Posted by Imagine333 > 2021-05-09 15:35 | Report Abuse

Brilliant

Posted by stockraider > 2021-05-09 15:59 | Report Abuse

Yes buy what u understand loh!

Remember 2 of the world most richest & savvy investors w.buffet & bill gates like investing in farmland now mah!

U can emulate them now too mah....!!

Thats why the 2 richest savvy investors have taken note the point of concern that palmoil & commodity price cannot going up forever like the case of glove & eventually the commodity price will also fall 1 day mah!

To address this issue or concern w.buffet & bill gates, say buy farmland & palmoil plantation, even the commodity price fall, u still have great protection on the value of cheap plantation land & farmland mah..!

If u buy into cheap land, u have both margin of safety accorded by cheap land plus prospect of reaping great profit from high palmoil price loh!

Thus u should Quickly Buy into palmoil plantation now, b4 its price shoot up mah!

Time to be a little bit more contraian in view of mkt at reasonable high level mah!

Warren buffet says inflation is definitely coming in view of low interest interest and speculative sign such as bitcoin, rubbish stock price run up sky high and unrealistic stock valuation & expectation and now raw commodities price run up mah!

Bill Gates already bought alot of farmland at low in preparation & in anticipation for the coming armmagedoom coming mah!
Why would one the world tech best richest owner switch alot of his investment into farmland, this bcos farmland or value real estate if it is bought at reasonable low price, u cannot go wrong over longterm bcos the availability of land is limited, u cannot manufacture land like bitcoin mah!

Coming back to msia the equivalent to farmland is oil plantation, u still can get it real cheap & it is paying u reasonably good dividend loh...this is the best defensive & offensive play like bill gates and warren buffet had highlighted mah!


As calvin sifu said timber is at record price & palmoil at record price surely some optimism will spillover to plantation & timber share price mah!

But this up 1 to 2 sen is chicken feed mah, why up so little leh ??

Timber & palmoil share r suffering from lack of production mah and also huge impairment losses on its assets mah & previous falling share price mah!
Thus they are jittery on recovery of palmoil & timber share loh!! They want to see actual profit b4 jump in loh!!
That means if u base on profit...as indicator that means the share price will be lagging loh!

Then why promote Wtk leh ??
1. The owner , directors and insiders already accumulating quietly without fanfare mah!
2. The palmoil & timber production volume of wtk, mhc, jtiasa, boustead, ijm plant already creeping up loh...this is further support by the record price of its commodities. Just imagine u have higher prices & higher volume....that will be a very important sign of higher big profit coming mah!
3. The share price already corrected over 3 yrs of downtrend previously, when there is a big shakeout of all the weak holders...u can only grow more optimistic as time past by loh!
4. Wtk is sitting on some prime land that invested at a very low cost near major town & city, they are good development mah!
5. With all the liquidity & quantitative easing & low interest rate environment, u can see big inflation will be coming loh...!! Wtk in commodities business plus very big cheap land bank is a very good inflation protector mah!

Based on the above i think wtk , jayatiasa & ijmplant is the best pick to make profit & this is concur by sifu calvin findings also mah!

Posted by pjseow > May 8, 2021 6:08 PM | Report Abuse

Calvin and Ahbah , Investment timing is very important and be at least medium and long term horizon . Dont buy at the peak . Gloves stocks had came down 50 to 60 % from the peaks in August last year . I did not promote glove counters then because the earnings were still not proven , PE were high . Glove stock prices peak before its ASP peak . There was a 9 months to a year lead of the share prices over its ASPs . Glove stocks had finally PROVEN to deliver fantastic results in the last 3 qtrs after August 2020 while their prices came down 50 % . THeir PE are less than 5 while they will continue to deliver superb results in the next few years with double and tripling of capacities . The palm oil price cannot keep going up forever since it started picking up 2 years ago in 2019 .Likewise , the oil palm counters will peak soon or already peak now before its palm oil ASP peak which may happen in 3 to 6 months time or even earlier . When palm oils ASP came down finally , do the plantation counters have doubling of capacities to compensate for the drop in ASPs ?

Posted by observatory > 2021-05-09 17:43 | Report Abuse

Ben, thanks for your article on the important topic of inflation outlook.

