We started to collect KIPREIT at 925 and price now is at 850 closing of the year. We managed even bought some at 840. As our investment model always emphasize a consistent cash flow so that we can buy value across time. Price at 850 may have yield close to 8% which we think it is a good cash flow generating stocks.
Disruptive technology has become a proverb lately. From Snapchat to Uber to regionally Grab car. The corporate game getting larger and thousands of startup following the path. Perhaps until too big to fail then everyone need to keep supporting the model.
Good will model are in social media, games and even busij3ss application. But eventually how does this model will be monetized and carry actual return is questionable.
There is one interview by CNBC on Qatar investment arm. (Unnamed) That eventually I aware Softbank, Uber and even Tencent are part of the their investment target. That made me easy to understand why tones of money are burning into this model and does it really guarantee a return?
Perhaps it is just everyone doing the same thing for a great short term money. I am not totally disagree as there are model like Facebook did really well. However when overall supply flooded the market. Perhaps very questionable eventually will this become an end or perhaps it switch to another race to make big money.
Let’s get to Moon and Mars!!
We continue to add on MBSB at RM 1.06 and readjusting our portfolio for 2018. By now MBSB has become our largest position of our portfolio with estimated of 20% of our portfoli9 size.
Atleast Down Jones will not crash in near turn. We are positive about the market though liquidity is a problem.
We think the market will gradual recover and invite more buyers in 2018. It can be as soon as in the first quarter. Unless something I do not know that we believe many growth stocks earnings will start to pick up all in general for 2018.
This is the world now. When Bitcoins hit 15,000 in days from 10,000 as a currency. It is claimed is real. It defy logic and economics. They are people still buying. That’s the funny part of today’s capitalism.
I believe it makes it much expensive to invest in KLSE. But also some funds are cashing out profit. But if long term perspective RM suppose to be undervalued and still have much potential to grow. I think KLSE is full of potential.
I don’t calculate overall market PEs as that’s not accurate. We are not buying into all stocks. Under our picks, prices look cheap now. MBSB, MNRB, KIPREIT, KEN, CIMB, MAYBANK, RHBBANK, AFFIN, YSPSAH all looks cheap to us. We will buy whenever we feel there is a lack of liquidity and caused unexpected big drop the day. We will continue to do so.
Especially financial stocks where interest rate expected to move up in 2018 will have significant improvement on income.
Commercially it is a very lucrative business if you make it right. On the other hand, the way it designed mostly today create individualism and addiction. It is creating a hidden impact on our next generation if it is not taken care properly.
As for the final month of 2017, we will continue position our strategy to be stayed invested but bracing for a potential market correction.
We will continue to selling off stocks with losses in consecutive quarters of negative result. Also unloading those that does not embrace dividend policy. Most important if the company does not have a competitive edge towards digital and automation economy in coming years.
We think the market in 2018 can be a better year but political, structure of world economy and climate may stun the market.
We also think of ASEAN is the engine of growth in the coming years where lot of activities are focused into Asia particularly ASEAN.
Highlight about our strategies in 2018 portfolio management:
1. Stay invested
2. Stocks with consistent profit and prospective future
3. Dividend yield
4. Reduce debt ratio
5. Increase gradually income trust
6. Increase exposure in ASEAN particularly Indonesia, Thailand and Vietnam
7. Increase gradually contingency fund in Gold
8. Factoring digital economy and automation impacts