Highlights

Trading With A View

Author: tradeview   |   Latest post: Tue, 1 Jun 2021, 10:22 PM

 

Tradeview (2021) - Peterlabs Holdings Berhad Long Term Value Stock (Update)

Author: tradeview   |  Publish date: Tue, 1 Jun 2021, 10:22 PM


Dear all, I just want to drop in a quick update on Peterlabs. Back in 2020, I highlighted Peterlabs in an article dated 10th December. I shared Peterlabs as my gratitude stock to all readers as the numbers of followers on my Telegram channel finally hit 6000 pax. Why did I choose Peterlabs? There are many reasons and it was highlighted in the earlier article. For those who missed it earlier, you can read it here :

https://klse.i3investor.com/blogs/tradeview/2020-12-10-story-h1537507644-_Tradeview_2020_Long_Term_Value_Pick_6_Peterlabs_Holdings_Berhad_My_Gra.jsp

The one main reason, why I focused on Peterlabs apart from it being a fundamentally sound penny stock is because I know it is one of those stocks majority of retail investors can benefit from it if they are willing to buy and hold for some time. There were plenty of time for retail investors to patiently accumulate the stock over the past 6 months as it wasn't driven by technical or promotional efforts. The only question is the timeline for it to move.

Whenever people or prominent investors write about articles especially on forums, many are for pump and dump purposes. It is an unscrupulous means to attract retail investors into buying a stock promoted then once it gains traction, dump it all and the outcome, is retail investors losing money. It pains me to see if happen over and over again as I know most retail investors invest with their hard earned money.

Every time I write about companies, I focus on the quality of the company apart from the financials. It is important to remember "The MONEY Equation" which I highlight in my book - Once Upon A Time In Bursa. It is a simple and practical guide towards finding good companies in Bursa, be it big or small cap stocks.

Today, Peterlabs hit and exceeded my Fair Value of 30 sens as highlighted in my earlier article. I honestly, do not know why it has been moving rapidly for the past weeks. Some say strong earnings report soon. Some say privatisation or corporate exercise. I absolutely have no insights to all of these and I don't really bother myself with these unfounded rumours. I only know that there were many penny stocks with poor fundamentals surging through the roof for the past 1 year. Peterlabs on the other hand being fundamentally sound barely moved and staying mostly stagnant at 22-23 sens. 

Many will claim credit for surging stocks, but retail investors must be smart and trace the source where it was first highlighted. I know some "Guru" are now promoting due to the huge surge in volume. As far as I am concern, the fair value is still the same at 30 sens unless something fundamentally or structurally has changed. Also, those "Guru" who are promoting Peterlabs saying it is a manufacturer of "dog food", they clearly didn't do their home work. I would highly recommend readers to have a look at my previous article and do a proper study to understand the background of the business. 

With this episode, I hope retail investors who benefit from investing in Peterlabs remember the virtue of patience whilst investing. 6 months for 30% return is not too shabby. Ultimately, I am a fundamentalist. I believe in investing in good companies that meet the metrics of The MONEY Equation. If it does, I have no problem holding for the long term.

As MCO impending lockdown, I know many retail investors would once again flood the stock market. I hope all will invest wisely and be careful not to be trapped by pump & dump operators or fake "Gurus". Take care & stay safe.


----------------------------------------------------------------------------------------------------------------------------------------------

For link to my new book - Once Upon A Time In Bursa, please click here :

https://www.modern.my/tradeview.html

Labels: PLABS
  2 people like this.
 

Tradeview - Once Upon A Time In Bursa (Launching Of A New Book)

Author: tradeview   |  Publish date: Sat, 1 May 2021, 12:53 PM


 

 

 

 

Dear all,

I would like to take this opportunity to express my sincere appreciation for the support over the years. This is the 7th year since I started writing publicly on companies and the stock market. For the longest time, I have taken pride on being one of the more objective and honest writer in the investment community. Sometime in 2020, I was offered an opportunity by AcePremier to write a financial book. I have given plenty of thoughts to it before deciding. 

