Thursday, May 7, 2015

When kings got dethroned.....

First, it was Bill Gross got dethroned as king of bonds and now we have Mark Mobious dethroned as king of emerging markets. Those basically believe in valuation practically got hammered and driven to the ground.

The End of Mark Mobius’s Reign as King of Emerging-Market Stocks

For a quarter of a century the name Mark Mobius has been synonymous with investing in developing markets. A bald, energetic, New York native who often dresses in white suits, Mobius is constantly tweeting and appearing on television from St. Petersburg to São Paulo encouraging investors to put money into fast-growing developing economies. A Mark Mobius comic book published in Asia in 2007 chronicled his globe-trotting exploits. (Really.) In the U.S. he was voted by his peers onto a list of the top 10 investors of the 20th century, putting him alongside Warren Buffett, Julian Robertson, and George Soros. What Bill Gross was to bonds, Mobius was to emerging markets: the King.
His reign may be coming to an end. Like Gross, Mobius, 78, has posted mediocre numbers in recent years and seen investors depart. While they still make money, 11 of the 13 largest funds that Mobius oversees at Franklin Templeton Investments have underperformed their benchmarks over the past five years. At his zenith in 2011, Mobius oversaw $39 billion. Today that figure is down to $26 billion. And in December, his flagship Asian Growth Fund lost its long-held position as the region’s largest to First State Investments’ Asia Pacific Leaders Fund. “He’s one of the few well-known managers in emerging markets,” says Todd Rosenbluth, director of mutual fund and ETF research at S&P Capital IQ. “Unfortunately, the track record is below average. Investors are more frustrated.”

There is only one kind of people that I know is making money now: traders and momentum traders.....If you don't belong to this special breed, be very careful. You can loose your shirt minus your pants....yes....pants(plural).

Sunday, May 3, 2015

Random thoughts on the markets

Waiting for major market corrections requires a lot of stamina. But I know if I give in now, I would really an idiot. Why?

Look at this chart.

S & P 500 is valued @ 21x PE ratio. Except the extreme bubble or of the chart during 2009 crisis, it is certainly at top of the valuation range. The median is 15 x. I always believe in reversion to mean.

KLCI is selling for 17 PE ratio. Again it is above the long term valuation and also at the top of trading range. Corporate earnings have been dissapointing. 

My only market that I used to be bullish while the rest of the world keep saying China was about to implode due to property bubble, crashing economy and shadow banking. As time goes by, my convictions were proven right. China is heading towards managed landing. China stock market is getting very pricey, close to 20x PE.

What is really worrisome the stock market is fuel by high school drop out and "da ma".

I don't think I am looking for the end of the world scenario but we certainly need a deep 20-30% corrections before the bull run can continue.

Please note that the cheap money is here to stay forever, is an illusion. Look the US unemployment is approaching full employment. It's close to 2006/2007 level.

Yet the interest rate stays ZERO?

No, it will not stay for long, at least not what 10 year treasury traders think. It starts to trend up.

To those who still swimming out there, just be careful. Just like Warren Buffett said: "A bull market is like sex. It feels best just before it ends."

Saturday, March 28, 2015


It was strange that I feel sad for a man whom I never met. Have not really even really read one of his greatest trilogy writings. Have heard about younger generations of Singaporean ranting for wanting more freedoms. Certainly have seen a successful Singapore, feel safe walking any where you want and getting a lot things done very fast.

If you want to know how much respect you got is what your people say about you when you are no longer around. Even Dr. M has something nice to say about him, in a personal way, Kuan Yew and I

What he has done inspired many third world countries to do the same. China was one of them. Deng Xiao Ping opened up China after a visit to Singapore. As a result of that, millions and millions of people were liberated from poverty. I am sure the world has also benefited from this multiplier effect.

The greatest criticism on him was authoritarian style. Many have also abused by saying a country can achieve what Singapore had achieved if they sacrifice some of their freedom. In a real world, it is not so simple.

