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Author: tradeview   |   Latest post: Tue, 26 Jan 2021, 10:39 PM

 

(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

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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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

(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.




 
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  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.

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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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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.

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(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 to sign up. Please note, I am a fundamentalist, not a short term speculator or punter. If you are looking for a quick trade, I do not provide such services. However, if you would like exposure to a sound investment education to build a sustainable long term investment portfolio, feel free to reach out. Thank you. 

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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  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 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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  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

(Tradeview 2020)- Long Term Value Pick 6 : Peterlabs Holdings Berhad, My Gratitude Stock

Author: tradeview   |  Publish date: Thu, 10 Dec 2020, 10:36 AM


   





Dear all, thank you for the support as Tradeview Public Channel has broken 6000 followers today. Maybe to some it is an ordinary feat but to me, I am very thankful for the interest in my writings. To be honest, as a writer with a fundamentalist investment philosophy, this journey was hard as it is extremely tough to build up readership interest or following because of the society's general tendency towards instant gratification, quick returns and "get rich now" mindset. Most would know I never write or advocate loss making penny stocks or companies with bad fundamentals however "beautiful the chart / headline news". This is because I believe strongly that investing in the stock market is a long term endeavor to built wealth over time, not a one hit wonder which disappears after the hype. This mindset have served me well through the years. 

Whether it is the 1920s or today, the stock market has captured retail investors imagination. This is particularly apt in 2020 as Bursa records historical highs due to retail investors participation which filled in the void of close to RM 23 billion of foreign funds net selling for the year. When most said the end of loan moratorium means the significant reduction of retail participation, it would appear experts undermine the retail investors' enthusiasm & appetite for the market. The market continues to rally with local funds playing mere supporting role, foreign funds selling, and retail investors buying. However, to err on the side of caution, please remember to be very careful in your stock investments especially in a heated market. Avoid loss making penny stocks and news driven stock plays. The outcome is highly dangerous & risky. One wrong pick can wipe a year's effort.

To thank everyone for the continuous support especially those who have been with me since I started writing publicly 6 years ago, I would like to share publicly a small cap fundamental stock which meets the criteria a strong balance sheet, earnings track record and good growth catalyst. Whether there is big cap, mid cap or small cap stocks, there are good companies in Bursa worth considering over speculative plays. The stock I am referring to is Peterlabs Holdings Berhad (Peterlabs). Peterlabs is in the business of manufacturing animal health products, animal nutritional feed additive and veterinary pharmaceutical to serve the livestock industry.  It is one of the rare small cap stock with continuous growth in revenue, earnings track record, consistent dividend payout, healthy yield, professional management and net cash position. Recently, they have moved to acquire 60% stake Thye On Thong Trading SB (TOT), which is an established distributor of notable consumer goods / daily essential brands with more than 30 years history. The terms of the M&A is fair and synergistic (including for distribution of Peterlabs products). I like it because of the profit guarantee and commitment by existing owner of TOT to continue to be a part of the business with a 40% stake. 





Apart from the general considerations, I like the stock despite the small outfit is because of how well it is managed. The CEO of Peterlabs, Mr. Lim Tong Seng has accumulated over 33 years of experience in the livestock industry, mainly in the animal health and nutrition sector. Mr Lim's career in the livestock industry began when he joined the feedmill division of Industrial Farm Pte Ltd in 1978 as a Feedmill Executive. In 1984, he assumed the position of Production Executive at Agrinuser (M) Sdn Bhd, a feed additive premix manufacturing company. In 1989, he founded Benuser and spearheaded the company's operations in manufacturing various feed additives and premixes for the livestock industry. In 2002, Mr Lim left Benuser and co-founded PeterLabs, Osmosis Nutrition and PLON Synergy together with two (2) directors from Chern Tek, namely Teo Chin Heng and Dr. Teo Kooi Cheng. 


When a management is technically strong, that is an added bonus. Having knowledge in the industry means the company is not a fly-by-night operations run by cowboys. To begin with, most loss making penny stocks in Bursa have this problem hence my apprehension in looking at micro cap stocks.  However, after an in-depth study of the company, it gives me comfort to invest in Peterlabs. Buying into a company is equivalent to buying into a management. If you do not trust the management, do not buy the company. 



The operating cashflow is healthy with RM12 million (42% increase YoY) likely due to improvement in receivables collection as well. The earlier private placement exercise (share price issued at 20.6 sens has also contributed to a strong balance sheet with cash amounting to RM27 million (net cash RM22 million) which stands at 0.49x of the total market capital. With a strong balance sheet and generous management, the dividend payout has always been rather consistent for the past 7 years except FY 2019. However, management did compensate with a higher dividend payout for FY 2020 which comes up to 4.16% yield at current market price of 24 sens.

To be honest, Peterlabs has always been a consistent feature in my portfolio. I have held it through the years and revisiting now is because of the new growth catalyst which will provide immediate term earning visibility at least for the next 2 years. This is the acquisition of 60% stake in TOT for a sum of RM 3 million in cash and issuance of  39 million new shares to TOT owner at 20 sens making the full payment consideration to be RM 10.8 million. This is good method of acquisition as it ties the interest of TOT owner with Peterlabs. Furthermore, the owner of TOT would not be silly to accept purchase consideration in shares if he is not confident with the prospects of the deal. A good indication for shareholders is the price tag of issued shares of 20 sens forms the base as well for the stock. This takes care of the downside for investors.

All companies have some risk factor and for Peterlabs, it would be the cost of materials which is imported to be used for manufacturing the end product. It means a weak Ringgit will cause margin compression due to higher forex impact (importation cost). On the contrary, a strong Ringgit will help lower cost of raw materials and enhance margin. MYR has been strengthening for the past few months and if this trend continues, Peterlabs margin would improve.  

At current share price of 24 sens, I am of the view the share price is still undervalued and there is more upside because of the past track record combined with the future potential. Although I am of the view that near term impact on the core business would still exist due to MCO / pandemic aftermath but based on my calculation, the valuation should be in the range of 30 sens taking into account of at least RM 4.5 million of guaranteed profit in the next 2 years as per the acquisition deal. 


_______________________________________________________________

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  2 people like this.
 

Tradeview Commentaries - "Risk On" For Financial Markets?

Author: tradeview   |  Publish date: Tue, 8 Dec 2020, 6:11 PM


  



Record high for Dow, SP500 and Nasdaq last Friday was a huge boost in confidence for participants of the financial markets. The global stock market participants are clearly risk on, with bullish mode and relying on a abundant of reasons to justify the rally. 

1. Liquidity due monetary policies of central banks around the world

2. Vaccine optimism and potential economic reopening 2021

3. A hopeful new Biden era ushering multilateralism and ending of trade wars 

4. Weakening USD and rebounding of commodities market

5. Inflow of funds into emerging markets 

Cumulatively, all these are strong reasons for a bull market. Locally, even KLCI Bursa closed at 1622 today with 16 billion in volume and 7.2 billion in value, erasing losses for the year to close above January 2020 levels. All naysayers which said if Trump is gone, stock market and economy will collapse are now proven wrong. The big question remains is whether the rally is sustainable? There ought to be some correction, no?

Whether we agree with the stock market rally or not, it doesn't really matter anymore. The stock market and the larger economy is clearly at a disconnect. This is the effect of releasing large amount of liquidity into the economy. Although our government coffers are limited, our country monetary policies consist of loan moratorium, SOCSO, and EPF 1 & 2 early withdrawal. This is akin to bringing forward future earnings / income to the present. Raising debt ceiling and borrowing more to spend now to spur the economy is what's being done by most governments. This has structurally change the stock market direction. It can be seen from the banning of short selling, extension, holding back on force selling, the stock market is being prop up by agencies.

The worst in terms of the stock market is definitely behind us. Nothing can be worst than "March Plunge 2020" when Covid-19, oil crash and government change happen all at once. The strategy forward, should simply be to have 30% of cash on hand at all times (in case of any untoward incidents like sudden General Elections), buy into fundamentally sound stocks with minimal debts or net cash and not to get ahead of ourselves or too gung ho on recovery stocks especially loss making stocks. Sell into strength for stocks that hit TP or exceed Fair Value. I will maintain this strategy going into 2021. A gentle reminder to be careful of loss making companies especially penny stocks that are making announcements on deals / vaccine related plays etc without basis. 