My view is the inflation expectation in US has gone up mainly due to optimism about reopening of economy. 45% of US population has received at least one jab, way higher than many have expected just a few months ago. Daily confirmed cases have dropped from a peak of 25k to less than 5k now.

https://ourworldindata.org/covid-vaccinations
https://ourworldindata.org/coronavirus/country/united-states

Higher inflation expectation is also encouraged by the Fed with its plenty of patience in holding off rate hike. In Aug 2020 the Fed has announced that instead of targeting 2% inflation, it would target inflation that AVERAGES 2% over time.

While the Fed is silent on how long is the average duration, most people believe the Fed would be sanguine to let inflation runs to say 3% in the coming quarters to compensate for the shortfall in earlier period. This could help to put the economy on a firmer footing. This would reduce deflationary risk due to frequent undershooting of target in the last decade.

Besides a little push on the wage increase helps to reduce income inequality in the US. Inequality has been feeding the dangerous populist sentiments and creating a fertile ground for demagogues like Donald Trump.

Yes, there is a risk that the Fed monetary policy, coupled with Biden's expansionary fiscal policy, could bring back double digit inflation like what happened in the 70’s.
https://tradingeconomics.com/united-states/inflation-cpi

But so far there is little evidence of wage-price spiral that was necessary for persistent high inflation. Higher wages is the key to high inflation given close to 80% of the US economy is contributed by services. As long as wage growth remains moderate, as many expect it to be, the commodity price rise in crude oil, copper, lumber and so on is likely to be transitionary. Besides, technological advances are deflationary in nature given it replaces manpower.

I note that not even Larry Summers, who has strongly criticized Biden’s stimulus, has boldly predicted the comeback of high inflation. Summers has covered himself with plenty of ifs.

In fact if one were to believe in the market verdict, participants in the Treasury market bet with their money that the US inflation rate 5 years from now is 2.3%

https://fred.stlouisfed.org/series/T5YIFR

Of course, a 2% to 3% inflation rate in US does not provide comfort for Malaysians if we experience much higher inflation.

Looking at Malaysia past situation, normally the risk of high inflation comes from sharp depreciation of the Ringgit, especially during a financial crisis which leads to capital flight.

That’s why I don’t agree with your view that a person living in Malaysia should focus his investment in Malaysia. I believe a healthy dose of diversification out of Malaysia is important. Not necessarily just US, or China for that matter. For example, a typical retailed investor may invest in good track record unit trusts that invest in the region or even globally. Better still, dollar cost averaging into low-cost ETFs that track US, European and AP market.

But there is a more important decision than selecting which share market, which sector or even which stocks. A well thought through asset allocation plan is crucial to help investors ride through all market conditions. So to me the most important decision is the percentage allocation into cash, equity (foreign and local), bonds, real estate and even precious metals.

Take three typical scenarios that associate with the inflation rates:
1) Deflation (negative inflation) – as experienced by Japan in 90s and 2000s, or by HK in late 90s and early 2000s. Government bonds will outperform (but this does not apply to developing country government bonds given the tendency of capital flight). Cash is an alternative option

2) Mild inflation – like most of the years in US from 80s and now. Actually S&P 500 return since 1980 is about 100 folds!

3) High inflation – Not just bonds and cash, but stocks will suffer too, as most companies cannot pass on cost increase fast enough. It will be even worse during stagflation, where companies also suffer from weak demand. When there are fears about debasement of fiat currencies, I believe gold will make a comeback. Gold has not only been tested in the 1980s high inflation period, but also in many war periods centuries ago.

As for cryptocurrencies, I believe it is an expression of easy liquidity today. When there is a systemic risk that the world is falling apart (though very unlikely in my view), individuals as well as country central banks will prefer to hold physical gold rather than Bitcoin, Ethereum, not to mention dogecoin, as they all rely on a functionating Internet to verify transactions!

Posted by Ben Tan > 2021-05-09 22:21 | Report Abuse

Imagine333, stockraider, observatory, thank you for your comments.

observatory, I feel like we are running a little bit off-topic again. I explained in the first part of the article why the underlying depreciation of certain currency (among them, chiefly the USD) is unquestionable. You can read it here: https://klse.i3investor.com/blogs/bursainvestments/2021-05-01-story-h1564229949-Debt_Money_Printing_and_Inflation_The_Economics_of_a_Pandemic_Part_1.jsp

If The Fed, or Treasury holders, have positioned/prepared properly for that inflation, or if The Fed is simply trying to calm down the markets, is beyond the point. The real question, which cannot be answered as it is largely politically-related, is when and how quickly the underlying depreciation will get resolved and will start showing up in official statistical data.