To begin with, writing an article and writing a book is very different. I will admit authoring a book was definitely not in my plans at this juncture of my life. I still feel inadequate as there are much to learn every single day. I am definitely not a "Guru" or financial coach and have no interest being one. I am just a keen observer of the world of business, finance and economics. 

What made me changed my mind was the huge influx of new investors in the stock market over the past year at unseen levels historically. At the same time, the proliferation of scams, syndicates and operators resulting in substantial losses to retail investors stirred a strong urge in me to play a modest role in the investment community. 

Personally, the stock market have been an avenue of happiness and possibilities for me. I hope to see the stock market be a force of good for retail investors, their families and the society. With much humility, I would like to share my new book - Once Upon A Time In Bursa. 

The book is a simple read which is a culmination of stories and anecdotes about the stock market peppered with my own interpretation and experience. It give insights to the financial world and investing in the local context (Bursa) which I believe would be especially helpful to retail investors. I chose to present the book with stories and anecdotes as simplicity is memorable, whilst complexity is forgettable. After all, everyone likes a good story. If you are new to the stock market and don't know where to begin, the book may provide some form of assistance.

 

 

 

 

 

 

 


 
On the cover of the page presents the crux of the message I hope to impart to my child. If my child grows up to read and understand the content in my book, I believe it would be significantly more meaningful and sustainable than leaving behind any form of monetary wealth or physical assets.
 

For those who are interested, the pre-order is now officially on the way. Feel free to click the link below https://www.modern.my/tradeview.html For pre-order, there will be a 10% Special Discount. The checkout discount code is attached here : TRADEVIEW10 . In addition, those who order above 4 books will be entitled to free shipping. Anyone who require additional information, feel free to email me at tradeview101@gmail.com Lastly, the book has been sent for printing and I expect it to be ready for delivery in 3 weeks.

Those who enjoyed my writings over the years and believe what I am doing is of a worthy cause, feel free share with a fellow investor in the stock market or a friend. For the journey I have taken albeit unconventional, is one of great adventures, joy and gratitude. Thank you all readers for making everything possible for me, a passionate student of the market. I hope the book would live up to your expectations. 

 

Best wishes,

Tradeview

 

 

  5 people like this.
 
Erudite Tq tradeview bro! Finally a book! So exciting...
01/05/2021 1:44 PM
zhangliang Nicely said. Ordered
01/05/2021 2:25 PM
abang_misai can give free pdf copy?
01/05/2021 5:32 PM
Fergiehengheng Ordered n awaiting delivery
01/05/2021 8:27 PM
DLGF Long awaited one! Ordered as well, can't wait...
01/05/2021 9:58 PM
Erudite Ordered tqvm
01/05/2021 10:59 PM
megat36 I enjoyed your writing and ordered straight away the moment i saw this post in your tele channel...
02/05/2021 9:35 AM
ivanlau support you ........
02/05/2021 9:43 AM

Tradeview Commentaries - Journalism & Extraordinary Individuals

Author: tradeview   |  Publish date: Wed, 21 Apr 2021, 2:28 PM



Source : NYFA.edu

Today I am writing on a topic somewhat unrelated to stocks. It just came to me after reading a column in The Star by Datuk Seri Cheah Cheng Hye, Penang born billionaire fund manager and founder of Value Partners listed in HKEX. 


If you happen to read his column today, it tells of his rags to riches story which captured how he spent some years as journalist in The Star early days before venturing out on his own. What captivated me after reading the story was how I realise the interlink of journalism & extraordinary individuals. He is the not the first person I have come to know who started as a journalist and reached the upper echelons of society. 



Wu Yajun, the most famous woman billionaire in China who was at a time the richest self made woman in the world also had a 5 years stint as a journalist. She was formerly an editor with China Shirong News Agency. She focused her coverage on property market. Subsequently, she co-founded Longfor Properties which is a leading real estate developer in China listed in HK. She was also known to be an early investor in Uber and Evernote. Her net worth is estimated to be at US 19 billion. From humble origins working in factory in post communist China for US 16 a month, she made it to the top of the wealth list of Forbes.


