NEW Public Mutual PRS Fund: PRS Strategic Equity and PRS Equity

In addition to its existing PRS funds comprising 3 conventional core funds and 3 shariah core funds, Public Mutual right now is offering another 2 non-core PRS funds for investors to choose from.

What's the differences between this two new funds?

Unlike those core funds which primarily invest mainly in local market and with an equity exposure of maximum up to 70% under the guideline of Securities Commission, these two non-core funds may looks more attractive to those investors whom has a higher risk appetite and those who want more foreign equities exposure.

Below is the key differences of both funds:

Source: Public Mutual

Download the Product Highlight Sheet for PRS Strategic Equity fund
Download the Product Highlight Sheet for PRS Equity fund

Click here to read our previous series of article about PRS...

Blimey ...

This has to be the best find on You Tube for the longest time. Anyone who has spent a couple of years in Australia would find this hilarious. To most Australians, this would be fucking funny. The great thing has to be that its produced and scripted by our Indian friends, who obviously have lived long enough down under. The series were not done entirely by OZ-affected Indians, they have a couple of white Aussies producing this shit.

Enjoy ... you wankers.

Panic. Judgment Day. Carnage. Meltdown.

The headlines for the past 24 hours seemed like great blockbuster movie titles. If you haven't already acted to realign your portfolio, now would be too late to get scared.

Emerging markets currencies collapsed, and to a lesser extent their stock markets. As explained before, the whole shebang can be largely explained by:

a) the bastardisation of developed countries' currencies (USA, EU and Japan) ~ liquidity



b) the slowing of global demand ~ demand for commodities tanked


Some of the liquidity went into:

a) higher stock prices

b) even more liquidity went into property ~ thanks to the low interest rate environment pegged to the developed nations' rates


So, what is the present carnage all about then. Isn't it sufficient to see emerging markets fall both in their currency and stock prices?


The fact that developed markets worldwide are falling in tandem are due to:

a) an unexpected volatility and mismanagement of the China's stock markets ~ a reflection of a real slowdown in China, having overspent on resources, commodities ~ devaluation of the yuan

b) China being an important demand and supply factor has to be factored into global share prices, esp companies that do business with China

c) a disenchantment with many global companies using share buybacks to prop up their shares ~ a misuse of cash flow, profits and cheap liquidity if you ask me ~ i.e. companies are not reinvesting properly ~ little real growth, little R&D ~ which in turn will continue to stunt global demand

Hence developed nations carnage will continue a bit more, but we near the end as investors start to realise that ASSET PRICES (stocks and properties) over the last few years are largely an illusion and not based on the real worth of these assets.

Its funny as selling these assets you would end up in currencies anyway, which have been bastardised. Hence refuge seeking will remain in USD and other developed countries currencies such as the British pound and SGD.

Having said that, many investors who have been cashed up earlier will be itching to move back in, ... thus the first signs of recovery will be in emerging markets with 20%-30% discount on currency and maybe 20%-30% discount on share prices ~ add that together you are seeing minimal risk and no one wishes to stay in any currency if they can help it in the long run.

Markets are very unforgiving ... I recall a mantra shared by a mentor of mine which may encapsulate the whole situation here: IF IT IS NOT GOING UP, IT IS GOING DOWN.

A bit zen but reflect on that statement. Investors buy for security, protection, dividends and capital appreciation ~ if things are fully priced or priced in too much optimism due to various factors ~ then the only way is DOWN. Only by going down, can they go up again. Sounds like kindergarten but its true.

Same for any stock recommendations or tips if you are a short term trader. If it is not going up, it will go down. You can give it a time frame if you are a trader, 10 days or a month if its more fundamentals based, but if it takes too long ~ the whispers are wrong ~ it was a play ~ big players are distributing. Because something that goes up can be manipulated or due to a growth in believers or buyers, that do not take too long. If the prices do not show those signs, you are holding the short end of a stick.

Weakening of Ringgit: Should we invest locally or abroad ??? (Aug 2015)

In the midst of weakening Ringgit currently, many investors are starting to feel uncertain about their next move. Should we invest locally or abroad going forward? What are the factors that we should consider?

In our opinion, we should go back to the basic of investing by answering these two simple yet mind-challenging questions:

1. What is the type of return are we looking at?
   Yes. All of us knew that we can either go for dividend or capital gain. But, the third type of return comes from foreign exchange gain. Given the same type of investment holdings, the return could be very much different if it was invested in different currency class.
   
   
   
   
2. What's the rule of thumb for placing your money into an investment?
   
   Talking about the rule, it should be very much based on the fundamentals of various asset classes. Profit and loss, P/E ratio, ROI, Equity to Debt ratio and so on... However, sentiment and emotion sometimes clouded our mind, forcing us to forget these fundamentals and succumb to our inner fears. The fear of Ringgit continues to go down and the fears of holding Ringgit still.

