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Trading With A View

Author: tradeview   |   Latest post: Thu, 8 Apr 2021, 11:11 PM

 

. Tradeview Commentaries - The Glove Surge, A Mirage or A Path To Oasis?

Author: tradeview   |  Publish date: Thu, 8 Apr 2021, 11:11 PM




Readers know I am a believer in glove companies, I always have been and until now I believe that glove companies especially Hartalega & Riverstone are undervalued. My view remains consistent and transparent. There is no flip flop just because the glove sector faced a weaker sentiment in the past few months. This is because as a long term investor, I cannot decide solely based on sentiments. However, my opinion does not matter as the stock market is a collection of diverse views, opinions and investment thesis. 

I am writing this short commentary today as I received many  enquiries today from retail investors asking the following questions (more or less): 


1. Is the glove rally today a technical rebound? 

2. Should I re-enter now? 

3. I am still holding, should I sell and take profit / cut loss? 


One of the more important signal I have been waiting for was local funds flow. For 16 weeks in a row, local funds have been net sellers. From my channel checks, many local funds (except EPF) have been selling gloves since the start of the year. In a large part, the selloff in glove stocks was contributed by local funds. Of course, this triggered some panic selling from retail investors. Foreign funds is a mixture. There are a combination of bottom picking which showed they were net buyers at times, there were also cases of short covering (covering RSS). As the selling momentum outweigh the buying momentum, naturally, share price of glove stocks trend downwards. Today, from the preliminary data, local funds are strong net buyers. It remains to be seen if local funds were the buyers for glove stocks and this will need further data  to be out in a few days.

As a fundamentalist, I hold firm to the investment philosophy that for every stock, there is a company behind the stock and for every company, there is an underlying value or intrinsic value. Value investors look to buy a stock when the share price goes below the underlying value. Back to the 3 questions above, 


1. I believe if local funds are net buyers of glove, this surge in glove stocks is not a one day show due to "technical rebound". 

2. I dont believe in chasing stocks, neither do I believe in going in and out with a short term horizon. Invest in glove stocks if you believe in the fundamentals of the company. Otherwise, just stay away. 

3. One should hold for the long term if one have a long term investment horizon and the ability to hold without pressure (no margin / no leverage). One should sell on strength if one is overexposed to the glove sector without sufficient cash on hand or a balance portfolio. One should cut losses if one do not believe in the glove sector.


Lastly, in investing, it is always about buying into good companies with wonderful management and strong fundamentals. It is not about the "theme of the day" or what everyone else is doing now. With that in mind, if you are keen to invest in glove companies, please stick to the good names, avoid the dodgy ones. Back on 2nd March, I wrote a detailed article on whether investors should take off their gloves? My focus in the article is about the underlying value of the company which particularly focuses on "retained earnings" portion of the company. 

Whether investing in glove stocks is a mirage or a path to oasis, it is fully dependant on your individual belief and investment horizon.

___________________________________________________________

Telegram channel : https://telegram.me/tradeview101


Website / Blog : http://www.tradeview.my/


Facebook : https://www.facebook.com/tradeview101/or 


Email me at : tradeview101@gmail.com


Food for thought: 







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CynicalCyan Peter Lynch mentioned before: “Sometimes it's always darkest before the dawn, but then again, other times it's always darkest before pitch black.”
11/04/2021 12:47 PM

(Tradeview 2021) - iSinar EPF Withdrawals For The Stock Market, One Should Err On The Side of Caution

Author: tradeview   |  Publish date: Tue, 23 Mar 2021, 12:55 PM


   

 

 

 

Retail investors was the unsung hero of Bursa in 2020. As we are now coming towards the end of March 2021, retail investors participation remains very high. Local institutions have been selling non stop since the start of the year which in my honest view was quite surprising. Considering how bullish research houses are on the Bursa KLCI year end target, it would appear that optimism and bullishness have not spilled over to local funds.

Year End Bursa KLCI 2021 Target

Maybank                1830

MIDF                      1700

Rakuten                  1870  

Affin Hwang          1730

AmInvest                1695

UOB Kay Hian       1680 

It is possible the year has just begun, so there is potential for stronger catch up in later part of the year as vaccination roll out continues and potentially economic reopening. Although I hold a different view (more conservative in terms of outlook due to political instability and lower consumer, investor & business confidence), that is a story for another day.

Back to the topic on hand, I would like to draw readers attention towards the iSinar EPF Withdrawal scheme. Based on the news headlines on 27th February, 'Leaving just RM100' - 30 per cent of EPF members withdraw almost all of Account 1 savings , it goes without saying I am deeply concern. I strongly believe there is some level of manifestation of these withdrawals appearing in Bursa KLCI. The reason I am concern is because the "original intent" of the iSinar EPF withdrawal scheme is to assist those who are facing dire situation to cope with the current hardship caused by Covid-19 pandemic towards their daily lives. These hard earned future savings were not not supposed to be utilised for discretionary spending, luxury goods consumption or speculating the stock market. I personally do not believe in borrowing from the future for present gratification. It goes against every sound financial logic. However what one does with their money, is one's right and business which I am in no position to meddle or comment. I would like to point out though, the dangerous mindset of withdrawing EPF money to speculate or punt the stock market.

Most readers know I am a strong fundamentalist in terms of investing philosophy. I believe in this notion strongly and rarely waver. Speculating and punting with excess cash to me, is highly risky activity. Imagine, speculating and punting the stock market with EPF savings. It is akin to walking a tightrope blind folded on a windy day.



With regards to new retail investors in the stock market, let me highlight some of the dangers of investing your EPF money recklessly : 

1. Majority of new retail investors enjoy speculating and punting penny stocks without fundamentals, logic or sound investment thesis except for "hearsay,  rumours or tips". This can be seen that although retailers are net buyers of the market, mostly the ADV is high but value is low.

2. New retail investors do not invest or build a diversified all weather portfolio, but rather concentrate their funds into several "hot" stocks. This would be dangerous especially when using future savings with an aggressive investment strategy. 

3. A go big or go home mindset is not the right way to handle your EPF money. The stock market is not a casino

4. EPF long term investment strategy allows your EPF savings to grow over time through boom and bust cycles. However, once you take it out and invest in the stock market, very few retail investors have the long term investment horizon of more than 5 years, not to mention 30 years. 

5. There is no guarantee one will succeed in making money from the stock market. EPF on the other hand is guaranteed by law to provide a minimum return of 2.5% per annum. (Under Section 27 of the EPF Act 1991, the guaranteed minimum dividend rate is 2.5% per year on members' savings.)

 

The current market condition is as such : 

When everyone is talking about the stock market, it is usually a sign of a vibrant market. 

When everyone is justifying future earnings of companies with lofty valuations, that is a sign of the market overheating. 

When everyone is talking about loss making penny stocks and justifying speculating it on the basis that "I know it is not a bad company, but I will get out first", the market is fleshing red signal. 

 

Safety Net

EPF savings are your safety net. When all else fails, you still have the EPF to fall back on in your golden years. Taking it all out now, and if you are not able to preserve or grow it, worst, if you lose it all, how and where are you going to turn to? 
 
I have always believe investing should be enjoyable, utilising excess cash, free from the stress of leverage (margin) and to grow over time, not overnight. Unless and until absolutely necessary, it is my view that withdrawing EPF savings to invest in the stock market is unwise.  
___________________________________________________________

Telegram channel : https://telegram.me/tradeview101

Website / Blog : http://www.tradeview.my/

Facebook : https://www.facebook.com/tradeview101/or 

Email me at : tradeview101@gmail.com

Food for thought: 
 

 
 
 

 

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CynicalCyan How are you gonna save those who believed your writing & participated in the glove mania months ago?
30/03/2021 3:39 PM

(Tradeview 2021) - Are Research Analysts' Reports Worth Their Salt?

Author: tradeview   |  Publish date: Wed, 17 Mar 2021, 6:40 PM


  

 

 

 

Before I start off, let me qualify that I have a lot of respect for equity research analysts especially who have substantial experience, competency and professional work ethics. They are far and few between. In addition, I would like to state that I am in no position to criticise or condemn research analysts' reports. Many of the research analysts in our country have strong qualification such as CFA, ACCA, CPA, ACA, CFP and others. All of which also passed the Securities Commission licensing examination specifically on Module 12 & 19. In short, every research reports that were published by licensed institutions are professional opinions permitted by regulators. 

Recently due to the wave of downgrades by research analysts covering glove stocks be it in terms of target price or market weightage, it have drawn a lot of "feedback" from the retail investing community. It has come to my understanding that quite a number of retail investors even went as far as to lodge an official complaint to Securities Commission. Market rumour is that Securities Commission also acted on the complaints to commence some level of investigation to ascertain the authenticity and merits of the complaints by retail investors. 

 

Source : WallStreetMojo

 

The reason I am writing this article today is to merely share my objective viewpoints as a fellow retail investor. Nothing more, nothing less. There is no specific agenda but to somewhat diffuse the negative emotions or sentiment towards research analysts in the current investment climate where retail investors dominate the market participation rate. I think with the large influx of new retail investors in the local stock market since 2020, specifically "Millennial" investors, it is important to have a proper perception and right investment mindset or it may deter or impact future retail investors participation rate. To put it bluntly, if new retail investors feels that the system is rigged and skewed against them in favour of big banks and institutional funds, they would shun the local stock market altogether and that will be bad for the markets. I personally, do not want to see that happening. Thus, it is paramount for us to understand the role, function and structure of research analysts in the full spectrum of the investment banking structure. 

 

 

 

 

There is a China Wall supposedly between the investment banking divisions and the research division. This is to prevent conflict of interests, sharing of material information to safeguard independence and objectivity of the research division. This structure have long been in placed. To understand better, it important to know the role research analysts plays in generating income for the organisation (be it banks or brokerage). 
 
 
 
 
Source :WallStreetMojo
 

 

Research division as a standalone cannot make money. However, with their research reports, they generate trade ideas for their clients which in turns bring in revenue for their organisation via the brokerage firm or bank. So who are the clients in which they serve? Traditionally, it have always been the large institutional funds such as asset management companies, hedge fund, pension fund, mutual fund, insurance funds etc. Retail investors play a very insignificant role as the market participation is largely skewed towards institutional clients. Of course, this have changed significantly over the course of the past 2 years in part due to the rise in lower cost of participation for retail investors and also low interest rate environment. Locally, we can see some brokerage firms or banks do particularly well as their focus is towards retail investors. Immediately that comes to mind is Kenanga / Rakuten, CGS-CIMB amongsts others. It is important to know this to understand the role of research analysts and who are their "main clients". Their "main clients" were never retail investors but big institutional funds.
 
 

 

 

After understanding their role and their clients, it is important to understand the organisation chart with the research division. The most senior person would be the head of research. He is the captain and final approval level before the research reports goes out to public. Then it would be the senior analysts who are usually seasoned and experience analysts who may even be known as "sector specialist". Example : a senior analysts covering banking stocks may be even more experienced than the head of research as a sector specialist probably due to the years of experience covering the sector. This sector specialist research analysts also have good network with the companies in the sector they are covering. Then the lower levels would be associates and junior analysts who are mostly "generalist" where they cover whichever sector or companies allocated to them by the head of research. As a junior in the organisation, they would have to do most of the grunt work and across sectors subject also to availability. Sometimes, fortunate "junior analysts or associates" is given the chance to be "sector specialist" if they show a knack or potential for their particular role. The interesting thing about the research division is that mostly anyone who is qualified, licensed by Securities Commission and approved by the head of research can issue a research report with their name on it. Most research analysts takes pride in their name being printed. Just like an author of a book.

 

To the main focus of the article, are research analysts' reports worth their salt? 

In my view, it all comes down to the individual analyst. It is extremely hard to be a research analyst. It is not just about being objective and analysing the companies fundamentals. Textbook theory may be so, but in reality it is far from the truth. This is because no matter what is written, there will be different or opposing view. This is not only views from clients, but also views from management within the organisation outside of the research division whose interest are involved, views of stakeholders, views of regulators, views of retail investors (who may or may not be the client) even views of politicians or government agencies. With many interests and views at stake, the individual analysts will need to juggle and make all considerations. All is well and good if the organisation has an understanding and respected head of research. What is bad is when the organisation's head of research is a "yes man" or "lalang". To make it simpler for readers to understand the complexity of being a research analysts, I shall segregate the considerations into the following :

 

1. Competency, Experience & Diligence

In my view, this is the baseline for being a good research analysts whose report is worthy of us  relying upon. Most research analysts have qualifications like CFA or accountancy or finance related professional qualifications on top of their degree. So it goes without saying that analysts are intelligent individuals. Competency is a must in their line of work. Competency involves the ability to derive logical fair value, projecting reasonable future forecast and justifying their forecast with sound rationale. Whether to adopt DCF valuation method, EV/EBITDA or PER multiples with historical and peer comparison, it is the research analysts weapon of choice. The important thing is to make sense. Experience on the other hand have to be acquired. Experience means going through market cycles including bull and bear markets as well as seeing a full cycle of a companies boom and bust. Diligence is the attention to detail, looking at perspective not considered by others and separating wheat from chaff. 

2. Integrity or Honesty 

This is probably a compulsory qualitative quality that must be a part of a good research analysts. To be honest and objective with their analysis without vested interests or personal agenda such as working with insiders of companies, front running with syndicates or writing reports based on their "key clients" needs, is paramount to being a respected research analysts in the industry. Some analysts who are very intelligent chooses to be "intellectually dishonest" by relying on weird or outrageous justification masked in an "intellectual presentation format" to justify their calls be it for the purposes of jacking up the stock price or plunging the stock price. This is in fact the worst thing a research analysts can do as it is unethical and morally wrong to distort truth. To write without fear or favour is hard, but in a way, research analysts are like professional financial journalist who should report the truth based on their analysis of companies without any vested interest.

3. Stakeholder Management

This is one of the more tricky part about being a research analyst. Most people do not know the hardship they face in their line of work. A research report is powerful by nature because it can move the stocks up or down, which means it can increase of decrease the value of companies. Even the most powerful billionaire tycoon are careful when communicating with sell side research analysts. That is why there is a special division called the Investors Relations (IR) within all listed companies. Research analysts when writing reports need to consider the repercussion of their reports. If the companies covered by the research analysts is not happy with the report, they can always block access. 

