- The economy of Asia ex Japan can be growing, but the market (i.e stock market) might not truly reflect that in the short term. This is because though the Asian ex Japan economy has more or less decoupled from the western economies, the fact remains that our stock market is still coupled. Just look at the impact of a drop of the DJIA has on the subsequent day in the Asian markets!
- But this can prove to be a good buying opportunities for the long term. However the speaker from Aberdeen said that they are currently underweight in China but are overweight in Singapore and Thailand
- If you want exposure to the China market, do it via the China companies listed on the Hong Kong Stock Exchange as opposed to those listed in the Shanghai Stock Exchange. This is due to various issues like accounting methods, transparency etc.
- Singapore has been trading at a long term average of 1.8x PTB(price to book ratio), though he did not mention how long the average was taken and also that presently, we are just slightly above average.
- As for the US market, apparently the stimulus of around USD 787 billion has not been fully utilized yet. Only about 60%. Hence the remaining money can still be used to push up the economy.
- Currently the S&P 500 companies rake in around 37% of their revenue from non US markets. This means that even if the US economygoes into recession, US companies that actually do well overseas due to the growing world economy, they will still make money. He cited an example of MacDonald. It doesn't take a rocket scientist to predict the MacDonald will have an increase in worldwide revenue over the years.
- Overweight on technology stocks. They do not pick it because of the sector, but rather because they see many companies that have big potential coming from that sector. The speaker being based in San Francisco (not too far away from Silicon Valley) says that he has seen many exceptional talents who are setting up their companies, especially in the renewable energy sector, which he feels will do very well in the years to come.
Lastly, I believe that I will be updating this blog much less frequently as I embark on a new journey in my life. I aim to be an oil trader and will defintely strive hard to acheive my goals. Meanwhile, I will still actively search the markets for good investment opportunities in order to create a reliable stream of passive income.