As for the Glove stocks, it will remain a solid feature in my portfolio. I believe unequivocally it will rebound and the current levels are close to the bottom. There are no better value stocks in the market currently in terms of earnings, yield, balance sheet and outlook. Those who thinks otherwise, is making a mistake ignoring fundamentals. 

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  Be the first to like this.
 

(Tradeview Commentaries) - The Glove Dilemma

Author: tradeview   |  Publish date: Tue, 1 Dec 2020, 10:24 PM


 


 

 
 
 
I am quite hesitant to write another glove commentary as I believe that my earlier article on "Yield Will Protect Gloves Share Price From Falling Further" would have  ease investors' concern on the sector. Shortly after I wrote the article, Top Glove Chairman during the press conference mentioned Top Glove yield is expected to be more than 6% in FY 2021. Later on, a clarification statement to Bursa by Top Glove indicates the yield would be 8% based on Bloomberg consensus forecast in earnings and existing 50% dividend policy. This is in line with my forecast of Top Glove's yield and by extension it provides a good guesstimate of FY 2021 performance for the glove sector as a whole. Even recent Comfort Gloves results was unbelievable. 
 
After Top Glove conference, it attracted investors interest for awhile. Sadly, it was short lived as the share price for Top Glove stabilised before the issue of windfall tax was raised again by  politicians before the Minister of Finance closed the topic for good. As the glove stocks was finally showing some colour, the continuous Covid-19 case reports and subsequent Labour Department raid for Top Glove Ipoh dorms dampened sentiment further. This led to opening of an investigation paper when the law was said to only take effect next year under a new act by the Minister of Human Resource himself in the media.  
 
With all these avalanche of bad news impacting Top Glove, it would be very normal for the share price of glove stocks to be impacted and underperform. This negative sentiment will naturally spill over to other glove stocks for fear of similar kind of targeting by Ministry of Human Resource / Labour Department. If indeed Malaysia's Labour Law and Labour Department is fair and efficient in their inspection or enforcement, I believe this issue would not only be applicable to the Glove Sector but others such as Plantation, Construction. 
 
The glove stocks share price movement has nothing to do with trends, fundamentals or earnings performance anymore. It comes down to only 1 important factor -  Confidence. Investor Confidence, Consumer Confidence, Business Confidence are all key driving forces that moves the machinery of the economy forward. In the stock market, investor confidence is the most important. If there is no investor confidence, it is  hard for the share price to perform. Investor confidence is a qualitative factor that is tough to quantify via common financial analysis. 
 
I am by no means absolving Top Glove of their responsibility in providing a good accommodation, welfare and environment for their foreign labourers. Top Glove who always tout themselves as the world's largest glove manufacturer with 26% of world market share should have taken preemptive measures to ensure such problems are rooted out from their system in entirety. Top Glove not only represent the country's proud glove sector, they also put Malaysia on the map. This would be a painful but good learning experience for the company. I believe Top Glove will come out a better and stronger corporation after this string of incidents.
 
Most know that I am  believer in the glove story, as it has growth, fundamentals and importantly the scale of a global market to do well continuously. I have written many articles on the sector and although my top picks of the sector has always been Riverstone and Hartalega, I still deem Top Glove as a very sound company. In fact, I think companies like Sri Trang, Kossan, Supermax, Comfort, UG Healthcare are strong. Many regard the glove companies as "lucky" to benefit from a global pandemic. A prominent politician even call it "Durian Runtuh". I beg to differ. Luck is when preparation meets opportunity. The glove makers that survive from the intense competition of over 300 players in a crowded sector in 1990s to only 45 world class players today is no mean feat. They did so through sheer grit, hard work and innovation with no direct subsidy or bail out from the Government of Malaysia. In addition, they contribute significantly to employment opportunities and tax revenue & levy to the company. Latex glove makers also help the dwindling rubber planters and Nitrile glove makers drew foreign investment like British's Synthomer to Malaysia. Even Petronas is venturing to Nitrile Butadiene (raw material for glove industry) seeing the potential in the industry. In a nutshell, the glove sector despite this period of negativity is a sector we as Malaysians should be very proud of. We have no FAANG corporations in our country, but we have these glove giants. 
 
So if you are in a dilemma whether to hold glove stocks, I just have this to say - "It cant get any worst than this". Vaccines, Covid-19 cluster, investigation / fine by Labour Department, Customs Detention, windfall tax rumours, pretty much anything you can think of has been thrown at the sector. The glove sector will survive just as they had done so for the past 30 years. There is no fundamental or structural change to the companies. It is because of negative headlines, local funds who has met their KPI for the year and not taking  positions to support the sector, and retail investors who lack the confidence to invest in the glove sector contributed to the weak share price movement.  When all these negativity blows over, local funds have to chase yields and returns, retail investors become bold again, the glove stocks are the most attractive to keep in your portfolio. Hopefully this  help clear some of your doubts. 
 
 
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Food for thought: 
 
 

 



 

 

 
 
 

 

 
 
 
Labels: TOPGLOV, HARTA
  4 people like this.
 
sarafizoo Excellent article
01/12/2020 10:56 PM
jolow sell
01/12/2020 11:00 PM
gohkimhock It is game over. Overvalued.
01/12/2020 11:13 PM
gohkimhock Finance and Construction counters will continue to attract interest due to recovery.
01/12/2020 11:14 PM
Erudite Tq Tradeview 4 d article. Agreed
01/12/2020 11:37 PM
greedy44444 Still promoting glove stocks ? Glove companies going to become the largest covid cluster soon.
01/12/2020 11:45 PM
lcchyun Well written article with facts presented!
02/12/2020 8:23 PM
amateurJR Dun be the last to escape, game over for gloves. All sifus who earlier bought gloves have disappeared, all are mostly new ID usernames in glove forum.
03/12/2020 10:14 AM
Lukey_Greek Yes, good yield for next few years. But do expect a big capital loss after that!
03/12/2020 9:15 PM

(Tradeview 2020) - EPF iSinar Withdrawal Programme & The Stock Market

Author: tradeview   |  Publish date: Sat, 28 Nov 2020, 2:24 PM


 



Dear all, many have emailed me with the concerns on the potential impact of the iSinar programme expansion allowing 8 million members to withdraw RM10,000 from the "sacred EPF Account 1" announced by Tengku Zafrul recently over the week. Largely, I can segregate the gist of questions to these 4 points :

1. Should EPF savers still leave their money in EPF or withdraw to the maximum allowable limit?

2. Will the dividend for EPF next year still be good?

3. If the EPF is financially sound, why did the CEO of EPF said there is a need to liquidate the assets to meet surge in withdrawal demands and shortfall? 

4. If EPF liquidate assets, would the KLCI Bursa stock market be impacted?

I shall answer the questions point by point and try to avoid any comments on politics but solely focus on the economics behind this issue. 

On Question 1 :

I think it comes down to individual financial circumstances to make this decision. For the longest time, I have always held on the belief that EPF money shouldn't be touched until the very last resort. It is the savings for your old age so that you do not need to work in McDonald's when you are 70 or 80 years old when your savings run dry and normal employment opportunities are no longer available to you. Allowing withdrawal now is also in expense of savers, who maintain good discipline and fiscal responsibility over the years to enjoy the fruits of their labour in the twilight years. 

However, the counter argument is the Covid-19 pandemic has brought many households which may suffer from loss of jobs, pay cuts or business closure to their knees. If one cannot survive today, there is no future to talk about. This is especially true for the B40 & M40 segment. Near my office, there used to be only 1 Nasi Lemak seller by the roadside. Today, there are 3 Nasi Lemak and 1 Chee Cheong Fun sellers within 5 mins walking distance. It is such observations that made me understand the plight of others better. 

