Meltdown and challenging times and profiting from market downturn


starbiz@thestar.com.my

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IT is trying times for everyone as the global financial world melts down but the order of the day is really to stop the spread of coronavirus (Covid-19) so that some normality could return.

Ironically, two things seem to be rising amid the turmoil – the demand for toilet paper caused serious fights in supermarkets across the globe and this has gone viral across various networks.

The other is the US dollar. Its rise has many reasons.

Everything else, including stock markets, oil, bonds, commodities, currencies and bitcoin are plunging to new lows with no clear signs of immediate reversal. Just in a month the FBM KLCI is down by 20% while the Dow Jones Industrial average 31%.

The rise in demand for toilet paper cannot be comprehended but the rise of the US dollar in a mayhem is understandable. Corporations across the global are rushing to draw down credit lines and seek the US dollar for their funding needs.

In fact, people are scrambling for the US dollar and as a report said “world markets are still very, very nervous …people are scrambling for cash any way they can.’’

Ringgit against the US dollar has reached the RM4.41 range.

Bonds are also seeing the biggest wave of withdrawals since 2017 and gold has fallen as there are concerns of a global economic recession.

The timing of the Saudi Arabia-russia oil price war was shocking and a report said it is a “risky move likely to further destabilise a world economy that is already wobbly with the pandemic.’’

Oil has plummeted to about US$30 a barrel and experts believe it could plunge to US$20 a barrel though the Us-trump Administration may intervene as US producers are suffering from the historic crash in prices.

Amid all these fears, governments across the globe are coming out with stimulus packages to help its citizens and businesses. It is a much needed aid as many countries have enforced total lockdown and people on daily jobs need money for survival. The US alone is forking out US$1 trillion in aid. Other countries have set aside billions of dollars including Malaysia Rm20bil.

StarBiz compiled by B.K. SIDHU & EUGENE MAHALINGAM

Profiting from market downturn

Investment strategy: The benefit of dollar-cost averaging is that you don’t have to monitor the price movement and you don’t have to make a decision every time you want to invest. In fact, dollar-cost averaging is quite a no-brainer strategy.

MOST people tend to be very bearish about the stock market after a crash. In fact, most investors would feel that it would be best to avoid the stock market for now.

Some may even want to cut their current investment losses and get out of their investments in equities, even though seasoned investors would tell you that the best opportunity to enter the market would be after a market crash

Following the recent global stock market downturn, market sentiments, the desire and motivation to invest is at an all-time low. Understandably so, after all, once bitten twice shy.

However, the legendary “Oracle of Omaha” and one of the most successful investor of all time, Warren Buffett, once said that as an investor, it is wise to be “fearful when others are greedy, and greedy when others are fearful.”

It’s hard, if not impossible, to convince oneself to invest when the whole world is panicking.

On one hand, you think the market crash is so sharp that you are fearful it may drop even further. On the other hand, you can clearly see that premium stocks are now trading at a great discount, and hence now would be a great opportunity to snap them up. What should you do?

If this is your dilemma, there’s an investment strategy that can help you to take advantage of the market downturn and allay your fear: the method is called dollar-cost averaging.

How dollar-cost averaging operates

Dollar-cost averaging is a strategy to invest a specific amount of money in the market at routine intervals (monthly, quarterly, half-yearly or yearly). Done right, you can protect yourself against fluctuations and downside risk in the market.

For example, instead of investing a lump sum of, say, RM120,000, you invest RM10,000 a month over one year. By doing this, you average out the cost of investments over an extended period of time. This is to make sure you don’t invest all your money at the peak of the market.

On the other hand, this strategy works especially well in an extended market downturn (like what you expect now) as you will keep buying at lower and lower prices until the market recovers.

For example, you invest RM1,000 in an equity unit trust fund at RM1 per unit. So, you end up with 1,000 units. The following month, you invest another RM1,000 in the same fund but because the unit price has dropped to 50 sen, you end up with 2,000 units.

So, what is the average cost of all your units? If your answer is 75 sen, you’re wrong. That’s because you have used the arithmetic mean (RM1+50sen/2>75 sen). You should use the harmonic mean.

This is how to calculate the average cost of all your units correctly: Your total investment is RM2,000 and you have 3,000 units of the fund. Divide RM2,000 by 3,000 units and the average cost is 67 sen. This means by using harmonic mean calculation, dollar-cost averaging gives a lower average cost.

How it helps you to profit from current market

Now, let’s see how we can apply dollar-cost averaging strategy to the current market scenario. You’re bearish about the market and think it will go down for another six months.

Dollar-cost averaging works well if you believe the market will continue to go down.

With reference to Table 1, if you invest RM1,000 a month for the next 12 months, you would have invested RM12,000 and accumulated 25,648 units at the end of the period. At 80 sen (which is lower than the original price), your investment value at the end of the period is RM20,518 (80 sen x 25,648 units).