Locally back in Malaysia, apart from Datuk Seri Cheah Cheng Hye, the notable investor Cold Eyes (Mr Fong Siling) was a Chief Editor of Nanyang overseeing the business, finance and economics section of the paper and happen to be a well known rags to riches story in the investment community of Malaysia. Interestingly, Cold Eyes is more widely known for his prowess as an amazing investor who built substantial of his wealth from the stock market over the years. He is also highly respected for propagating fundamental and value investing in Malaysia over the years through his column in Nanyang and multiple best selling books. 


Another amazing story would be that of Riverstone Holdings Limited founder, Mr Wong Teek Son who is also one of the glove billionaires of Malaysia. Riverstone is the world leader in Class 10 and Class 100 Nitrile Cleanroom Gloves with a market share of 60% globally. His glove quality is top class and along with Hartalega and YTY, belonged to Tier 1 nitrile gloves in the world. Mr Wong who came from hardship was also a former journalist with China Press. Albeit a short stint and earning meagre salary as a cub reporter, ultimately, Mr Wong rose through society  as his company grew. When we talk about Malaysia glove industry, Riverstone which is listed in SGX, is a household name.


Sharing these stories with all is because I had the realisation that journalism have produced exceptional individuals of the society. Growing up, I was told the journalist like nurses and teachers are the most underpaid and under appreciated profession of the society. Yet, it is amongst the most selfless, essential and important job. A good journalist is objective, factual and often write without fear or favour for the betterment of the society. I have utmost respect to journalist who possess top class ethics and independence. Coming back, as I connect the dots, I found a common denominator on why journalism produces extraordinary individuals. That would be the access to knowledge / information. Wu Yajun was a journalist covering the property sector, Datuk Seri Cheah Cheng Hye and Cold Eyes were financial / economics journalist.

If you all know any journalist, take them out for coffee and you will have the most fruitful afternoon. They are highly knowledgeable and possess great insights. I believe every industry there are talents too. However, I have noticed a high propensity of journalist scaling the heights of the political and business world. In my view, it all comes down to making full use of the access to knowledge, information and being resourceful. Hats off to all journalist.



  2 people like this.
 
CynicalCyan Magnanimous of you not to take a jab at your Favourite Magazine that labelled you "deceitful".
21/04/2021 11:30 PM
Erudite Thumbs up sir
22/04/2021 12:13 AM

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

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


 

 

 

 

 

 

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

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

 

1. Is the glove rally today a technical rebound? 

2. Should I re-enter now? 

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

 

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

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

 

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

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

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

 

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

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

___________________________________________________________

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

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

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

Email me at : tradeview101@gmail.com

Food for thought: 
 

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

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

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


   

 

 

 

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

Year End Bursa KLCI 2021 Target

Maybank                1830

MIDF                      1700

Rakuten                  1870  

Affin Hwang          1730

AmInvest                1695

UOB Kay Hian       1680 

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

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

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



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

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

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

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

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

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

 

The current market condition is as such : 

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

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

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

 

Safety Net

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

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

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

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

Email me at : tradeview101@gmail.com

Food for thought: 
 

 
 
 

 

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

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

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


  

 

 

 

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

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

 

Source : WallStreetMojo

 

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

 

 

 

 

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

 

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

 

 

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

 

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

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

 

1. Competency, Experience & Diligence

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

2. Integrity or Honesty 

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

3. Stakeholder Management

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

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

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

4. Economic or Market Environment

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

Ranking of Analysts

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

 
 

 
 
 

 

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

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

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

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

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


  

 

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

 

 

 

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

 

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

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

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

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

5. Low interest rate environment

6. New breed of investors - fearless millennials 

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

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

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

 

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

 
 

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

 
 
 

 

 

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

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

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

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

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

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

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

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

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


            

 

 

 

 

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

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

 

 

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

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

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


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

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

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


Email me at : tradeview101@gmail.com
 

Food for thought: 

 



 

 
 

 
 
 

 
 
 


 
 
 


 
 
 
 

 

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

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

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

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


        


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

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

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

 

 
_______________________________________________________________


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

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

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


Email me at : tradeview101@gmail.com
 

Food for thought: 

 

 

 

 
 
 

 

Labels: ORIENT
  SureWin1Woh likes this.
 

