Some Recent Thoughts

Been rather busy couple of weeks and will be until after CNY, it would be timely that I address some of my thoughts as I start the year 2011 and soon the year of the rabbit. 

Malaysia's (developing nation) inflation rate is reportedly at a 2.x% level. Most intriguing considering that Great Britian (a developed country) has a CPI of 3.7% in December. 2.x% level is a blatant lie, if you ask me it is somewhere near 10%, I'll pick 8% since I am Chinese. God knows how they calculate it, even if they do. A more sound method to compute a near accurate CPI is to use the average income earner expenditure, break down their expenses by categories (food, transport, entertainment, education...etc), measure the increase in terms of % and weight them accordingly into a single CPI %. But sorry I am not in the PM's economic team so everyone in the country should continue being conned.

Market sentiment for 2011. Tricky to say the least, Feng Shui masters and analyst repeatedly say that 2011 will be a bullish year; testing new highs and set new financial records. Some idiots say that KLCI can reach 2,200, yea right, they just failed their maths. My personal opinion would put KLCI at 1,700-1,750 points. Considering that they is no big bubble in sight, (stress in sight), 2011 is still a bullish year but returns will never be as good as 2010. Hot money will continue to flow in Asia, developed countries still trying to clean up the debt mess. I would personally hold more cash than securities for 2011, it is getting very hard to do value investing in such time. You can go ahead with trading buy but please note the risks involved.

Climate change will have a more profound effect, more natural disasters that will inevitably push commodity prices higher, sigh. I hope more people will hop into the green bandwagon. As we enter the new decade, I would also believe a new pandemic will spread, possibly early in this decade. History has shown that in each and every decade, there will always be one. The industry to look at is glove markets and Malaysia is the world's biggest player.

I have stated that I will jump into the US market in 2011. Why? There is great money to be made in the US financial market for a number of reasons. No other financial market comes close to its size, and liquidity. The US market capitalization is x3 to x4 the size of its nearest rival: Tokyo stock exchange. U.S. markets are still the biggest in terms of turnover as well as value which implies that it is easy to find buyers and sellers. Greatest diversification, giving me the ability to invest in major companies and brands from all over the world (>7000) who list their shares on U.S. financial markets. My good investing friend has started ahead of me and well I have some catching up to do. I will continue to invest in Malaysia equities but for the US I will go for stock options.

For entertainment purposes I did a Joey Yap's Bazi Profiling Chart and found out that my two most influential elements are Day Master: Yang Wood (3) and Yang Earth (2) with the two Yang Earth's at indirect wealth column (properties, equities..those stuffs that doesn't come from ya own sweat and blood), wow! The key words of my success is through diversification (Yang Wood) and observation (Yang Earth). That explains a whole lot of me (for those who know me well). The only problem I have is procrastination err some days I feel very lazy to do anything. Nevertheless it has sort of build a little of the already big confidence that I have towards building my wealth. Though I am not an absolute believer, I do not discredit it since it is so popular they must be some beyond science truth in it.

Some say I'm pessimistic or always in the negative thinking. I vehemently believe that you can both criticize things and be happy at the same time. You have to give credit these people for they communicate better, think more clearly & could be more attentive to their surroundings. I am not saying that negative thinking is superior to positive thinking, but neither is positive thinking the god of all thinking. Want to lose weight? No need to eat right; just think about being skinny! That doesn't really work. Criticism at its best leads to improvements, you think I like to always be negative solely for the sake of being negative? You condemn the government so they can improve. If you continuously praise them and be content or fully optimistic, you think anything would change? Strike a balance between both and call it critical thinking. Be positive in what you like to see or want but be negative on things that don't look right at all.