It means that you would have gained RM8,518 (RM20,518 – RM12,000). That’s a 71% gain over 12 months, despite the fund price being beaten down by as much as 78% (90 sen – RM0.20 = 70 sen, then divided by 90 sen = 78%).

Why it can help you

Dollar-cost averaging is a discipline that can help investors overcome their emotion, dilemma and other human feeling when it comes to investing, be it fear or greed. We’re always tempted to invest when the market is high and so we end up buying high instead of buying low. With dollar-cost averaging, we’re automatically programmed to buy less units at higher prices and more units at lower prices instead.

Thus when the market crashes and prices are low like now, we would be empowered to invest, not react out of fear.

For this strategy to work, you would need to invest a specific amount of money at specific intervals, say RM10,000 a month over one year, no matter what the market condition is in. If you think that the market may crash and rebound in a shorter period, you may want to implement the strategy within one month. For example, RM30,000 a week over a one-month period. It does not matter which interval, what’s important is that it’s done consistently.

Your current investment strategy to buy only when the price has dropped to a certain “attractive” level is commendable. However, to execute this strategy well, you must be disciplined enough to monitor the market movement closely and spend time and energy to decide when would be the right time to buy the investment.

The benefit of dollar-cost averaging is that you don’t have to monitor the price movement and you don’t have to make a decision every time you want to invest. In fact, if you’d ask me, dollar-cost averaging is quite a no-brainer strategy.

How to make dollar-cost averaging work better

Dollar-cost averaging offers the most benefit when you invest in investments whose prices are highly volatile (move up or down in a big quantum).

An investment that is highly volatile is often perceived as a risky investment. However, this risk plays to your advantage when dollar-cost averaging is applied. How so? The strategy helps to perform an efficient accumulation of investment units. When a particular investment drops significantly in price, you get to accumulate more units. The bigger the drop, the more units you accumulate, thus your accumulation is more efficient (you get to buy the units at a cheaper price).

In comparison, if you invest in an investment that has low volatility, the drop in price would be too small and you can only accumulate a few units, thus rendering your accumulation to be less efficient.

Therefore, when you apply dollar-cost averaging strategy on your unit trust portfolio, go for equity funds. Avoid money market funds or bond funds.

Warning: Don’t apply dollar-cost averaging strategy on a single share. There’s usually an underlying reason why the price of a particular share is in a continuous downward trend. In such circumstances, there’s no assurance that the price will ever go up when the whole market rebound. Worst, the share may not even survive the tough economic crisis and ends up getting delisted.

Do remember that for dollar-cost averaging to work, your chosen investment must be resilient enough to rebound when stock market recovers.

Dollar-cost averaging is best suited if you have a portfolio of equity unit trust funds that is diversified into various regions, so that risks is spread across the share of many companies.

Act on it

To truly benefit from dollar-cost averaging, you have to apply it to your investments. During the implementation process, your resolve would be tested.

There will be times where you will be tempted to abandon the strategy especially when the price of your investment has dropped even further.

Do not waver! Be discipline in executing your strategy and enjoy the gains when the market recovers. Onwards and upwards.

– Yap Ming Hui (ymh@whitman.com.my) is thrilled that his mission to empower every Malaysian with a roadmap to financial freedom has finally come to fruition with the release of a free DIY roadmap to financial freedom tool on the iWealth mobile app. The views expressed here are the writer’s own.

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All the majority Malays need to change is to abandon their fear of the minority non-Malays, well said Datuk Zaid Ibrahim



Malays say they are falling behind other ethnic groups in many fields. They seem to think that it is all because the non-Malays are in control of the economy and the country. The solutions offered to them by their political and religious leaders are the same; they were told that they must unite and that they must follow the real teachings of their religion. It is the same advice given to them all these years since independence. It did not work out to help the Malays and the poor. How much more unity can the Malays achieve, and how much more Islamic can they be?

I wish to offer the Malays a new practical solution to their problems. They need to abandon their political groupings where only Malays are members of that group. They tried UMNO PAS and lately Bersatu; for sixty years now, and what have they achieved? Very little. The Malays should abandon the Malay only parties altogether. They are not only useless but damaging to the welfare of the Malays.

For many years now, we are full of corruption and abuse of power; and where religion has become a political tool. The purity and sanctity of religion are compromised — the need for politics soils religious values every day.

They must now join the grouping that they believe is a “threat “to them. DAP is seen by many as a threat to the Malays, according to these failed Malay leaders. If that is true, then the Malays should join the DAP in droves.

You may say that DAP is a Chinese party, but that’s because the Malays refuse to join them. If we all join DAP then DAP becomes a multiracial party where Malays will be fairly represented. It will cease to be a Chinese party. It can be a dominant Malay party; not that it’s essential.

