29 May 2021
Dear Fellow Investor,
Recovery delayed
The theme in the KLSE for the last 3 weeks is delayed recovery. On Friday it was announced a total lockdown with only essential services allowed to operate. Traffic has slowed to a crawl, shopping malls are empty and people are afraid. The main topic of conversation and news flow is Covid infections, clusters and vaccination schedules.
Despite the negative news flow the KLSE is well supported. The 1560 support level has been tested 5 times this year and held. Foreign investors are nibbling. Vaccination rates are accelerating. There is deep value in our market and professionals know it .
There was an insightful article in the Edge today by Dr Mahathir. Bottom line he said “ let’s have a serious vaccination campaign to reduce the number of new cases.” He reported that if China with a population of over 1.1 billion can solve their Covid problem and achieve a herd immunity of 80% why can not we with a population of only 32 million be slow to rollout ? He even suggested we use Sinovac as it has worked well in China .
My view is we will get through this. There is light at the end of the tunnel.
Inflation watch
Despite the increase in money supply by almost all world central banks the US Treasury 10 year bond has congested for the last 11 weeks. If the market were afraid of higher rates prices would be accelerating. This is in the face of a multi trillion fiscal stimulus plan by Joe Biden and free money to millions of Americans. Common sense tells me this can not last and at some point inflation and interest rates will rise. I do not trust those who run the Central Banks. They have consistently been wrong having failed to warn us about the 2008 financial collapse . I am sceptical of the word transitory inflation which is the buzzword of US treasury and federal reserve officials.
I just finished a book Fed Up by Danielle Booth who was an insider working for the US Federal Reserve. She details the corruption, abuse of power and incompetence of these unelected officials and why we should be very sceptical of their actions and pronouncements. Most hide behind their PHD credentials and most have no practical market experience.
Next week will review what shares/ sectors foreigners are buying after the dust settles from the lock down order.
Keep safe
Bill
Playing for the animals at the Berlin zoo. Just like musicians today the zoo animals lack an audience. Link below.
https://www.facebook.com/dw.euromaxx/videos/237055981349722/
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