My view would be to only withdraw if you already have absolutely no where else to turn to as the final resort. If you are intending to withdraw to buy a new car, upgrade your house or spend on a new iPhone, this would be grossly wrong. As for savers, EPF by law is required to give a min 2.5% return per annum to members and at this rate of return, it is still higher than all Fixed Deposit rate given by commercial banks today due to the 100 basis points OPR rate cut through the year by BNM. If look at the chart above of EPF dividend performance for the past 15 years, the worst performance was in 2008 during the Global Financial Crisis. Even then EPF declared 4.5% dividend yield then.

Additionally, I conducted an internal poll with my private group subscribers. 79% would leave their EPF funds in Account 1, 15% would withdraw the maximum allowable limit and 6% would leave half and withdraw half subject to eligibility. 

On Question 2 :

Prior to iSinar initiative, I was still rather confident that the dividend to be declared next year would be quite good, if not better than last year's performance as the stock market did very well this year especially when compared to regional peers. The stock market has rallied from a low of 1208 during the "March Plunge" on 19th March to a high of 1607 as at last Friday. This is despite the strong headwinds of a pandemic driven economic recession. Even domestic bond markets are performing well with large inflow due to attractive yield compared global bond market low yield. After the iLestari and now iSinar initiative, in addition lower EPF contribution inflow as many members has either loss their jobs, suffered pay cut or companies have closed down, the net inflow vs outflow gap widens significantly and likely it will be in negative territory for EPF this year. This would mean the potential dividend return next year would probably be lower than last year. In the event it matches last year's performance, the full impact will be felt in the years down the road. This is in line with what CEO of EPF, Tunku Alizakri Raja Muhammad Alias said "There is no such thing as a free lunch" in reference to the need to sell off assets to make funds available to depositors withdrawing from their EPF Account 1 & 2.

On Question 3 :


I believe many have a misconception when it comes to the CEO statement on liquidation of assets. EPF like any other funds, have to be invested in the equity, bond, real estate or money market instruments. Cash / dry powder cannot be the the bulk of the holdings as EPF mandate is to deliver returns to members. To do so, the cash on hand cannot go stale. However, this does not imply that EPF is lacking in cash allocated for yearly withdrawal. In fact, it is because this year is an exception / anomaly as a result of the pandemic driven economic recession and policies made by the Government which caught EPF asset allocation practice off guard. Hence, it cannot be business as usual as "something's gotta give". 

EPF will need to liquidate assets or some of their existing position in bonds, equities or money market instruments to meet the urgent demand and need for withdrawal of members especially since Account 1 is now accessible. 

A simple example : Imagine you who invest in the stock market actively, suddenly with very short notice, your wife or husband tells you that there is  emergency need for funds, hence you need to pull out money from the equities market now. What will you do? Will you sell your profitable positions which you believe can do better if you continue holding or will you sell the loss making position which you believe can rebound? Either way your investment plan is affected. This is especially bad for long term value investors who makes exponential returns in later stage of the investment horizon. EPF in essence is a long term investor. This would mean EPF will be impacted one way or another from the liquidation of assets / position. 

On Question 4 :


This is the one which most investors in the stock market are concerned about, it is important to understand the vast investment holdings of EPF extends beyond local stock market. EPF would have options to sell foreign equities, bonds in global markets outside of Malaysia equities. If they opt to sell local equities more than the others, it would definitely cause a sell down in the KLCI Bursa. I believe EPF wouldn't do that but only embark on selective profit taking in sectors that have done well this year. Hypothetically, if I am the decision maker, selling foreign stocks which has ran up to record high would be a quicker and better option without causing systemic risk to the local financial markets. Bonds market where yields are less attractive though would be an issue in terms of the price of sale. 

In addition, if members of EPF withdraws funds from Account 1 and put it back into the equities market, spurring another retail rally, there may be some net-off effects. Hence I am of the view the risk of large self off in local markets is not high at this moment although there will be some selling pressure unless foreign funds make a comeback with a bang. We must remember it is local funds that has supported the KLCI Bursa stock market with retail investors filling the void as foreign funds sold stocks in Bursa to the tune of RM 23 billion to date in 2020. 

Conclusion :

The intent of this article is to alleviate some concern of readers and assist one in better understanding the situation with EPF moving forward in the near term. My humble view, if at all, the government should not be asking people to dip into their own future savings to save themselves but should use government internal funds to support these community. Funds allocated for select new infrastructure projects, repairs or upgrading of building work can be postponed as it is not of the utmost priority now compared to the livelihood. The increased allocation for controversial issues such as PMO, JASA departments can also be reduced to compensate for the shortfall. My fear is this allowance for withdrawal will set a precedent for the future and open the floodgates. After all, EPF is one of the last few bastion of our country's esteemed institutions that have yet to be exploited at the expense of the Rakyat.

_______________________________________________________________

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Food for thought: 











  hhswong likes this.
 

(Tradeview 2020) - Yield Will Protect Gloves Share Price From Falling Further

Author: tradeview   |  Publish date: Sat, 21 Nov 2020, 3:10 PM






In 2019, EPF declared 5.45% Dividend yield for Conventional Deposits and 5% for Shariah Compliant Deposits. The Divided Yield is highly anticipated every year by savers especially retirees who would rely on yearly withdrawal to sustain their livelihood. If the EPF yield declared for that year is bad, there will be huge public backlash. Hence, Government of the day will do whatever they can to ensure dividend payout is good or at least above expectations.

Source : RinggitPlus

In fact, if we compare the pension fund returns for EPF to others around the world, our EPF has one of the best performance in the world. Now, when it comes to EPF savings, savers are very particular about dividend yield given. What I find strange is that majority of investors in the stock market, especially during bull runs is no bothered about Dividend yields. Naturally, these investors believes that the stock they are investing should give better returns in terms of capital gain compared to the miniscule dividend yield. 

Following the vaccine news announcement by Pfizer & Moderna, the vaccine positivity has led funds to rotate away from  high growth stocks to value stocks. A good example in Malaysia would be the shifting of funds from Tech & Glove stocks to Banking and some recovery themed stocks. This has resulted panic selling across growth stocks and panic buying in value stocks. This chart below as a comparison is very telling :








Now the question is whether such movement in the stock market is warranted? I think there are two points to this question.

One, there is a difference between value stocks and recovery stocks. Value stocks are company with strong balance sheet and fundamentals which business were somewhat impacted by the pandemic / MCO. The value stock has enough assets, cash to navigate through the pandemic without the risk of default. These stocks are like the banks, telecommunication, utilities  and insurers.

Two, recovery stocks are referring to companies which are mostly badly affected by the pandemic such as tourism, hospitality, airlines, retail, travel etc. These companies are not equivalent to value stocks because these companies may not have strong fundamentals to begin with. In effect, it means there is default risk to these companies. So I do agree in buying value stocks and always keeping them in your portfolio but I do not agree that one should look at recovery stocks any time in the near future. 

The reason is because even if vaccines are rolled out, it will be done gradually and the lasting impact of Covid-19 is not eradicated overnight. These recovery stocks will take a long time to return to pre-Covid 19 level earnings. Currently, the market investors or speculators are just riding on the optimism of reopening of economy and resolution of the pandemic ahead of time. This brings me to why Glove stocks are still necessary to be kept in your portfolio even after vaccine announcement.






For the longest time, Glove stocks were given many different categorisation by financial analysts. Some called Glove stocks as cyclical, some say defensive, some say growth but which category does Glove stocks truly belong to? 

It is cyclical in nature due to the events of the world (HIV, SARS, H1NI, EBOLA, Covid-19) and fluctuating raw materials cost (Latex Gloves depends on Natural rubber, Nitrile Gloves depends on Nitrile Butadiene Rubber which is linked to oil). Why then some call Glove stocks defensive? The key reason in my view is because of its designation as part of healthcare sector and it is apolitical with continuous demand over the years. 

In my humble view, Glove stocks are quintessentially growth stocks. There is no denying their growth stock nature just by looking at their earnings and share price chart over the past 10 years. But, due to the supernormal profits in FY 2020, 2021 and potentially 2022, Glove stocks are moving from Growth to Yield.






