Thursday, September 24, 2020

Countries Stock market's Capitalisation As A % Of GDP

 Why is the figure important ... if you can strip out foreign listings and non related listings (inclusive of SPACs) and maybe some REITs that are foreign or regional in nature, you get a good grasp of how much of your economy is listed. 

The higher the figure, the higher the importance of the stockmarket in feeling and shrinking economic activity. IN a super bull, Malaysian domestic economy would flourish as most people will see a lot of funds swishing around, the same when its a bear market when restaurants business dwindles sharply. The higher the figure, the more attention will the central banks and authorities pay to major fluctuations in share markets.

China, though has a lowly figure of GDP that is listed, is climbing rapidly. HK has a figure higher than 1000% because we have to strip out their China stocks listed on HKEX. If only Hongkongers realise how dependent their financial centre reputation (and business transactions) on mainland China.

Singapore has an awful lot of "foreign component REITs, and that's how their government has shaped their future.

Malaysia, is highly interlinked to our GDP... every time we see a business makes RM4-5m a year, we will try to get them listed. Though now that profit figure hurdle is higher (around RM10m a year), we are still very linked. The vibrancy of our economy has a lot to do with the vibrancy of our stock market. 

148.3 %
United States's Market Capitalization accounted for 148.3 % of its Nominal GDP in Dec 2018, compared with a percentage of 164.8 % in the previous year.

Stock market capitalization as percent of GDP, 2019 - Country rankings:

 The average for 2019 based on 58 countries was 83.64 percent.The highest value was in Hong Kong: 1338.48 percent and the lowest value was in Belarus: 0 percent. The indicator is available from 1975 to 2019. Below is a chart for all countries where data are available. 

p/s images of Candy Law Lam, 55 year old actress

Wednesday, September 23, 2020

Why We Need Testosterone (a message from this site's sponsor)

Why do we need testosterone?

Last updated Wed 6 February 2019 By Markus MacGill Reviewed by Daniel Murrell, MD

What is testosterone? Imbalances Testosterone levels and aging Treatment Outlook

Testosterone is the key male sex hormone that regulates fertility, muscle mass, fat distribution, and red blood cell production.
When levels of testosterone drop below levels that are healthy, they can lead to conditions like hypogonadism or infertility. There are, however, sources from which people with low testosterone can boost their levels.

Low testosterone is becoming more and more common. The number of prescriptions for testosterone supplements has increased fivefold since 2012.

This article will explore what testosterone does and whether men should worry about decreasing levels of the hormone as they grow older.

Fast facts on testosterone
- Testosterone regulates a number of processes in the male body.
- Levels of testosterone tend to drop as men age.
- Prohormone supplements do not have any effect on testosterone levels.
- Testosterone replacement therapy (TRT) is also available. However, this can carry side effects and risks.

What is testosterone?
Testosterone is the male sex hormone.
Testosterone is the hormone responsible for the development of male sexual characteristics. Hormones are chemical messengers that trigger necessary changes in the body. Females also produce testosterone, usually in smaller amounts.

It is a type of androgen produced primarily by the testicles in cells called the Leydig cells.

In men, testosterone is thought to regulate a number of functions alongside sperm production. These include:

- sex drive
- bone mass
- fat distribution
- muscle size and strength
- red blood cell production

Without adequate amounts of testosterone, men become infertile. This is because testosterone assists the development of mature sperm.

Despite being a male sex hormone, testosterone also contributes to sex drive, bone density, and muscle strength in women. However, an excess of testosterone can also cause women to experience male pattern baldness and infertility.

The brain and pituitary gland control testosterone levels. Once produced, the hormone moves through the blood to carry out its various important functions.

Testosterone imbalances
Testosterone test
Testosterone decreases naturally with age. It is important to receive tests to determine whether any imbalances are due to an active condition.
High or low levels of testosterone can lead to dysfunction in the parts of the body normally regulated by the hormone.