Also, other stakeholders include "key clients". Key clients are essentially the one that drives revenue for the organisation. This makes the "key clients" very important. When research analysts reports does not favour the "key clients" position, example : such as a sudden downgrade, it will impact the balance sheet of the "key clients". This is where sometimes, it gets ugly when the sales division interferes with research analysts reports. It is known within the industry that sales always try to please their client and make them happy. So some unethical sales will try to influence research side to tailor made reports to the interests of their key clients. This is where the head of research will need to step in to ensure objectivity. 

Lastly, it is internal management stakeholders. Sometimes, the higher ups such as CEO or directors who have certain interest may not be pleased with the research analysts reports which may run afoul of their personal or organisation interest, example : clients they bank or do deals with, imagine the research analysts downgrades or present a less than favourable report of these clients. A research analysts will always be in a difficult position where they have to manage stakeholders whilsts ensuring objective analysis.

4. Economic or Market Environment

Research reports have a pre-determined timeline. Usually it is 12 months. It is not like research analysts can be Warren Buffet and call a hold or buy forever. This means within a tight timeline, research analysts would want to see their stocks perform. This would help them build their reputation, deliver earnings for their "key clients" and draw following from potential new clients. However we all know economic or market environment plays an important role. Sentiment especially affects the stock price of a company or particular sector. So with this, what I am trying to get at is that research analysts would likely avoid calling a buy on stocks or sectors which are not the theme of the day. Similarly, if the sector or stock is popular with investors, they would put more focus to it. This is one the rationale behind how research reports are crafted. It is neither wrong or right, but from a professional capacity, it is what they need to do for the organisation goals. 

Ranking of Analysts

Unknown to many, analysts are ranked annually by their clients. It is important to them especially if they ranked higher. It justifies promotion and increment for them. For clients to rank them high, the most important criteria is getting their calls right and service level. In fact, for years now, The Edge also gives out best call awards to analysts to recognise their efforts. You can see the awards in 2020 and 2019. The awards are not all encompassing but it shows some of the analysts who did very well for the year. Of course, one or two good calls doesnt mean anything. Many good analysts actually fly under the radar and consistently churn out high quality reports. Even if the stocks don't perform, a hold or a downgrade call is equally important. What matters most is about giving an informed judgment which is reasonable, the outcome is not within anyone's control especially when the timeframe is merely 12 months. 
 
Conclusion
 
The industry is very small, some even call it a "musical chair" industry. This means that because there is limited positions in this sector, many research analysts move around from organisation to organisation. As it is small, it is hard to get in. Newcomers have the opportunity only when the old timers leave. I believe there are many good research analysts in the stock market. As investors or readers, which should be discerning of the reports and seek out the good ones to follow closely. Many like to follow stock market "Gurus", of which plenty are charlatans and fraudsters. Those you see on advertisements or sponsored videos, majority are fake. Following good research analysts reports is much better than "fake Gurus". At the very least, they are regulated and they have a professional risk of losing their license if they violate regulations.
 
I hope retail investors especially new ones do not disregards research analysts over the gloves downgrades because sometimes, it is at no fault of theirs. As long as you filter out the good ones from the "intellectually dishonest" ones, I believe research analysts' reports have great value especially their access to management and deeper insights which normal retail investors wouldn't have. In addition, for research analysts who are "sector specialist", they have very sharp observations that we retail investors would otherwise miss due to our more generalist approach in investing across sectors.
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Food for thought: 
 

 
 

 
 
 

 

  4 people like this.
 
CynicalCyan I wonder how many netizens took the time to read your lengthy article.
17/03/2021 11:34 PM
Erudite Terima kasih sharin wit us
18/03/2021 12:09 AM
gohkimhock the JP Morgan report on TopGlove is very accurate. I have read it few times and then compared it to the local ones. Totally different class.
18/03/2021 12:25 AM
qqq3333 longer than research reports.
18/03/2021 12:47 AM
Erudite JPM report sampah.
18/03/2021 12:51 AM
Sslee https://klse.i3investor.com/blogs/Sslee_blog/2021-02-26-story-h1541916706-MRDIY_Can_Media_and_IB_report_be_independent_and_free.jsp

The question to ask:
Can any news media and IB report be independent and free?
18/03/2021 6:40 AM
NawaMan Interesting question. I believe the China Wall was put in place for them to justify that they are free, independent and objective.

In other words, false sense of security for the public. In reality, they write what can make money for their bosses.
18/03/2021 5:38 PM

(Tradeview 2021) - Where Do Retail Investors Go From Here?

Author: tradeview   |  Publish date: Sat, 13 Mar 2021, 4:07 PM


  

 

For a large part of 2021, the net buyers of the local stock market have been retail investors. Foreign funds are most net sellers with some net buying spree on occasions. Local institutions on the other hand have been a consistent net seller for almost every day since the start of the year. There is a transfer is shareholdings from local institutions to retailers and I am particularly concern with this phenomenon. It goes without saying for the stock market to go up, retail investors strong buying momentum alone is not able to push the index upwards. There must be complementary support by local institutions or foreign funds. 

 

 

 

Into the 3rd month of 2021, retail investors participation are still very high although last year many analysts have reckon that post loan moratorium, the stock market would see retail investors participation dwindling. Even in the shortened month of February 2021, in terms of value, local retail investors dominate 36.5% against other categories whilst the volume stands at a whopping 45%. This essentially means out of 10 trades, 4-5 of the trades are conducted by retail investors. I believe there are many reasons why this is happening amongst which :

 

1. ISinar EPF withdrawal (30% of members withdrew)

2. Investors who enjoyed good returns from the stock market in 2020 is bullish that 2021 would be the same

3. Record opening of accounts in 2020 spilled over to 2021

4. Proliferation of social media and "Gurus" advocating the ease of making money from the stock market

5. Low interest rate environment

6. New breed of investors - fearless millennials 

When everyone is talking about the stock market, it is usually a sign of a vibrant & "hot" market. 

When everyone is justifying future earnings of companies with lofty valuations, that is a sign of the market overheating. 

When everyone is talking about loss making penny stocks and justifying speculating it on the basis that "I know it is not a weak company, but I will get out first", the market is fleshing red signal. 

 

 
There are two views which are polar opposite today in the stock market :
 
One side is bullish, believing this is the potential start to a super bull cycle as it was in 1920s - know as the roaring 20s. This side of of the aisle believe that the current financial system is flushed with liquidity from central banks' monetary policies, new growth phase is in the horizon due to recovery & reopening from Covid-19's economic damage in a 2020 and advancement of technology such as 5G, AI, IoT, EV & RE would be the engine for growth for the next decade. 
 
Another side believes that the "bull" is tired, it has overran its lifespan since 2009 and despite multiple steroids (QE, rate cuts) the market is long overdue for correction. Those on this side of the aisle do not think 2020 Covid-19's Great Lockdown, is remotely considered a crash because the stock market made a quick V-shaped recovery. 
 

 
 

 
 
It is very hard forecasting the stock market overall direction. Macroeconomics is complex and there are confluence of factors that shapes the direction of global economy. Time spent on studying or predicting market crash in my humble view is an exercise of futility. There is no point being obsessed over it as no one can make a call with certainty. However, there are various indicators in the stock market which we as investors should take cognisance of. 
 
1. Is the index trading at reasonable valuation levels ?
 
2. How are the corporate earnings?
 
3. Who are the main participants in the stock market?
 
4. Is it easy to find good companies to invest in at a reasonable valuation?
 
5. Would the liquidity or ease of credit starts to tighten?
 
From my observations based on the 5 questions above, unlike this time last year 2020 where I made a confident call to deploy cash to enter the stock market, I am far from confident today. On the contrary, I am worried and am taking a prudent approach. Although I do not believe there will be market crash in the near term, I believe a correction is in the horizon. A crash and a correction is vastly different. In addition, my view is more skewed towards the KLCI Bursa. The recent corporate earnings actually provides much needed insight and for those who actually studied the results in detail, they would realise many companies especially small and mid cap stock share price have far exceeded its earnings or value. 
 
In addition, many private placements are related to these penny stock rallies where majority are loss making but somehow private placement were done for the purposes of new venture or business expansion. This is probably in part due to Bursa increasing the private placement mandate from 1o% to 20% of issued share of the listed company. A deeper analysis would tell you that majority of th companies are doing badly require capital injection but doing it via private placement due to the "hot retail sentiment". This is a faster, quicker more efficient fund raising method than a rights issue or loan or raising bond. Share price are played up prior to announcement of private placement to make it enticing for private placement subscribers. 
 
There are many more reasons behind why penny stocks are being manipulated but if anyone, retail investors are the most susceptible to these syndicates and operators play. Retail investors with their hard earned money should avoid getting caught up with the penny stock frenzy before it is too late.
 
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Food for thought: 

 
 
 

 

 

  2 people like this.
 
ahbah to the Pure Land of Prosperity ?
13/03/2021 6:00 PM
Sslee One of this penny stock is PA. PP with 20% discount then consolidate.
A pump and dump promoted day and night with disguise Live TA teaching by one headless chicken, a liar and a con man. + chicken

You can have a look at PA forum.
13/03/2021 6:50 PM
Sslee Resolution Vote in favour Vote Against Results
No. of Shares % No. of Shares %
Ordinary Resolution 1 - Proposed Private Placement of up to 525,529,762 new Ordinary Shares in P.A. Resources Berhad ("PARB") ("Placement Share(s)") representing up to 20% of the total number of Issued Shares of PARB.
522,057,180 100.000000 0 0.000000 Carried
Ordinary Resolution 2 - Proposed Subscriptions of an aggregate of 88,891,000 Placement Shares at an Issue Price of RM0.045 per Placement Share by Datuk Seri Lau Kuan Kam, Wang Sze Yao @ Wang Ming Way and Hoe Thiam Soon, collectively, to be satisfied entirely via cash. 522,057,180 100.000000 0 0.000000 Carried

21:STATUS OF CORPORATE PROPOSALS
On 21 Jun 2019, the Company proposed to undertake a Private Placement of up to 20% of the total number of issue share of PARB to third party Investor(s). A total of 374.1m placement shares with a value of MYR16.9m were issued pursuant to the said proposal. This exercise was completed on 02nd December 2019.

Utilisation of proceeds
Proposed Utilisation: Actual Utilisation
Capital expenditure: 8,350,000: 4,392,000
Working Capital: 8,334,000: 12,370,000
Estimated expenses: 150,000: 150,000
13/03/2021 6:52 PM
CynicalCyan I COMPLETELY AGREE with this article, esp. the following 2 lines:

1. "When everyone is justifying future earnings of companies with lofty valuations, that is a sign of the market overheating."

2. "Retail investors with their hard earned money should avoid getting caught up with the penny stock frenzy before it is too late."

Problem is, those penny stocks have flown to become RM1, RM2, RM3 ,RM4, RM5 stocks until retailers can't recognise them as goreng penny stocks anymore.
14/03/2021 5:15 PM

(Tradeview 2021) - Should Investors Take Off Their Gloves?

Author: tradeview   |  Publish date: Tue, 2 Mar 2021, 11:46 PM


            

 

 

 

 

2020 came and went. Whilst it is a watershed year, it is nonetheless a year that investors in the stock market will never forget. Apart from myself, many have studied, analysed and commented on the glove sector including specific glove companies. Amongst all sectors, the glove sector is the most crowded in terms of analysis and scrutiny. After all, it is a uniquely Malaysian Cinderella story. I have read many wonderful observations and analysis, and thankful for the free sharing. I can tell from the articles, voluminous amount of work have been done by fellow writers.
 

As per my past writing, my favourite Glove stocks which I deemed are long term value stocks would be Riverstone Holdings Ltd, Hartalega Holdings Berhad and Sri Trang Agro. Each of these stocks are listed respectively on SGX, Bursa and SGX / SET (dual listed). Rest assure, this article is not about their wonderful results and record breaking earnings or cash position. Instead, I will spent this article mostly showing readers the performance of the stock price in the past 1 year since the start of the pandemic, towards its peak and its selldown.
 
1. Riverstone (Adjusted for 1 for 1 bonus)
 
 
2. Hartalega
 
 
 
3. Sri Trang Agro Industry PCL
 
 
 
For ease of reference, I took the stock price of each glove companies from mid April to today's closing market price. 
 
  • Riverstone rose from SGD 62 sens to SGD 1.31 - An increase of 111%
  • Hartalega rose from RM 7.25 to RM 9.41 - An increase of 30%
  • Sri Trang Agro rose from THB 11.70 to THB 48 - An increase of 310%
How about the profits and cash position increment for each of this company?
 
  • Riverstone revenue rose 85%, net profit rose 396%, dividend rose  and cash position rose 398%
  • Hartalega revenue rose 123%, net profit 536% and cash position rose 1211% (conservative estimate using similar revenue (RM6.5 billion), net profit (RM 2.76 billion) and cash position (RM 4 billion) based on Q3 FY 21
  • Sri Trang Agro revenue rose 25%, net profit rose (loss of THB 149 million to THB 9.5 billion), dividend rose 5x and cash position rose 1010%.
 
Because the companies have different reporting timeline, so it is hard to compute full year results as comparison. However, based on what I provided above, record results (best have yet to come, likely the next quarter), you can use it as a gauge to compare the valuation vs the current share price. Well, surely seasoned analysts or those with contradicting view will surely argue, 2020/2021 is a one off event due to the century pandemic. Hence, must discount it and not factor the calculation in such manner. Also must compute it against 2022 or even 2023. This is where I would like to point out an important distinction which some failed to appreciate. 
 