(Tradeview 2021) - Are We In A Bubble?

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


 

 

 

 

 

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

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

 

 

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

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

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


   

 

 

 

 

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

 
 
 
 
 
 

 
 
 
 

 

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

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

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


  MFCB | MEGA FIRST CORPORATION BHD

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


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

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

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


Email me at : tradeview101@gmail.com
 

Food for thought: 

 
 

 
 
 
 

 

Labels: MFCB
  2 people like this.
 
Erudite RM 8 today. Nice. Results shud b quite bagus!
25/02/2021 4:58 PM

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

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


            

 

Pic : TMZ
 

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

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

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

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

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

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

 

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

 

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

 

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

 

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

 

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

 

End Part 2

 
 
_______________________________________________________________


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

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

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


Email me at : tradeview101@gmail.com
 

Food for thought: 



 


 
 
 

 
 
 

 
 
 


 
 
 


 
 
 

 

  Be the first to like this.
 

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

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


           

 

 

 

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

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

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

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

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

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

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

 

End Part 1

 
 
 
_______________________________________________________________


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

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

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


Email me at : tradeview101@gmail.com
 

Food for thought: 




 
 
 

 
 
 

 
 
 


 
 
 


 
 
 
 

 

  Be the first to like this.
 

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

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


            

 

 

 

 

 

 

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

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

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

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

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

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

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

 
 
_______________________________________________________________


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

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

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


Email me at : tradeview101@gmail.com
 

Food for thought: 


 


 
 
 

 
 
 

 
 
 


 
 
 


 
 
 

 

  Be the first to like this.
 

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

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


           

 

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

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

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

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

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

 
 
 
 
 
 
 
 
 
 
 

 

 

 

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

 
_______________________________________________________________

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

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

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

Email me at : tradeview101@gmail.com

Food for thought: 



 
 

 
 
 

 
 
 


 
 
 


 
 
 
 

 

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

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

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

Please check facts before nitpicking.

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

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

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

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

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


         

 

 

 

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

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

 

 
_______________________________________________________________

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

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

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

Email me at : tradeview101@gmail.com

Food for thought: 
 

 


 
 

 
 
 

 
 
 


 
 

 



 

 

 
 
 

 

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

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

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


        


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


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

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

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


Email me at : tradeview101@gmail.com
 

Food for thought: 

 

 
 

 
 
 

 
 
 


 
 

 



 

 

 
 
 

 

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

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

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


       

 

Pic from The Star

 

 

 

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


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

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

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


Email me at : tradeview101@gmail.com
 

Food for thought: 

 
 

 
 
 

 
 
 


 
 

 



 

 

 
 
 

 

 
 
 
  Be the first to like this.
 

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

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


      

 

 
Pic from Business Insider

 

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

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

 

_______________________________________________________________


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

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

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


Email me at : tradeview101@gmail.com
 

Food for thought: 

 

 
 
 


 
 

 



 

 

 
 
 

 

 
 
 
  SureWin1Woh likes this.
 


APPS
I3 Messenger
Individual or Group chat with anyone on I3investor
MQ Trader
Perform Technical & Fundamental Analysis on Stocks
MQ Affiliate
Earn rewards by referring your friends
 
 

438  423  589 

ActiveGainersLosers
Top 10 Active Counters
 NameLastChange 
 DNEX 0.86+0.005 
 AVI 0.17+0.06 
 SERBADK 0.605-0.035 
 ITRONIC 0.21+0.03 
 DNEX-WD 0.325+0.02 
 VIZIONE 0.195-0.01 
 PWF-WA 0.055+0.005 
 SCOMI 0.05-0.005 
 YGL 0.27+0.01 
 SERBADK-WA 0.085-0.015 

FEATURED POSTS

1. MQ Trader - Introduction to MQ Trader Affiliate Program MQ Trader Announcement!
PARTNERS & BROKERS