You make a very valid point on political risk in Malaysia, which I believe is a more serious problem than a financial crisis as it is isolated to the country itself. However, political risk is by its nature very hard to estimate and predict. There has been a significant amount of depreciation in the value of the MYR over the past several years (since 1MDB), and a significant outflow of foreign investment from the country. My belief is that it would be hard for the process to exacerbate further at this point. A non-elected government has been moving the country through the biggest pandemic in a century after the ruling coalition disbanded. It hardly gets worse than that. Thus, my view is that the downside on the political risk side is generally controllable hereon after.

The real elephant in the room is the aforementioned underlying depreciation in the currencies. I have briefly looked at the figures for other countries, and I can see that as far as money supply expansion goes, Malaysia has been on the very conservative side as compared to most other countries. Thus, I am very comfortable with my MYR denominated holdings so far.

Posted by stockraider > 2021-05-09 22:47 | Report Abuse

Dear Ben,

Earlier ur presentation abit long winded, Raider has trouble grasping what is ur point loh ? Since I notice u want to talk like an economist, General Raider will speak at your language loh!

U mentioned the following important point loh!

1.Severe Disruption in world economy due to covid19 & lockdown
2. The strategy adopted to cushioned the impact is thru interest reduction & quantitative throughout the world loh!
3. Usa & europe has printed 29% & 18% more monies yet USD depreciate only 6% v excess money printing, that means alot of hidden inflation ?
4. The majority of the Quantitative easing & Govt financial support have gone into the People personal savings instead into spending.
5. Keynesian theory says we must spend b4 we can kick start a major recovery & but beyond that will create an inflation loh!
6. MYR will not depreciate much compare to USD bcos we have printed currency only 6% v 29%

Posted by stockraider > 2021-05-09 23:11 | Report Abuse

When the severe covid19 & lockdown hit the major western countries, alot of people are anticipating Great economic impacts and severe stock market crash that are more severe than The Great Depression in 1929 & Great Recession in 2008 loh!

But luckily most Government chose option 3 that are quantitative easing & sharp monetary interest reduction throughout the world mah!
These strategy prevented complete collapse of the stockmarket & the severe negative impact of recession due to the lock down & averted the unrest of people throughout the world due economic hardship loh..!
General Raider still thinks that this is the best tools adopted by the govt coordinating throughout the world loh!

Yes there are many job losses due to business collapse but the govt has created safety nets through handout plus job support directly plus lowering the interest rates drastically through quantitative easing as a result most economy did not freeze thus avoided recession or worse a depression loh!
We must bear in mind most of the western world had very high rate of borrowing, if the govt had chosen option 1 or 2 the world will be a dead duck and the whole world stock market & business will severely collapse & we will be in for another Great Recession just only 12 years after the previous Great Recession in 2008.
Bcos of the Govt action the impact on the economy, business and stock market have been very much milder than expected loh!

Posted by stockraider > 2021-05-09 23:35 | Report Abuse

the quantitative easing throughout the world are as follows USA has printed extra 29% monies, Europe 18% and Msia 6%....plus countries like Japan, China & others loh!

Beside quantitative easing the monetary interest of Usa were brought down to zero, Europe negative interest And Japan negative interest this in a way help the climate of business, investment and stock market with lower cost of funds thus in a way alot of business avoided bankruptcy and stock market complete collapse bcos liquidity & credit are available loh!

The negative consequence of quantitative easing is latent inflation and currency depreciation loh! But this did not happen loh!
Firstly the liquidity & handout & support the Govt the recipient use these resources to paydown debts, for investment and for saving for the rainy days loh!

2ndly There are not much opportunity to spend, the world is in a severe lockdown & people fear losing their jobs there are little incentive to be any big spender Mah!

3rdly since no one are really spending big & some business are closing down most country did not experience inflation in fact there are mild disinflation for the 1st few months loh!

As a result the stockmarket benefited as the return on equity are very much higher than the meagre return putting monies in the banks.