I had a long walk this morning to think about this. My conclusion was, yes I don't mind to submit to a leader who is smart(1st class Cambridge graduate), a workaholics, 100% clean and like a candle that burning himself to light up the nation. That is why too, many tried the model, only a handful successful because some ingredients were missing. Thanks LKY.

Monday, February 23, 2015

Ringgit to USD Chart ...... pray it does not breakout @ MY 3.70 !

MYR closed at 3.64 against USD today. It's getting very close to 2009 level.

We may think that USD is universally getting stronger against a lot of currencies but look this. I do not want to show SGD here because we always have something to say that they are a well managed country. Let's compare to Thailand.....Geez......holidaying in Thailand seems to get much more expensive.

I don't think Ringgit depreciation is driven by poor sentiments or uncertainty caused by 1MDB alone. First almost default on RM 2 billion loand and now rumors are swirling of RM 3 billion cash injection needed.

Something is wrong!

But at the same time, things seem to be quite calm in the bond markets.

Our 10 year yield is still quite stable and I do hope things will be under control. The movement so far has been in locked steps with US 10 year bond yield though there were some spikes that quickly brought back under control.

The divergent is building up. It's really time to be vigilant.

Wednesday, February 18, 2015

Spring Cleaning.........Welcoming Goat Year

Aha.........the good news is I have finally done spring cleaning my house. When I was young, I remembered we all would gathered at grandma house turning her house upside down to make it sparkling clean. We would repaired leaked roof and repainted the gate. Then welcomed a new year.

During those days, it were really special occasions that we get to eat chicken and receiving red packets. 

During those days, red packets were more symbolic gesture of love than money.

The situation is quite different nowadays - the tradition is either disappeared fast or hard laborers of love replaced by maids......sigh.......The situation has also changed due to much smaller family size. In my case, I ended up doing most of the works(without maids).

I finally reached the last and my favorite place today -- my's a place that we tend to throwing in our stuffs or keeping our stuffs promise to deal with it. It's kind of writing IOU. Unfortunately we usually default on our IOU - don't make good on our promises. I finally resolute to make good of my spring cleaning. 

I found there were many things that obsoleted, I mean technologically....So I finally made up my minds to get rid of the ADSL modems  as we had transitioned to Unifi. I found copies and copies of old annual reports and also warranty cards that more than 5 years old. Sorry, those were also finally ended up in a big rubbish bag.

I also had something I really wanted to keep such as this old mobile phone which is more than  17 years old.....Not too sure it will worth a lot of money if I keep it for another 17 years old.

I also have a prized 17" Macbook Pro that was 12 years old. The screen was not in working conditions but it was still one of those stuffs that I wish keep.

Apple MacBook Pro 17in

Fortunately for me this year, when come to investment portfolio, I don't have to work very hard. It looks pretty clean because most of them are in cash or really long term investment that I don't intend to sell even during the next bear markets.  Despite of high cash position, I still have no intention to re-balance it by moving some of cash to equities or other assets. It is not so fun though seeing strong markets rebound from sharply oversold markets in December 2014. I keep reminding myself everyday that it is better to have lower return from risk free investment than making a negative return by making wrong moves at the wrong time. 

Wishing everyone a happy Chinese New Year. May the year of goat brings lots of good lucks, good health and good fortunes.

Image result for goat year picture

Sunday, January 4, 2015

Are you(Am I) prepared to retire?

You might find it weird that I post about the subject as my first posting of 2015. No particular reasons just that after taking a long break, I want to get more clarity what exactly is retirement.

I am bored and tired of the same old, same old text book writings or advice about retirement. It's always about money, money and money. We all will be blasted of not having enough money to retire. We will run out of EPF money within 30 months and etc. Therefore, starts with PRS and so on.

What make me feel even more sick is whole bunch of these people who are advising other people about retirement, are people who never experiencing retirement themselves. They just copy and paste from textbook without serious efforts of getting primary or secondary research.