When a man has low testosterone, or hypogonadism, he may experience:

reduced sex drive
erectile dysfunction
low sperm count
enlarged or swollen breast tissue
Over time, these symptoms may develop in the following ways:

loss of body hair
loss of muscle bulk
loss of strength
increased body fat

Chronic, or ongoing, low testosterone may lead to osteoporosis, mood swings, reduced energy, and testicular shrinkage.

Causes can include:

- testicular injury, such as castrationi
- infection of the testicles
- medications, such as opiate analgesics
- disorders that affect the hormones, such as pituitary tumors or high prolactin levels
- chronic diseases, including type 2 diabetes, kidney and liver disease, obesity, and HIV/AIDS
- genetic diseases, such as Klinefelter syndrome, Prader-Willi syndrome, - hemochromatosis, Kallman syndrome, and myotonic dystrophy

Too much testosterone, on the other hand, can lead to the triggering of puberty before the age of 9 years. This condition would mainly affect younger men and is much rarer.

In women, however, high testosterone levels can lead to male pattern baldness, a deep voice, and menstrual irregularities, as well as:

- growth and swelling of the clitoris
- changes in body shape
- reduction in breast size
- oily skin
- acne
- facial hair growth around the body, lips, and chin

Recent studies have also linked high testosterone levels in women to the risk of uterine fibroids.

Testosterone imbalances can be detected with a blood test and treated accordingly.

Testosterone levels and aging
Testosterone levels naturally decrease as a man ages.

The effects of gradually lowering testosterone levels as men age have received increasing attention in recent years. It is known as late-onset hypogonadism.

After the age of 40, the concentration of circulating testosterone falls by about 1.6 percent every year for most men. By the age of 60, the low levels of testosterone would lead to a diagnosis of hypogonadism in younger men.

About 4 in 10 men have hypogonadism by the time they reach 45 years old. The number of cases in which older men have been diagnosed as having low testosterone increased 170 percent since 2012.

Low testosterone has been associated with increased mortality in male veterans. Late-onset hypogonadism has become a recognized medical condition, although many of the symptoms are associated with normal aging.

The following are symptoms of late-onset hypogonadism:

- diminished erectile quality, particularly at night
- decreased libido
- mood changes
- reduced cognitive function
- fatigue, depression, and anger
- a decrease in muscle mass and strength
- decreased body hair
- skin changes
- decreased bone mass and bone mineral density
- increase in abdominal fat mass

As well as sexual dysfunction, late-onset hypogonadism has also been associated with metabolic disease and cardiovascular disease.

The degree to which testosterone levels decline varies between men, but a growing number of men experience the effects of reduced testosterone levels. Life expectancy has increased, and many men now live beyond the age of 60 years.

As a result, a higher number of men see the effects of age-related testosterone depletion.

Administering treatment for hypogonadism as the result of a disease differs from treating late-onset hypogonadism in older men.

Testosterone supplements
One proposed treatment for low testosterone comes in the form of testosterone supplements.

One type of testosterone supplement, methyltestosterone, has received approval from the United States Food and Drug Administration (FDA). However, guidelines advise doctors not to prescribe this supplement due to the speed with which the liver metabolizes testosterone.

This can lead to liver toxicity. While doctors can legally prescribe the supplement, they generally try to avoid this.

Until stronger evidence is available to support the benefits and safety of testosterone supplementation, only older adults with severe clinical symptoms of low testosterone should be candidates for these supplements.

The FDA have advised that testosterone supplements are not suitable to treat late-onset hypogonadism, and a doctor should only prescribe them for an identifiable cause.

Testosterone replacement therapy
Testosterone replacement therapy (TRT) can help restore some affected functions of low testosterone.

Current research is conflicting. Additional studies into testosterone replacement are necessary for physicians to fully understand its potential risks and benefits, and to identify the individuals that may see the most benefit.

For men, testosterone levels are important to maintain, but they naturally decrease over time. If symptoms of severe or chronic low testosterone are showing, the hormone deficiency may be caused by an active disease or condition.

