A Prosperous CNY To All

My year is almost up, Tiger year that is. You can say that it has been a tumultuous one with its Yang Metal Year Element, bursting conflicts and creating headlines especially with the currency wars and the global economy still recovering in a fragile but gradual pace.

Year of the Golden Rabbit, which begins on February 3, 2011 (technically 4th following the lunar calender) and ends on January 22, 2012. In accordance to Chinese tradition, the rabbit year signifies rest and respite; a year to calm your nerves and catch some breath. Things should be done in a more laid-back, easygoing and relaxed manner.

For those looking for fabulous CNY gifts here are some thoughts: money plant, pineapple or pineapple tarts or peach blossoms for loved ones. Hope your business/wealth will prosper, health in good shape and happiness will flourish like never before!! Wishing you an early Happy Chinese New Year, Xin Nian Kuai Le and Gung Hay Fat Choy.

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.

Malaysia's Inflation Rate is Bogus

Inflation rate refers to a general rise in prices measured against a standard level of purchasing power. In Malaysia it is measured through consumer price index (CPI).

 

Our government has again and again restated and hold firm to the fact that the index is still hovering at 2%. Their worst case scenario include a figure only as high as 5%. How did they get those figures? Pluck from the air? Pull it from a magician's hat? Whatever it is, someone must have massaged the figures before it went live on our newspapers. And today's newspapers finally made me to write it out.

New sugar price for F&B manufacturers to impact consumers. F&N CEO Datuk Ng Jui Sia said he was confused, adding that the government normally announced any increase before such a notification from suppliers. Referring to the price for coarse grain sugar is now RM2540 per tonne up from RM1940 while that of fine grain sugar has risen to RM2620 per tonne from RM2020.

Coffee shops increase drink prices. It is difficult to find kopi-O below 80 sen any more. Those who were charging 70 sen before have increased the price by 10 sen or 20 sen. "Many raw materials like sugar, curry powder, evaporated milk and even plastic bags have gone up in price in the last few months.

Let's just take a look at the recent hikes:

Petrol prices: RON95, RM1.90 per litre up 5 sen (2.7%), RON97, RM2.40 per litre up 25 sen (11.6%)

Kerosene: RM2.50 per litre up 10 sen (4.16%)

Sugar: RM2.10 per kg, up 20 sen (10.5%)

LPG a.k.a cooking gas: RM1.90 per kg up 5 sen (2.7%)

From market: Kuih bulu 10 pcs RM1.50, now RM2.00 (33%), pork min RM2.00 now RM3.00 (50%), swiss corn used to be 70 sen, now RM1.00 (42.8%) 

Look at the figures, you call that a 2%? TNS u govt, get your facts right first. While it is true that we are the cheapest in the region in most items and subsidy rationalisation has to take effect, how do you plan to stop leakages and corruption? Oh ya by catching "small fishes" these days as have been published in newspapers recently. A few hundred thousands missing is nothing compared the billion you have ninja-ed from taxpayers.

If the argument bought forward by the govt saying that the increase by hawkers and sellers are not in tandem with the rise in raw materials then it is an invalid argument. CPI is supposed to be measured from the end-consumer perspective not from your own damn reference. Did the govt conduct any surveys before the price hike? No, so how do they come about the 2%. Of course ting tong tiang la (guesswork).

Our oil and gas (O&G) including automotive pricing mechanism is even more absurd. You can read it BN = Barang Naik! Premium Fuel RON97 Goes Up. Sooner or later you will see that cooking oil and electricity will go up, I have 95% confidence in this. What the govt needs to do is to show the people the real facts & figures, there is no point in lying as we can feel the effect at a much greater magnitude.

So the questions is, will I get a big salary increase as well? The answer is probably no, because most companies measure inflation rate from the figures given by the govt and well you do know now that the rate is bogus! There's many things to change in the country, including a simple thing as a percentage.