Markets look volatile but we stay invested

FED reduces tapering surprisingly plus emerging market’s currency crisis and many Dow components misses profit forecast caused sell off everywhere.

However, low cost fund has been exiting across Asia.  In Malaysia, persisted foreign net selling registered more than 4 to 5 months. 

We believe the market will be volatile ahead.  However, we continue recommend stay invested as we believe always value in a trouble market.  We continue nibbling quality stocks when market hit correction gradually.

Our strategy:

1. Stay invested in quality stocks
2. Agricultural, climate changed related and asset oriented.
3. Reduces foreign purchases as RM weaker.
4. Continuous buying Gold
5. Short KLCI when market rebound.

It will be mainly a stock picking year in 2014

As overall market worldwide becomes more fragile. Stock picking will be very important to stay invest in the market for a better return. We believe a few key factors may be helpful in still profiting from a volatile market condition. Undervalued, growth prospect, trust worthy management, asset oriented, dividend oriented, agricultural and foods and finally climate change related.

Our top picks remained as below for 2014:-


For income M-REITs, we recommend below in 2014:-


Dow continues its biggest one day drop in a year -2%

Dow shed over 300 points over continuous concern on slow data from China and itself.  As such, we believe KLCI and Asia indices will have pressures next week.  However, we see it a healthy correction after artificial excess liquidity drive Dow to many records high.

Dow Selloff after China and US manufacturing index weaken

Dow started more frequent sell off lately and as of time Down shed 190 points. Market see weakness and if Europe start to lag. We can expect a major correction coming soon. We recommend reduce position on any speculative stocks. Buy low on quality stocks. However, we will need more data to see the actual picture.

I don’t see NAP announced competitive

Exercise tax and APs remained. CBU hybrid exemption discontinued with CKD extended till 2015.  Plan to be EV hub of Asean and hoping liberalisation will reduce car price by 20-30%.  EV definition on consumption where CO2 output to be announced later.

Possibly RM continuous weaken without BNM intervention may due to strategy to maintain low cost strategy as manufacturing in Malaysia.

I still believe in fuel consumption tax rather than vehicle tax that bring no help but unproductive loan to the people.

Drastically reduce exercise tax and no tax for hybrid and EV.  Plus introduce consumption tax on fuel is the key to both maintain or increase tax revenue, reduce car price for unwanted unproductive loan to people, create bigger car sales market,  therefore creating jobs and benefiting all people.  By then, luxury car with high CC will be taxed most due to usage.

Possibly a greener country too!

I remembered I sold Iris at RM 1.30

Years back when Iris fiasco around the market.  Everyone is so love and hate why the stock can grow from RM 0.10 below to RM 1.30.  I cut short the story but I was lucky to sell off at that peak before it enter into a free fall.

Now Iris is trading at RM 0.470 where securities research houses further recommend it at RM 0.500 above.

I try to work out the formula how they calculate and using what kind of methods including forward earnings and fortune teller style to know the future.  With the last two quarters latest earning where Iris currently trading at more than 20 times PE. 

Beside of new governmental placement and rumour on foreign workers ID.  May be even something that we don’t know.  I will rather buy Google for this PE.  We may be wrong, because we don’t have insider news.  This is a classic example of over priced and trading with rumours.

KLSE is getting expensive

It is hard to find potential fund participated stock below PE 10.  Most PE 10 below has no interest I believe due to small capitalization.  Others are well above PE 15 to 20.  Again if to buy anything PE 20 I will rather go for Google.

We added ABC and YTLREIT

We have reinvested part of our income portfolio in ABC at HKD 3.60 and YTLREIT at RM 1.020. Both are in good value plus dividend oriented.  Bank in 6 times PE is rare these days.

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