DAP is a party in government. Its a strong democratic party. Besides PKR, this is the party that the Malays should join and try to get better economic benefits for them by having a government with good policies for the Rakyat.

Some questioned if the Chinese will share the fruits of the country’s economic development with the Malays. Of course, they will. They have been sharing the wealth of the country with the Malays for three hundred years now. Except that in the past; the wealth was shared with the Malay elites.In Perak, the tin miners were partners with the aristocracy. Since the NEP the Chinese were partners with the Malay political leaders. I am sure you must know how many Malay political leaders become wealthy because they have good Chinese and Indian friends. I don’t have to elaborate.

In this religious country; PAS leaders tell you that we must elect Muslim leaders first. They conveniently do not follow what they preach. You must know that the big timber tycoons and developers in the country are mainly Chinese. PAS leaders, too, are close to wealthy Chinese people in the business. So you see the Chinese do share their wealth with the Malays.

What must change is that the ordinary Malays like you and me must get together to create a new political force and become a genuine business partner of the non Malays? Why should the Chinese deal with the ‘middlemen’ like they have done for hundreds of years when they can deal directly with the “Rakyat” to make this country prosperous and to share its prosperity?

The reason why our leaders, both political and religious, want to keep the Malays and the non Malays apart is to make them”relevant’ as power brokers. After sixty years of independence, I urge you, the people of this country, regardless of race, to take ownership of the country. Enough of the leaders using the politics of race and religion to divide the people; and enrich themselves.

When the Malays and the non-Malays have real political power and willing to collaborate as one, we can devise policies and programs that will benefit all Malaysians. We can do so directly; addressing the real needs of the people. Only then can we give real development to the people; without the need to continue with the services of the rent-seekers and wealthy politicians and wealthy civil servants.

All the Malays need to change is to abandon their fear of the non-Malays. After all the non-Malays have always been sharing their wealth with the Malays; since the days of Yap Ah Loy, the Perak miners and the estate owners. This time we just have to tweak the formula; Let the non-Malays unite with the Malays. Political and economic benefits will flow to the ordinary Rakyat instead of the elites of this country when politics ceases to be about race and religion.

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PUTRAJAYA: Prime Minister Tan Sri Muhyiddin Yassin will be in charge of all ministries and government departments until the appointment of Cabinet ministers, says the latest Federal Government gazette.

The gazette signed on Tuesday by the Chief Secretary to the Government Datuk Seri Mohd Zuki Ali, also stated that the Yang di-Pertuan Agong, pursuant to Article 43 of the Federal Constitution, has appointed Muhyiddin as Prime Minister.

“This Order is deemed to have come into operation on March 1,2020, ” said the notice that was uploaded on the Attorney General’s Chambers website.

“It is notified that the Prime Minister, (Tan Sri) Muhyiddin (Yassin) shall be charged with the responsibility in respect of all departments of the Federal Government and the subjects for which the departments are responsible until the appointment of other ministers in the Cabinet.”

Muhyiddin, who was sworn in as Prime Minister on March 1, met chief secretaries from the Education and Foreign Ministries yesterday.

The newly minted Prime Minister posted pictures on Facebook of him meeting the duo in his office that featured empty shelves and empty tables, a sign of someone who has just moved in.

In the Facebook post, Muhyiddin said Education Ministry secretary-general Datuk Dr Mohd Gazali Abas briefed him on developments and suggestions to upgrade the education sector.

Foreign Ministry chief secretary Datuk Seri Muhammad Shahrul Ikram Yaakob was also seen explaining Malaysia’s current diplomatic relationships and pending international conferences.

“Mohd Gazali gave explanations on developments in the education sector as well as statistics of achievements, and gave suggestions on how to build up the education sector.

“Shahrul of the Foreign Affairs Ministry briefed the prime minister on the current relationship between Malaysia and other countries, as well as collaborations and important conferences which will take place this year, ” said the post.

It is believed that one of the main subjects discussed was the Asia-Pacific Economic Cooperation (Apec) inter-governmental forum that will be held in November in Kuala Lumpur.

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The Cabinet list jigsaw puzzle


Muhyiddin Yassin

GPS, having played the kingmaker in the political saga, expects to be well rewarded. Thus, drawing up the Cabinet list will be a more complicated task this time around, as there are just so many variables that need to be considered.


AS Prime Minister Tan Sri Muhyiddin Yassin thinks about the composition of his Cabinet list, he will certainly need to take heed as to how Sarawak should be rewarded.

There is no doubt that the 18 Members of Parliament from Gabungan Parti Sarawak (GPS) were the ones who made the critical difference in the numbers game last week.

The GPS consists of Parti Pesaka Bumiputera Bersatu (PBB), Sarawak United People’s Party (SUPP), Parti Rakyat Sarawak (PRS) and Progressive Democratic Party (PDP).