Every stock has a company behind it, and every company has an intrinsic value. The intrinsic value is what determine what the company is worth. In essence, the stock price is a manifestation of the intrinsic value. The argument then lies with how to compute the intrinsic value. Of course, it is somewhat a mixture of science and art. One thing is for sure and most would agree, an important metric to look at is earnings. For me, to know the intrinsic value, it is important to value the company based on (Assets - Liabilities = Equity) + Ability to earn / grow profits + Ability to sustain profits + Ability to pay dividends. Apart from that, Retained Earnings which is part of Equity is an aspect that is overlooked by investors. In short, we can conclude the higher the company's retained earnings, the more valuable the company is. This is in fact, highlighted not by me, but by Warren Buffet in his recent Annual Letter to Berkshire Shareholders 2021. You can read this passage here -
 
So this is where I would like to draw your attention. Whenever I read articles saying "gloves are overvalued" or "gloves are dead", I am often bemused by the ignorance of individuals who make such shallow comments. The value of a company does not diminish or gets eradicated once supernormal profits disappears. This is simply because when a company makes profits, the profits translate to retained earnings and of course the retained earnings can then be used for other things like paying dividend, investments or future capital expenditure. The supernormal profits may reduce like how Covid-19 reduces but the value of the company does not reduce unless it starts making losses overnight. The higher the profit, the higher the retained earnings, the higher the value of the company. In essence, the company's value holds itself and that is why share price maintains at a certain level. Even if next year or following year the earnings fall, the value built and accumulated do not get wiped out unless the retained earnings are deployed egregiously resulting in losses to the company. It is absolutely wrong to equate the share price chart of gloves, to the Covid pandemic infection & death rate chart. 
 
 
 
 
 
 
 
Owens & Minors is one of the notable PPE maker and supplier in US. It has a history of over 100 years. Despite the vaccine roll out and all the talks of pandemic being over, the share price continue to perform and sustain in tandem with the earnings. This is due to the structural change and hygiene behaviour pattern following Covid-19. Investors are knows the importance of such company now and appreciates its retained earnings, future earnings visibility and accord it higher value compared to before. None is rushing to take profit the way it is happening in Bursa. In fact, the performance of Owen & Minors shows the major flaw in the thesis of a Foreign IB research report.
 
 
 
 
Mercator Medical, the superstar polish glove maker that rose to fame on the back of the pandemic is still 7X its stock price back in April 2020 and sustaining well even after falling from the peak of PLN 770 to what it is today. We must remember, Mercator unlike our Big 4 did not even enjoy the same level of global reputation and standing yet it is sustaining much better than the price action of our local glove makers.
 
 
 
Intco Medical needs no introduction anymore. It is one of the top two glove players in China which have recently came on the news touting to build 190 billion glove capacity factory in the coming years. As a background, Intco traditionally is a vinyl glove maker and one of the largest in the world. Vinyl gloves are also known as "poison plastic". Seeing the demand and value paid for nitrile gloves, Intco is venturing big and even raising US 1 Billion on a secondary listing in Hong Kong to achieve this. Although its capacity is only 20+ billion now with more than 60% production in Vinyl gloves, the stock price have continue to risen and sustained very well. To put things into perspective, Intco Medical market cap today is bigger than Top Glove and Hartalega. It is also bigger than Supermax + Kossan + Riverstone + Comfort + Careplus + UG healthcare combined. Is Intco medical such a good glove player and ours so inferior to China's glove maker. Does this make sense?
 
 
 
Looking at the stock price performance of other glove makers which have been through a superb record shattering 2020, for the stock price to revert almost back to where it was despite the profits, cash and balance sheet strength defies logic. The irrationality and emotions flooding the market is not only retail investors. In fact, I think the retail investors in Malaysia have done very well and held on to the conviction in the face of huge RSS selling, institutional selling. I take my hats off to them as it is extremely tough to go up against such adversity. The age old adage which states, "the market can stay irrational longer than you can stay solvent" is absolutely true.
 

 

 

 Zoom was one of the hottest tech stock which captured everyone attention due to the pandemic too. It was the poster boy of pandemic so much so the stock itself went up 7 times to a peak of US 588 with a market cap US 172 billion. It even helped Li Ka-Shing recapture his title of Hong Kong's richest despite the impact that rampage through his notable companies CK Hutchinson, CK Assets and others. Why I am sharing this is to show you even though Zoom was regarded as the face of Covid-19 beneficiaries due to the work for home need for video conferencing, it still managed to stave off the plunge when the vaccine was developed and funds rotated towards recovery plays. Even outside of the sector, stocks like this can retain its value due to the "new normal" and "value of the company" which was brought to light resulting from the pandemic. Otherwise, Zoom may still take its time to jostle for attention of major funds and investors. 
 
 

 
One of my favourite boxing movie is Cinderella Man, by Russell Crowe. It is based on the real life story of James Bradock who was injured and had to work in the docks during the Great Depression just to survive. He returned to competitive boxing in order to make a living for the family during the most challenging time and despite being an underdog, he rose to the occasion to dethrone the incumbent and became the heavyweight champion. His nickname was the "Cinderella Man". The glove makers in Malaysia are tales of Cinderella, rags to riches and underdogs to world domination. It took 30 years to get to where they are. When the time came for them to rise to the occasion, they performed and delivered extraordinarily. 

History have shown, whenever the glove sector retraces, it has never gone back to previous low and it forms a higher low each time. However, most people painted doomsday scenario such as price war and oversupply yet in the end the sector prove them time and time again they were wrong. Indeed, China capacity may be scary but ultimately they don't have the expertise. In terms of efficiency, our glove makers still have at the upper hand. Glove making especially Tier 1 quality is not as simple as making mask. As for the US wanting to build their capacity, at the first place back in the days, their manufacturers chose to disposed all these assets as they they find it low value in nature and could not compete hence adopting the OEM model. 
 
I believe investors need to ask themselves what is their investment horizon, ability to hold (no margin, no leverage) and stomach the emotional rollercoaster. I do not deny sentiment plays a part in investing. Herd mentality, fear and greed swings share price. However, as  a true fundamentalist, I invest based on the value I see in the company. I have great faith in Riverstone and Hartalega for the reasons I have shared before and have a long investment horizon. Ultimately, investors must know the value of the company behind the stock price in order to determine the best course of action. 
_______________________________________________________________


Telegram channel : https://telegram.me/tradeview101

Website / Blog : https://www.tradeview.my/

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Email me at : tradeview101@gmail.com
 

Food for thought: 

 



 

 
 

 
 
 

 
 
 


 
 
 


 
 
 
 

 

 
 
  10 people like this.
 
greedy44444 Very good write-up ! Congrats !!
03/03/2021 1:00 AM
huat8787 najib said we need 52 years to vaccinate everyone
https://www.sinchew.com.my/content/content_2436353.html?fbclid=IwAR27q...
03/03/2021 1:00 AM
Albukhary Good write up, wise thought.
03/03/2021 1:39 AM
ocpd Excellent analysis
03/03/2021 2:11 AM
mjong99 Excellent post
03/03/2021 2:16 AM
Ikanbilis999 syok sendiri post
03/03/2021 3:13 AM
paperplane Gloves even before pandemic is growing 9 to 1p% annually.
03/03/2021 8:26 AM
paperplane Just because post pandemic, ppl will not just stop using gloves anymore. It's a basic demand tool in many places. Ppl inside too speculative in short term and not wise for longterm. Hence they are 99% which lose money
03/03/2021 8:27 AM
skyz we all know gloves are taken a beating from the SS from the IB (not surprising if local institution has also took a cheap shot along with the foreign IBs) to slaughter the shaky base of retail investors who are easily intimidated. As long as there is not enough power balance to counter the power of the IBS, glove counter prices will always be easily follow the direction on how the IBs want to make money (go south also they can make money, go north also they can make money)
03/03/2021 9:14 AM
CynicalCyan You truly are immovable in your views on gloves, huh? I admire your tenacity.

But you omitted the part where Intco also sells other medical equipment as diversification, unlike Malaysian glove companies that are solely glove manufacturers.
03/03/2021 9:39 AM
Ben Tan CynicalCyan, for the first 9 months of 2020, 96.5% of Intco's revenue came from their PPE segment. Their expansion plans are practically entirely focused on this segment.
03/03/2021 12:10 PM
trylearn123 很欣赏你的见解到位,公司里的钱足够他们面对将来的难题,竞争加收购。很多科技股涨了很多倍,可现金贮备少的可怜,风暴来袭可能就不见了。自从第一次见你分析riverstone,我一直拥有着,也在加码着,至目前还是有50%赚率。黄老板是踏实的人,在新加坡上市。我守着这支股长久。股息很满意。
03/03/2021 1:34 PM
Erudite Terima Kasih. Article which comfort me.
03/03/2021 1:54 PM
Joe Ng the market cashes in profits several years early
03/03/2021 3:01 PM
zhangliang Great day 4 gloves...hope it will go on
03/03/2021 6:08 PM

(Tradeview 2021) - Long Term Value Stock 1 : Oriental Food Industries Holdings Berhad (7107)

Author: tradeview   |  Publish date: Fri, 26 Feb 2021, 10:04 AM


        


 
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Source : OFI website
 
In a blink of an eye, 2020 have passed and now we are on to the second month of 2021. Many seniors I know in their golden years have lamented to me how the Covid-19 pandemic have stolen the time of their life for enjoyment, simply joys and peace of mind. In fact, majority worried about contracting the virus (elderlies have higher propensity to contract the virus) that they even reduced to staying at home fully, not even going for morning walks or evening strolls anymore. The young ones on the other hand would live through 2020 deprived of their proper education, socialising with school mates and examination. 
 
When it comes to the economy, the number of companies especially SME which have shuttered have reached levels unseen since the 1997 Asian Financial Crisis. During times of uncertainty, volatility and distress, the Government and agencies plays an important role to assist the people to get through the darkest hours. We have to admit, like Covid-19 patients, beating the virus is only the first stage. What comes after, long term effects are what patients will need to battle with in the years to come. Hence, if anything, investing in the midst of a pandemic driven economic crisis has taught me the importance of investing in quality business which can sustained over a long duration of time. There are many companies listed in Bursa but not many companies are like that. To be a good investor, we must do the necessary work to scour through the stock exchange to find these hidden gems. It is not easy but when you do find it, it is all worth it. 
 
As we are approaching the end of Chinese New Year 2021, I would like to share a  company which fits the frame of my expectation, namely Oriental Food Industries Holdings Berhad (OFI). Please do not confuse this company with Oriental Holdings Berhad which was a conglomerate I have written about in 2020. OFI is a consumer FMCG company with many years of track record and own brands under its stable. I like the stock for a variety of reasons based on a set metrics. To give a little background, OFI is the manufacturer of these familiar food products :
 
 

Pic Source :  OFI website
 
 
 
1. This is a confectionary products manufacturer and exporter. I like the company because it is rebounding from multi-year lows and returning back to steady consistent profitability. This provides some level of earnings visibility. The products I have tried myself, it is really quite good. Well, the best way to know if a company is worth investing is if you try the product yourself. Additionally, despite MCO and lockdown, they have done very well for themselves in 2020 with the latest quarterly results with strong growth on Revenue and Profit YoY. The first 3 quarterly results profit alone have exceeded last full year results FY2020. Based on the trajectory of the recent quarterly results, it would appear that OFI will likely deliver all time high revenue and much improved earnings since 2018 despite the onslaught of the pandemic. It shows the resilience in earnings for the FMCG sector despite the weak economic climate. In comparison, its peers apart from Kawan have all been somewhat affected by the pandemic including Hupseng, Poweroot to name a few. Kawan remains to be growing and OFI is making new highs in terms of revenue and profits.
 
 

 
 
2. Management to me is very important when considering investing in companies. OFI was founded by Dato Son and with decades of experience under his belt, he has built OFI to be a household names with brands like Jackers, Rota, Super Ring, Zess. Each of this brands are up against Fortune 500 MNC products which caters a value alternative to local and mass market consumers. Until today, Dato Son at 74 years old still personally lead and take charge of the R&D of the business. This is what I value most in a business. Strong management running a quality business.
 
 
 
3. The expansion plan are in place. The loans used previously were for expansion of facility and new production line for further increased which will kick in soon. As of March 2020, they were finishing the balance production line pending delivery of the equipment and machineries. With the new expansion and facility in place, it would raise their revenue and provide the growth trajectory which this conservatively managed company requires. There is no point buying a company purely because it is undervalued without any growth potential. This will serve as a catalyst to the upward revision of the stock price in line with growth rate.
 
 
4. Importantly, it is net cash company with good balance to of local and export markets. It is currently RM 18 million net cash and cash position stands at 12.5% of total market cap. For many years, the company have always maintain healthy cash position and this allows consistent dividend payout ratio policy of 35% for shareholders. Also, indication of stronger earnings is from their increased in dividend payouts which also is consistent every quarter. Based on the past year dividend trend, the conservative estimate this year at current price of 86 sens would be a yield of 2.3% assuming they continue the payout of 0.5 sens per quarter (full year 2 sens). The only downside is the low liquidity. 
 
 
 
5. Prominent substantial shareholders including EPF, KWAP and Fidelity. As per the latest list of 30 largest shareholders in the 2020 annual report, we can spot notable names which to me is rather surprising considering the company is a small cap stock with low liquidity. So this would give confidence to investors that the company while not a major cap stock, it still have the ability to draw institutional investors.
 
 
6.  The most significant reason I like OFI is because they have their own brand and market standing in the country (or overseas). Having your own brand with a dominant position in the market can lead to valuation premium just as what Munchy's happened back in 2018 where the company was bought by CVC Capital, a renown Private Equity fund at RM 1.1 Billion. According to Nielsen, Munchy's had a 21.5% share of Peninsular Malaysia's RM1.044 billion biscuit market in 2017. Based on this estimation, Munchy's revenue would be about RM 200 million. OFI currently for the past 5 years have a revenue ranging from RM 226-288 million. I believe OFI with their wide range of products should have comparable market value being offered as Munchy's as OFI have a wider range of snacks and confectionary products. To put things into perspective, OFI current market cap is only RM 211 million less than 5x valuation offered for Munchy's. This reminds me the arbitrage value difference example when I highlighted QL few years ago when they started their venture into Family Mart. Back then, I highlighted that QL will likely have a possible valuation rerating due to Jaya Grocer's valuation paid by the acquisition of PE fund then as new benchmark. For those who missed that article in 2018, feel free to read here :
 
 
Munchy's news :
 
 
 
7. Regardless, I believe this is a mid to long term stock that has strong share price growth potential. My calculation shows the long term Fair Value of OFI would be around RM 1.25 at a 20x PER of latest QR compared to peers which are more expensive like Hupseng, Power Root and Kawan. Once the new production goes full force, there is a further potential for rerating and to me, there is a solid grounds for the stock to be a multibagger. Lastly, the Price to sales ratio (P/S ratio) is 0.79x, less than 1 which is rather attractive. But using P/S ratio must be considered sparingly and in tandem with other metrics, like net cash position. This brings to the conclusion that OFI is attractive.
 