One of the key determinant of whether a share price moves up organically is earnings. Excluding M&A and corporate exercise, the direct correlation between share price uptrend is earnings growth. With earnings growth, the increased in profits / excess cash will be used to lower debts, pay dividends, investments, capital expansion or cash reserves. This is why I say Gloves are moving from Growth to Yield stock especially so within the next 1 year window. Just look at Top Glove as an example, it has in place a 50% Dividend Policy. Which in effect means, 50% of the profits would be used for dividends to reward shareholders every financial year. So let's do a simple back of the envelope calculation to understand the potential dividend that Top Glove will declare in FY 2021. 



Top Glove : 

FY 2020 Profit after Tax = RM 1,867 Billion              50% Dividend Policy = RM 934 Million 

FY 2021 Profit after Tax = RM 10,378 Billion            50% Dividend Policy = RM 5.19 Billion

FY 2022 Profit after Tax = RM 5,295 Billion              50% Dividend Policy = RM 2.65 Billion


The current share price is RM 7.30 as at 20th November :
 
The Dividend per share for FY2020 is 11.8 sens which translates to Dividend Yield of 1.6% 

The Dividend per share for FY2021 is 63.5 sens which translates to Dividend Yield of 8.7% 

The Dividend per share for FY2022 is 32.4 sens which translates to Dividend Yield of 4.4% 

Do you think the current share price of Top Glove is cheap or expensive based on looking at its earnings and yield? Objectively, it is undervalued even looking at FY 2022 where the analyst projects a fall in earnings due to the end of Covid-19 pandemic. Taking a normalise averaged out Dividend Yield across 3 years, Top Glove shareholders at current share price would enjoy 4.9% per annum.





Now, lets turn to Hartalega. It has 60% Dividend Policy where 60% of the net profits every financial year are distributed to reward shareholders. So let's do a simple back of the envelope calculation to understand the potential dividend that Hartalega will declare in FY 2021. 

Hartalega: 

FY 2020 Profit after Tax = RM 435 Million              60% Dividend Policy = RM 261 Million 

FY 2021 Profit after Tax = RM 2.88 Billion               60% Dividend Policy = RM 1.73 Billion

FY 2022 Profit after Tax = RM 5.07 Billion               60% Dividend Policy = RM 3.04 Billion


The current share price is RM 14.40 as at 20th November :
 
The Dividend per share for FY2020 is 7.75 sens which translates to Dividend Yield of 0.55% 

The Dividend per share for FY2021 is 50.5 sens which translates to Dividend Yield of 3.5% 

The Dividend per share for FY2022 is  88.7 sens which translates to Dividend Yield of 6.16% 

Similarly, do you think the current share price of Hartalega is cheap or expensive based on looking at its earnings and yield? Objectively, it is undervalued especially looking at FY 2022 where the analyst projects a continuous growth in earnings despite the end of Covid-19 pandemic. Taking a normalise averaged out Dividend Yield across 3 years, Hartalega  shareholders at current share price would enjoy 3.4% per annum.




You can see that company earnings, growth and yield are all correlated. The most important point to takeaway is this - the company's share price should be determined by its ability to deliver earnings first, grow earnings second and sustain earnings third. This will naturally form the transition phase of a company from growth to value to yield stock. 

With that in mind, do you think that the Glove stocks, both Hartalega (RM14.40) and Top Glove (RM7.30) specifically, would be trading at current price or even lower when the coming years they would be having a Dividend yield of 3.5% & 8.7% in FY 2021, 6.16% & 4.4% in FY 2022? Definitely no as investors and funds who chase for yields will move the share price up. The worst case scenario - you still get to collect dividend at a higher rate than FD.




I understand everyone have their own view and opinion on the glove sector because it is an industry that is relatable, understandable and Malaysia is the world leader. The scrutiny adopted towards the sector is of higher standard compared to other sectors because of the access to information and knowledge. Whether one uses DCF, PER, Dividend Yield or EV/EBTIDA to value glove companies, at the end of the day, valuation is an art, not science. There are many factors to consider and it is hard to say one's valuation method is better than the other.

This was an article I wanted to write a long time ago during the September Glove selloff. I held back from publishing because I was anticipating Glove earnings season would clash with a vaccine newsflow month which may lead to a potential selloff. I was hoping that readers and investors who are rational would be able to see the record earnings and not succumb to headlines news and fear to panic sell. Sadly, many neglected to view the facts & data objectively. Even some (not all) professional analyst were similarly panicking where their judgment was impaired by mainstream view and "herd mentality".


The recent good news shows that what EPF is doing is in line with the key message in my article. EPF was the big buyer on 17th November 2020 (Tuesday) when gloves were still being sold off after Pfizer and Moderna announcement. EPF did not buy small as they bought close to 174 million shares more than RM 2 billion worth bringing them above the 5% substantial shareholding level. Hartelega being my Long Term Value Pick means there is little you need to worry about and EPF being a long term shareholder buying into Hartalega is a strong validation of this investment thesis. It is also a confidence booster to the sector.


My simple conclusion remains :

1. Severe shortage of gloves in the market, 
2. Earnings visibility for at least 1 year minimum for the sector, 
3. The companies will be delivering continuous record earnings in coming quarters 
4. Transition from Growth to Yield or Growth + Yield stock,
5. With the recent selloff, Glove stocks have become very attractive valuation wise. 

If you are wondering whether you should still hold glove stocks in your portfolio, that is a decision you must make on your own. However, the history of the financial markets has taught me that yield is very important to investors and funds, hence it will ultimately form the bottom to protect glove stocks from falling further. When the downside is protected, the upside takes care of itself.

_______________________________________________________________

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Food for thought: 










Labels: TOPGLOV, HARTA
  3 people like this.
 
sikusiku Something else to consider in your article here.

Top Glove has been aggressively buying back their shares, although aggressive is a somewhat arguable term - depending on which side of the fence you sit on. Their buyback is capped at RM70 million per day, although of course as outside investors, we do not know what the upper limit for the buyback price is set at before buybacks discontinue.

Now whilst our beloved Uncle Koon has of course condemned the buybacks as being counterproductive (since he views it as management trying to support the share price), whilst at the same time throwing in a plug praising his flavour of this time, Supermax - heh, I think there's one other view one should look at.

TG will be issuing a dividend of 50% of their net profit for the quarter. That's their stated policy.

What some investors may not realise is that the their cash flow is far more robust than net profit simply because of the advance payment (deposits/prepayments) paid by buyers, way in advance of delivery. As I understand it, spot order deposits are at around the 50% range, whilst longer term orders (extending up to the 650-660 day backlog) have a deposit of around the 20% range.

Deposits are not counted as profit. Profit is only recognised upon delivery of the goods. Thereafter deposits will then be categorised as revenue, along with any balance of payment.

It is possible for TG to declare the bulk of the prepayments as dividends. They can do so and recognise it as a special dividend issue.

Alternatively though, there is share buybacks. Consider this, there is still another 12 days of trading before the expected release of 1QFY21 results by Top Glove (tentatively set at 9 December).

If you do the math and assuming that TG continues to buyback RM70m worth of shares, up to the end of day of 8 December, and assuming the share price is bought back even at an assumed higher average price of RM8 per share, the amount of treasury shares would then exceed 2.5% of the company's total number of shares.

They could very easily issue a share dividend of 1 for 40 with that amount. Or a higher amount assuming the average buyback price is lower of course.

From the major shareholders perspective (inclusive of the founder), they get to boost their own shareholding by a minimum of 2.5%, without any outlay or activity needed on their own personal trading accounts.

The buybacks then aren't a way of supporting the share price alone, but for the benefit of shareholders (especially the major ones).

How big a dividend are we expecting for the upcoming quarter? Let's put a conservative 10 sen nett per share (high unlikely, since EPS should be MORE than 20 sen for the quarter). At 10 sen against the current RM7.29 price, that's a 1.37% yield for the QUARTER.

