Stock Investment Lessons from Malaysia Election

It is very hard to write about Mahathir (老马) in history book 10 years later. 成也老马、败也老马。幸亏老马识途,大马有救!
 
Mahathir’s life is like a company, started as an activist (start-up company or disruptive technology), then leading the party or even establish country vision 2020 with own set of rules (growing company), eventually ruling for more than 20 years (matured company), finally stepping down from the stage (changing from CEO to Chairman or Advisor of a company after retirement), cannot rest during retirement (bringing down at least 2 prime ministers and 2 deputy prime ministers, similar to internal company conflicts), finally starting another party and rule the country again (start new company as competitor to take over the market share).
 
Under PH, due to balanced power among the 4 or 5 parties (if Sabah included), we are back to 1957/1963 when Malaysia first independent with balance of power among Umno, MCA, MIC and even later with Singapore and Sabah/Sarawak joined. This is similar to a company with several major powers, there is no significant major shareholders, no one has more than 50% shares (like Umno in the past few decades), then it becomes a group decision making, until one day a party becomes larger again.
 
People should be the boss, although each one is like owning only 1 share in a company but when group together, it could choose the board of director to rule the company or the country. Malaysia now has a dual-political system which is good, similar to USA, every 5 years, the board or ruling parties/alliance has to show the report card to people (you as the boss), you could decide who to fire or hire. Therefore, education is required to train the people to be a smart boss, knowing the short term needs (saving GST, toll fee, income tax), understanding to compromise for long term needs (growth of company or stock).
 
Understanding a country (general election) is similar to choose a good company. However, when a company is not good, we could sell the stock and choose a better one. When a country is wrong, we should correct it, not just abandon it. Although there is no forever right, at least Malaysia is back to the right starting point again, which path to choose will determine the growth of Malaysia.
 
Singapore without much natural resources, after SG50, could grow to be a strong country, therefore a giant (not just by size). Singapore is similar to US in the past 50 years, able to attract foreign talents who are dissatisfied with home countries, to stay as second home or even new home, contributing to success of Singapore. If Malaysia has the right management (see the example of last 10 years of statement governments in Penang and Selangor), the growth rate should be stronger than Singapore. Singapore may not have the same outstanding leader as late Lee Kuan Yew anymore but with a system setup, at least it could be a slow grower country (3-5% GDP), similar to other matured economy such as US.
 
From investment perspective, there is no need to guess or predict which country will be better 10 years from now. We could just choose from the current market. China has been recovering from the 100 years of correction since Qing Dynasty, we could ride the way by considering China related stocks, especially related to rising of middle class. For Malaysia stocks, we don’t have to guess the impact of new government, just use the next few years to observe the different Malaysia giant stocks.
 

To learn about stock investment, which country to invest, what giant stocks to buy, when to buy …. simply register for a free stock investment course by Dr Tee.

Dr Tee Investment Course (Stock, Property, Commodity, Forex, Bond)

Malaysia Political Cycle Investing

I stay till over 3am tonight (9 May 2018) so far, observing an important historical milestone in my home country, Malaysia: a dramatic change of federal government, from BN to PH. PH will also control 7 state governments (Perak is still uncertain).

Chinese believes in 60 years of cycle duration (5 x 12 = 60, 一甲子), it is about 60 years of BN ruling Malaysia since independence in 1957. 《三国演义》:“话说天下大势,分久必合,合久必分。From the wisdom of thousand years of Chinese history, we learn that when there is common interest, various groups could become friends, but one day, they will split due to internal conflicts again. It will take a long time before the next cycle to split begins, if the new PH government could use this historical opportunities to strengthen the foundation, it could continue to rule Malaysia for several decades.

How’s the impact on Malaysia future economy, stock investment, forex, etc? Short term market reaction so far is a weaker Ringgit vs USD because this is a major change in Malaysia. PH has announced 2 days of public holidays on May 10 and 11, not sure if Bursa stock market will follow the soon-to-be government to rest for 2 days. If yes, there could be some turbulence.

We don’t have to speculate which Malaysia stocks will rise or fall down. Instead, let the trading or investing opportunities come to us. Let the share prices stabilize for a few days after absorbing the market news. It is never too late to grab on investing opportunities in Malaysia.

In a longer term, if Malaysia is under a more efficient government, the economy and stock market will have higher growth potential but it will take at least 1 decade to see the results. PH is still an alliance of different parties, sometimes compromised decision may not be the best but as long as it is fair and transparent, the country could move in a positive uptrend direction again.

Optimism is also crucial for a political system. BN lost in this political tsunami, partly due to past few years of oil & gas crisis and weak ringgit, local people has been at low optimism in life, especially with the rising cost of living (eg. GST). PH may not be lucky as well because currently is Level 4 (global) high optimism, even if Malaysia stock is at moderate optimism, based on a 5 years political cycle for 1 term of government, it is not easy to achieve uptrend in stock market to show the results 5 years later. It is the same situation for Trump in US, who may try to sustain the high optimism US stock market till at least year 2020 as a report card to seek for his second term as US president.

There is no regret to witness a political cycle of a country. Sincerely hope Malaysia will become a better country, being a closer partner with Singapore. Learn about future stock investment opportunities in Malaysia, Singapore and the rest of the world with from Dr Tee free investment courses.

Dr Tee Investment Course (Stock, Property, Commodity, Forex, Bond)