Monday, April 29, 2013

Supermax made me sit up and take notice

When this guy made a stand, he earned my respect almost immediately. A business guy who dare to say these kind of things surely do not need to depend on our gomen. I suspect his business should be competitive internationally. If you are good, then you don't need to suck up to the government. 

I have not been taking a look at Supermax for while. So I went and had a quick browse on their 2011 Annual Report. A couple of highlights.

See. They are no 1 in US dental glove market.

This company grew their shareholders' total return by 7 folds.
EPF has been selling shares in this company since end of last year. When people said the company said Supermax kena hit because of what the chaiman said certainly is not true. Keep this company under your radar. Buy when it falls hard when somebody is trying to to punish them unjustly.

Saturday, April 27, 2013

Post GE: What would you do if market plunges?

As at 25 April 2013, the daily trading participation statistics were quite telling. Retail investors 11%, local institutions 53% and the balance goes to foreign investors. The KLCI made fresh new high, 1,718 but I never felt the excitements. I suppose I wasn't alone. I have been thinking whether the market has been climbing wall of worries. Are the worries genuine or just silly irrational fears?

There have been many talks that if PR comes to power, the market will surely drop. The most popular explanation is uncertainty. Uncertainty of power transition or economics policy. The second theory is disappointment  Failure of BN to retain power will certainly create disappointment to certain group of investors or speculators.

Both theories can be correct but what is more important is this. If the market really plunges, will you scoop up with two hands? My take is political driven sell-off seldom last long. It is a matter of time, people will wake up. An event like that will create a trading opportunity.10 - 12%  corrections in oversold territory will be a good entry point, then sell into relief rally of another 8 - 10%. 

For those who practices a bit of  market timing, the answer can be a bit more complicated. The overall regional markets that have been hitting new highs but it has never corrected significantly despite of  many signs of weak global economy recovery. A sharp corrections in external markets may push the market down after triggered by assumed GE 13 political tsunami.

For those who believe in coupling theory will be even more complicated. The governments intervention around the world had turned every market participants into very disoriented mode. The non-stop liquidity pumping activities have been supporting the equities markets. It was not entirely correct however to say that all asset classes, especially risky one, benefited from the liquidity. BRICs indexes were still way off from their 2008 peaks despite of it accounts for 50% of global growth since 2001. Commodities prices tanked and yet to make any new highs. In other words, the recent gain so far have been quite narrow(US equities) or lagged such as Japanese market and to some extend of Malaysia equity market. This worries me a lot and at the same time stress me out seeing it keeps rally days after days.

So the answer ranges from very simple to a very complicated one. To make things simple, the true north is always guided by valuation. Post GE 13, one thing for sure -- I will deploy cash to buy stocks on big sale if PR wins.

But what if BN wins and the market rallies? I will surely not buy into that rally and I will explain why in the next posting.

Saturday, April 6, 2013

GE 13 Fever and market

The parliament was finally dissolved this week. Our stock market has been in see-saw moods since beginning of the year is finally made up its mind. It is zipping up. Pointing out the obvious, the foreign funds have been pouring in money driving the herd to charge ahead. I am not sure they are leading the herd to a green pasture or over a cliff. I have not seen retail participation more than 20% but they finally showed up last Friday.

The FBM Small cap seems to dance out of consolidation range, though it is over-bought now.

Judging the momentum of the market, this moving train is hard to stop, leading up to polling date. Price actions will surely get people emotionally charge. Those choose to play are surely have their own reasoning. They don't expect people to agree with them. Understandably.

Judging from what I read, those choose to play in the market is betting BN to retain power. You and I know to forecast outcome is as good as flipping a coin. To forecast the stock market post-election is even more difficult. Let's be honest, if you can do so, you already made money for the last few months from the volatility.

I see the market is no longer cheap. Cheap stocks(especially small cap) that can attract institution funds, are no longer cheap after parabolic surge within 1 - 2 weeks. Cheap stocks (own by retailers) are still cheap but may remain cheap.

Foreign funds can come, they can also go. Local funds can join, they can also sell when things start to wobble. Only retailers who have been highly disciplined telling themselves to buy at the buy at the bottom of market look shaky. They are finally start thinking to buy and contra(T+3) may ended up as a long term investor - stuck with a large losing position for next 10 years.

Thinking of hit and run?

Be my guest but just remember this. "Bulls make money, bears make money, but sheep just got slaughtered."