Money matters aside, I think there are some other big pieces of puzzles are missing. Let's warm up with simple questions like What exactly retirees do? We all dream of retiring, Yes? What would you(I) want to do with this new found freedom? Or suddenly turn ourselves into "billionaires" of time?

Before I go on, I have a qualifier: I have never experience retirement myself too. The subject pops up is just to provoke myself to kind of thinking through about retirement. Hopefully, I have sufficient clarity before I really decided to retire. After I started to make this entry I found out reality(facts) and imagined retirement(myths) could be two very different animals. I don't want to just focus on the financial preparation alone but also thinking through how am I going to live until the day I going back to see the Lord!

I have a hard time to think how are we going to fill our new found 16 hours(24 minus 8 hours sleep) for the next 15 to 40 years. One-Five is a long time, Four-Zero is closer to eternity. Looking back, during my career, I have quite a number of events that break my monotony. Most of the challenges are forced by changing business or personal environments. Living for next One-Five and Four-Zero years doing the same thing(or no idea of doing anything) is quite a scary thought to me. I have more to comment on this later.

An ideal retirement according to our imaginations or told by people are(my comments are in red color):

# 1 - Spend more time with the loved one. Be careful of what you wish for. You might find out the more time you have with your loved one ended up with more quarrels. You may ended up finding more ugly sides of yourself or loved one.

# 2 - Travel around the world. Each trip may last you 3 days to 15 days, what are you going to do with the rest of 350 to 362 days, not to mention the depletion in your saving account?

# 3 - Improve your home. Sounds reasonable. Repair here and there, do a bit of gardening, vacuum and shine the whole house. Technically we have just found ourselves a full time job coming out from retirement.

# 4 - Community service. Spend more time in the church, temple, mosque, etc......volunteer ourselves. It's a noble inspiration. But....a big BUT. Are you ready for public service? Public service can mean it's a thankless job. A candle burning itself? Not everyone has that calling. 

# 5 - Learn something new. Yea.....great idea. Do it today! If you can't do it today means you won't do it when you're retired.

# 6 - Execise. This is another no brainer. What is preventing you exercise today? Kick your butt and get the fuck out of couch watching the TV, surfing Internet, etc.....Just do it!

# 7 - Reward yourself.  Draw up a bucket climb Mount Everest, buy a xxx car, drink that xxx wine, switch to xxx brand clothing. Nice in theory.

The list can be endless.........on those so called retirement dreams.

In reality, these are more likely.

# 1 - Sleeping. When you are inactive, the tendency of sleeping or taking naps are high. 

# 2 - Watching TV. Most likely you will spend about 4 - 5 hours daily watching TV.

# 3 - Surfing the internet. Facebook, gossips, blogging, and etc.....

# 4 - Eating. In an unhurried life, we tend to spend more time to prepare food and also eat more slowing. Some may even travel miles and miles to find things to eat.

# 5 - Shopping. Like teenagers with so much time at their disposal. They ended up with lots of window shopping. 

# 6 - Reading. Yea, I think most people will try to read from cover to cover with a few cups of coffee.

# 7 - Socializing. Personally I don't have that many friends. So I am not so sure about this. Again, talking to the same friend over and over again for next 15 to 40 years is kind of weird and scary.

You may start to protest and demanding the punch line. What are you trying to say?

Do you have any aspirations when you quit your full time job(voluntarily or by forced)?

Before we talk about aspirations, let me share my views of what my retirement certainly SHOULDN'T be:

  • Running away from the world. We shall never alienated ourselves to a monastery to be monks or nuns(unless you strongly feeling that you have the calling).
  • Downgrade ourselves to become manual laborers - butler, driver or housemaid.
  • When time turning from a friend into an enemy. Getting ourselves into trouble of developing clinical depression that leads to all kind of other problems - alcoholism, womanizing, popping blue pills or all kind of escapism.
  • Wasting time endlessly gossiping about people, politics or any other special topics, stocks. Yes, especially the last one is dangerous because thoughts will eventually trigger action.
  • Mechanical programs that sold by imaginary successful retirement like go round the world, fulfilling exotic bucket list wishes, play golf, etc.....  
  • Volunteer ourselves to do community works just because we have nothing better to do.
  • Turning ourselves for next half our life into somebody who are worse off than our first half of our life. Why should l sleep more than it should be? Why shall I spend more time on a couch? Why should I allow my physical and mental sharpness to deteriorate?
  • Preparing our funeral.