 
Of course, there is the argument that FMCG companies having specific client base due to the price point of their products will limit its potential reach. What I like about OFI products is the wide range it caters to, not only the lower middle class but even the elites. Our former Prime Minister is a big endorser of their product. Assuming you can't recall, let me refresh your memory :
 
 
 
 
 
 
Whenever I write about Long Term Value Stocks, the most frequent questions I receive from readers are, how Long is "Long" ? I can understand the frustration of waiting and sitting compared to active trading. Investing in fundamental stocks require very different set of skillset but most importantly, the difference is in the mindset. Active trading gives you a faux sense that you are doing something, working on making money. Investing in long term stocks feels boring. However, if your goal is to invest large sum of money and build wealth, then there is only one real way to do it, investing long term. Hence, long term can be anything more than years to decades so long as structurally and fundamentally, nothing has changed. 
 
 
Again, when choosing long term stocks to be in your portfolio for many years, it must meet my 5 metrics :
 
1. Strong, honest and capable management team / owner
2. Consistent Growth, Earnings & Dividend payout
3. Strong balance sheet & cash position / cash flow
4.Can hold across decades / generations without risk of delisting or bankruptcy
5. Undervalued & lack of appreciation from investors
 
At this juncture, OFI is beginning to meet the metrics. 
 
To those who are celebrating Chinese New Year, Happy Chap Goh Meh. May the new year usher in prosperity, good healthy and plenty of joy. For those who aren't celebrating, happy holidays. Let us looking forward to a better year ahead for all.
 
 

 

 
_______________________________________________________________


Telegram channel : https://telegram.me/tradeview101

Website / Blog : https://www.tradeview.my/

Facebook : https://www.facebook.com/tradeview101/or 


Email me at : tradeview101@gmail.com
 

Food for thought: 

 

 

 

 
 
 

 

Labels: ORIENT
  SureWin1Woh likes this.
 

(Tradeview 2021) - Are We In A Bubble?

Author: tradeview   |  Publish date: Tue, 23 Feb 2021, 5:06 PM


 

 

 

 

 

About 2 weeks ago, Elon Musk's Tesla revealed they have taken a huge position in Bitcoin and he believe in this cryptocurrency so much so he think it is worth more than cash (I am assuming he is only talking about currencies which are subjected to negative rates). Then, this week he said he feels Bitcoin is a bit on the high side. Few weeks ago, he promoted Dogecoin. Then he said it is best to sell. In 2020, the most watched or followed twitter account was Donald Trump. After Trump was banned, Elon Musk pretty much became the new king of twitter. One was a mad president. Another is a mad richest man in the world. Both are extremely powerful people with great influence.  

 
I grew up with the belief the the Presidential office of the United States is one of prestige, decorum and greatness. I too believed to become the richest man in the world, it would require someone of great brilliance and humility like Bill Gates, Warren Buffet and the likes. I never knew being eccentric, crazy and out of the norm would be what it takes to scale such heights. At times, I am not sure what is becoming of the world anymore. 
 
 
 
In relation to the stock market, everyday, I am learning something new, toying with new ideas and trying to bridge the gap between expectations and reality. I have always understood being a fundamentalist is very lonely. Most path taken is not that common. With the flood of new retail investors, social media and surge in "Gurus", the market may not behave as in tune with the usual rationality that I am used to. In 2020, investors were always searching for resilient stocks which are shielded from the pandemic and is able to deliver earnings. In 2021, investors are looking beyond recovery. Those who are screaming buys on tech stocks mostly do not know what they are shouting about except to justify with the common hip words "5G, AI, IOT, Solar, Green, Renewable, Digitalisation etc".
 
So how do we navigate the market as it is? I asked myself this question almost every day. To sit out a rallying market is to miss out on opportunities. At the same time, to be highly vest in an overextended irrational rally, is to take a huge risk. The good thing is, we are retail investors. We should use this to our advantage. Our capital is small, we are nimble and we have the luxury of time. The luxury of time is not what hedge funds, professionals or banks have. They need to churn out returns every single day, month and year to justify taking clients money. We do not face such pressure. We are not forced to pull the trigger or swing the bat. This is what I hope you all will remember. One of the best lessons I have learnt from investing over the years is risk management is as important as picking the right stock. 
 
It is never easy investing in the stock market. Over the CNY, I have heard how many people became stock market experts in the course of 2020. Often during such conversations, I am usually a very good listener. A big part about investing is to be a good observer, listener in order to gauge the market sentiment, feel on the ground in order to have better market insights. If you are always the one talking, I do not think you would benefit much in terms of learning from others. My takeaway from these CNY conversations which revolved around glove stocks, GameStop, BitCoin, Tech stocks, EPF withdrawl, "what's next year theme" would be - Retail investors did well in 2020, is hungry for more action in 2021 and can't wait to have another stellar run.
 
 
There were honestly no sense of fear or worry but more skewed towards optimism. In my view this is a good thing. Being all solemn and worrisome wouldn't help with the current predicament. Optimism translates to confidence and confidence is important from the aspect of investor confidence, business confidence and consumer confidence. However, whilst I do think it is important to remain invested in the stock market, I will adopt a rather cautious stance in 2021. I believe that the market is due for a correction, before it can continue any further uptrend or historic rally. When too much optimism is in the market, it becomes exuberance. Over-exuberance at any point in time, is never good. You can have a look at this viewpoint from Michael Burry, famous from the movie "Big Short".
 
 
 
 
In a nutshell, this is what I would do in such times. Take your time in looking to enter stocks. If you want to take a position, be prepared to hold it for some time. If you are not, stay sidelines. For position in good fundamental stocks which may yet to be performing or temporarily underperforming, do not be too worried as overextension in the market goes in both directions (upwards and downwards). This is why I am advocating as what I always have been, build a balance portfolio and build up the cash coffers. By doing so, in the event there is a correction, investors can navigate better be it to average down or take fresh positions in their favourite companies. By being heavily invested as they were in 2020, would be a dangerous move considering many sectors or stocks are "overvalued".
 
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Food for thought: 
 
 

 

 

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SureWin1Woh Fully agreed. Market is overdue for a healthy pullback. Stay vigilant for the unexpected ....
23/02/2021 11:27 PM

(Tradeview 2021) - What I Learn of Fundamental Arbitrage Through Sri Trang Agro

Author: tradeview   |  Publish date: Sat, 20 Feb 2021, 2:50 PM


   

 

 

 

 

Last year August 2020, I wrote a piece about Sri Trang Agro as a long term value stock due to the strong fundamental nature of the company which meets all my metrics as a long term investment. As of Friday 19th February 2021, 7 months since I wrote about the company, Sri Trang Agro hit all time high at $ 1.97 and THB 43.50 (Sri Trang Agro is the holding company of Sri Trang Gloves and is dual listed in Thai Stock Exchange and SGX). For those who missed my earlier write up for Sri Trang Agro, feel free to revisit here :
 
 
 
 
 
 
 
 
 
Most readers would known by now that Sri Trang Agro is one of my favourite Thai listed company. I have written extensively and believe it is a well managed company. The problem have always been the question of Sri Trang Agro versus Sri Trang Gloves. When I first highlighted Sri Trang Agro, many were asking me why didn't I choose Sri Trang Gloves instead which was all the rage. Many told me to focused on a pure play glove maker like Sri Trang Gloves instead of Sri Trang Agro which would be susceptible to holding company discount. In fact, at a quite a long stretch, Sri Trang Gloves valuation was far ahead of Sri Trang Agro. The biggest frustration came from the huge valuation gap and the subpar share price performance of Sri Trang Agro which was sideways for a long time. This concern is valid and indeed a deterrent for investors. 
 
However, my rationale was simply, there is deep value in Sri Trang Agro because of the arbitrage difference between Sri Trang Agro which is trading at too steep a discount to Sri Trang Gloves considering Sri Trang Agro still hold more than 50% of Sri Trang Gloves. Also, the diversified nature of its business between upstream and downstream (from plantation to finished goods) and the strong management team would protect the downside of the company. In essence, Sri Trang Agro was punished because of the dismal commodities price where natural rubber price was low from Covid-19 because of suffering automotive sector and industries that require natural rubber raw material (besides latex glove).
 
Now with the huge interest in glove stocks dissipating due to the unwarranted fear of ASP falling off the cliff as a result of the pandemic ending, Sri Trang Gloves and other glove stocks have been impacted irrationally. Sri Trang Agro on the other hand buck the trend and broke new record high in terms of the share price movement. This is because of their diversified nature of being a full upstream and downstream player. Natural rubber being a commodity have trend upwards in line with commodity "upcycle". This will directly benefit Sri Trang Agro bottom line especially when the investors are flocking towards recovery play and economic reopening. On top of that, their gloves division will continue to provide strong earnings visibility. Another reason is their exposure to hemp plantation. With the Thai Government recently legalising cannabis, this have led Sri Trang Agro being given attention although this venture have yet to kick off or bear fruits.
 
This is why I find investors at times behave irrationally. They move with news flow of potential future earnings (unproven) rather than actual solid earnings track record with earnings visibility. Nonetheless, despite the noises and emotional turmoil, I know many fundamental investors held on although some were anxious when they emailed me to enquire. To all my readers who believed and held on to Sri Trang Agro, a well deserved returns for you all after going through all the ups and downs. 
 
For those who thinks that fundamental investing or value investing is dead, this is a proof yet again that you do not need to do active trading daily to do well in the stock market. Finding good stocks, holding on and sitting through, letting the passage of time and value to be realised is the key to building wealth over a sustainable period of time. Active short term trading is fun, exhilarating and give a sense of thrill. Just like gambling. Whilst some would argue its the way to make money from Bursa, not long term investing, I beg to differ. Such short sightedness is a way for Bursa and brokerage houses to make money, through transaction fees. Time and again, history has shown for fundamental investing all it takes a good selection of quality companies, the returns would be astronomical. Likewise, for all the accumulated short term trades, one mistake is enough to wipe out a portfolio. 
 
The beauty in finding a company which is undervalued, both fundamentally and via an arbitrage would provide a base or "defence" against any potential selloff. The downside is protected. Arbitrage investing is one of the many strategies that seasoned investors adopt along the likes of  earning yield investing, dividend investing and others. I often adopt this method in 2020 to determine whether to invest in stocks because of the volatility and uncertainty. This have resulted in outcomes which exceed expectations for my private portfolio in 2020 with the likes of Wilmar International Limited, BIMB-Wa and APB Resources Berhad outperforming many stocks and the larger market albeit at a gradual and slower pace. Of course, the downside is the waiting time. One ought to be patient. Just like reading an article, if you are only willing to read the first 3 paragraphs and not finish the article, you would miss the most interesting bit at the tail end. Back to the topic on hand, if investors ever come across fundamental arbitrage opportunities, one should not hesitate to take it even if it requires a little more time waiting. Remember, wealths is built over time, not overnight. 
 
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Food for thought: 
 

 
 
 
 
 
 

 
 
 
 

 

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okdoke Hi Sir, you mention example of arbitrage in bimb-wa. Any opinion with regards to closing price 31.5 and possibility to buy now? Thanks in advance
20/02/2021 5:33 PM
Erudite Tqvm Sri Trang hit $2.38. I still holding. Time 2 sell?
25/02/2021 4:57 PM

(Tradeview 2021) - Mega First Corporation Bhd Long Term Value Stock (Update)

Author: tradeview   |  Publish date: Mon, 8 Feb 2021, 12:32 PM


  MFCB | MEGA FIRST CORPORATION BHD

Last year August, I wrote about MFCB as a long term value stock due to the strong fundamental nature of the company which meets all my metrics as a long term investment. As of close of Friday, MFCB closed above RM 8 and hit a new all time high. For those who missed my earlier write up for MFCB, feel free to revisit here :
 
 
With the permission of a fellow reader, who asked for my view in the course of the week, I will be sharing my views for the benefit for all. 
 
Q: She said, "I held on MFCB for a long time, added when it dropped below RM 7. Yesterday I sold half at RM 7.45, today I sold the balance at RM 7.70. I am very heartache now as MFCB is RM 7.89. I feel painful because every time I take profit, it seems to go higher. When I hold it doesn't move. How can I prevent this in future?"
 
A: In essence, this is about long term investing vs short term trading. For short term traders, they enjoy the thrill, excitement of fast money, quick income, small wins. For long term investors, they are not interested in small returns, they are fishing for larger windfall. Some people like to feel like a winner and winning means making money in the stock market. So they enjoy the feeling of being a winner as often as possible. They cannot stand seeing a red portfolio or at a loss. So whenever their losses start piling up, they sell. Whenever their profit comes, whether big or small, they take. At the end of the day, the real winner is the brokerage who basically makes commission from the frequent trades with none or minimal risk involved. 
 
However, a long term investor looks at the company like buying a property or land. They understand it may not make money in the short term, so long there is capital appreciation in future, in the mean time, as long as there are some form of income yield (dividend yield is just like rental yield), which may not be large but can cover some cost, they are happy. Often, it is this group of people who makes the most money. Not immediate, but in the long haul. 
 
Coming back to MFCB, it is a good company and have huge potential. The management is strong and they have a recurring cash flow from their cash cow Don Sahong dam. Their expansion plans are paying off after 10 years of hard work and till today, they have yet to realise their full potential yet. Their results would be out this month. When I call it my Long Term Value Stock, it is because its a long term investment. Sure, if it the share price moves faster towards the goal, I am happy too. However, I would not rush to take profits because of the potential. As an investor, we must look at the potential, not immediate short term gains. Having said that, if you are happy with the profits, don't want to risk further and can accept missing out on future upside, then by all means take profit. Don't feel heartache thereafter, as you still landed yourself a good profit. 
 
So to overcome this issue, you have to ask yourself, what is your intent of investing in the first place? Is it to seek immediate gains, or to build wealth?
 
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Labels: MFCB
  2 people like this.
 