It was game over when these lawmakers chose Muhyiddin instead of Tun Dr Mahathir Mohamad to be prime minister.

Sarawak Chief Minister Datuk Patinggi Abang Johari Openg put it aptly when he told the media that “now you know the value of GPS votes.”

He said the ruling state coalition initially supported Dr Mahathir to continue leading the country.

“After that, he resigned. Then he resigned from Bersatu. After that, he was back again. So left, right, left, right, what else to expect?

“That’s why we supported Muhyiddin. At the same time, our Sarawak interest is uppermost, ” he added.

And the rest, as they say, is history.

Datuk Seri Anwar Ibrahim had hoped that GPS would remain neutral at least but the political reality was that GPS had to make a stand.

If there was one big factor that had made up the final decision of the GPS, it has to be the DAP.

Outspoken Deputy Chief Minister Tan Sri James Masing has consistently said that GPS would not support a coalition that included DAP in the ongoing political crisis.

He blamed DAP’s “administrative arrogance” for this, adding that the party did whatever it pleased without listening to others, citing Lim Guan Eng as an example.

He pointed out that the former Finance Minister had announced that Sarawak would go bankrupt within three years when the DAP leader came to the state last year.

The reality is actually the opposite.

In 2019, S&P Global Ratings has affirmed its ‘A-’ rating on Sarawak with stable earnings outlook and said the state’s exceptional budgetary performance and liquidity will likely mitigate its elevated debt, supporting its creditworthiness.

The state’s healthy financial standing and its stable socio-political environment have earned Sarawak commendable investment-grade credit ratings of A-, A3 and AAA by reputable international and domestic rating houses.

A Google search of the financial standing of the country’s largest state is sufficient to show that.

Lim’s hurtful remark, and other past disputes with the DAP, seem to have left a deep-rooted resentment of the party among GPS members, and last week, was payback time.

While it has been said that there are no permanent friends or foes in politics, this doesn’t seem to apply in the case of the GPS in this regard.

At one point, Masing even said the GPS was “more comfortable working with PAS than DAP.”

As the situation turned desperate, Sarawak DAP chief Chong Chieng Jen said the party was willing to make concessions with GPS to keep the Pakatan Harapan government intact, appealing to GPS “to put aside all past political differences and work together with Pakatan to save our country.”

Many interpreted the offer to mean the DAP’s readiness in not contesting in the upcoming Sarawak state elections.

But it came too late as the GPS had already made up its mind after having huddled together for two days at the Ritz Carlton hotel in Kuala Lumpur.

It remains to be seen what the GPS had asked for and what Muyhiddin has to offer.

It will be Sarawak’s gain over neighbouring Sabah as Chief Minister Datuk Seri Mohd Shafie Apdal opted to stay with Pakatan.

A statement from the Sarawak Chief Minister’s Office on Feb 29 said GPS supported Muhyiddin to restore political stability in the country without sacrificing Sarawak’s interest.

It also said that GPS would be friendly to the new Federal Government but was not a member of the Perikatan Nasional coalition.

Some senior leaders of the GPS said privately that they wanted to see what would be on the table but expected to be rewarded accordingly.

Others said that they were prepared to wait till the state elections were over – as these veteran politicians were aware that Pakatan would most certainly use the alliance with Perikatan Nasional as a rallying call against the GPS in the state polls.

Unlike Peninsular Malaysia, Sarawakian leaders are more interested in protecting and keeping their state positions rather than federal posts.

“The interest of Sarawak is more important than the interest of lawmakers, ” Masing told this writer.

But the immediate priority would be to demand a higher oil royalty from the current 5% and if this was a sticky point under Pakatan, it will likely remain so for the new Perikatan Nasional government.

The other is the Malaysia Agreement 1963, or more popularly known as MA63.

The agreement – an 18-point pact for Sarawak and 20-point for Sabah – was signed on July 9,1963, before the formation of Malaysia.

It is an important document safeguarding the rights and autonomy of the two states.

The 18-point and 20-point agreement covers religion, language, constitution, immigration, the position of the indigenous people, finance, tariffs and citizenship.

Sabahans and Sarawakians are understandably annoyed when they hear “orang Malaya” remark that these two states “joined Malaysia”, pointing out that they had, in fact, helped to form Malaysia.

In the peninsula, the governing state leaders are known as state executive councillors but over in Sabah and Sarawak, they are known as state ministers.

That also explains why Malaysians from the peninsula side need their identity card or passport when entering these two states, and state immigration have the right to deny anyone entry.

“Orang Semenanjung” who want to work in these two states have to apply for a work permit.

The same goes for lawyers who wish to appear in the courts of either state – they have to get approval beforehand.

Most Malaysians may not understand fully what MA63 is all about, even if they have become contentious political issues.

