The year ended with a good effort of window dressing done. From a low of 1629 on 21 Dec to close 1692 on 31 Dec, a rise of 3.9% for a better financial report card. The year of 2015, KLCI recorded a (3.4%) vs my FA profile of 16.5% average per stock. Personally I believe this year will more or less focusing on export industries, oversea construction base who receive monies in USD, companies with strong cash flow to do M&A (good time to phase out your weak competitors and spreading your wings) and companies with strong prudent management team to sail through a challenging 2016.
Industry to avoid / keep in view until further improvement seen in their industry results and market sentiment - oil & gas, property, importers, highly impacted by GST and highly relying on government contracts / awards to name a few.
One thing to note, becareful on companies that recorded on high profits but worse off cash flow and trade receivables. No point if you can do businesses but you dont know how to collect the monies after that. Becareful with companies that have a problematic Management Team and Bad Track Record. Good times, everyone is happy and no one cares about the book whether is cooked or genuiene. During the bad times, it is always the best time to see who is swimmming naked.
Those who went through 2007 Subprime Mortage will know the Lehman Brothers, AIG, Citigroup either went bust or bailed out by Uncle Sam. No such thing as too big to fail anymore. It created a history in US Investment Bank World when the world big 5 Investment Banks left with only 2 and 1 being bought over.
Be prudent with your cash. it is hard earned money and don't gamble it. We shall see many more house keys will be handover in 2016 to 2017 during the DIBS time when buyers buy without collateral from developers. With all the domestic issues ongoing, it will be an exciting year to do good stocks accumulations and perhaps bargain hunting in properties.
Till then Happy Trading!
Regards,
Humblepie
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