Erudite RM 8 today. Nice. Results shud b quite bagus!
25/02/2021 4:58 PM

Tradeview Commentaries (1st Feb 21) - Why GameStop's Phenomenon Resonate with Malaysia's Glove Retail Investors Part 2

Author: tradeview   |  Publish date: Mon, 1 Feb 2021, 10:59 PM


            

 

Pic : TMZ
 

In the past year, retail investors participation in stock market globally like US, South Korea were at record highs. This is largely due to the prolonged Covid-19 lockdown and flood of liquidity expanding the money supply in the economy (M3). 

Locally, in 2020, foreign funds outflow from KLCI ballooned to RM25 billion. On the contrary, Retail investors were net buyers at RM14 billion and local funds at RM11 billion. Hence, it can be concluded it was retail investors who supported KLCI. As a result, Bursa is on track to deliver record profits for FY20/21 due to record high retail participation, so are the IBs and other brokerage firms. Active retail participation is a boon for the stock market. If social media changes the landscape and levels the playing field between retail investors and institutions, it should be welcomed. Of course some level of oversight is a must to prevent abuse however the same can be said towards the conduct of the Foreign IB whose research report was a sales piece to pitch to institutions to capitalise on RSS ban lifting in KLCI to short the 3 glove stocks. If Regulators intend to clamp down on retail investors, equal scrutiny should be accorded to those questionable IB's analysis. 

Irrationality in the stock market swings both ways and over time it will normalise. A fundamentally sound stock will not go down indefinitely. When the buying volume and momentum outweigh selling, the share price goes up and vice-versa. The point to note, however, it is important for funds to come in to support for share price ascension. For glove stocks, it has been punished irrationally and retailers banding together can be seen as a reactionary market forces. 

Indeed, the circumstances of GameStop vs Gloves stocks while sharing a common distaste for shorters, the substance is different. Unlike GameStop, the Glove stocks are undervalued, delivering continuous record profits and good dividend yields. The demand won't disappear overnight just as when I repeatedly said the vaccine announcements won't eradicate Covid-19 instantly. 3 months since Pfizer / Moderna announcement, globally and Malaysia is in a much worst state than 1 year ago. For those who choose to ignore the supernormal profit of glove stocks, please reassess your valuation model impartially. This is not the same where a company disposes their core business and net a huge windfall, declare one-off dividend and is left without a profitable business the next year. How many times have we seen the glove stocks grow post pandemics (H1N1, SARS)?

I understand valuation is subjective. The argument can go on indefinitely. So let's leave it as that. I am just a blogger and a retail investor. In my years writing, I have always put the interests of my readers and retail investors close to my heart. It pains me to see many subjected to losses resulting from "pump & dump" operations. This means I would not write on companies or sectors which I deem risky, questionable or fundamentally weak. 

I would like to take this opportunity to share my honest view on the "Glove Movement" with retail investors.

 

1. Do not invest in glove stocks if you don't believe in the fundamentals and not willing or able to hold for the long term. Only do so if you believe in buying a wonderful company for the long haul.

 

2. Do not get carried away, caught up in the hype and be emotional. No point using hard earned money to spite anyone, be it IBs or shorters. They don't care about you, only their books.

 

3. Do not use margin to invest in stocks, only excess cash. Invest within your means at all times (regulators can clamp down, banks can impose margin caps anytime)

 

4. Avoid structured warrants, derivative products especially if you have no knowledge.

 

The stock market will keep evolving with the advancement of technology. Retail investors, looking out for each other may just be a new way forward. I do not know for sure, but this is surely an experience we will all remember. 

 

End Part 2

 
 
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Tradeview Commentaries (30th Jan 21) - Why GameStop's Phenomenon Resonate with Malaysia's Glove Retail Investors Part

Author: tradeview   |  Publish date: Sun, 31 Jan 2021, 12:38 PM


           

 

 

 

Dear all, the largest telegram group now consist of over 42,000 members. Since the "Glove Movement" started 4 days ago, it spread like wildfire capturing people's attention. Notable experts, regulators, pundits, prominent investors have weighed in over the weekend on this phenomenon which was largely inspired by the GameStop rally in Wall Street. 

Many were quick to distinguish the GameStop, AMC stocks and the Gloves stocks in Bursa pointing out a short squeeze would not happen in Bursa due to the 4% RSS limit, glove stocks are not oversold up to 140% and robust regulations in Malaysia. I do agree that a short squeeze like GameStop will not happen for the Glove stocks in Bursa. 

However, those who assume retail investors are naive and this is just a elaborate ploy of some unscrupulous "Gurus" manipulating social media to start a "pump & dump" operations failed to recognise a crucial underlying issue. Why did GameStop resonate with Malaysia's investors?

If you look at the largest telegram group, people from all walks of life are there, from VVIPs to students, all banding together for the Glove sector. It was an organic movement with no leaders. Hence, it is not right to brand and undermine those who participated in the group as manipulators. 

In my humble view, the common denominator is that retail investors share a strong distaste towards the short selling facilitated by some IB towards the Glove stocks. To be fair, whether Permitted Short Selling, RSS or IDSS are actually healthy for a vibrant stock market. It's like your gastro system which flush out the bad elements to ensure your body is healthy. However, too much, too sudden or extreme cases, it cause a severe reaction. In this case, the short selling was not conducted towards a struggling company with weak fundamentals. It was towards fundamentally sound glove companies. Shorting selling by right, should be directed towards a overvalued or fraudulent companies like Luckin Coffee, Wirecard AG. 

Retail investors have found the glove stocks easy to understand, relatable and a story of entrepreneurship. Many view them as underdogs who succeed in the midsts of this economic debilitating global pandemic after years of hard work. To some, they feel a huge sense of pride to know Malaysian gloves are protecting the global population. I have not seen such unity in our increasingly fractured country since national badminton heroes competed for 4 gold medals in 2016 Olympics. Yesterday, the Government announced Malaysia recorded the largest trade surplus for December in 23 years. The Glove sector played a huge role there. In addition, even Bursa's Chairman acknowledged if not for the 3 healthcare counters IHH, Hartalega & Top Glove, KLCI would have fallen 11% in 2020. Indeed, KLCI is one of the poorer performer in the region since 2021. This coincided with the massive selloff of glove stocks for the past 2-3 months. How did this happen? 

Sure, it started with the vaccine announcement in November 2020 which led to premature optimism by the investment fraternity on economic recovery and reopening spurring profit taking. This was further exacerbated by the Foreign IB's research report which led to facilitation of massive short selling exercise at the start of the year. Citing The Edge, in the first trading week of the new year, there were 196.19 million shares worth RM1.09 billion shorted during that week. An old timer in the investing fraternity said he has never seen such weight of money being put on the table before this on Bursa. The short selling volume accounted for 56% of the week's total volume. It did not end there and today Top Glove, Kossan & Hartalega are the 3 most shorted stocks in Bursa. Coincidently, these 3 stocks were sell calls with ludicrous TP in the Foreign IB's report. Therefore, it would appear the Glove Movement in Malaysia is not about manipulating the market but a reactionary force. 

 

End Part 1

 
 
 
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Tradeview Commentaries (28th Jan 21) - Of GameStop, Gloves, Short Selling & Short Squeeze

Author: tradeview   |  Publish date: Thu, 28 Jan 2021, 12:07 PM


            

 

 

 

 

 

 

Most by now would have heard about the parabolic rally of GameStop of 1600% since 12th Jan 21. Some are calling it a mania, some argue it's the sign of a bubble, some say it's due to the Fed's liquidity. The fact of the matter it was a case of short selling went awry due to organised retailers fighting back, over-selling by shortsellers who couldn't get enough stocks from the market to cover their position and prominent names lending weight during the height of the frenzy. It became a movement and sparked unprecedented wave of reactions in the investment community. Now, what has this got anything to do with us back home in Bursa? 

The top 3 most shorted stocks in Bursa since the lifting of RSS in 2021 would be Top Glove, Kossan, Hartalega. RSS known as Regulated Short Selling require approval from the exchange. Primarily, large funds / institutions are involved in RSS who take a view to short the stocks in return for profits. In order to execute RSS, they need to have in hand or access to large amount of quantity of stocks they plan to short. This was why, we saw EPF ceased to become substantial shareholder of Top Glove on 8th Jan 21 when it lend its shares for short selling (SBL). Recently, EPF recalled closed to 55 million shares and became substantial shareholder again. 

When a Foreign IB research came out with an outlandish sell report in December 2020, I was perplexed by the entire premise and analysis of the report. I have never came across a report like that. What bewildered me wasn't the questionable analysis but WHY would a sell side initiate the first report on the glove sector as a strong sell with ludicrously low target price across the board. I spoke to analysts and those in the industry, where they too were surprised. As Bursa is generally a long market, sell side rarely initiate with a strong sell for new coverage. Come January 2021, it became clear what the true purpose of the report. It was to facilitate short selling of these 3 stocks in Bursa immediately upon lifting of RSS where funds can execute short selling through this Foreign IB. This Foreign IB would make huge fees from the execution of RSS for their clients. 

After doing some channel checks, it turns out this Foreign IB in fact made a huge profit in 2020 facilitating foreign fund flows into our Glove sector during the rally in 2020. Now, this Foreign IB is simply doing the opposite. This was why, the Foreign IB research produced 4 reports during January month reiterating the sell call, when the glove sector sustained and at one point rallied back due increased in Dividend payout ratio by Top Glove, Share Buy Back by Kossan and Major shareholder buy back with own funds by Hartalega. 

Of course, we have all witnessed Hartalega's record shattering results recently to know well enough that the glove sector is not only doing well, its strong earnings are sustainable even with the vaccines announcement since Nov 2020. Hartalega at USD 55 per carton could deliver record earnings, what more other glove makers who have much higher ASP. 

The issue at hand is the earnings visibility, strong fundamentals and sustainability of ASP due to demand far exceeding supply due to a structural step up in demand, heightened hygiene awareness and large healthcare budget allocations by government all around the world. Based on these reasons, it is clear that the institutions and market participants took profit too soon expecting a speedy recovery of economy due to vaccine without considering the possibility of even a MCO 2.0. The short selling via RSS by funds further exacerbated the irrationality of valuation towards the glove sector. 

I am a believer of fundamentals and think the glove stocks are undervalued by all metrics regardless of what is being misrepresented by some to mislead investors. These are wonderful Malaysian companies that have stood the test of times and are now world leaders. To invest or otherwise, that's a decision only you can make. 

 
 
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(Tradeview 2021) - Malaysia's Glove Makers Deserve A Fair & Objective Assessment (Regardless Of Their Share Price)

Author: tradeview   |  Publish date: Tue, 26 Jan 2021, 10:39 PM


           

 

 
When Bill Gates first actively went around the world promoting the development of vaccine research and spent much of his wealth raising awareness, there is the lack of attention given by the general public. However, with the Covid-19 pandemic, everyone started to call Bill Gates a visionary. His Ted Talk 5 years ago titled "The Next Outbreak" chalked up close to 33 million in views today with the explosion happening only when Covid-19 erupted in 2020. Feel free to watch it here : 
 
 

 
 
The argument can be said to be the same for Glove makers. Some 30 years ago, glove manufacturing was not what it is today. Glove manufacturing is an extremely tough, competitive and difficult industry earning only meagre margins as the bulk of the profits are taken by glove distributors abroad. Your big names like Cardinal, Ansell, Kimberly Clark and many others. The Malaysia glove industry came about because of the natural rubber / latex supply due to rubber plantations in the country. The access to raw materials as well as some level of manufacturing capability led to these savvy entrepreneurs to pivot from using Latex or Natural Rubber for tyres to new products like rubber gloves. Some saw the opportunity with the heightened awareness due to AIDS pandemic abroad. For many years, Malaysia glove makers sweat and toil being the "sweat shop" / OEM for foreign distributors, hospitals and government. Fast forward to today, the Glove industry have improved leaps and bounds, most importantly, Malaysia has become a world leader that controls the supply of gloves in the world with an estimated 67% of global market share. From 1980s till today, there were 250-300 glove manufacturers then, now there is only 45 world class players in the country.  
 
Manufacturing as an industry itself relies on productivity, cost efficiency and economies of scale to achieve cost optimisation in order to be become profitable. It is extremely hard to achieve that because of most manufacturers will get pressed by their distributors or clients. Manufacturers are the lowest cost centre in the entire supply chain. Most of the glove makers in Malaysia are run by family owned companies, very few by large MNC. This is because manufacturing is a hands on, laborious, 24/7 long hours complex operation. A machine breakdown or an electricity blackout for 1 day can easily wipe out the potential profits for the entire month. If not for this global pandemic, glove manufacturers would be extremely happy with a commendable high single digit to low double digit profit margin. 
 
I think most readers would know some of the things mentioned above by now, apologies for being long winded, but why am I repeating this? The reason I am sharing this is because, I hope readers know it has been an arduous journey for glove makers. This so called "windfall" or "stroke of luck" as stated by some did not happen overnight. It was due to lots of blood and sweat. It is very easy to be envious when others are doing well in a tough time. It is also very easy to condemn and criticise. Talk is cheap but that is the reality of today's world. When we are suffering, we hope the world suffers with us. This is because as human, we take solace in collective suffering. If we are the only one suffering, we would feel very depressed right? 
 
Actually, this is not the right mindset. In Chinese, there is this saying "将心比心"。Loosely translated, it means having empathy and putting yourself in others position. If you worked hard for all your life as an honest entrepreneur, and you have done right for most part, is it fair to be run down just because you are doing well today albeit with some flaws? Do not get me wrong, I am not defending any company in particular but the glove sector as a whole. In addition, there are many layers of problem with regards to ESG, labour issue in our economic sector which most people know about such as : 

1. Foreign labour dependency is not a singular issue of the glove sector but majority of the sectors in Malaysia because locals are not interested in 3D jobs - dirty, dangerous, demeaning (or dangerous or difficult)
 
2. Agency monopoly / cartels exists which control the supply of labour between Governments (politicians) leading to exorbitant agency fees imposed on foreign labours.
 