What about if a 1 for 40 share dividend is also issued? Using the current share price as a baseline, that's equivalent to another 18.225 sen dividend. Making the QUARTER'S payout equivalent to 3.87%. Pretty good, no?
21/11/2020 5:36 PM
stockraider Of all the newcomers to Gloves...mahsing hold the greatest Prospect loh!
21/11/2020 6:07 PM
emsvsi The writer has a low IQ

There are recovery stocks that have strong balance sheets that are ALSO value stocks because they are very cheap AND that pay dividends

That stock is Genting Malaysia / Genting

In 1 years time we shall see the performance of gaming companies vs the hype of gloves

The stock market is a voting machine in the short term, a weighing machine in the long term

Gaming is forever and eternal and will once again show its enduring quality

Sincerely,
EMSVSI
21/11/2020 6:19 PM
Erudite Excellent write up. Good article. Tqvm 4 d assurance
21/11/2020 6:21 PM
stockraider The problem is the covid19 affected stock can survive b4 covid19 over leh ?
21/11/2020 6:22 PM
Erudite Emsvi, who r u 2 call people low IQ. Who gv u d rights? U can’t even write a proper article. Look in d mirror b4 insulting. Can’t even read accounts talk crap. Low IQ? U can’t even do stock valuation. Super embarrassing.
21/11/2020 6:27 PM
stockraider Simple mah...!!

Look at the logic loh...u r investing in Gloves stock bcos of 1 or 2 years good earnings or R u investing for the long term leh ??

Surely sustainable good share price is not depending on just 1 or 2 yrs good short term earnings mah...!!

If that is true...the conclusion below missed the point loh..!!

My simple conclusion remains :

1. Severe shortage of gloves in the market,
2. Earnings visibility for at least 1 year minimum for the sector,
3. The companies will be delivering continuous record earnings in coming quarters
4. Transition from Growth to Yield or Growth + Yield stock,
5. With the recent selloff, Glove stocks have become very attractive valuation wise.

If you are wondering whether you should still hold glove stocks in your portfolio, that is a decision you must make on your own. However, the history of the financial markets has taught me that yield is very important to investors and funds, hence it will ultimately form the bottom to protect glove stocks from falling further. When the downside is protected, the upside takes care of itself.
21/11/2020 6:28 PM
williamh My view is it starting to go south,dont hesittated to sell
22/11/2020 7:08 AM
Pgraduate123 Genting n genm already Uturn last week, and gloves uptrend... Tomorrow will continue up till 2023
22/11/2020 12:04 PM
Erudite agree with pgraduate123
22/11/2020 12:09 PM
2021money simple buy profit then sell, buy profit then sell, profit money is king. why keep ? buy and sell, easy money......
22/11/2020 12:24 PM
witan Unfortunately market sentiment has changed dramatically since vaccine news have come out. Everyone knows that glove is going to produce stellar result next year but how about in 1-2 years time.

Eventually glove price will go back to its normal. How soon?? We dont know the answer.

I definitely dont want to hold the high price ticket by then.
22/11/2020 12:58 PM
Noned Big boys always at the buy side..rain or shine..bullet proof..
Retail players pls set n monitor your cut loss b4 buy any stock..
22/11/2020 2:27 PM
CynicalCyan If yield protects falling stock prices, why didn't it protect BAT? Stock market sentiments still play a vital role.
19/12/2020 1:08 PM
zhangliang BAT wrong ex buddy. BAT went thru structural change. Sold factory, move manufacturing facility. Dividend one off & big drop from b4. Not apple 2 apple comparison. Apple 2 orange.
19/12/2020 2:14 PM
Erudite Market retail investor dunno how important DY is until d time comes den too late
19/12/2020 2:20 PM

Tradeview Commentaries - Market Irrationality Swings Both Ways

Author: tradeview   |  Publish date: Fri, 20 Nov 2020, 12:44 PM


         




Dear all, I hope my constant writing is not becoming a nuisance. I have been receiving many emails over the glove stock selloff by readers. Most are panicking as they see their portfolio profits evaporating since Pfizer announcement last week followed by Moderna last night. 

Investing requires knowledge, competence, strategy and importantly qualitative aspects that help you navigate the troubling times. It is easy to be a "hero" when the market is rallying, but the true test of your aptitude & character is during a selloff. One requires a calm and collected composure coupled with the nerve of steel to do well in the stock market continuously. You must be able to handle an irrational selloff of epic proportion to sustain, otherwise it is possible to be wiped out entirely. 

This morning, during the huge selloff for gloves, how many actually went against the flow to catch the bottom? Remember I have always said the best time to buy is when the fear is in your gut? Did you have that feeling this morning? If so, and you acted on it, you would be making good returns by the close of trade today. I am delighted to see the market closed strongly for gloves after the series of bad news on Top Glove factories, Moderna announcement and negative comments in the media by certain fund managers / research houses which impacted the gloves stock price further. But what I find the biggest irony is how certain individuals can flip their view overnight. I remember some were in fact big glove bulls just few weeks back. If a columnist or professional, keep switching his opinions based on the herd mentality, would you value his opinion? I am not saying that such opinion is wrong but there must be justification to backup an opinion. Investors, unlike politicians, we do not need to play to the gallery hence what we express should always be objective.  

As what I shared to my subscribers, this is how I view Top Glove negative news on Covid-19 cases - if  Top Glove production is hampered, it will only worsen the glove shortage as Top Glove supplies 26% of world market share. Clients have no choice but to buy from others even at a higher ASP to the address immediate demand. Having gloves at high price is better than no gloves due to the need to fulfill contracts with hospitals and end consumers. This will in turn benefit the other glovemakers unaffected. Why should the other glovemakers share price plunge irrationally? For Top Glove, they will need to draw on all their inventories during this closure and by the time their affected factory can resume operations, they will need to catch up with their new capacity. Failing which, the shortage persist and will drive the ASP even higher. 

Of course today's reversal may be just a technical rebound due to oversold position in gloves. But from the huge movement in the afternoon session, I believe it is the foreign funds who bought in. Maybe EPF. Some share buyback as well possibly. But retailers would be the smaller portion. If you believe in the glove story, it is not because you are irrational, after all irrationality swings both ways. Those who are advising you to buy O&G, Hospitality, Tourism, Airline stocks are the ones who are being irrational. The fact remains even if the pandemic blows over, will you resume travelling immediately, will you start flying again, will oil price suddenly spike without OPEC controlling supply? It will take 1-2 years maybe more before earnings recover to pre-covid levels. Glove stocks on the other hand are giving you great record earnings visibility for the next 1 year. So you have a bird on one hand, but decided to go for two in the bush?   

If I have to choose one metric to guide me in selecting stocks for investment, I would choose earnings. Apart from share buyback & corporate exercise, earnings is probably the only factor that have direct correlation to pushing share price upwards. Good luck.



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  3 people like this.
 
CCCL MFCB better bet.
20/11/2020 3:17 PM

Tradeview Commentaries - Learn To Separate Wheat from Chaff

Author: tradeview   |  Publish date: Wed, 18 Nov 2020, 10:45 AM


        




Do not waste your time, effort and money on goreng penny stocks which promises the future potential earnings which likely does not exist. Those who talks about venturing into various new businesses such as gloves etc are often relying on sunshine and rainbows to attract naive new investors especially retailers. 

There is no way new entrants like them can compete with existing players with clientele, scale, technology know how and certification. While it is true that some select few new venture may be legitimate due to ex-management with experience being involved, majority are fluffy and dubious. If you want to put your investments into penny stocks that promises earnings, it would be wise to put your funds into the big established players which have shown you the actual earnings and continuous record high earnings yet to come. Many of the big boys like Hartalega, Top Glove, Kossan, Supermax, Riverstone are all at attractive prices again.

Do not let your hard earned money be taken away from you. Remember the saying - the market never fails to punish the greedy, the egomaniacs and the ignorant. Just because prominent investors or blogs promote it, does not mean it is true. Times are very tough, business is very hard to build and establish, making money isn't an overnight effort. Do not be caught up by wishful get rich quick promises. All the best and stay safe.