But most believe that the Federal Government has not given due recognition to the MA63 or that these safeguards have not been honoured or taken away.

Sarawakians want a greater degree of financial and political autonomy as compared to other states in the peninsula and not end up being merely one of the 13 states in Malaysia.

It remains to be seen how or what posts would be given to the GPS MPs, and whether this state coalition wishes to wait till the state polls are over before moving in but what is certain is that the new Prime Minister certainly cannot ignore the Land of the Hornbill.

Abang Jo’s words (now you know the value of the GPS) would surely ring continuously in the ears of the Prime Minister.

And now, this explains why a tiny country like Malaysia, with a population of over 32 million people, has a big Cabinet – it is simply because the Prime Minister has to accommodate so many geographical and ethnic interests.

It is also very possible that the Prime Minister may announce the appointments in batches, starting with the crucial ones. This will allow him time to tinker.

Drawing up the Cabinet list will be a more complicated task this time, unlike previously, as there are just so many variables that need to be considered.

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Covid-19 reaches the West


https://youtu.be/F_Jq7ItdHtA

Tourists wearing protective masks walks by the Duomo in central Milan on February 27,2020 amid fears over the spread of the novel Coronavirus. – The number of COVID-19 infections in Italy, the hardest hit country in Europe, hits the 400 mark late on February 26, with 12 deaths. (Photo by Miguel MEDINA/ AFP)

But keep cool, negative volatility will likely be followed by positive volatility

The coronavirus (Covid-19) outbreak has officially reached Western shores.

Since last week, the virus has spread to Europe, Brazil and the Middle East.

New cases have emerged across Europe.

There have been more than 81,000 people infected with nearly 3,000 deaths so far.

Just the previous Wednesday on Feb 19, stocks in the US were complacently at record highs, never mind that Asian markets were roiling and taking huge hits, thanks to the coronavirus that first took roots in Wuhan, China.

Asia has been battling this disease since January. Markets have been volatile but have since recovered as the number of infections have reduced and governments have been diligent at handling the disease.

It is like the domino effect, with the same reactions, panic and emotions that happened throughout Asia now migrating to the West.

It is almost deja-vu, seeing the fear and market reaction, no doubt the impact to the Dow and S&P 500 has a significantly larger impact.

The Covid-19’s largest impact is the fear it has transmitted with rapid speed.

In the US, stocks fell for a sixth straight day on Thursday, with the S&P 500 price index falling 4.4% and bringing this pullback officially into correction territory. On a six-day basis, the Dow Jones was down 13.4% at 25,766.64.

This plummet followed California governor Gavin Newsom’s revealing on Thursday that the state was monitoring 8,400 people for potential Covid-19 infections.

Adding to the bleak outlook, Goldman Sachs slashed its profit outlook and warned the outbreak could cost Donald Trump his reelection in November.

The MSCI all-country global index has dropped more than 7% over this six-day period. Considering stocks were at record highs the previous Wednesday, this is very harsh and painful.

Why, Tesla was all the hype earlier in February. It was US$901 on Feb 21, and new higher target prices were being touted by analysts, nevermind that the stock still didn’t have a price to earnings ratio.

In the last five days, Tesla’s share price had tumbled more than US$200 or 32.7% as of Thursday to close at US$679.

Don’t panic

For the average investor, panic has likely set in.

Whose confidence level would not be shaken with a 12% decline in the S&P 500 in six trading days?

Now talk of a 20% decline is starting to emerge.

Meanwhile the 10-year US treasury yield dropped below 1.3%, remaining in record-low territory.

The downward spiral in oil also continued with WTI crude toppling 2.71% to trade at US$47.41 per barrel on Thursday. Brent oil hovered at the US$51.42 level. So just barely two months into 2020, it is Covid-19 which has been responsible for crushing markets and dismantling profits across the globe.

Many have already slashed market forecasts for the year.

In the past two market stories featured on StarBizweek, readers would know that Fisher MarketMinder thinks that fears over the virus’ market impact are overdone. It thinks that this is part of a longer-running pattern prevalent throughout this bull market.

“The stock market will do what it does – rise and fall.

“If you’ve got a plan based on your risk tolerance and investment horizon, don’t let fear make you swerve in the wrong direction and lose traction.

“Panic is never a good investment strategy, ” says Fisher MarketMinder.

It adds that Covid-19 is grabbing attention because it is new and somewhat novel, but that doesn’t mean its economic effects far outweigh more familiar diseases.

The Center for Disease Control and Prevention estimates that there were 34,200 deaths in the United States from influenza during the 2018-2019 flu season.

For infections of Covid-19 outside of China, the mortality appears very low.

Furthermore, the people who are dying tend to be the old and immuno-suppressed or otherwise sick.