P.S. My postings will be infrequent until market valuations improved or I might write additional follow up thoughts on this topic.

Happy New Year 2015!

Wednesday, December 31, 2014

Wrapping Up 2014 - Turtle Portfolio

It's this time of the year again, that most people will be heading to shopping malls, restaurants or bars to celebrate the closing of 2014 and welcoming 2015.

For me, it's time to stay at home and do nothing. My private lifestyle and investment philosophy are identical. I hate crowds. For most people silence is very frightening. They felt that they can't breathe, as if they are trapped in a bottle sealed with vacuum. It is the opposite for me, noises from the crowds will make me feel that I am trapped in a drum with somebody drumming so hard trying to burst my eardrums and head.

For most people, inactive is only for birds(small brains). They think they got to beat the index. Or only idiots will stick with risk free investment. Sitting still makes them feel that they are trapped in a vacuum bottle. They just can't breathe.

Turtle Investor Portfolio on the overall is very cash rich. It has risen to RM 79 k or 95% cash. Return on capital was RM 11 k or 15%(CAGR of 3.25%). With so much cash on hand, it will be very handy during bears hunting seasons. I am getting more excited because the bull market is getting older and older each day.

In 2014, I bought only 1 stock for Turtleinvestor portfolio, CIMBA50. It's an ETF that has exposure to China Stock market, it has risen by 25%. Though the exposure was small, I was happy because of my strong convictions about China was vindicated.

Did I regret for not able to much move cash in 2014 ? Absolutely not, on the contrary I felt the opposite way. I feel rewarded for doing nothing.  KLCI closed at 1852 on first trading day of 2014 and as I making an entry, KLCI is around 1766 or minus 4.6% return. If we look at individual stocks, losses could be even more glaring for those who had bought stocks this year. 

Even some regarded as safe stocks like Petronas Dagangan which many regarded it has many Buffett-like qualities company falling like a hot knife piercing through butter, with many bleeding hands. For those think valuation does not matter, think again. They must be licking their wounds quietly defending themselves as long term investors. I bet if the price were to drop another 20-25%, these long term investors will be selling out like nobody business, then then call themselves traders who are cutting losses.

I suddenly found many people feel their brains turbo-charged to IQ 180 talking about Black Swans. Nobody ever foresee that crude oil price can collapse in 2014. They can draw all kind of trend lines and all kind of technical indicators but when the trend reverse, gravity rules breaking so many ribs in a short time. If we don't respect random walks of markets, let's be more humble.

Even the bluest of blue chip oil and gas stock can free fall.

Let me show you another chart, our Finance sector is the process of making a downtrend and essentially it will drag KLCI lower. Over the last few years, the loan growth had been going into unproductive area such as cars and funding after ever rising housing prices. May be some will still argue that we have 83% household debt to GDP but we are also been backed by solid assets, let's not get too negatives. Just consider this, even I am sold with the arguments of many experts justified reasoning of no housing bubbles but it is also a sure sign of people have maxed out their credit. For this reason alone, we ought to leave our mind open that housing prices can reverse direction.

Please don't get me wrong. I am not in the mood of bashing or spreading bearish views.

Rather, I find the wisdom of Warren Buffett is more apparent as time goes by.

Rule # 1 don't lose money.

Rule # 2 Refer to Rule # 1.

I find the witty side of Buffett's new wisdom, Virginity can only be preserved and cannot be restored. So???? Don't get fuck by the markets. 

My posting will continue to be infrequent until market valuations are getting more attractive. 

Until then, Happy New Year!