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  Be the first to like this.
 
tylee81 The windfall tax news come back again,syed saddid re-proposed it at budget21 today,what do u think?will it implement?
18/11/2020 10:14 PM
tradeview Hi there, politics will always be politics. Playing to the gallery, issuing populist statement without considering repercussions are normal SOP for them. But I dont blame the politician, I think this is the fault of the research houses who plant such ludicrous policy thoughts in the minds of politicians. My view remains the same, I have said it before many times even though research houses like Maybank and Public Bank repeatedly brought the topic up, windfall tax cannot happen because the implementation is the issue. Ask any tax experts or legal experts, they will be able to share the the implementation of windfall tax are on commodities sector like palm oil or Oil & gas where it is a singular product. For gloves there are many classes & types of gloves which is hard to slap a blanket windfall tax across. Hence it is important to be technically sound before making public comments. Furthermore, unlike commodities sector like palm oil and oil and gas, glove makers do not receive direct subsidy from government. Hence it would be unconscionable to impose windfall tax. The budget 2021 tabled which highlighted donation to Covid-19 fund is the best approach to address the implementation issue of windfall tax.
18/11/2020 11:35 PM

Tradeview Commentaries - Unwavering Confidence In Glove Makers In Spite of Vaccine Newsflow

Author: tradeview   |  Publish date: Mon, 16 Nov 2020, 7:00 PM


       




The market sentiment over the week was a mixture of anxiety and joy. Joy for those who believed in value stocks and blue chips, whereby it surged tremendously. Anxiety however, are for investors of glove, PPE and related stocks which reacted adversely due to the news of Pfizer vaccine. 

On a positive note, following US elections and Pfizer vaccine news, foreign funds have been flowing back to Malaysia for 3 consecutive days and even exceeded 20% overall market participation level. 

In the coming weeks, there will be more vaccine news. It will likely be Moderna and Astra Zeneca to follow. Potentially, China vaccines will also come through with their phase 3 safety data. 

In this case, it will bode well for Value stocks (Banks, select blue chips) and Legitimate Vaccine related companies 

How about glove, is it all over?

Through the year, I have done many site visits personally and met with management of key industry players, even spoke with established distributors. Whatever I have shared are not information pluck from the sky based on airy fairy hopes but on objective facts. I will update all my latest view post-Pfizer announcement. 

1. Earnings visibility for gloves are still at least 12 month / 1 full year through 2021. (This is not a disputed fact even by the most bearish analyst for the sector. )

2. Vaccine or no vaccine, ASP and demand won't fall off the cliff. (Again not disputed fact even by the most bearish analyst)

3. Mass vaccination will take time, and implementation for the world even longer. At the very least 1 year. (This is a fact stated by WHO & Dr. Fauci.)

4. Glove strong demand due to severe shortage will last through to 2022. New hygiene practice and structural step up, increased healthcare budget for governments around the world and stockpiling requirements contributes to this. (This is a fact)

5. Potential future oversupply concern. (Two camps arguing with 1 side arguing due to new entrants there will be oversupply but I don't believe this as new entrants can't compete with established players due to certification, safety standards, economies of scale and technical know how)

6. Eventual decline in mid 2022/2023 for ASP and demand (strongest argument for glove bears. My view - I can't tell what happens in 18 / 24 months. No one can. As the time progresses, more visibility comes through. But I believe ASP will plateau later than sooner, definitely not this year) 

7. Glove stocks are overvalued. These are noises by naysayers and bears. No matter which method I adopted, PER multiples against past year Standard Deviation, DCF or the most accurate EV/EBITDA (EV ratio), dividend yield forecast, gloves stocks are undervalued and a mile from being overvalued. This is a fact. If analysts are objective and fair in their assessment for all companies in Bursa using the same stringent assessment scrutinising glove stocks, there will be absolutely no companies that we can buy or invest anymore. Tech stocks are by far grossly overvalued, recovery stocks like airlines / tourism are taking into account future earnings which does not exist, local vaccine related stocks with MOU has no proof of ability to deliver as the best vaccines are taken up.

In a nutshell, I think some investors and select funds are overly conservative in valuing glove stocks. They are worried being caught as the last one holding the stocks choosing to forego 1 full years of record Profits and potential bumper dividend.

Use this opportunity to buy on weakness. When value emerges ignore the noises. I think Riverstone, Hartalega, Top Glove, Supermax, Sri Trang, Kossan are good fundamental companies worth a place in your portfolio regardless of the "overnight vaccine experts" who think otherwise. 



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  hhswong likes this.
 
Black Swan Antifragile Since last week, we have witnessed massive rotation into value stocks. funds rebalanced their portfolio from stay at home stocks into stocks that linked to economic recovery, the airlines, banks, etc.

Treasury yields have rallied to multi-month highs. the 10YR is approaching 1%.

While positive vaccine news a boost to sentiment, clearly we are in a mini upcycle, I am more wary on the workings of mean reversion.

The path to recovery is much clearer since the onset of the pandemic, the pace is still very much dependent on the successful containment and commercialization of vaccine.

Short term fluctuations aside, I still believe glove stocks a must have in your portfolio, especially so given its prevailing valuations. Post-covid, glove demand is expected to expand at least 20-25% from the usual 8-10% annual growth rate.

Of course, diversification is one free lunch available. When the global economy does recover next year, consumption to eventually normalise, my portfolio of energy stocks would benefit from the rebound in oil price.
16/11/2020 8:14 PM
CCCL Gloves stocks aka No-Brainer stocks. Any Ah Kau or Ah Mau can trade now. So any sensitive news, they run helter-skelter...
16/11/2020 9:30 PM
cngi fund direction now is towards covid recovery related stock. Glove undoubtedly is good stock to hold, but short term not to against the flow of fund..
16/11/2020 9:42 PM
CCCL Don’t falls into a die-hard fan syndrome..narrowing your investment horizon.
16/11/2020 9:52 PM

Tradeview Commentaries 2020 - Pfizer's Vaccine Is Not Distributed Via The Rain (Importance of Diversified All Weather Portfolio)

Author: tradeview   |  Publish date: Tue, 10 Nov 2020, 10:08 PM


      




KLCI Bursa has not rallied in such record quantum in a long time (3.3% for the day). The vaccine positivity truly spread across global markets with huge funds rotation away from Glove and Tech stocks into recovery, laggards and beat up stocks. 

Today by far, I received the most questions from readers who are panicking over the selloff in glove stocks. The common 2 questions : Should I sell / cut loss now then buy back later? & Should I buy O&G, Tourism, Recovery stocks? I will be blunt - both are wrong questions to ask.

In my Principles of Investing article series, Rule 4 - Diversification Is the Best Defence written in my blog April 2020 shortly after the "March Plunge", I emphasised the importance of having a diversified portfolio and techniques of doing so. Often when the stock market or particular sector is doing well, investors forget about this important rule. Only when something bad happens, the "what ifs" comes in. 


Most readers know I am one of financial writers who is very confident with the prospects of Glove stocks. I have publicly written on 5 of those. Am I still holding gloves in my portfolio, the answer is yes. Am I still confident? The answer is yes. Do I intend to buy more glove stocks? The answer is yes but on weakness. Where does my confidence stem from despite the announcement of Pfizer's "Great News for Mankind" yesterday? The answer is fundamentals. 

As a fundamental investors, I look at the earnings, yield, balance sheet, prospect, management and various factors assessing the company before deciding to buy. If there is no structural change to a stock, my view remains valid. However, if there is structural change to the company, I will make an objective decision whether to buy or sell. So the fact remains - glove stocks will have earnings visibility for the next 12 months, minimum. Vaccines cannot reach most of the population in the next 12 months. Remember, Pfizer's vaccine even if proven 90% effective, it is not distributed via the rain, where it pours over the globe to vaccinate everyone and eradicate Covid-19 overnight. 

I do not deny the risk for the investment thesis of gloves have risen. But it also does not mean the investment thesis for recovery / laggard stocks automatically becomes viable. Many are loss making and will continue to suffer, the worst being tourism related and oil & gas. The Pfizer vaccine or others to follow reduces the default risk / bankruptcy risk of these companies. That is the important truth. 

Coming back to my topic. Diversification is a form of risk management in investing. When one falls, another rises. Then it covers the losses and ensure your position is hedge against any form of potential "black swan event". This is why I am confident to buy and hold gloves stocks as well. I am not a thematic investor, I do not look short term. I invest to build a portfolio for a sustainable returns over a long duration in time. This means I invest whenever I see value, not when the news reports something. 