Treatment can lead to unwanted side effects, so it can be crucial to balance the expected benefits of testosterone supplementation with the risks of the treatment. Often, low testosterone levels come without harmful physical effects and do not require treatment.

Speak to a medical professional, and confirm if treatment is required.

Thursday, September 10, 2020

There's Company Research Downgrade and then there is the (Aisayman!!!) "Company Research Downgrade"

 I have not been holding any glove stocks for the last 3 weeks. So I try to be objective here.

Fact 1: 29 May 2020, research report by Macquarie, Outperform TP RM13.10.

Fact 2: 25 August 2020, research report by Macquarie, Outperform 12 month target RM30.40.

Fact 3: 9 September 2020, research report by Macquarie Downgrade to TPRM5.40.

Fact 3: First two reports by Denise Soon. The downgrade report by Prem Jearajasingam.

Fact 4: Macquarie is one of the top covered warrants issuer in Malaysia.

Fact 5: Ex basis the RM30.40 would have been equaled to RM10.13. Which is to say the down grade wasn't just 10% or 20% in target price. The downgrade to RM5.40 was an astounding 46% cut in TP.

Fact 6: 46% cut in TP all in a matter of 15 days. Pray tell what were the variables and valuation dislocation that caused such a decision.

Bursa and SC need to look into this closely cause I am sure you have already received a lot of complaints. I guess you cannot have the same analyst do all 3 reports as that would have been tantamount to harakiri for the analyst. The change in analyst has to be questioned. Apparently, Prem is the Head of Research, and Denise has left her position. Still, Prem would have had to approve the previous reports.

The "new analyst" halved the TP on the basis that "ASP cannot sustain forever". What changed the analyst's forecast within this short 2 weeks? Did he suddenly talk to industry leaders worldwide to realise that ASP will not last forever? 

Analysts/research heads have very little power as they do not bring in the big bucks. Before investors focus their ire on them, remember that. But this does not feel right. It leaves a very bad taste in our mouths. The integrity of the markets and the participants are at stake. We need answers and clarity.

THE FUNNIEST THING ... and its a big mistake by Macquarie... look at the table for projections. The first table was the upgrade to TPRM30.40. The estimated revenue for 2021 and 2022 were RM12.14bn and RM7.413bn respectively. Reported profit for 2021 and 2022 were RM4.646bn and RM850m respectively.

THE DOWNGRADE REPORT projected revenue for 2021 and 2022 to RM19.058bn and RM9.023bn respectively. The expected profit for 2021 and 2022 were RM10.259bn and RM2.022bn respectively.

How da-macha? The massive downgrade report had a substantive upgrade in revenue and profit. SUDDENLY the valuation parameters changed???

It is not even funny, when within 15 days one can revised the profit UPWARDS from 4.64bn to 10.259bn (+110%) for 2021 and from 850m to 2.022bn (+138%) for 2022 ... and at the same report downgrade the TP from RM10.13 to RM5.40 (-46%).

Please explain.

YAZ:  The way this particular report is laid out also isn't comprehensive. The analyst showed his different assumptions for FYE20 - FYE22, including all baseline figures (revenue, profit, et al). But then he gives his base case price target based on FY23 earnings, which is not stated in the report. Kindly go kira yourself it seems! Then in an impressive of cover your ass (CYA) mentality, he also outlines two other cases on page 2 of the report. Bull case shows a price target of RM20.40 based on multiples of FYe22 earnings! (FYE22, not FYE23!) Finally his bear case of RM2.80 shows the price target based on multiples of FYE21 earnings! Shenme the f**k! Is he saying then his house is giving price targets of RM2.80, RM20.40 and RM5.40, based on the estimated earnings for FYE21, FYE22, and FYE23? Since there's a time lag dilation between expected results and price movements (in a rational market), it's up to the investor to use their own respective crystal balls to target their entry points lah, based on the estimated price targets provided by this house. The part that's amazing though, his main target price catalyst (as shown on page 1 of this report) is: 12-month price target RM5.40 based on a PER methodology. And that PER methodology is based on FYE23 earnings! Holy sweet bejesus. You're ascribing a target based on financial results for the year ending August 2023. Buy today because my estimate for what is 3 full financial year results away starting from after FY20 shows a downtrend. If one assumes glove stocks is going to rebound (and it probably will with the upcoming results, albeit to what extent up to the individual to figure out lah), he's going to have to eat humble pie. And it really makes one wonder if there's really a Chinese wall between the research side and the other divisions in his house.