3. Hypocrisy of foreign distributors and corporations that forces local glove manufacturer to lower cost, compress margins in order to enjoy profits on their end. (On one hand talk about ESG, on another hand press the price of OEM manufacturers. This is not only applicable in the glove sector but other industries too)
 
 
In 2014, I remembered our country's top national Badminton player was embroiled in a doping scandal. This was when he was World No.1 and at the height of his career. It was the worst possible scenario for any athlete. I remembered back then, most Malaysians were skeptical whether it was true. Eventually, our national hero was given 8 months ban due to illegal substance Dexamethasone. The point to note, our national Badminton shuttler wasn't aware and the drug was not performance enhancing but for rehabilitation given to him by those in charge of his care. He paid the price of the ban and came back to competition including the 2016 Olympics where he nearly won our country's the elusive Gold medal. He said during his retirement press conference, that his greatest honour was being able to play for the country. I believe he was an exceptional talent. Those that comes in generations or decades. However, the Malaysia badminton ecosystem have always been able to nurture and support talents. This is because the sport itself had the support of the government, association and the people. If the media, government, associations back then chose to only focus on sensationalism / populism without giving the benefit of doubt and crucify him, he probably would not have the chance to rebound and make it for Olympics. Also, imagine, the world's impression of Malaysia's badminton when this doping incident exploded. Just because of one doping case which was a mistake, does it mean all Malaysia's badminton athletes are dopers? 
 
 
 
 
Few years ago, two former national shuttlers was banned for life for match fixing. One was a promising young star who even won the world junior championship. Due to the match fixing, he was banned for life. I felt the punishment to be harsh as he was young and misguided by a senior national shuttler. This boy trained his whole life to be a national player (neglecting his studies), now that he is banned for life what can he do next with such a long path ahead? People make mistakes, but unlike our national hero's case, his matter was not given the same benefit of doubt and a second chance. So, what has this story got anything to do with glove makers? There are many similarities in the varying way some quarters of the media, experts or commentators treat out Malaysia glove makers. 

1. Because of the labour and ESG issue highlighted on a few glove makers, the entire glove industry was painted with a stroke of brush across the board as "forced labour industry"? Is that fair? How about those others glove makers who complied with all laws and regulations? Also, when we talk about forced labour, what about the other industries which are much worst? Why is the glove sector singled out? Is it because of the sky high profits they are making now? Have anyone been to the construction "kongsi" and plantation "estates"?
 
2. Just because the Glove makers are finally doing well, some have been loud to ask for windfall tax incessantly as it is a populist move. How about the years when they were making losses and taking out substantial loans, raising bonds for cashflow purposes? Where was the help? Also, the taxes and levies they have paid over the years to government, jobs created and capital investment made? Granted, MIDA have supported the industry with promotion, patent application and other forms of assistance. However, compared to other industries in our country, the glove sector predominantly was organically developed and grown by entrepreneurs of grit.
 
3. An objective media shines light in darkness and brings justice to the weak, it also condemns the powerful without fear or favour. I think the role of the media is extremely hard and good journalism should be respected. I have much respect for those who practice true journalism. However, for those media who brings down the ethical standard and good name of a free and impartial press in return of clickthrough or viewership, readers ought to be discerning. The 2 examples below : 

- News portal A decided to publish a letter from an anonymous contributor, referencing his friend (which is tantamount to hearsay) alluding that a glove manufacturer in the country lacks integrity and filled with hypocrisy. It is one thing to report a news with sources and keeping it anonymous to protect the identity. It is another to reproduce a letter by an anonymous writer referencing a friend. Isn't it a tad too much? If indeed the writer's friend went through grave injustice, there is the media and there is the law. The media cannot win your compensation, the law can. As a lawyer myself, I know for a fact we have robust industrial court that protects employees. 
 
 
 
-News portal B decided to conveniently attach the picture of glove manufacturing to a "clickbait" title on FMM letter to manufacturing sector warning of disastrous outcome if the Covid-19 issue does not come under control. FMM in the letter which I sighted, never once mentioned glove manufacturers. So why did the news portal do this? Was it a genuine mistake or a pre-conceived notion / generalisation to imply that Covid-19 cases are all from glove manufacturers? Is this fair to other glove makers who complied with all regulations and have no Covid-19 cases? How about the construction, electronics, furniture manufacturers and others which had Covid -19 outbreak? If this is not coloured lens, I don't know what is.
 
 
 

 
 
 
 
 
 
 
 
 
 
 

 

 

 

 
 
 
 
Yesterday, the government after conducting "Ops Glove" found that 90% of the glove industry players are compliant with the regulations and laws. Which means those who are in violation are in the minority. Those who violated and did not do enough, should pay the price and subject to the repercussions of the law. Everyone deserve a chance to improve and upgrade themselves failing which, they should be held accountable once more. As media reports on the flaws and failings of the glove industry, they should also shower praise for those who done right by the law. They should accord fair opportunity to hear both sides of the story instead of relying only on Andy Hall, the activists who had his agenda. Trial by media, shouldn't happen especially if sensationalism gets in the way of true journalism. Lastly, to be fair to all, apart from "Ops Glove", there should be other "Ops Bina", "Ops Sawit", "Ops Petroleum" etc. That way, it is fair play to all. Selective persecutions should not exist in today's society and I look forward to news portals above to continue to facilitate the role as the guardian of truth when the time comes. 
 

 
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  4 people like this.
 
LimitUp Beautifully written and goes right to the point. The issue at hand is the incessant persecution by those so called activists, investment analysts and journalists sponsored by fund managers who see the once in a lifetime huge profits to be made in the phenomenon of an industry that's benefitting from this global pandemic. Just because they're making an important product that saves lives doesn't mean these gloves manufacturers should not be making a profit. What's wrong with making an honest profit for their shareholders by taking advantage of the forces demand and supply. Glove manufacturers are running a business and not charities. Indeed everybody have their own agenda. But those analysts, corrupt activists and journalists wrote articles against some glove manufacturers skewed facts and even fabricate the facts in their attempt to influence the value of their stocks in the share market. These are the people should be ashamed of themselves. They are a disgrace to their profession and should be called out publicly and shamed !
27/01/2021 7:31 AM
Sslee locals are not interested in 3D jobs - dirty, dangerous, demeaning.

Please do not use the word demeaning for any job that required your physical output. Nothing is more demeaning that get pay without doing any job.

You can use dirty, dangerous and demanding to describe those jobs that required physical work.
27/01/2021 2:18 PM
Erudite The Term 3D is based on WIKIPEDIA https://en.wikipedia.org/wiki/Dirty,_dangerous_and_demeaning

Please check facts before nitpicking.

Author, gud article. Kudos, keep up good work. Terima Kasih sir
27/01/2021 2:23 PM
zhangliang Tqsm tradeview, nice one
27/01/2021 2:25 PM
Sslee Who is nippicking when I am trying to give respect to all those doing the so called 3D jobs.

You do not need to follow wikipedia to the every words as I was bought up to respect anyone doing a honor job.

I only despise those corrupt people get pay withou doing the job.
27/01/2021 2:32 PM
Lewis Lee This Focus Malaysia is a big shame of malaysia !
I have long boycotting them (stopped buying their papers) !
If one day I come accross any Focus Malaysia old papers, I will use them to wipe my dogs' asses as shit are where they belongs and should Focus on !!
28/01/2021 12:39 PM

(Tradeview 2021) - A Reflection on Covid-19 Pandemic, Being A Fundamentalist Saved Me

Author: tradeview   |  Publish date: Thu, 21 Jan 2021, 3:25 PM


         

 

 

 

 
If 2020 has taught me anything, it is never to take things for granted in life. The global pandemic have upended even the most normal of life and reshaped people's perspective in life. It has given me lots to think about, to reflect upon and to look forward to. My generation is very fortunate to not have to go through World Wars 1, 2 due to a long period of peace and prosperity. This has made many complacent about life. Think about it, in a way, the fight against Covid-19 is a form of global war, it is World War 3, except, we all have a single common invisible enemy.
 
 
As an investor, when we talk about war times, it is a time of great volatility and uncertainty, followed by a sustained period of recovery and growth post-war. Most wars last several years, at times decades. Spanish Flu lasted from January 1918-April 1920 (2.3 years). During the start of Covid-19 in 2020, many investors would have thought the best thing to do is to stay away, lock up all the funds and save it for rainy days. If indeed investors have done that in 2020, then it would be a great loss not forgetting missing out on some unbelievable action. 
 
Recently, a prominent investor who always promote "The Golden Rule", suddenly flipped and said fundamental investing led to his investment losses and price chart is the way. I unequivocally reject this notion and would like to put it on record, fundamental investing is the best if not the safest form of investing in the stock market. This has proven to be true by many who walked the path before us, like Peter Lynch, Warren Buffet, Dr Neoh Soon Ken, Mr. Fong Siling and others. These individuals are successful consistently over a prolonged period of time. They are not one hit wonders. 
 
I cannot speak for others but I can speak for myself. I am thankful to have invested in 2020 and took the biggest position in my lifetime during the "March Plunge". This set up 2020 to become the best investment year on record. Some argue this is due to luck, guts, or risk taking. On the other hand, I believe it is a culmination of years of investing mistakes, experience and a strong belief in fundamental investing. Think about it, when Bursa as a whole lost RM 190 billion in market cap from the stock exchange in the span of 1 month in 2020, who in the right mind would throw money to buy and hold? Only a fundamentalist. This is because fundamentalist see stocks not for its price but the value behind the company.
 
Entering 2021, many have asked me what is my outlook for the year. Unlike some, I am unable to give an accurate view at the start of the year. Just imagine, 6 days into a new year, the US Capitol was stormed by rioters due to Trump. Who could have seen that coming? I do however hold certain view firmly, I believe Covid-19 wont be eradicated overnight and looking at recovery thematic stocks especially in the area of airlines, tourism and retail is too premature. I said that 3 months ago. This is because structural damage has been caused to these sectors which requires time to recuperate. If one would like to look at recovery play, the best considerations are still banks, utilities, telcos and select FMCG /Consumer stocks.
 
 
 
As I am writing, I see many pockets of irrationality in terms of valuation. Not only the overvaluation but also undervaluation. I see the local tech sector to be severely overvalued (highly dangerous) and the banks, gloves, utilities, select consumer/FMCG to be undervalued. I also see polarising view between "expert opinions" & "research analysts". For instance : those glove "gurus" or bulls last year are now weary about promoting glove stocks. Interestingly, they advocated "all in" to glove stocks last year against a diversified portfolio. Similarly, the "recovery theme" gurus talking about airlines, hotel, tourism and retail loudly end of 2020 suddenly became quiet once MCO 2.0 was announced. I find this perplexing because confidence can just evaporate overnight due to the price action of stock price. This is the power of the stock market.
 
 

 
 
"Ignorance", "overconfidence" and "greed" are 3 most devastating traits for investors. On the contrary, "patience", "prudence" and "conviction" are 3 most valuable traits for investors.  Going contrarian doesn't always mean investors would make money. However, buying fundamental stocks in terms of value will almost always lead to success. The difference? Horizon. Timeline. There is no point being a preacher on fundamental investing as investors mostly learn from experience. If you are doing well with your investment style, then do what that suits you. If you are not doing well, why not give what I have written some thoughts, try it for awhile and let the results show after some time. Try extending your investment horizon, sit on it and wait for the results to show you. If its too painful to sit for a long time on stocks, separate your investment capital into 2 baskets, 
 
1. short term active trading basket 
 
2. long term value pick baskets. 
 
Compare the results after 2-3 years and let the results show you. If there is a good time to start, the time is now. Let 2021 be a year of new resolutions, realisation and aspirations. If US can hit reset with President Biden after 4 Years of Donald Trump, investors can reset their investment mindset too.
 

 

 
_______________________________________________________________

Telegram channel : https://telegram.me/tradeview101

Website / Blog : https://www.tradeview.my/

Facebook : https://www.facebook.com/tradeview101/or 

Email me at : tradeview101@gmail.com

Food for thought: 
 

 


 
 

 
 
 

 
 
 


 
 

 



 

 

 
 
 

 

 
 
 
  3 people like this.
 
CynicalCyan "Ignorance", "overconfidence" and "greed" are 3 most devastating traits for investors.
26/01/2021 11:56 AM
Erudite Terima kasih 4 d article.
26/01/2021 12:55 PM

Tradeview Commentaries (14th January 2021) - This Is A Time of Irrational Exuberance of Epic Proportion

Author: tradeview   |  Publish date: Thu, 14 Jan 2021, 2:18 PM


        


Pic from Forbes
 
 
Dear all,  it is almost 1 year since the last MCO in March 2020 that caught everyone by surprise. Most expected Covid-19 to be over by now entering 2021. Sadly, Malaysia once again entered MCO 2.0. This was coupled with the nationwide Emergency Proclamation. Whether we agree with the rationale behind these measures is not important anymore, the issue at hand that we have to face is the rising Covid-19 cases to record levels and alarming infection rate in the community. With things as it is, we are not yet on the path of recovery as what most pundits / "experts" have forecasted as early as Oct 2020. 
 
I have written on this topic before and warned multiple times that investors should not count their chicken before it hatches. I said, recovery play can be considered for Banking, Telco, Utilities and select blue chip names. I repeatedly warned against Hospitality, Tourism, Retail. By nature, I am an optimist. I believe in the resolve and ingenuity of mankind to adapt & overcome adversity. However, it doesn't mean an announcement of vaccine translates into a "global rain shower that eradicates Covid-19 overnight." 3 months since the announcement of Pfizer, Modern, Astra Zaneca vaccines in November, it is proven fact that the numbers continue to sky rocket daily (globally and domestically). This is largely due to the 3 reasons below :
 
1. Slow execution / implementation of mass vaccination globally (logistical / manufacturing hurdles)
2. Slower receptiveness towards receiving vaccines 
3. Lax mindset, overconfidence or failure to abide by SOP in view of the vaccines newsflow
 
I am not a medical expert so I dont want to elaborate further beyond this. I believe most would agree the main reason our own country's Covid-19 cases spiked was due to the relaxation of CMCO allowing interstate travels followed by the Christmas & New Year holidays. Now imagine this for many countries around the world with larger population which are less law abiding. 
 
The stock market is a reflection of an important part of the economy but it does not represent all of the economy. We can see the rich gets richer and the poor gets poorer everyday with the record high unemployment rate, business shuttering yet market cap of billionaires reach new stratosphere. This wide disparity is particular obvious in the stock market. Many astute investors whom I know personally have even told me, 2020 was the best year for them in terms of ROI. What does this show us? 
 
