STAY CLEAR OF USA

Lately, a biz affiliates was telling me that lately he attended a strategist talk on the stock markets, saying bursa has a good chance of doing well, partly due to the upcoming Sarawak election.   Ringgit Malaysia may appreciate to RM3.85 per US dollar.

(I am just a messenger)

HAHA, WHO IS RIGHT AND WHO IS WRONG?

Well for a fund manager suddenly said that corruption in Malaysia involve the highest level sound like something new, I think, he should not even consider Malaysia. It already started 30 years plus ago.  

On a contrary, look at US Market

1. Apple
2. Microsoft
3. Facebook
4. Amazon
5. Google

A fund manager said these 5 companies is BIGGER than all the stocks listed in Frankfurt (i.e. more than USD2 trillion).  Frankfurt exchange has BMW, Mercedes, BASF, SAP, VW, Siemens, etc and other international brand as well.

Of course, this is just an anology, but, it does sound a bit hard to believe.

STAY CLEAR OF EVERYTHING

No, always has a plan in investment.  Plan for 5 years.  Execute your plan.  Market will goes up and down, during extremely down (20% or more), historically, proven, value stocks will revert to its intrinsic value, if it is traded too much below the stock price, period.

LONG TERM INVESTORS

A long term investor that worth his salt, seldom talk about timing.  Because, they are in the market for a long haul, i.e. more than 30 years.  First 10 years, learning, second 10 years paying tuition fee, after that, gradually return on investment better than FD.

So, market crash, isn't it an opportunity.  Everyone sound like expert, too high don't go in yet.  When the market is down, don't go in yet, wait for recovery.  When market recover, don't go in yet, recovery not strong.  So, please, focus on the VALUE STOCKS.  If available, buy, if not, wait until it is available. Period.  

Improve your PROCESS of investing over time, that is the most rational thing to do.

ACE vs SMALL CAP vs KLCI

Lately a fund manager mentioned that the ACE and SMALL CAP (Overall) is overvalue at PE of 13-15x, when it usually traded at PE 8-9x.  I agree with this general statement.  Consequently, he advised investors to SELL their ACE and SMALL CAP stocks and let the PE normalise to single digit before reenter.  

Be careful, this is a general statement, just like the general statement made on KLCI when it was toppish.  For me, if you hold a value stock with reasonable margin of safety, you should not sell and come back later, that is for trading.  For me, if, only if, the value stocks you hold dropped, then get more.  What if it did not drop? And continue to go up?  For me that statement is true if you buy a big basket of ACE or SMALL CAP stocks, disregarding the VALUE, then, you should SELL and COME BACK later, i.e. you are like buying the Index.  However, if you have selected only a FEW, with strong growth and margin of safety, selling now, you may gain, buy you may not reenter it drop.