Where To Next?

Above is a chart showing the KLSE movements for the past year.

The stock exchange has been on a down trend since 4 months ago. Volume is seen as steadily decreasing.
However, the index seems to have stabilized at the 1270 point mark, and is currently experiencing consolidation.
The big question is, is it preparing for a bull run? A sloth run? Or a catastrophic sky dive?

Here are a 2 short term scenarios.

1.Oil prices
If oil prices continue to surge, Economic heavy weights such as US and japan may actually fall into recession or experience 0 growth. Consequently, this creates a domino effect whereby all smaller economies dependent on exports for growth slow down.
Prediction- The KLSE will stay near the 1220 point region. Plantation stocks such as palm oil will see even further gains.

2.Political Developments
If BN is overthrown, expect rioting or a re-election.
Prediction- Political stability will cause the index to fall around 50-150 points. Stocks controlled by UMNO, GLC's- Government linked companies (UEM builders, Telekom etc etc..) can expect HUGE declines.

Assuming that both scenarios do not happen, a bull run is still not expected at this point of time. However, a sloth run is possible.
Therefore, Investing in stocks now is not a very good idea. This is because we stand to loose much and gain little.



Sloths move at a jaw dropping speed of 0.08km per hour even if threatened by a predator!

Malaysia's looming Economic Melt Down

Despite Malaysia's pretty economic growth over this past few months, something just doesn't seem to be right. It is almost as if the Gdp growth figures were manipulated or spiced up.
Well , it wasn't.
Contrary to popular believe, the government does not really jack up economic figures. It just found clever ways of spice up growth.
That's all.
Lets use last year as an example.
Mr Abdullah found out that economic figures were not good , and it couldn't be at a worse time. Elections were just around the corner and he didn't want the economy to appear weak. So he did something very clever, increase the wages of civil servants. This of course leads to higher spending. And as we know, spending helps boost the economy.
I am not saying that civil servants do not deserve a pay rise. But the reasons on why it was done couldn't be any worse.
Yes, Malaysia is actually a failing economy. China and India are fast replacing Malaysia as the manufacturing power houses. 50% of Malaysia's Gdp comes from the manufacturing sector.
If oil & palm oil prices did not increase last year by a mile, Malaysia would have registered economic growth of somewhere near 3.5%. This is a measly figure for a developing country.
By 2014, Malaysia will no longer be a net exporter of oil. In turn, this translates to losses for every cent oil prices go up.
To achieve developed status by 2020, Malaysia should have registered at least 8% economic growth annually since 1995. (a developed country should have Purchasing Power Parity of at least $25,000, and GDP per capita should be close to PPP figures.)
Right now, Malaysia has PPP of $14,700 and a GDP per capita of $6500.
We have only done an average of 5% increase in gdp growth from 1995- 2007. So vision 2020 will not be achieved, despite what the government might claim.

Furthermore, for Malaysia to move up the value chain, (I define this as a country that is able to innovate and produce high quality products-eg. companies such as Samsung, Lg from Korea) large amounts of Foreign Direct Investments (FDI) are needed. To show you how low our FDI's are, Malaysia has a pathetic $7Billion of FDI's annually, while Singapore, a country 100 times smaller then Malaysia, Has FDI's of $55Billion annually.

Last year, nearly 50% of our FDI's went into Iskandar development region. This in my opinion, is a project bound to be a major failure. When Singaporeans were invited to invest, they did. But when they started to invest, our smart politicians say that they will chase the Malays out to the jungles.

To summarize everything up,
1. Malaysia's economic growth is now based on Oil and palm oil prices.
(Malaysia will soon be a net importer of oil, and palm oil prices have reached its peak, meaning it will be down hill from here on)
2. Malaysia's manufacturing sector is shrinking, thus unemployment rates will go up.
3. Immigrants imported from Indonesia, Philippines are causing wages to remain stagnant.
4. Malaysia is suffering from a brain drain. No qualified professionals want to work in Malaysia anymore.
5. All the peoples tax money are being used in stupid subsidies and unnecessary 'Mega projects'.

BN or Pakatan??

So the winds of change did not just come, it brought along a hurricane along with it.
Many Malaysians have celebrated since then, and i will not deny that I was one of them.

After 4 months, the political orgasm is certainly dying down. And something not very pleasant just cropped up into my mind.
What is the future of Malaysia should the Pakatan come into power??

As we know Pakatan is a combination of Pro secularism DAP, Pro islamist PAS, and PKR which falls somewhere in between.
Just looking at the combination alone is disturbing. Lets just use the school uniform issue as an example.
While DAP was busy slamming those who said that the uniform were sexy, PAS not only agreed with that view but demanded action to be taken.
Shouldn't a Political Party share the same views and principles?? Well that just doesn't seem to be the case here, does it?
Its becoming very clear to me that DAP will always be DAP, and PAS will always be PAS.
This is indeed, a classic example of the 'Inconvenient Truth'.

I can't say much about the UMNO-MCA-MIC coalition either. Although UMNO is basically a Islamic party, it does have much more modern Malays. MCA and MIC just seem to be overshadowed and pooh poohed by their big boss all the time, although thats a statement that they most certainly refute.
And from all this, the underlying problems which in my opinion, destroyed Malaysian politics clearly speaks for itself. 1.The politicization of Islam. 2.Corruption and arrogance.(I wont touch on this since we already know what i mean, don't we?)

Don't get me wrong. There is nothing wrong with Islam. In fact, it is a beautiful religion.
The problem starts when people use religion as a base to gain political millage.
As beautiful as it may be, religion if allowed to, starts becoming a subject of manipulation to win votes. The manipulation of religion was the ultimate cause for the near downfall of Christianity during the dark ages. And i certainly hope that does not happen to Islam.

And why do i say all this?? Well thats because UMNO and PAS have been playing the Tug a War game, over who is more Islamic.(Thou Art Holier then Me) In the process, bringing everybody down with it. ( i could write 10 pages about this if i had the time)

Lets again use the school uniform issue as an example. I dare say, that if religion was not involved in this, the Non Muslims would have agreed that it is too thin. But when you start putting religion into the equation, and make stupid statements that the uniform causes rape, (which clearly is the stupidest thing i've heard on earth) it does raise eyebrows.

For starters, the non Muslims would think that agreeing to this issue would associate them with Islam.
Secondly, all educated people on earth know that rapists will rape a 50 year old woman if they want to. The real issue here is really protecting the girls modesty. And because of some fanatics saying that this uniform may cause rape, will in turn cause most people to shoot down their views, and disagree with whatever they say.

So do you see what I see?? The extent to which Islam has been politicized is unbelievable. Many would rather die then being associated with Islam- Thanks to a handful of idiots, that is.