Monday, September 07, 2020

The Probable Next Theme - Chip-Related Sector


Thanks to Trump, Beijing has no choice but to create its own "centre of the new universe" for the chipsector. The headline last week was largely ignored by many investors but I think will snowball in the days to come. How to create your own nucleus. Bring in your friends. When a bully does not want to play ball, try and exclude him/her. I think it is only natural for China to put more investments and shift their upstream downstream partners towards Asian minors.

The real impact may not be felt immediately but going by the thematic plays, the markets are always keen to look for the next crop of highlight counters. It makes for easier trading and gravitational pull of retail investors.

I was handed the list below a week ago and have been monitoring the volume and price action since the news came out. Decided to post it cause I can see the bubbling of volume and positive price action. Somebody somewhere is readying the ship. Check out the following counters.

Gloves did it best work already and looks very tired. The thematic play on IT worked for a while but seems to be puttering as well. The switch to healthcare and vaccine related counters reared its head but was shortlived as well. Lots of liquidity looking for new direction.

Not all will fly at the same time even if this proves true. Watch and monitor their volume price action.

p/s this is an opinion and not a call to buy or sell.

Sunday, September 06, 2020

Why Waste Time On Fund Managers & Other Experts


“Economists, when faced with a conflict between theory and evidence, discard the theory. Stockbrokers discard the evidence.” 

Some people are obessed with "beating the market". I mean, it is just beating a mean average of a basket of stocks. It means in a normal class of smart ones, savants, the humdrum and idiots ... the very middle of the class. You'd think  being happy is being in 25th position out of a class of 50??? Hence, the index is not even a "very hard level", its the average of the mediocre. 

And yet ... the majority,, no... the vast majority of professional fund managers and so called experts FAIL to beat the S&P500 year in year out. Still, textbooks and business schools prescribe fundamental valuations, various models to measure risk and performance, blah, blah ... just so we can probably underperform the index.

How hard is it. S&P500 is just 500 stocks. It is not studying for a 5 year medical degree. So why is the media, our parents, the biz journalists, the big corporates ... all still kowtowing to these professionals for opinions and soundbites. Just go and watch 10 minutes of Bloomberg TV or CNBC, and know full well that the majority of these people cannot even outperform the index. 

If Mercedes Benz produces cars that almost always barely make the mean average of car quality..., even with their marketing efforts, I am sure the car company would tank. Why is the public giving so much room for forgiveness to these business experts (and yes, you can put chartists in that group too).

This table above is even more damning. Its not that I just simply select a year to whack these funds. Go take any year, any kind of table summation - it is consistently the same result. Only, this one is more galling. You can spend USD100,000-150,000 a year for 2 or 3 years to learn about management, business strategies, valuations, to gain the latest advancements and theories on processes, marketing and companies ... so that you can underperform the index.

Look at these huge fund managers. These are the managers selected by the so called best business minds, I mean they are the gurus of business world. Its a bit like the USA presidency, you set up debates, other vetting obstacles and hurdles, primaries ... blah blah... and you still come up with a Trump.  Nearly all of the top 20 actively managed equity mutual funds in the U.S., as ranked by assets, are behind the S&P 500 index’s 23.2% return through October. All but three, that is. The market beaters— Fidelity Growth Company (ticker: FDGRX), Vanguard Dividend Growth (VDIGX), and T. Rowe Price Mid-Cap Growth (RPMGX)—are also topping the S&P 500 over the past one and five years. The Fidelity and T. Rowe Price funds are ahead for the past 10 years, as well, Morningstar data show. All three benefit from having long-tenured portfolio managers. Only one, Vanguard Dividend Growth, is open to new investors, however.