Then when will inflation, currency depreciation and lost of productivity due business closure really strike leh ?

Posted by stockraider > 2021-05-09 23:51 | Report Abuse

Since Usa printed 29% more of its monies and Europe print 18% more and msia 6% why usa currency did not really fell agst msia and why Europe with negative interest rate , its currency did not collapse leh ?
In fact europe the currency appreciated instead loh!

As for Usa the currency did not really depreciated agst msia despite Usa print much more than msia leh ??

U see valuation of currency is quite unique mah!

There are many factors affecting exchange rate these includes;
1. Confidence & rating
2. Govt Policy
3. Interest Rates
4. Inflation
5. Purchasing Power parity
6. Balance of Payment & Reserves it hold
7. Economic power of the country

Thus despite USA score badly on printing monies despite it has appreciated alot previously b4 QE, it has not depreciated much agst msia post QE maybe say 1% to 3% down, this is mainly due to msia credit rating was downgraded from A- to BBB+ loh!

Going fwd RM wii be volatile if u look at the 8 factors affecting MYR loh! Any of those element will impact the exchange rate mah!

Posted by stockraider > 2021-05-10 00:19 | Report Abuse

Thus when will rapid inflation going to hit us leh ?

U see Keynesian theory says u need to spend money b4 economic growth kick in & eventually lead to inflation mah!

If u hoard cash, pay down debts and refuse to commit on spending all these are disinflationary mah!

Right now only the Govt are really planning to spend big loh!

If u look at Covid 19, we are already been thru more than 1 yr...right now we actually at phase 3 the emerging recovery phase, where vaccine are here and the world already not so fear of covid 19, bcos we now understand more of it loh!

We are getting ready for the world economy to open up soon loh..!
Raider see somewhere July to Sept the world economy will open up with a very big bang and inter country will be allowed to travel loh!
That will means big spending will come and people will spend very big with revenge in mind loh!

Tokyo olympic in July, will be the beginning of the open up phase loh!

Now as for inflation it is already on its way here loh!
All commodities Food like soya bean, corn, wheat, palmoil all ramp up. Industrial products like copper, alum, steel, lumber, oil, resin, chemical all begin to move up high in tandem mah!

Freight cost had already move up sky high loh!

Eventually all these will translate to inflationary pressure & higher price on our consumer products in the form of cost push inflation, General Raider expect this is somewhere December 2021.

The next Stage will come in the form of demand pull inflation in the form of revenge spending where excess demand overwhelm supplies that will be by June 2022 loh!

The stockmarket will have 1 big leg of continuous run up until December 2022, in which by then whole world will start to take action to prevent rampant inflation loh!

Posted by stockraider > 2021-05-10 00:24 | Report Abuse

The best strategy to prepare for rampant inflation when it hit us in msia is to invest in palmoil plantation loh!

Yes buy what u understand loh!

Remember 2 of the world most richest & savvy investors w.buffet & bill gates like investing in farmland now mah!

U can emulate them now too mah....!!

Thats why the 2 richest savvy investors have taken note the point of concern that palmoil & commodity price cannot going up forever like the case of glove & eventually the commodity price will also fall 1 day mah!

To address this issue or concern w.buffet & bill gates, say buy farmland & palmoil plantation, even the commodity price fall, u still have great protection on the value of cheap plantation land & farmland mah..!

If u buy into cheap land, u have both margin of safety accorded by cheap land plus prospect of reaping great profit from high palmoil price loh!

Thus u should Quickly Buy into palmoil plantation now, b4 its price shoot up mah!

Time to be a little bit more contraian in view of mkt at reasonable high level mah!

Warren buffet says inflation is definitely coming in view of low interest interest and speculative sign such as bitcoin, rubbish stock price run up sky high and unrealistic stock valuation & expectation and now raw commodities price run up mah!

Bill Gates already bought alot of farmland at low in preparation & in anticipation for the coming armmagedoom coming mah!
Why would one the world tech best richest owner switch alot of his investment into farmland, this bcos farmland or value real estate if it is bought at reasonable low price, u cannot go wrong over longterm bcos the availability of land is limited, u cannot manufacture land like bitcoin mah!