It means this is a time of great irrationality largely driven by the liquidity flooded by central banks around the world (expanding M3, money supply in the economy) and expansionary fiscal policies for countries which can afford to do so. This is why, the stock market runs ahead with such expectations whether rational or not. Remember, this is a time where Tesla with no profits have become the world's 6th largest company by market cap making the founder the richest man in the world. It is also a time where Bitcoin broke US $40,000. This is a time of "irrational exuberance" of epic proportions.
 
Locally, I am seeing tech stocks which are actually manufacturers trading at 100x+ forward PER, stocks which signed MOU with nothing to show for rallying, stocks with extraordinary earnings being shorted ridiculously on weak justifications. Of course, everyone is entitled to their opinion. After all investing is subjective and the stock market is a platform for exchange of investment thesis. Right or wrong, we will know in due course.
 
With all things, irrationality will normalise. If you believe in Yin & Yang or Newton's 3rd law, you will understand there must be balance. I believe for 2021, there will be opportunities but investors have to be selective and ignore the noises. Risk management is still the way forward. A balanced portfolio not heavily skewed to any sectors with sufficient cash holdings in hand is good. Value + yield stocks would be the best combination.
 
_______________________________________________________________


Telegram channel : https://telegram.me/tradeview101

Website / Blog : https://www.tradeview.my/

Facebook : https://www.facebook.com/tradeview101/or 


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Food for thought: 

 

 
 

 
 
 

 
 
 


 
 

 



 

 

 
 
 

 

 
 
 
  2 people like this.
 
wkc5657 agree with the irrational exuberance part
14/01/2021 5:04 PM

Tradeview Commentaries (11th January 2021) - All Things Being Equal, Are Gloves Back?

Author: tradeview   |  Publish date: Mon, 11 Jan 2021, 3:25 PM


       

 

Pic from The Star

 

 

 

Dear all, due to last Friday surged in buying volume and share price ascend of glove makers across the board, the KLCI index turned positive by 1.9% to close at 1630. What is impressive is not only the magnitude of purchase but the rally upwards. Over the weekend, I received many calls, emails, messages asking me whether is this the start of the glove mania again. Should investors consider taking a position in Gloves?
 
I am sure most readers have noticed by now that I am not a short term thematic investor. I do not look to invest in stocks week by week or month by month. The past 2 months, the sell down of gloves have been very frightening even for the most seasoned investors. I have friends around me who actually cut loss last week, throwing in the towel despite my repeated advice to them to hang in there. These are not new investors with minimal investment experience. They are investors who have the market knowledge and view but could not withstand the frightening selloff for the past 2 months which worsened when short sellers came in last week. 
 
It caught many by surprise considering early in the week, the massive short selling flooded glove sector to start the year. When they saw what happen on Friday, they called me. They couldn't believe what happened. They felt cheated. But I did not rub it in. I simply told them, believe in fundamentals, believe in the logic and believe in the rationale of investing. Do not be swayed by market sentiment and noises. Otherwise, there is no point investing, just put the money in FD and lock it away. 
 
We have seen many rejoicing, gloating and showing off with the glove superb rebound last Friday. However, I did not write any articles over the weekend. There are 2 reasons : 
 
1. I do not think this overnight rebound should be misconstrued that "Gloves are back". I believe it will be a very tough fight between the bear and the bull upwards. This is especially so when the short sellers have plenty of ammunition. Definitely, the stock market do not move in a straight line so there will be gyrations on the way up just as there is the gyrations downwards. To be fair, gloves should never have been dead in the first place. There were too many non-rational investors and commentators in the stock market providing input on this subject. Everyone is like an expert. Who do you trust?
 
2. I do not believe in "Gloating" or "I told you so" mentality which is unhealthy for the investment community. In fact, we should all work together and study why and how the experience of glove selloff in the past 2 months should become a guide towards the future. 
 
As per my title, all things being equal, are gloves back? My humble view -  investors should consider whether do you have the stomach to continue holding on and soldiering on believing the fundamental quality of glove stocks. If the answer is yes, then you can still ride glove stocks no matter what happen next week (MCO / Politics / Vaccine etc). If the answer is no, then investors should sell on strength because we know short sellers are back in droves, this round it is unlike 2020. So it all comes down to your investment horizon, risk tolerance and mindset of investing which will determine if you should continue holding or otherwise. As for me, my favourite glove stocks especially for long term investment remain to be Riverstone and Hartalega. This shall be a topic for another day. 
 
_______________________________________________________________


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Facebook : https://www.facebook.com/tradeview101/or 


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Food for thought: 

 
 

 
 
 

 
 
 


 
 

 



 

 

 
 
 

 

 
 
 
  Be the first to like this.
 

Tradeview Commentaries 7th January 2020 - Blue Sweep in US, Riot In Capitol

Author: tradeview   |  Publish date: Thu, 7 Jan 2021, 2:31 PM


      

 

 
Pic from Business Insider

 

 
Dear all, Democrats have pulled a stunning upset by winning both Georgia race. This will flip senate control back to Democrats since 2014's loss. This would also be the first time since 2009 where Democrats control the White House, Senate and Congress. What this means - a strong Biden Presidency. Democrats would have the opportunity to rollback policy damages caused by Trump administration and rectify the wrongs domestically or foreign. 
 
Market is currently mixed with tech leading the plunge due to the potential anti-trust movement by the left wing of Democrats. However, other stocks are doing rather well as they expect a larger stronger stimulus which is broad based and favouring small businesses. I think if Republicans were still in control of the Senate, it would be a frustrating Presidency for Biden. Although some are worried that a Democrat is bad for business, economy and corporate due to higher taxes / wealth tax etc, on the contrary, I think Democrats in the course of their history, they have always managed to salvage the economy and bring the nation out of troubling times such as Franklin. D. Roosevelt during the Great Depression with the New Deal and World War 2, Barrack Obama during the Great Recession and I believe Joe Biden may do well navigating the Great Pandemic. At the very least, he would do better than Donald Trump. 
 
Many said, the stock market would collapse if Donald Trump loses. It has proven to be untrue. Probably the typical fear mongering rhetoric by the GOP and right wing extremist. Similarly this time, a Blue Sweep by Democrats is not an apocalypse. 4 years of damage control requires a strong mandate. I believe this is exactly what US needs at this juncture. This is to restore public confidence in US domestically and globally.  
 

 
 
With regards to KLCI, the selloff is not likely due to US but rather the increasingly serious Covid-19 cases as it would appear the infection has spread into the community with the healthcare system at the brink of capacity. Additionally, locally the politics are not stable again with the potential implosion in PN as we move towards 1 year anniversary of the infamous "Sheraton Move" 
 
My view - any selloff off in good blue chip fundamentals stocks is not a bad thing. Do not be  overly pessimistic as the market is presenting a great opportunity for investors with sectors such as Banking, Insurance, Utilities starting to look attractive again. In addition, glove stocks have came to life with the increasing worry on the pandemic front. While it is too early to tell if the rally of glove would be sustained, as a strong fundamentalist, I have always believe in the quality of stocks lie in the fundamental value. A stock cannot be trading below its true value perpetually regardless of the noises. I think our earlier patience is paying off and I will be a little bit more patient before looking to collect these good blue chip stocks for 2021's play.
 

 

_______________________________________________________________


Telegram channel : https://telegram.me/tradeview101

Website / Blog : https://www.tradeview.my/

Facebook : https://www.facebook.com/tradeview101/or 


Email me at : tradeview101@gmail.com
 

Food for thought: 

 

 
 
 


 
 

 



 

 

 
 
 

 

 
 
 
  SureWin1Woh likes this.
 

(Tradeview 2020) - Year-To-Date Portfolio Return 56.3% as at 31st December 2020

Author: tradeview   |  Publish date: Thu, 31 Dec 2020, 10:10 PM


 

 

 

 

Dear fellow Readers,
 
2020 which was supposed to be a fresh start of new decade has brought about a rude awakening for all due to the pandemic that swept across the globe. Global economies pummelled, unemployment piled up and importantly many lives were loss. This was no ordinary war. It was a war against a lasting pandemic. Looking back, it is truly a difficult year for everyone. As a natural optimist, I believe there is a silver lining to everything. Looking on to 2021, may it be a better year for all be it in life or investments in the stock market.

As in the past years practice (5 consecutive years now), I have always shared my performance with the sole purpose for transparency and accountability. This is the updated results as of end of December 2020 for my personal record purposes. 
This is just a simple periodical report to keep track of the progress of my write up. Feel free to cross check my public comments or article posting date as reference. 
__________________________________________________________________
 
*When it was written YTD ending 31st December 2020 : (Gains exclude dividend) 
 
1. Oriental Holdings Berhad - On 6th May @ RM 5.03 vs Present RM 5.47 (8.74% Gain) 
 
2. Riverstone Holdings Ltd - On 5th March @ 43.5 sens (post bonus issue adjustment)  vs Present $1.11  (255% Gain) 
 
3. Sri Trang Agro - On 16th August  @ $ 1.21 vs Present $ 1.16 (-4.2% Loss) 
 
4. MFCB - On 16th March @ RM3.40 & 22nd August @ RM 7.35 (combined both) vs Present RM 6.90 (28.4% Gain) 
 
5. Hartalega  - On 19th September @ RM 14.16 vs Present RM 12.14 (-14.2% Loss) 
 
 
6. Peterlabs Holdings Bhd  - On 10th December @ 24 sens vs Present 23.5 (-2.08% Loss) 
 
7. DKSH Bhd - On 5th March @ 2.55 vs Present RM3.39 (32.9% Gain) 
 
8. CCK Bhd - On 5th March @ 47 sens vs Present 62.5 sens (32.9% Gain)
 
9. OCK Holdings Bhd - On 5th March @ 53 sens vs Present 45 sens (-15.1% Losses) 

10. RCE Capital Bhd - On 5th March @ RM 1.64 vs Present RM 2.75 (67.6% Gain) 
 
11. GCB Bhd - On 12th March @ RM 1.85 vs Present RM 2.67 (44.3% Gain) 
 
11. Pintaras Jaya Bhd - On 12th March @ RM 2.50 vs Present RM 2.70 (8% Gain) 
 
12. Scicom Bhd - On 19th March @ 52 sens vs Present 93 sens (78.8% Gain) 
 
13. RHB Bank Bhd - On 19th March @ RM 4.40 vs Present RM 5.45 (23.8% Gain) 
 
14. Pentamaster Bhd - On 19th March @ RM 1.85 (Post Bonus Issue adjustment) vs Present Post Bonus Issue RM 5.05 (272.9% Gain) 
 
15. Public Bank Bhd - On 19th March @ RM 13.10 vs Present RM 20.60 (57.3% Gain) 
 
16. QL Resources Bhd - On 19th March @ RM 4.60 (Post Bonus Issue adjustment) vs Present Post Bonus Issue RM 5.80 (26% Gain) 
 
The Average Portfolio Gain Year-To-Date 31st December (Based on equal shareholding weightage but excluding dividend gain which means actual return would be higher) : 56.3% Gain beating the KLCI Index YTD Return of 2.42% Gain  
 
To date, it is 12/16 winners against losers. Should you are keen to follow my writings, there are 4 ways to do so. I usually share my writings :
 
If you are keen to learn how to invest the right way and navigate the stock market, feel free to contact me at tradeview101@gmail.com. Please note, I am a fundamentalist, not a short term speculator or punter. 
 
Regards, 
 
Tradeview 
 
**Please note this is not a recommendation to buy or sell. It is also not an investment opinion or advice. Please seek professional advice when considering risk and making investment decision. I am not a "Guru" but I am a passionate financial writer who enjoy fundamental investing including the joys and sorrows that the stock market brings. The above mentioned stocks' price were based on the prevailing market price during my first mention in my writings. The record above is based on the assumption of a full YTD portfolio returns on a fundamental investing strategy of buy and hold.

 

 

  hhswong likes this.
 
CCCL Yes indeed more winners during crisis when those bought at the time market crash in March. But not those bought 5 to 6 months later. While holding at a longer horizon will see more fruitful gains. Wishing you a Healthy and Prosperous New Year 2021.
31/12/2020 11:04 PM

Tradeview Commentaries - To Glove With Love, Merry Christmas

Author: tradeview   |  Publish date: Thu, 24 Dec 2020, 8:36 PM


     



Dear all, it has been difficult year for most. It is especially tough for the B40 and those who have lost their job or had to undergo a salary cut / VSS. In these trying times, many struggled to get by and provide for the family. Even those with emergency funds set aside (The rule is minimum 6 - 9 months saved for rainy days) would probably have dried up by now in the event one is not able to find a job or for business to return to normalcy. Such is the state of the economy in the face of adverse pandemic circumstances. This is truly a shocking start to a new decade. 

During the height of the pandemic, I was having a meeting with one of the listed Singapore glove makers. It was a work meeting but I had the chance to ask him "how do you feel that glove stocks are now deemed beneficiary of Covid-19". He said "no money in the world, can replace the lost of loved one or having to see your love one suffer due to sickness, if I had a choice, I would like to see the pandemic end yesterday." 

In another interview with the IR present, my close friend who is a research analyst had a management meeting with one of the big 4 glove makers' son. During the management interview, my research analyst friend asked "why is your company increasing the ASP for gloves at much slower pace than your competitors?" The answer given simply "Gloves are PPE, which is meant to protect front liners and end users against this deadly pandemic. If we were to hike ASP of Gloves too arbitrarily, and in turn our distributors do the same, the one that suffer would be the end consumer. Those who can afford, it is ok. Those who cant afford, will then switched to alternative self-made PPE which are not effective against this fight."  

Both of these true stories was a humbling experience to me. It made me respect both glove makers entrepreneurs more and learnt that not all business was about profiteering or bottom line. There are entrepreneurs and owners who cares. This is probably due to the fact both of these founders did not come from money and build their business from ground up through hardship of life and poverty. They are rare but they do exist and they placed the importance of the welfare of their employees, end users far above even that of shareholders or investors like me. Ironically, my investment philosophy being a fundamentalist is choosing companies like this which has management that values employees, customer relationship as part of my investment portfolio. I always tell my readers, I rather pay a premium for wonderful management of good companies than pay cheap price for ordinary companies. 