After answering these two questions, we hope that investors like you could really have a clearer mind before making your next move. If our investment is based on the fundamentals of a country or region, and we knew that the prospect of it is still bright, should we simply avoid it due to its weakening currency now?

After depreciating so much, do you still think that Ringgit will continue its free fall for a prolonged period? In our opinion, the downside risk for Ringgit is limited going forward, and based on the current valuation of local shares, it becomes attractive once again for bargain hunting. Does investing in local market posing you any currency risk? Definitely NO... (Do you understand?)

An Affair To Remember

I used to think I would find my soul mate if that person could tell me the linkages among the 3 movies: An Affair To Remember, Love Affair and Sleepless In Seattle. Yes, these are all the so called chick flicks, but to me its a lot more than that. Who doesn't adore An Affair To Remember with Cary Grant and Deborah Kerr. Love Affair, an absolute labour of love from Warren Beatty and Annette Bening, was a remake of An Affair To Remember in 1994.

Sleepless Seattle made tons of references to An Affair To Remember, and it would have layered meanings when Meg Ryan met Tom Hanks at the top of the Empire State Building. But, you should watch all 3 movies to truly appreciate what I am saying.

While some knew that the 1994 Love Affair was a faithful remake of the 1957 An Affair To Remember. What most do not know was that An Affair To Remember was also a remake. The film is considered one of the most romantic of all time, according to the American Film Institute. The film was a remake of McCarey's 1939 film Love Affair,  starring Irene Dunn and Charles Boyer.  An Affair to Remember  was almost identical to Love Affair on a scene-to-scene basis.

SPOILER ALERT: The two main characters were involved with different people when they met on a cruise. They fell in love hard, and when the ship made an unscheduled stop near some islands, he brought her to meet her aunt (played by Hepburn in 94 version). She loved Hepburn's scarf. Later she made him paint again. They promised to meet at the top of Empire State building 6 months later when both have sorted out their respective partners (meaning to dump them). On the day they were supposed to meet, she knew he was up there and kept looking up at the building and got knocked by a car, she was nearly crippled. He thought she did not showed up because she chose to stay with her man. Months later they bumped into each other at a theatre, she was with boyfriend and seated. He knew nothing better than to think that was very final on her part. Later he had to find out where she moved to as he had to drop off a present from his aunt for her ... see the rest in the video below.

Some of the more memorable lines from the movie:
Annette Bening: How long were you married? (on learning that Kath's husband has passed on)
K Hepburn: Dearie, I am married ... (long pause)  .. even though he died 12 years ago. I am still married.

( Cary Grant ):
"Why didn't you tell me? If it had to happen to one of us why did it have to be you?"

Terry McKay ( Deborah Kerr ):
"What makes life so difficult?"
Nickie Ferrante ( Cary Grant ):
"People?"

Terry McKay ( Deborah Kerr ):
"Winter must be cold for those with no warm memories."

Nickie Ferrante ( Cary Grant ):
"You've been crying."
Terry McKay ( Deborah Kerr ):
"Beauty does that to me." 

Aunt Ginny
"He's always attracted by the art he isn't practicing. The place he hasn't been. The girl he hasn't met."

Aunt Ginny ( Katharine Hepburn ):
"The trick is life is not getting what you want. It's wanting it after you get it. For people like you and Mike, the getting is easy."

Kenneth Bradley (the boyfriend): I really hope you've found happiness, and if you're ever in need of anything, like someone to love you, don't hesitate to call me. 

Terry McKay: The Empire State Building is the closest thing to heaven in this city. 

The 1957 version was sublime. Though many did not like the 1994 version, I thought it was excellent and the music was brilliant, in particular they inserted my favourite Beatles tune as well, "I Will", so appropriately. Cannot really discuss the movie without revealing the plot, rest assured its easily the most romantic movie of all time, next to Somewhere In Time (Jane Seymour, Christopher Reeve).

When you watch these two movies, the modern day chick flicks such as Sleepless In Seattle and You've Got Mail pale into insignificance. The only good one for the last 20 years has to be When Harry Met Sally. I think its time they do another remake of An Affair To Remember, maybe with George Clooney and Zooey Deschanel.

Emerging Markets Conundrum

Suddenly we have emerging markets' currencies being whacked left right and centre. Suddenly we have a plethora of headlines and expert views on the situation. 

Where were all of them BEFORE? Including yours truly here ... most commentators will only comment on the situation AFTER it has presented itself. We will all try to sound masterly and professional when asked for our views ... which is why the financial industry is possibly the most over-rated, over-loaded with bullshit ... employing the most pathetic "hope-they-don't-find-out-how-average-I-am" souls on earth!