Coming back to msia the equivalent to farmland is oil plantation, u still can get it real cheap & it is paying u reasonably good dividend loh...this is the best defensive & offensive play like bill gates and warren buffet had highlighted mah!


As calvin sifu said timber is at record price & palmoil at record price surely some optimism will spillover to plantation & timber share price mah!

But this up 1 to 2 sen is chicken feed mah, why up so little leh ??

Timber & palmoil share r suffering from lack of production mah and also huge impairment losses on its assets mah & previous falling share price mah!
Thus they are jittery on recovery of palmoil & timber share loh!! They want to see actual profit b4 jump in loh!!
That means if u base on profit...as indicator that means the share price will be lagging loh!

Then why promote Wtk leh ??
1. The owner , directors and insiders already accumulating quietly without fanfare mah!
2. The palmoil & timber production volume of wtk, mhc, jtiasa, boustead, ijm plant already creeping up loh...this is further support by the record price of its commodities. Just imagine u have higher prices & higher volume....that will be a very important sign of higher big profit coming mah!
3. The share price already corrected over 3 yrs of downtrend previously, when there is a big shakeout of all the weak holders...u can only grow more optimistic as time past by loh!
4. Wtk is sitting on some prime land that invested at a very low cost near major town & city, they are good development mah!
5. With all the liquidity & quantitative easing & low interest rate environment, u can see big inflation will be coming loh...!! Wtk in commodities business plus very big cheap land bank is a very good inflation protector mah!

Based on the above i think wtk , jayatiasa & ijmplant is the best pick to make profit & this is concur by sifu calvin findings also mah!


Posted by pjseow > May 8, 2021 6:08 PM | Report Abuse

Calvin and Ahbah , Investment timing is very important and be at least medium and long term horizon . Dont buy at the peak . Gloves stocks had came down 50 to 60 % from the peaks in August last year .
I did not promote glove counters then because the earnings were still not proven , PE were high . Glove stock prices peak before its ASP peak .

There was a 9 months to a year lead of the share prices over its ASPs . Glove stocks had finally PROVEN to deliver fantastic results in the last 3 qtrs after August 2020 while their prices came down 50 % .

THeir PE are less than 5 while they will continue to deliver superb results in the next few years with double and tripling of capacities .

The palm oil price cannot keep going up forever since it started picking up 2 years ago in 2019 .Likewise , the oil palm counters will peak soon or already peak now before its palm oil ASP peak which may happen in 3 to 6 months time or even earlier . When palm oils ASP came down finally , do the plantation counters have doubling of capacities to compensate for the drop in ASPs ?

Posted by Ben Tan > 2021-05-10 15:15 | Report Abuse

stockraider, that's a lot of text, sometimes really hard to read or follow (it seems like it's a collection of copied texts from somewhere else?).

In any case, the exchange rate of a currency depends on a myriad of factors which in normal times cancel each other out to a large extent, so that the currency exchange rate rarely swings in either direction, except for during major cataclysms. Such a cataclysm is an increase in the money supply to GDP ratio by close to 30%. Another potential cataclysm in the making might be a sharp increase in taxes, which is expected to happen in the US.

The rest of your comments are explained and covered in the two parts of the article.

Posted by observatory > 2021-05-11 18:25 | Report Abuse

Hi Ben, thanks for your reply.

I didn't read Part 1 of your article earlier until you pointed out above. I just read up and commented. We could continue our discussion there if you wish to.

Posted by bpsiah > 2021-05-16 18:14 | Report Abuse

2) In order to be of attractive valuation, the company would need to have a forward P/E (as quoted by The Edge based on Bloomberg data) higher than the P/E ratio as of March 19, 2020.

Ben, why higher P/E ratio here? Can you elaborate?
Thanks for the sharing.

Posted by stockraider > 2021-05-16 18:41 | Report Abuse

What they actually mean better Pe ratio or lower Pe ratio, it is a misquote mah...!!


Posted by bpsiah > May 16, 2021 6:14 PM | Report Abuse

2) In order to be of attractive valuation, the company would need to have a forward P/E (as quoted by The Edge based on Bloomberg data) higher than the P/E ratio as of March 19, 2020.

Ben, why higher P/E ratio here? Can you elaborate?
Thanks for the sharing.

Posted by bpsiah > 2021-05-16 22:43 | Report Abuse

Tq Stockraider