Do you all remember in my last week commentaries I shared publicly some of the stocks I have advocated to my private subscribers to buy on weakness before the US elections? In the list, there was only 1 glove stock amongst all. You can refer to the picture again above. All of it today, has rallied and cover the fall in gloves stocks. It negates the potential impact if I were to only hold a single sector stock. 

This brings me to my key message. Avoid chasing stocks that has rallied, always buy on weakness and you will have the margin of safety to protect you. Avoid rushing to buy on dips, exercise patience, let it settle and buy when you feel the fear in your gut. Lastly, headlines creates gyrations. Market is never rational, that is why it moves up and down. Often the sways are very violent in one direction or another, but at the end of the day, it will normalise and find an equilibrium. This too is a fact.





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  hhswong likes this.
 

Tradeview Commentaries 2020 - Budget 2021 Preview & US Election Conclusion (No Windfall Tax for Gloves, Expansionary Budget 2021, Biden Wins)

Author: tradeview   |  Publish date: Thu, 5 Nov 2020, 10:53 PM


      



Dear all, this is my 3rd commentary in 1 week. The last time I wrote so many commentaries in a span of a week was during the panic / massive selloff of Glove stocks between end August - September. This time is because this past week is probably the biggest week of the year packed with all major events globally and domestically. 

I am not a Guru, not a Sifu, but I am an objective financial writer. I believe readers who have read my writings would agree I share my opinions on matters from a macro view down to the specific stocks with integrity. The most important trait of being a writer is to be responsible for what you write. What you write must be consistent and can be validated. Also you must walk the talk. With that your reputation will be one that is honest, accountable and transparent. 

I have written many times in the past year that I do not believe Glove stocks should be subjected to windfall tax, as it is not a commodity like Palm Oil and Oil & Gas. The mechanics will not work because glove companies manufacture various kinds of products and gloves with different classification across. In addition, Glove companies DO NOT receive subsidies unlike commodities. Furthermore, the Government through corporate income tax would benefit greatly from any supernormal profits. That would make the most sense in terms of revenue collection. Otherwise, being selectively arbitrary to target private sector companies that are doing well is anti-capitalistic / interfering with free market economics. This would attract negative repercussions as it does not instil confidence of investors in your financial markets. Ant Financial's IPO last minute suspension by Chinese regulators should serve as a stark reminder. Therefore, I will reiterate here that Glove stocks should not and will not be subjected to windfall tax in Budget 2021. Any irrational selloff should be a window of collection. If indeed it happens, it would be morally unconscionable as government around the world are supporting and giving incentive to the healthcare sector in the fight against Covid-19, not otherwise. 


With regards to the overall Budget 2021, it will be one of the most expansionary budget (fiscally) as the government have been given the mandate to resuscitate the economy at all cost due to Covid-19 pandemic. Politics aside, all parliamentarians would want a budget that can help the people and the economy.The Government also have the approval from earlier August 24th Parliamentary session to raise debt ceiling to 60% for this fiscal policies. If the Budget 2021 meets or exceeds expectations, it will spur a broad based relief rally across all sectors, not only glove stocks. 

Lastly, after 2 days since US Election day, the final results are still in tabulation due to record voting and mail in ballots. As per my earlier forecast, Biden will win and squeak past Trump. A Biden win is the return to normalcy / normalisation of global politics, economics and rebuilding of foreign diplomatic relationships between nations. If Trump concedes and dont drag it out with court case, it will be best for everyone. Otherwise, any irrational selloff is  a buying opportunity. I have said this as well through the week. My screen shot below shows my recent buy call for my private subscribers during the irrational selloff through the week.



I am human and subjected to fallacy as well. Mistakes are common but I believe what I have written so far is unlikely to be wrong. All the best. 

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  2 people like this.
 

(Tradeview 2020) - Flash Crashes Come & Go, Do Not Fear. Ride It Out.

Author: tradeview   |  Publish date: Mon, 26 Oct 2020, 12:19 PM


     


Major events are catalyst for the stock market. Depending on the outcome, more often than not, a knee jerk reaction is triggered. For those who have position in the stock market, the dilemma of holding or selling becomes the million dollar question. 

2020 is a truly extraordinary year. It is extraordinarily worrying and uncertain. For Malaysia, the people's mandated government fell due to Sheraton Move. Then the Covid-19 pandemic exploded globally. Yet in the middle of all this, the stock market went through an extraordinary period of boom due to the reactionary monetary policies from the federal government. 

From the lows of March 2020, the stock market went through a V shape recovery before hovering around 1500 levels. It is now end October. In another 1 week, US will be having their election. Globally, it is the most important macro political event as it impacts the global economy especially after 4 years of Trump's rule. Under Trump's Presidency, trade wars between nations commenced, trade agreements & international accords were abandoned, multilateralism & globalisation were replaced with unilateralism and nationalism. Again, all these happened whilst a global pandemic swept the world. 




Coming back to the domestic front, it would now appear that Malaysia is going through its own major political event. With the incumbent PN Government seeking to stay in power via "Emergency Declaration", that was a risk of triggering a huge selloff for the stock markets. Foreign investors be it in the stock, bond or FOREX market do not like uncertainty. What they dislike even more is the erosion of democracy and free markets. In the event this "Emergency Declaration" is allowed in whatever name or form, it would be tantamount to a subversion of democracy and in turn the free market as an authoritarian government doesn't require Parliament endorsement for its action allowing executive branch of the Government a free hand to enact an laws, policies and orders they deem fit. Thankful, this democracy crisis was averted yesterday when the King rejected the proposal by the Prime Minister. 


My biggest concern however has always been the US Elections 2020 as its the major political event for the world. The outcome will either roil or rally the markets globally, including KLCI. It will also determine if the stock market recovery of Bursa is L shape or W shape. In my view, most funds be it foreign or local have been selling off to raise cash and stay sidelines. In the event of a steep selloff, their position is protected and they have cash to manoeuvre.



 



This is one of the rare video interview of Warren Buffet when he was only 31 years old and his views on the 1962 flash crash. I think its apt for me to share this as I believe the potential selloff in the coming 1-2 weeks is temporary in nature and not caused by structural or fundamental change to the economy. 





Majority of retail investors loses money. From my experience, even many professionals / experts loses money from investing. This is because investing based on sentiment and herd mentality doesn't give you an edge over others. The stock market is a zero sum game where when someone wins another loses. Most who are successful in the stock market or in life for that matter definitely would have extraordinary traits that the majority doesn't possess. One may be extremely intelligent, prudent, brave, patient or lucky. Any of the traits mentioned, if you have one over the others that means you have an edge. 

My readers would know by now I am a contrarian investor. I do not go with the common view. This is because I am objective. Just because select media, analysts or funds thinks in a way doesn't mean I will follow. Being objective and impartial in my view allows me to make the best decision based on the circumstances. However, as a believer in buying on weakness, selling on strength, potential flash crashes in the coming weeks will provides good  opportunity for me to enter the market. 

KLCI apart from the healthcare and tech stocks, majority especially traditionally strong blue chips companies has been whacked down terribly. I have not seen Tenaga below RM 9, Genting below RM3, Axiata below RM3 etc for a long time. However, these Foreign fund favourite stocks are being punished for a reason. It is also in line with the fact that foreign fund have been ditching out share market for a long period now. I believe strongly this is related also to our unstable political situation. 

In my article last week, I stated "if the healthcare index do not perform and continued being sold off, nothing else will do well. Possibly tech sector may still sustain (but bear in mind if anyone thinks Gloves are overvalued, tech is 3 times overvalued). This means, no other sector will generate returns and yields to the funds in the next 1 year if the healthcare sector is dismissed as game over." 


There are only 2 courses of action for investors in the event of a market selloff. 

1. Either you stay sidelines and observe (wait & see); or
2. You buy on weakness in batches (scale your entry)

This is on the assumption that you have cash on hand. Panic selling, which most retail investors do during a market selloff , is the sure way to lose money. This is because panic selling leads to even more vicious selloff and you neither benefit by selling at low price or when the market rebounds, you have no position on hand to capitalise on the uptrend.

