barrack Gold, the world’s 2^nd largest gold miner

The shock is that Buffet has always been bearish on gold as he believes gold has no intrinsic value and very little utility value. At least Barrack is a business and is a leveraged play on the gold price. If gold rises profit margins increase for gold miners.  

As 25 % of the costs of running a gold mine are energy, if oil prices fall or remain stable that benefits the miners.  

The point is actions speak louder than words. What Buffet preaches and what he does with his money are different.

Follow the money and not the talk.

Gold is an anti- government/ anti- establishment asset similar to bit coin which can not be created out of thin air by a politician or central banker.     Politicians print money to get votes but they can not print gold. That is why the establishment  discourages investing in it.

 It is the ultimate store of wealth and that could be the reason Buffet is buying gold miners and reducing exposure to some of his overvalued technology shares.  He feels inflation is coming and gold protects against inflation.

Our United Plantation shares have slowly broken to a new high as investors are realizing that there is value in this beaten down sector. Dialog is showing some life. They just released a positive earnings surprise.  They are a very conservatively managed oil company with a proven business model which earns residual income from their storage tank farms and earn money no matter the oil price.  

We will be holding a zoom meeting Saturday at 11 AM. This is a continuation of last week’s topic on Non Consensus Investing. If you have time this may benefit you.

Take care

Bill

 

This is a heart warming story I wish to share with you.

 

JAKARTA (Reuters) - Two critically endangered orangutans have been rescued from captivity on Indonesia’s Java island and sent to a rehabilitation centre on Borneo to assess whether they can be released back into the wild, a conservation group said.

“Samson” and “Boboy”, both male and estimated to be around 20 years old, were suffering from malnutrition when they were removed from an amusement park and a private family home, according to a statement from International Animal Rescue (IAR).

The two Bornean orangutans had been identified as being illegally held in captivity in October last year before a rescue was arranged, said Darmanto, the head of Indonesia’s nature conservation agency in Central Java.