“Supply chain disruptions as officials work to contain the outbreak probably dent growth temporarily, but markets are efficient and likely pricing in these expectations as companies issue statements.

“Short-term volatility could linger, but patience should pay off, in our view, ” it adds.

As legendary investor Ben Graham once said, stocks are a voting machine in the short term and a weighing machine in the long term.

“Sentiment wins in the short term, but fundamentals matter most over more meaningful stretches.

“The ‘why’ and ‘how much’ behind sentiment swings strike us far less important.

“The emotional swing itself is what matters.

“Market fundamentals likely didn’t change on a dime seven days ago, ” says Fisher MarketMinder.

Thursday’s drop simply put US stocks back at mid-October levels.

Furthermore, the world hasn’t fundamentally changed.

While there is no way to know when this drop will end or how much further it will fall, no drop is permanent.

“Whether the rebound starts in days or weeks, whether it is fast or slow, if you have held on thus far, we think you ought to reap the good that comes with the bad.

“Corrections hurt your long-term returns only if you don’t participate in the rebounds that follow them.

“Selling may feel good at a time like this. But when you remove emotion from the equation, all it does is transform a market decline into an actual portfolio loss, ” says Fisher MarketMinder.

Another investor who is cheering is one of the smartest investors in the world, Warren Buffett, chairman and CEO of Berkshire Hathaway.

He says the stock market rout we’re witnessing today is “good for us.”

“We’re a net buyer of stocks over time, ” he says on CNBC.

“Most people are savers, they should want the market to go down.

“They should want to buy at a lower price.”

Buffett’s comments came as Dow futures were down by about 800 points or 3% on Monday as stocks around the world plunged as the Covid-19 outbreak escalated.

Regarding the coronavirus specifically, Buffett made clear that he is “not a specialist.” And he warns that “a very significant percentage of our businesses one way are affected.”

However, he reiterates that investors should be more focused on the long term, not the short term.

“If you’re buying a business, and that’s what stocks are… you’re gonna own it for 10 or 20 years, ” he says.

“The real question is has the 10-year or 20-year outlook for American businesses changed in the last 24 hours or 48 hours?” the legendary investor asks.

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Covid-19, politics and house prices

Malaysia’s economic stimulus package of RM20bil to mitigate Covid-19 impact


Video: https://www.thestar.com.my/news/nation/2020/02/28/gdp-target-within-reach?jwsource=cl

Minimum EPF contribution by employees to be reduced by 4% from 11% to 7%, with effect from Apr 1 to Dec 31, 2020. This will potentially unlock up to RM10 billion worth of private consumption. Malaysian workers have the option to opt out from the
scheme and maintain their contribution rate
    • KUALA LUMPUR: Tun Dr Mahathir Mohamad had on Thursday unveiled the RM20bil stimulus package to offset the fallout from the Covid-19 coronavirus.

Below are the highlights:

    • Based on three strategies: counter Covid-19 impact, boost people-based growth, encourage quality investments

 

    • • Bank Simpanan Nasional provides RM200mil micro credit at 4% interest rate

 

    • • MAHB to cut rental for tenants, landing charges and parking fees at airports

 

    • • Postponement of income tax monthly payment for tourism-related companies

 

    • • Bank Negara provides RM2bil guaranteed financial aid for SMES at 3.75% interest rate

 

    • • All banks required to reduce monetary burden in the form of postponement of payments or rescheduling of loans

 

    • • Temporary six months discount of as much as 15% for electricity bills for hotels, tourism agencies, airlines, and shopping centres

 

    • • Hotels to get service tax breaks from next month to august

 

    • • Economic growth for 2020 expected to be between 3.2% and 4.2%

 

    • • Minimum EPF contribution by employees to be reduced from 11% to 7%, with effect from april 1 to dec 31. This could unlock up to RM10bil worth of private consumption. Malaysian contributors have the choice to opt out from the scheme and maintain their contribution rate

 

    • • A payment of RM200 to all bantuan Sara Hidup (BSH) recipients scheduled for May will be brought forward to March. an additional RM100 will be paid into the bank accounts of all BSH recipients in May. Subsequently, an additional rM50 will be channelled in the form of e-tunai

 

    • • As a result of the stimulus package, fiscal deficit estimated to increase to 3.4% of GDP from targeted 3.2%

 

    • • Grants of RM1,000 to RM10,000 for entrepreneurs to promote the sale of their products on e-commerce platforms

 

    • • Securities Commission and bursa Malaysia will waive listing fees for one year, for companies seeking listing on Leading entrepreneur accelerator Platform (LEAP) or Access, Certainty, Efficiency (ACE) markets, as well as companies with market capitalisation of less than RM500mil seeking listing on the main market

 

    • • Import duty and sales tax exemption on importation or local purchase of machinery and equipment used in port operations for three years commencing april 1

 

    • • Enough source of money for now, no issuance of bonds needed

 

    • • Stimulus package to be funded by RM2 trillion savings from bank Negara, Tabung Haji, EPF

 

  • • Bureaucratic procedures will be expedited to disburse stimulus

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Interim premier Dr Mahathir back at work in Perdana Putra; fight cronyvirus?