It has been a whirlwind year for those who invested in the stock market be it out of passion, interest, need, desire or simply opportunity. I believe with the record high retail participation rate, many who invested in the market is because of the glove makers. I also know many institutional funds, retail investors and foreign funds have many a handsome profit from investing in glove stocks. EPF too, recorded commendable investment income from equities which would definitely go to help towards those who need early withdrawal from iSinar & i-Lestari programmes. 

I did mention I have written too much on the sector even though Glove stocks are only part of my all weather diversified portfolio. There are 2 reasons I am writing this article today : 

1. To give my gratitude to the glove sector as I did benefit from the stellar performance in share price like most others through 2020 and also the lessons learned from the glove sector be it in life and investment. I am actually very proud as a Malaysian that the glove sector can play a role putting Malaysia in international limelight in the fight against Covid-19. For once, not everything used by global population was manufactured in China or Vietnam or India but Malaysia.

2. Is to correct a misconception in today's news article below by the Executive Editor of Focus Malaysia, Mr Cheah Chor Sooi, who selectively highlighted one paragraph from my 14th December 2020 commentaries, calling it "Deceitful". I do not know you Mr Cheah, and I have nothing against you. But if you had the chance to read my blog, and all my past posting be it glove or non-glove related (I think there is no less than 50 articles in 2020 alone), you would probably realise I built my reputation over the past 6 years on transparency, accountability and objectivity. I am not some fly by night writer. My belief is not very much different from you who was an award winning Writer of the Year by Minority Shareholders Watchdog Group's (MSWG). Of course, I am no where as successful as you, I am just a financial blogger.  

You probably did not like the fact that my "Friendly Advice" came across as a generalisation that there is a concerted effort by various parties including the media to witch hunt the glove sector. I actually do not think there is a concerted effort by anyone. I only seek fairness, objectivity and no double standard in scrutinising across all industries. I cannot blame you as you probably didn't read my past writings. If you did, you would know I have been critical of Top Glove handling of labour issue and Covid-19 outbreak. If you did you would know that my favourite glove stocks are Hartalega and Riverstone which are my Long Term Value Picks who are true champions of ESG. If you did you would have read my letter published in Nayang calling out Koon Yew Yin's call on Dayang in view of protecting the small retail investors. If you did read my writing properly, you would know I am not absolving any law breakers of responsibility but if scrutiny is imposed it should be fair across industries like plantation, construction, steel, agriculture. 

I am an independent, objective writer who have firmly said NO to offers by syndicates to "goreng" stocks for pump & dump operations because I care very much about the little guys (retail investors) and hope the stock market can be an avenue for the pursuit of happiness just as it has been to me. I believe you are a reasonable man. Just as you do not like media being called out as bias or sensationalising news on the glove sector, I do not like being called "Deceitful" by you. It is a wrong choice of word unsubstantiated by facts. I would like to put it to you, personally, I have utmost respect for journalist, nurses and teachers who have the most underpaid but noble profession in the world. However, if having an objective, independent and differing view from you is regarded as "Deceitful" in your context, I would gladly stand firm in my belief and take it on over and over again. 

Merry Christmas and May 2021 be a better year for us all.  


_______________________________________________________________

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Food for thought: 
















  7 people like this.
 
Lewis Lee The "one of the big 4 glove makers' son" is Hartalega's CEO Kuan, obviously ...
24/12/2020 9:11 PM
Lewis Lee AFter reading this "Cheah Chor Sooi's articles", I can't help but feel that he should go and do more in depth research before embarrasing himself with his shallow opinion ...
24/12/2020 9:17 PM
coolinvestor when the media is defending themselves hard...u know tradeview is right. the media IS bias towards glove companies ....lol

when u defend, that means u have something to hide
24/12/2020 9:36 PM
Erudite Tq 4 bein impartial voice in i3 . No deceit. Don noe wat tt fella complaining. Ur writing, 1 of d most informative. Those bising-bising kasi sama dia.
24/12/2020 11:07 PM
enigmatic [hodl your shares] Took me a while to understand the scenario.

So, FocusMalaysia(FM) posted an article labelling one of Tradeview's article as "deceitful". FM thinks the media hasn't written negative things selectively to run down the glove industry. FM thinks the media acts as check & balance, report good news when glove companies earn plenty and report bad news when certain glove companies have poor treatment of employees. FM feels Tradeview is misleading people to think the media is biased against glove companies.

Now, Tradeview being labelled "deceitful" is hurt. "Deceitful" is a strong word. It may damage one's credibility & insinuate bad intentions. If Tradeview writes its articles in good faith, without its content bluffing readers, FM may have misinterpreted & inadvertently described Tradeview as "deceitful".
25/12/2020 1:12 AM
Sslee It is awesome that we have the capacity to use words that can bring healing and strength to others. The words that we speak can add joy, enhance hopes, and sustain the health of the people around us.

On the other hand, it is sad that we have the capacity to use words that bring hurt to others. The words that we speak can destroy, tear down, break down, and devastate the people in our lives. Speaking hurtful or demeaning words to others can result in their failure and low self-esteem. “The tongue has no bone, but it is strong enough to break a heart”, so they say.

This, therefore, means that our use of words can have a positive effect on another person’s life or, in some cases, a negative effect.

The choice, however, regarding which words to use is ours; Proverbs 18:21 says that, “The tongue has the power of life and death”. We possess the power to replace negative words with life-giving words that breathe vision, dreams and hope. We can choose to use words that encourage, refresh, help, build, uplift, and edify. It’s inconceivable how much kind words from our lips can inspire the recipient to change for the better, to grow, and to have a higher self esteem.

More so the written words. So think what are the written words that gives rise to both author response?

I wish all a Merry Christmas and a More Productive Year 2021.
25/12/2020 6:57 AM
Sslee https://en.m.wikipedia.org/wiki/How_to_Win_Friends_and_Influence_People

How to Win Friends and Influence People is a self-help book written by Dale Carnegie, published in 1936. Over 30 million copies have been sold worldwide, making it one of the best-selling books of all time.[1] In 2011, it was number 19 on Time Magazine's list of the 100 most influential books.[2]

Twelve Ways to Win People to Your Way of Thinking

1.The only way to get the best of an argument is to avoid it. Whenever we argue with someone, no matter if we win or lose the argument, we still lose. The other person will either feel humiliated or strengthened and will only seek to bolster their own position. We must try to avoid arguments whenever we can.
25/12/2020 7:25 AM
CCCL Win one friend, less one enemy. Merry Christmas and Happy New Year.
25/12/2020 8:19 AM
zhangliang Ignore naysayers. Focus on investing. Believers believe. Non-believers bugger off.
25/12/2020 6:39 PM
emsvsi Nobody is witch hunting the glove sector

And certainly nobody is using 'snippets' from the glovemakers mouths and their humble beginnings, or the 'dire' economic situation we are in to paint the picture that the gloves sector is 'extraordinary', or that these companies are 'Malaysian champions and that we should be proud of them as Malaysians' to curry favour and sentiment from the general public and investing community

And then playing the victim card that of just being a 'humble financial blogger' and nothing like the other writer
25/12/2020 8:40 PM
Erudite Eh malu la, Emsvsi. Balik ur genting forum don buat kecoh. Ur Genting TP rm12, damm comic la. Super rich coming from lu la. Nak komen use facts & brains, don’t insult with ur half wit Cybertrooper spamming teknik. Ini FocusM suka sensation news u bising 4 wat. We all 4low TV blog make money, mana u? Ur genting TP rm 12 even tho 2 condos with workers all got Covid-19 theme park still open, double standard, jangan tipu la. U think v all don read annual report, go c who board of director / chairman of genting baru cakap. Don’t mislead public la
25/12/2020 10:03 PM
Erudite It is clear Sekarang, the 1 who is wrong is u, EMSVSI. How much ur losses now Genting + GentingM + all the warrants? Counting chicken before it keluar? Lu ingat lu pandai? Cakap banyak, y u hide in Gua Tempurung nw?
08/01/2021 3:58 PM
zhangliang Erudite, nvm... ignore naysayers. We make money from gloves, he make money from Casino. Let him b
08/01/2021 4:00 PM

Tradeview Commentaries - A Time of Reckoning & The Battle of Titans

Author: tradeview   |  Publish date: Mon, 14 Dec 2020, 6:38 PM


    





Malaysia is a blessed country with abundant of resources, human capital and potential. Before the Asian Financial Crisis of 1997 / 1998, Malaysia was regarded as a "Tiger Economy" and even Bursa (then known as KLSE) was the third largest stock exchange by value after Tokyo and Hong Kong Stock Exchange. Today, countries which were once behind us have surpassed our country in terms of economic strength, competitiveness and stability. Countries such as China, South Korea, Taiwan, Singapore are far ahead with Vietnam, Thailand and Indonesia catching up. Thankfully, Malaysia still have strong economics fundamentals laid down from our forefathers with SME forming the backbone of the economy. However, with the Covid-19 pandemic onslaught, SME segment was badly impacted with SME association forecasting close to 100,000 to shutter or on the brink of closing down by end 2020. Official figures from SSM shows 30,000. The huge discrepancy is likely due to the delay in official reporting.  

The stock market has however performed extremely well comparing to regional peers throughout the year. At today's closing of 1662 points, Bursa is up 4.66% YTD. This is unbelievable considering what is actually being felt in the real economy. I think regulators like BNM, SC, Bursa has done well to support the stock market. Another major reason is because Malaysia is blessed with a competitive Technology and Glove Sector which sustained our stock exchange during the triple whammy of oil price crash, government change and Covid-19 pandemic. 

In fact, thanks to glove makers, Bursa, hit record high retail participation and attracted some foreign investments. Of late, due to the announcement of vaccines such as Pfizer, Moderna and its ongoing rollout, the healthcare index took a beating especially the glove and tech sector. The rotation of funds from growth to value stocks and beat down laggards was swift. Banks, Steel, Construction, Telco, Plantation, Tourism, Oil & Gas rebounded strongly while technology and glove stocks was hit The market rally has drawn continuous retail participation, comparable to local funds and more so than foreign funds. This has kept the stock market lively and vibrant with average daily value above RM 4 billion. 

This spectacular stock market rally can be seen all over the world, not only Malaysia. However, it is impressive considering our country went through an unprecedented regime change midterm. I believe this would not be possible if not for the strong retail participation and remarkable earnings performance which led to share price ascend of glove makers. If we were to look at the entire stock market of Bursa today, the only sector with strong earnings visibility and sustainability is the glove sector. Nevertheless, the sector has been thrown into the limelight for good and for bad. Praise were given for their contribution to the world supply of gloves in the battle against Covid-19 (65% of market share globally), resolving PPE shortage. Criticism being zoomed in on labour issue, Covid-19 outbreak in workers hostel, welfare and extraordinary windfall in income. I have covered various angles of glove sector in the past 9 months and do not want to repeat further. I have however, a friendly advice to fellow readers who are either in the investment banking research fraternity, media or authorities / politicians, in everything we do in life, be fair, reasonable and objective. Do not make judgments, comments or opinions with a coloured lens. The glove sector of Malaysia is one which should be proud of. I know these days any articles or news on glove sector attracts huge number of views. I know it because I can see the statistics in my blog & channel. Do not for the sake of attention and populist agenda destroy an entire sector that was organically grown through entrepreneurial spirit, hard work and grit. This sector is a golden goose of our country. We must preserve, protect and help improve it.

Today, Tun Dr M and Tengku Razaleigh join hands during a press conference to share their advice input on the state on the nation including potential hint on tomorrow's Budget 3rd & final reading where a vote will be required of all 222 MP. This has led to last minute selldown of the market close to 1.3%. I believe the stock market will continue to be impacted and profit taking will continue across the board until a political resolution is in place or the budget 2021 is passed without hiccups. For investors, be prudent, hold sufficient cash and do not chase blindly. Avoid loss making stocks, whatever recovery theme it may be & focus on earnings or yield as your north star in these foggy times ahead. If you do that, I believe the worst will pass and eventually, you will see the light again.  

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Food for thought: 














  2 people like this.
 
Agjl Hi tradeview, whats ur view on the soon to be lifted RSS? The end of gloves?
18/12/2020 9:40 AM
CynicalCyan Avoiding loss-making recovery plays like Airasia or Genting would have cost investors the rare opportunity to profit handsomely from bottom-fishing.
19/12/2020 1:14 PM
zhangliang genting ok la, plenty of cash. Airasia, onli gullible ppl believe in the company. Even b4 covid oredi doing badly AAX, Airasia. Govt cable help thema lot.Otherwise long time game over. Whoever buy now making mistake.
19/12/2020 2:16 PM
Erudite Tq 4 sharing.Politik isu over now can buy? still bullish 2021? Window dressing?
19/12/2020 2:18 PM
VenFx Glove Surely will come back and roaring again.
I just sit quietly and wait for that moment.

How much more to the furthur pressurised level ?
10% or 15 % ?

Am happy to slot in my 1st battalion
If a furthur drop of 7% from 18.12.2020 Friday closing.

Supermax & Careplus my monitor counters.
19/12/2020 2:24 PM
Sslee https://klse.i3investor.com/blogs/Sslee_blog/2020-12-19-story-h1538283970-Glove_sector_behind_the_profit_growth_story.jsp

A normal profit growth is by capacity increase thus sales increase, revenue increase and net profit increase but NP margin stay almost the same.

Under unnormal condition like covid-19 where demand spike and fear of shortage causing buying frenzy and price increase thus revenue increase, net profit increase drastically because NP margin increase by many folds

The 3X or 10X is an ethical question of how much the selling price allowed to increase before the question of taking advantage of a situation to make excessive or unfair profit arise?

The next question is what will be the NP margin once the demand spike by covid 19 is over and with the increase capacity and many newcomers joining the game?
19/12/2020 2:55 PM
Kimly2 Pity guy, bought high keep to low
bless u, dude



VenFx Glove Surely will come back and roaring again.
I just sit quietly and wait for that moment.

How much more to the furthur pressurised level ?
10% or 15 % ?

Am happy to slot in my 1st battalion
If a furthur drop of 7% from 18.12.2020 Friday closing.

Supermax & Careplus my monitor counters.
19/12/2020 2:24 PM
20/12/2020 6:19 PM


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