This is the third month of the 2013 year. This post basically will set the tone for my investment portfolio for this year. I adopt a simple top bottom approach as compared to the bottom up approach favored by most banks. (Maybe that is why i am more successful as compared to them?) I will focus only on two markets currently; which is the US and also Malaysia. Before that, lets have a look at the macro economics first. Why i love stocks this year
Global liquidity is not seen to be drying up anytime soon. With all major economies printing money such as the USA and also Japan, the current market is flooded with cheap money. My guess, the stock market will rally higher and higher this coming year. The US seems to be growing and the consumers are spending again, Japan is hell bent on reviving its economy while China is building their way out of chugging growth. All these activities are likely to boost the share market higher.
However, do look out for a few speed bumps along the way.
a) China screeching to a halt. With many ghost towns sprouting across China, the property prices rocketing up to unsustainable levels, but the Government are still building more townships, a property bubble seems to be growing and it should be soon before it bursts. Coupled with the fact that their shadow banking is slowly spreading its icy cold grip to an even larger pool of SMEs gives me a sense of foreboding
b) Europe problem has NOT gone away. best part is, seems to me that Germany is being dragged down by the other EU countries. Scary eh?
c) Malaysian election. When will it be? Who will win? Go to any coffee shop and it will be rife with talks of the general Election.
Ok, now the industry that i really really like for the year and the industry i really really dont like for the year.
What i dont like:
Property developers: EVEN property players in the Iskandar Region i hate. The prices of property has gone up sooo much that many Malaysians cannot afford a decent condominium anymore. Rm500k per unit? How much are you supposed to make in the householed? Likely to be in the region of RM6,000 to be able to afford. While i dont see a bubble in Malaysia, i believe that more and more are likely to take on more debt ( either personal or credit card-which will not be good in the long run) or they will cut down on their leisurely spending ( which is also not good in the long run)
Oil palm counters:
EU has just signed a Agreement to NOT use palm oil in many of their products. From what i heard, big names like Wal Mart and Unilver is also thinking of not using palm oil in their products, As such this will definitely have an adverse impact on palm oil prices.
What i DO like:
Oil and gas
With Malaysia dying to increase national oil and gas output, the outlook seems bright for oil and gas players. Companies with steady earnings like Dialog seemed poised to benefit, international big boy like SKpetro also is one of my likes. But the hidden gem among all is a company that flirted with bankruptcy but now is roaring back stronger than ever, starts with M.......go figure.
Telecommunications:
bad times, good times, more smartphone launches, all point to the higher data and phone usage. CAPEX will likely trend lower as more equipment are bought at lower prices and sites are shared between players to reduce the OPEX. Major market catalyst seen very soon after the GE. Most likely to dump my dog's coffin money into this sector in the next few months. Hidden gem...starts with a D...go figure
Consumer goods:
With the market depressed for so long in the US, once the people there starts to have a bit of disposable income, common sense will dictate that they buy the following..new cloths and new cars. While i have not seen much effect yet on the cost savings, in the next few years, i can see the shift in their thinking on how to boost their profitability all across the world. If only they focus their cost savings in places like Asia huh. ( No ecoboost for the Focus, seriously?! what happened to saving costs?)
Hidden gem-Cars..starts with an F
Apparels, this company is slowly but surely picking up, they have mastered the wholesale segment and seems to be growing there, while after an initial few mistakes growing their retail business, it seems they are ready to move forward. However, no catalyst for this particular stock.
Hidden gem-apparel- stats with a J
Global liquidity is not seen to be drying up anytime soon. With all major economies printing money such as the USA and also Japan, the current market is flooded with cheap money. My guess, the stock market will rally higher and higher this coming year. The US seems to be growing and the consumers are spending again, Japan is hell bent on reviving its economy while China is building their way out of chugging growth. All these activities are likely to boost the share market higher.
However, do look out for a few speed bumps along the way.
a) China screeching to a halt. With many ghost towns sprouting across China, the property prices rocketing up to unsustainable levels, but the Government are still building more townships, a property bubble seems to be growing and it should be soon before it bursts. Coupled with the fact that their shadow banking is slowly spreading its icy cold grip to an even larger pool of SMEs gives me a sense of foreboding
b) Europe problem has NOT gone away. best part is, seems to me that Germany is being dragged down by the other EU countries. Scary eh?
c) Malaysian election. When will it be? Who will win? Go to any coffee shop and it will be rife with talks of the general Election.
Ok, now the industry that i really really like for the year and the industry i really really dont like for the year.
What i dont like:
Property developers: EVEN property players in the Iskandar Region i hate. The prices of property has gone up sooo much that many Malaysians cannot afford a decent condominium anymore. Rm500k per unit? How much are you supposed to make in the householed? Likely to be in the region of RM6,000 to be able to afford. While i dont see a bubble in Malaysia, i believe that more and more are likely to take on more debt ( either personal or credit card-which will not be good in the long run) or they will cut down on their leisurely spending ( which is also not good in the long run)
Oil palm counters:
EU has just signed a Agreement to NOT use palm oil in many of their products. From what i heard, big names like Wal Mart and Unilver is also thinking of not using palm oil in their products, As such this will definitely have an adverse impact on palm oil prices.
What i DO like:
Oil and gas
With Malaysia dying to increase national oil and gas output, the outlook seems bright for oil and gas players. Companies with steady earnings like Dialog seemed poised to benefit, international big boy like SKpetro also is one of my likes. But the hidden gem among all is a company that flirted with bankruptcy but now is roaring back stronger than ever, starts with M.......go figure.
Telecommunications:
bad times, good times, more smartphone launches, all point to the higher data and phone usage. CAPEX will likely trend lower as more equipment are bought at lower prices and sites are shared between players to reduce the OPEX. Major market catalyst seen very soon after the GE. Most likely to dump my dog's coffin money into this sector in the next few months. Hidden gem...starts with a D...go figure
Consumer goods:
With the market depressed for so long in the US, once the people there starts to have a bit of disposable income, common sense will dictate that they buy the following..new cloths and new cars. While i have not seen much effect yet on the cost savings, in the next few years, i can see the shift in their thinking on how to boost their profitability all across the world. If only they focus their cost savings in places like Asia huh. ( No ecoboost for the Focus, seriously?! what happened to saving costs?)
Hidden gem-Cars..starts with an F
Apparels, this company is slowly but surely picking up, they have mastered the wholesale segment and seems to be growing there, while after an initial few mistakes growing their retail business, it seems they are ready to move forward. However, no catalyst for this particular stock.
Hidden gem-apparel- stats with a J
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