PUTRAJAYA: Tun Dr Mahathir Mohamad has returned to his office at Perdana Putra amidst the political storm raging over the last two days.

The vehicle ferrying him was seen approaching the protocol gate here at 9.29am on Tuesday (Feb 25).

This comes a day after the 94-year-old Dr Mahathir resigned as Prime Minister, when the Yang di-Pertuan Agong accepted his resignation.

However, the King has consented for Dr Mahathir to continue running the country as interim Prime Minister until a new premier has been appointed and a new Cabinet formed.

Dr Mahathir is the only one from the Pakatan Harapan administration who is left after the Yang di-Pertuan Agong cancelled the appointments of all Cabinet members.

Aside from ministers, the duties of other members the administration including the deputy prime minister, deputy ministers and political secretaries ceased, effective Feb 24.

It is learnt that ministers have packed their belongings and left with them on Monday (Feb 24) night, following the announcement that the King had accepted Dr Mahathir’s resignation.

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Read more ..

Pakatan Harapan govt collapses

 

 

Malaysia’s Meltdown Moment – The INSIDE STORY | Sarawak …

http://www.sarawakreport.org/2020/02/malaysias-meltdown-moment-inside-story/

Yeo Bee Yin remembers Sheraton PJ on May 10, 2018

Yeo Bee Yin remembers Sheraton PJ on May 10,
2018

S. Korea risks economic pain as virus cases soar  


South Korea braces for economic pain as virus cases soar …

‘Avoid South Korea counties’ | The Star Online

Singaporeans told not to travel to Daegu, Cheongdo if possible

Rising COVID-19 cases in South Korea scare away shoppers, tourists from China

China-Malaysia ties to remain on course amid surprise PM resignation

Regardless of who Malaysian prime minister will be, he will have vision and goals for economic development, which  China, especially through its BRI, can offer. It is expected that Malaysia’s next state leader will cooperate with China. And the same can be said of other Southeast Asian nations.

 

 Mahathir’s resignation not to affect China relations 

 

Image result for The Wit And Wisdom Of Dr Mahathir Mohamad

The Wit And Wisdom Of Dr Mahathir Mohamad

Book by Mahathir bin Mohamad  https://www.amazon.com

 

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A plague on both your coalitions!

 

The good, the bad and the ugly: Chinese hits back at U.S. claim of “Huawei threat” ….


Chinese diplomat hits back at U.S. claim of “Huawei threat”

 Chinese FM: U.S. accusations against China are ‘lies’

US warnings about China are lies, Foreign Minister Wang says

It takes all kinds to dominate in a world obsessed with economic might and political power.

AS a young boy growing up in the 1960s, I watched many Western movies and TV shows about cowboys and Red Indians, and as expected of a naïve and ignorant kid, I cheered for the “good” guys – the cowboys.

And because they were portrayed as such, the Red Indians were the “bad” guys to me. They were the savage lot, while the Caucasian men were the civilised group trying to help them. And routinely, the Red Indians would be defeated.

As I reached my teenage years and read more about the West, I realised that my supposed heroes were the ones who robbed these natives of their land, violated treaties and consigned the Red Indians to living on reservations.

The most famous Red Indian, Geronimo, the head of the Chiricahua Apaches, and his men were arrested and despatched to Florida as prisoners of war. Some of them were even discarded at crocodile-infested swamps.

Fast forward to contemporary Hollywood movies – the modern-day bad guys are always the Russians, Albanians and Arabs.

They are usually portrayed as one of brutal spies, criminals, human traffickers, drug dealers and terrorists, and in more lurid plots, all the above.

In The Equalizer, Denzel Washington, who plays a former intelligence agency man latterly driving a cab, goes after sadistic Russian gangsters and predictably, decides to kill all of them – in equally brutal ways.

In the John Wick movie series, Keanu Reeves also goes ballistic going after some Russians.

For some reason, all these ex-operatives are reclusive, divorced or widowed, still connected to their agencies, and as always, their loved ones get harmed (mostly killed) by the Russians, which invariably leads them to needing to settle the score.

Albanians hit the big time after the 2008 movie, Taken, which starred Liam Neeson, who plays Bryan Mills, another retired CIA operative whose teenage daughter and friend get kidnapped by human traffickers (Albanians) while holidaying in France.

In Taken 2, the 2012 sequel, the film follows the family to Istanbul, only to be kidnapped yet again, along with his former wife, by the father of one of the men he killed while saving his daughter two years previously.