 “Why does indexing outmaneuver the best minds on Wall Street? Paradoxically, it is because the best and brightest in the financial community have made the stock market very efficient. When information arises about individual stocks or the market as a whole, it gets reflected in stock prices without delay, making one stock as reasonably priced as another. Active managers who frequently shift from security to security actually detract from performance (vs. an index fund) by incurring transaction costs.” ~Burton Malkiel, Professor, Princeton


This often cited excuse for under performance. The various fees in a trade kills the returns, they say. The more you trade, the worse it gets. Fair enough. Just how big are the fees, esp in USA where zero commissions is the norm.


Taxes are another major barrier to beating the market. When you pay tax on your investment returns, you lose a significant percentage of your profit. The capital gains tax rate is 15% to 20%, unless your income is very low. And that's the tax on investments held for at least one year. Stocks held for a shorter-term are taxed as ordinary income.


To me, the most plausible reason for active fund managers underperforming the benchmark is investors' psychology. Market psychology is very difficult to predict properly. A super computer can predict and manage risk by rebalancing the portfolio almost automatically. But how to gauge and react to the "fear of missing out", the rush to thematic plays, the inability to stay true to the "buy low sell high" mantra owing to "market noise".


What about Peter Lynch, Warren Buffett, etc ... They may be unicorns. They may be the 2% who can beat the market. Or most likely, they have SUPERIOR INFORMATION FLOW. Yes, I am not trying to belittle their market savvy or brain power ... Initially they may do well when they are small in fund size, to continue to do well when they get much bigger (e.g. USD500m or more), you need access to superior information flow. Everyone in the industry knows that the market is never the same for ALL. Some people somewhere will always be slightly ahead of the curve.

Experts who can read and predict trends and turns are very few. I like Taleb (Black Swans) and El-Erian (Allianz/PIMCO). Many can regurgitate expert sounding terms and articulate safe statements. Some scream out their shock statements just to stand out but have no pull. The key is to present your thoughts clearly and the process of arriving to their conclusions must be persuasive. It has to be logically persuasive, you can feel it in your gut. It is the discipline to search for the most plausible reasoning process and eliminating the rest, and having that opinion or platform being challenged to more vigorous counter arguments.

The ultimate study... over a 15 year period, 92%-97% of all funds, big or small, did not manage to beat their respective benchmarks.


In my opinion, it is clear that there are so many more super performers, just that they happen to be individuals. In a world where the normal index gains just 5%-15% a year, I am so certain there are plenty who got 50%-500% a year. They may be fundamentals worshippers, trend players, chartists, momentum driven traders, special events traders, etc... YOU CAN ONLY DO SUPERIOR OUTPERFORMANCE when you are SMALLISH IN SIZE OF FUNDS! Remember that. 

Being small allows you to take very few swings at the bat, thus easier to pick home runs. When you get big, a fund will find it very hard to outperform because you cannot just put 30% into one stock. You will not be able to access stocks that are too small in market capitalisation. You may find some companies cannot take your minimum liquidity sizing. 

Besides being small, it is very likely you can get superior returns by investing in smaller companies cause the bigger ones are crowded and filled with too many old crocs.

It is also the same when you are doing individual investing. Its easier to get supernormal returns when your portfolio size is 1 million or less. As you get to say 20 million or 50 million it gets a lot harder.

So, my advice to private investors. Invest on your own if you want superior returns but make sure you arm yourself with the necessary knowledge, weapons, sector knowledge and updated information flow. If you want to get big returns, do it yourself and usually never with big caps, stay with the medium or small caps.

If you can't get good results, maybe private investing is not for you. Pick an
index fund and go do other things.

Countries Stock market's Capitalisation As A % Of GDP

 Why is the figure important ... if you can strip out foreign listings and non related listings (inclusive of SPACs) and maybe some REITs th...