Huge drop in US!

I remember back in 2008, Malaysia had its first political tsunami and BN lost its 2/3 majority. Then, the KLCI dropped more than 100 points! However investors who thought its good to buy cheap later got burned as a few months later, the whole global markets had a meltdown followed by the recession of 2008/09..

With this political crisis in Malaysia now, I'm wondering whether history will repeat?

This post has been edited by Cubalagi: Feb 25 2020, 01:48 AM

I can't see the future.. but if KLCI continue to fall this week I will start to feel very tempted to sapu some of the Blue Chips.

So I guess my post is a reminder to self, not to go overboard.

Consumer staple is defensive equities. Like Nestlé stock here. Ppl still have to eat. It wil drop in a recession, but not as much as the benchmark.

VGSH, yes will go up in a recession. But TLT will go up much more.

My crystal ball not working well. But I think I can see 2Q2022. 😆

This post has been edited by Cubalagi: Feb 25 2020, 12:48 AM

Yes, happy to wait IF I'm getting 6.5% income per annum.

But of course, now with this political upheaval, not so confident.

Short term vs long term Treasuries

Long term treasuries will increase more if there is a recession, but what if actually this recession doesn't happen? It will fall in price more. And the dividend/interest which is not so great to begin with may not cover that loss of Capital.

So short term is less risky then long term. Less price volatility.

Medium term: It is somewhere between the two. In fact, I tend to prefer medium term.

Btw medium is usually called Intermediate

This post has been edited by Cubalagi: Feb 25 2020, 01:32 AM

KLCI back up above 1500 level.. Can stay tabove that for the day?

I keep an eye out on several of the normal big names. Maybank, Public, Petchem, Tenaga etc. Right now eyeing Genting.

Bond is only capital protected if u buy from issuance and hold till maturity. If in between you sell, then there is potential for capital loss or gain.

And yes there is also default risk. The safest bonds are Treasury bonds issued by a country in its own currency. This is because a country can always print more of its own currency. However, u still have currency risk if not MYR.

A bond etf is just a fund that tracks a bond index by buying the bonds. But it is not capital protected because there is no maturity.

I hv corporate bonds to hold till maturity for income. But I use bond etf for asset diversification purposes, n prefer treasury ETF as they hold the safest bonds. The price move inverse to interest rates.


USD is a safe heaven currency. Sfr n JPY are the others. But if u really expect a recession with the virus, the bond etf and gold are better.

Looking at some implications of this power change on GLCs. PNB Chairman will have to go. Maybe BNM governor as well.

When u buy at peak, u shouldn't complaint tak naik haha.

That's why I'm very cautious of investing at peaks.

Say if u bought SPY in mid 2000, u then have the dotcom crash and it took 7 years to reach back where it was. Then several months later it crashed 50%. U will say US markets suck big time...

This post has been edited by Cubalagi: Mar 5 2020, 06:24 PM

Last KLCI peak was April 2018, IIRC it was 1892 points. If BN stayed in power, it would probably have hit 1950 by June that year. But there was a change in govt, and I sold most of my Malaysian stocks during that short rebound tht followed in july/August. Then Public Bank was still RM24, Tenaga RM15+, Maybank still cose to RM10. Many retail.investors were buying then, confident of the Malaysia Baru.

When will KLCI reach back 1900? Will have to see how this Covid-19 plays out and whether this new govt is half competent. But now PAS will be in Federal, yikes.

Haha..maybe I should move back to Malaysia then..😆

This post has been edited by Cubalagi: Mar 6 2020, 01:45 PM

U think Maybank can go bankrupt overnight? Even after BNM declare that Maybank, PBB and Cimb are systematically important institutions?

Malakoff

Last year paid:
3.5 sen in June (final FY18)
2.44 sen in Oct (Interim)

This year:
4.11 sen proposed final FY19
?? Interim in Oct

Try to get 85 sen or below next week if market drops.

Countries can get bankrupt also..

Better start farming then

Looks like we will see KLCI below 1400 soon.

Based on cimb share prices in past few years, I not sure whether to be confident or not.. He he

Not a bad idea to put this in watch list , looks like recession is coming to eurozone for certain. So if the stingy Germans finally open their purses for a fiscal stimulus, could jump up pretty well after this Covid-19 is under control.

If u have MYR and scare it depreciate further to EUR but still not confident to buy the market, perhaps you should go into a short term Internationall treasury bond etf with large EUR exposure, while waiting for the right time to enter into Euro equities.

That's what I have done for SGX.. I have been buying loads of ABF SG Bond ETF since end Feb while waiting for right entry point to Singapore stocks. Since I started buying, the abf SG is up 4% and SGD:MYR up 2%. That's 6% gain in MYR.

Last 1 month, can see that KLCI massively outperform DJIA n S&P500. Proud of Malaysia.. 😆

That's why I suggest Short term treasury bonds. Not very volatile. Bond price lose money if interest rate go up. At current situation, ECB will be crazy to increase rate.