It wasn’t just the Albanians who suffered from bad press as until today, my wife still refuses to go to Istanbul – as a result of the movie.

Fortunately for me, I have been to Albania. It’s a beautiful country with good people, and nothing like what the movies depict.

In the case of Arabs, we are accustomed to seeing them portrayed in poor light. They were womanising oil sheikhs at one time and are now mostly barbaric terrorists. Scenes with them are stereotypically sound tracked to the call of the Azan.

Mexicans, typically, are drug dealers. Likewise, Colombians, Cubans and Venezuelans. Well, in the movies, at least.

The hip hop loving African Americans in the United States, with their bling and bad attitude, are a dangerous lot. And thanks to their racist slurs, smaller Asians like us avoid antagonising them.

The latest bad guys are the Chinese. However, Hollywood isn’t quite ready to cast them as the standard stereotype because they are explicitly aware of mainlanders having plenty of clout.

Experts predict that by 2020, China will be the world’s largest cinema market, with box office revenue expected to leap from US$9.9 billion (RM41bil) in 2018 to US$15.5 billion (RM65bil) by 2023, according to a report by PricewaterhouseCoopers (PwC). In the first quarter of 2018, China surpassed the US in box office revenue for the first time.

It has been reported that China is presently Hollywood’s biggest foreign market, and according to projections by PwC, this year, the Chinese box office will likely rake in US$11.05 billion (RM46bil) compared to ticket sales in the US, which is expected to amount to US$2.11 billion (RM8.8bil).

So, unlike with other nationalities, Hollywood won’t mess around with the Chinese anytime soon.

Failed Hollywood movies, like The Terminator: Dark Fate, which starred Arnold Schwarzenegger, were rescued by the box offices in China.

Hollywood understands the power of money well. In fact, Christopher Nolan’s Dark Knight wasn’t even submitted for Chinese approval because of a dubious Chinese businessman character in the 2008 Batman movie. But in the Western media, whether in the US, Europe or Australia, China is being painted negatively, in a blatantly concerted way.

Everything from Huawei, to face recognition and to Xinjiang, and now Coronavirus, China has been the bogeyman.

The elephant-in-the-room theory is that the US wants a “freed Tibet” because it’s angling to build an air base that can send jets into China within minutes.

Adding to the spin doctoring, rioters and vandals in Hong Kong are relentlessly referred to as pro-democracy protestors to burn in the minds of the audience that they are the good guys.

HK policemen are painted as brutal when, ironically, tougher tactics are applied elsewhere, including by the American police.

The US is disturbed by the South China Sea, although it’s thousands of miles away and isn’t even a claimant. It’s strange when you think it has military bases in the Philippines and the vicinity.

The disdain for China even turned comical at some point. When a group of Vietnamese were found dead in a UK truck last year, newsfeeds initially revealed they were Chinese.

As the media scrambled for answers, one reporter, who was pressed for an answer, told his live audience that they could possibly be Chinese who fled to the UK because of their protests over the Xinjiang issue.

The underlining reason is simple – the Western media no longer wants to report about China in a balanced way, resenting its growth to become an economic power in just 30 years as it sits behind the US as the second largest economy in the world.

The narrative is the same: China should be feared and doubted, while Chinese scholars in the US ought to be treated as spies. And advanced technology better than that in American products be branded spying devices.

Hostility towards China has intensified and with the outbreak of Covid-19, there is no silver lining, what with spins of resenting Chinese president Xi Jinping, concealing figures of casualties, cover up, poor food preparation and filthy eating habits. And there’s also the racist perception that Chinese people are to be avoided and cooked up stories of uprising against Xi Jinping.

Of course, there’s also the twisted religious angle – that the Chinese are being punished, either for their eating habits, or again, the treatment of Muslims in Xinjiang.

The war against China is being waged in various fronts because it is deemed to have threatened the international order dominated by the US and its allies.

It doesn’t matter if the US is led by Donald Trump or a Democrat president, which could be worse, because the end game against China will simply be the same.

The Coronavirus epidemic has damaged the image of the Chinese. Their invincibility and ascent have taken a knock, so Xi Jinping must prove that China can beat this killer virus soon.

It’s a bad time for China nationals still travelling, but then again, even ethnic Chinese elsewhere are affected.

The average American believes everything they watch on CNN or Fox TV. No one should be surprised since only 45% of Americans – or 41.8 million – have been overseas. That’s an improvement, being 9% more than in 2018.

There is a far bigger picture here, one rooted in the concept of master and servant.

Not too long ago, China was a far-away mysterious country where cheap toys, low grade garments and fireworks came from. In the last couple of decades, the most populous country learnt technology well from the west, like how Japan did in the 1980s.

Today, the republic is on the cusp of achieving world domination. And that’s not a point lost on any superior or inferior nation.

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