No one knows what will happen in the next few weeks. Whether current incumbent government would still be in power, whether a new leader will emerge, whether Trump or Biden will win and so on. But I know the pandemic would still be around and vaccine which may or may not be approved by November would not eradicate Covid-19 in the next few months. This means if you adopt either of the 2 choices above, your best bet for buying on weakness would only be the glove sector and select blue chips. This is a foolproof playbook. 

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Food for thought: 












  2 people like this.
 
SureWin1Woh I always find your article sensible and provide good view from another perspective. Keep it up!!
26/10/2020 1:34 PM
Erudite gud one! nice
26/10/2020 5:54 PM
CCCL Not only gloves, tech and blue chips..look for underdog sectors when others overlooked.
26/10/2020 9:23 PM
tylee81 https://www.theedgemarkets.com/article/asian-rubber-prices-soar-supply-woes-covid-glove-shortage-and-china-tyre-demand
01/11/2020 11:35 AM
stockraider Beware of this sohai dishonest 3iii loh...!!

He always ask u to chase expensive & overvalue loh...!!

Warren Buffett looks at three character traits in people who surround him: integrity, energy and intelligence. He says, if you don't have the first, the last two will kill you. In fact, if they don't have integrity, he would rather his managers be lazy and dumb.

"Integrity is like oxygen. If you don't have it, nothing else matters."

"Be honest. Never lie under any circumstances. Just basically lay it out as you see it. Simply speak openly and frankly."

Integrity is also about principles, full disclosure and openness.

Integrity is a choice, and the lack of it most often leads to self destruction.

The above lead Raider think of sohai dishonest 3iii of double standard below loh..!!

This sohai 3iii really talk like sohai loh...!!

What about Dlady fallen from Rm 66 to Rm 34.58 leh ??
What about Padini From Rm 6.00 to Rm 2.08 leh ??
What about Petdag from Rm 32.00 to Rm 17.20 leh ??

This what invest all about value & margin of safety loh...!!

U NEED TO UNDERSTAND RAIDER BREAKEVEN COST ON NETX IS 11.5 SEN, BUT AS AT NOW THE PRICE is 10.5 sen...RAIDER LOST MORE THAN 10% OR COST OF MYV LOH...!!
BUT THIS IS A TEMPORARY FLUCTUATION LOSS DUE TO MR MARKET MAH...DO REMEMBER THAT THE NET CASH PER SHARE of netx IS 15 SEN PER SHARE CERTAINTLY U SHOULD FEEL HIGH COMFORTABLE BASED ON THIS HIGH MARGIN OF SAFETY LOH..!

COME TO SOHAI 3iii LOOKING AT his PORTFOLIO ABOVE...U WILL NOTICE OVER 2 YEARS THIS SOHAI LOST MORE THAN 50% MARK TO MARKET VALUE OF HIS BLUECHIP PORTFOLIO LOH..!!
IF SOHAI 3iii CLAIM HE HAS RM 60M MARK MKT HIS PORTFOLIO 2 YRS AGO..TODAY IT IS WORTH ONLY RM 30M TODAY LOH...!!

HAVING SEEN THIS SOHAI 3iii STAGGERING LOSSES, DO U NOT THINK..THIS SOHAI IS NOT VERY SORE WITH SIFU CALVIN & GENERAL RAIDER LEH ??

BY RIGHT THIS SOHAI 3iii SHOULD LEARN FROM REFRAINING KEEPING OVERVALUE STOCK EVEN IT IS BLUECHIP LOH..!!
AS ADVOCATED BY SIFU CALVIN & GENERAL RAIDER U SHOULD SELL TO MR MARKET WHEN OVERVALUE LOH...!!


Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > Nov 1, 2020 8:50 AM | Report Abuse

conman calvin, dishonest raider and their whiners, groaners and moaners should be remorseful for deleting all the sincere honest truthful posts of their purported "naysayers". These deleted posts have saved many from losses in Netx.

Well done to the naysayers for their intelligence, diligence and hardwork in fundamental research on Netx.
01/11/2020 12:08 PM
stockraider correctloh...!!

Netx has gone thru development stage already spend Rm 200m loh...!!

The netx stage of commercialization more exciting towards making monies loh...!!

With cash hoard over Rm 126m....Netx has financial muscle loh...!!

U need to allow time for it to bear fruits loh..!

Posted by Good123 > Oct 28, 2020 5:26 PM | Report Abuse

Think long term

“The big money is not in the buying and selling, but the waiting” - Charlie Munger

Finally, patience. If you’ve been you’ll know that we’re long-term investors at heart.

As humans we generally have a tendency for activity, we always want to be doing something. In financial markets, that can take the form of buying and selling frequently.

However, if we buy and sell, we unnecessarily interrupt the 8th wonder of the world from working its magic: compound interest.

To illustrate, if you start with $1 and it increases by 1% each day and is compounded daily for a year, it grows to $37. That’s a 37 fold increase.

After 5 years, that initial dollar becomes $77,002,912.

So long term investing is where the big money is made.
01/11/2020 12:13 PM

(Tradeview Commentaries) - When Healthcare Sneezes, KLCI Catches A Cold

Author: tradeview   |  Publish date: Fri, 23 Oct 2020, 5:43 PM


     



I was driving on the road past few days and with the CMCO reimposition in the economic heart of Malaysia, I realised everyone is suffering. Big business or SME, this Covid-19 pandemic has delivered its second blow towards the country's economic health. The haste and lack of clarity by the Government in re-imposing this CMCO has caught many off guard once again. Around the commercial square near my office, I saw many roller shutters which were closed in March never to open again. Those survivors from the first lockdown, would likely not survive this second round. Unlike the first time, there were still moratorium for loans, this time, most would have exhausted their reserves. 

It is extremely unfortunate but this pandemic truly taught me the important of cash reserve. Having cash reserve isn't enough. The usual practice is 3-6 months of cash in hand. This pandemic is coming to a full year. If indeed a company has only 3-6 months of cash in hand, technically, they would have gone under by now. This further highlights the importance of being net cash with minimal debt.

This economic downturn will have lasting effects as well. It will take time to recover and the impact will change the old ways of doing things including adoption of technology be it for delivery, connectivity infrastructure, working from home, ecommerce etc. From a hygiene practice angle, the importance of PPE stockpiles & R&D or biopharma technology will take precedent in the the progress of society. 

If we are to look at investing in be it in our local market or foreign markets, there are only very select few sectors that one can safely put their funds. I remembered few months ago, many of my readers asked me about Disney. They told me this is the best time to buy Disney stocks because 1. Disney+ streaming service 2. Marvel & Star Wars series 3. Theme park will return once Covid-19 is over. Disney is the prime candidate for recovery play. Sadly, Disney announced it is laying off 28,000 employees on 30th September August. Such a strong blue chip company with solid balance sheet also have to resort to cost cutting measures to stay operational, what more the others? 




This brings me to my topic. I am a believer in buying on weakness, selling on strength. I am also a strong contrarian. I bought heavily during the 2020 March plunge. I would say almost 90% of my cash were ploughed into the market in March. Reason I am sharing this is to show you evidence that I am a strong believer in recovery ahead of time. But I do not see signs of recovery anytime soon. They always say share price moves 6 months ahead of time. Hence I can understand why there are strong arguments from certain media commentators, analysts, funds industry experts who says gloves stocks are over, its time to rotate to recovery. They said that in July, August, Sept, October. We are heading into November now. Those who started buying then, have lost money heavily. They moved too soon believing the "market talks" of Vaccine by October and miracle disappearance of the pandemic. This wishful thinking is similar to that of Trump. It is nice but wishful. 

I would put it bluntly, if the healthcare index do not perform and continued being sold off, nothing else will do well. Possibly tech sector may still sustain (but bear in mind if anyone thinks Gloves are overvalued, tech is 3 times overvalued). This means, no other sector will generate returns and yields to the funds in the next 1 year if the healthcare sector is dismissed as game over. I believe strongly that only glove stocks have the earning visibility minimum 1 year ahead. As of now, even Hartalega, Top Glove, Supermax, has come out to say their capacity is fully booked till end 2021. No longer 1H 2021. Its end 2021. 

Do not be afraid of mini sell offs or profit taking by funds. Gyrations are normal. Be objective in your analysis and you will do fine. Similarly, be prudent but buy low sell high.

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