OK, now that thats off my chest, lets see if I can add some value add comments to the situation. My only qualification to comment is based on having ridden through bulls and bears from 87 till now, plus having lost sufficient money which hopefully translates to what we refer to as 'experience'.

Let's see if I can try to make more sense of the situation:

How did we get here?

a) wasn't really the EM's fault, you know ... I think its the Greenspan's keenness to print money in the early 2000s which started the whole thing (following the Internet crash),  even so, it was smallish compared to what happened later. 

b) its the bastardisation of currency ... that would seem to be the underlying crux of the whole thing. Following the subprime crisis, Bernanke had little choice but to print even more currency (unbacked mind you). The EU suffered too and difficulties in integrating the Euro with differing economic structure in each country caused imbalances. Coupled with the subprime fallout, even the ECB had follow suit and print more money, trying to delay the inevitable. Greece was an outlier but the excesses had been too much. As Spain, Italy and Portugal are still struggling with double digit unemployment, the ECB had to maintain the easy money policy.

c) Japan to the mix ... as if that is not enough currencies in the system, the new PM Abe started on its easy monetary policy as well

d) what you have now is the major developed countries printing a lot more currency, while the EM basically having to maintain a stable and low interest rate environment so that their currencies do not appreciate against the majors ... thus leading to massive asset reflation in stocks and properties in EM, and places where investors from EM would like to invest their funds (e.g. UK, Australian, Singapore and HK properties)

e) a slowing global economy ... just before the subprime crisis, a lot of funds had been invested in commodities, be it mines or oil exploration or renewable energy projects .. which continued somewhat even after the subprime crisis, and much of that investment was shelled out by EM.

f) so what's the EM's fault ... they did little wrong really. They had to maintain low rates, which caused local properties to zoom up. Maybe China and some countries over invested in resources and did not forsee how weak global economy was following 2008. Actually at best the global economy stuttered and slowed, stocks went up because of the massive liquidity in the system with nowhere to go ... same for properties.

g) the slowdown caused a glut in many commodities, oil was about the last one to crash ... which is why if you match the ringgit with Aussie dollar, we are about the same for the past 3 years.

h) commodities based currency, including Australia, Malaysia and Canada were hit very badly... Canada less so because their financial system were untouched by the subprime and their economy a bit more broad based. 

Hence the ringgit's weakness was largely caused by the sharp weakness in oil prices and palm oil. An unrelated factor was the political turmoil which exacerbated the whole situation. Now the black swan event, China's yuan devaluation.

China's move confirmed a few things: things are pretty bad in China, thus anyone trading with China will be affected; any country producing similar products as China will be affected ...

In conclusion: EM's faults lie in not moving up the value chain fast enough; not diversifying their economy sufficiently when things were good; not reforming their economy to meet global challenges ... But these are not crimes enough to whack EM currencies when the bulk of the problems were started and still maintained by the developed nations. EM just do not have the clout to determine their destinies ... which is also why we needed institutions such as IMF to help out nations in need. Capitalism is never fair.

So, what can Malaysia do. Let's not touch on politics. Let's look at economics and finance only. Looks like local rates will have to rise, banks will have to manage higher NPLs, property sector will be hit, stocks have been hit already and is in fact way oversold. Malaysia will have to keep spending locally, projects will have to continue. If we need to run a deficit for a few years, so be it. We need to keep domestic economy chugging while the world works out the realignment. We need to keep as many people in their jobs as possible. Jobs is the factor that could throw the whole economy into a tailspin - no jobs, no money to pay mortgage or car payments, defaults and more defaults, higher and higher interest rates to protect currency ... Hence, making sure jobs is around is very critical esp when we talk of our economy with very few safety nets.

Losing My Religion

Taleb, better known as the author of The Black Swan effect ... has hit many nails on the head with his views on "religion".

Nassim Nicholas Taleb

11 hrs · Edited · 

People rarely mean the same thing when they say "religion", nor do they realize that they don't mean the same thing.

For early Jews and Muslims, religion was law. For early Jews it was also tribal; for early Muslims it was universal. For the Romans religion was social events and festivals (law was separate ). For Jews today religion became ethnocultural, without the law --and for some, a nation. Same for Syriacs, Copts, and Maronites. For Orthodox and Catholic Christians religion is aesthetics, pomp and rituals. For Protestants religion is belief with no aesthetics, pomp or law. For Buddists/Shintoists/Hindus religion is philosophy. So when Hindu talk about the Hindu "religion" they don't mean the same thing to a Pakistani as it would to a Hindu, and certainly something different for a Persian.

People keep talking past each other. When the nation-state idea came about, things got more complicated. When an Arab now says "Jew" he largely means belief; a converted Jew is no longer a Jew. But for a Jew it means a nation.

In Serbia/Croatia, or Lebanon, religion means something at times of peace, and something quite different at times of war.