Malaysian Stocks About To Shift From Dormant To Overdrive

 

Look at the broader markets for local stocks, we have been in the doldrums for more than 6 months. Although the indexed stocks have picked up over the last couple of weeks, the broader market still has not found its legs yet. However indications are strong for a good run for second and lower liners for the next 3-4 months going into CNY 2022.

There are concerns over supply chain bottlenecks and logistics "route/delivery" congestion. To me, it will take time to work itself out as different countries are opening up more liberally in recent weeks. These bottlenecks should not be viewed negatively, it shows the pent up demand is there, that the demand recovery is more sustained than it appears to be.

IT IS NOT THE FLIP SIDE, we are not at a situation where inventory is building up over weak demand.

Bottlenecks are viewed negatively by some as a rush for product delivery completion, and once satisfied, will die down. Well, looking at broader data, the recovery is from pent up demand, and also amore sustained recovery from businesses reopening. The massive liquidity taps turned on by most countries are now circulating with greater velocity.

The recent inflation data from the US supports that. Real inflation will creep in as more sustained demand is seen. If demand is a quick one off, you won't see much price pressure.

Look at where palm oil prices are. Look at the margins for gas, and the flow on rally into oil as some are switching to alternatives. The world’s most crucial metals continued on a breakneck surge as energy shortages forced more production cuts and piled pressure on manufacturers, fueling concerns about inflation.

Producers of metals from zinc to aluminum and steel are restricting output due to power restrictions or rising energy costs that are outpacing surging metal prices. The latest victim was one of the top zinc producers Glencore Plc, with production at its three European plants being cut because of surging power prices.  https://www.bloomberg.com/news/articles/2021-10-15/metals-waver-near-record-as-supply-cuts-fuel-inflation-concerns

Copper inventories available on the London Metal Exchange hit the lowest since 1974, in a dramatic escalation of a squeeze on global supplies that sent spreads spiking and helped drive prices back above $10,000 a ton. Copper tracked by LME warehouses that’s not already earmarked for withdrawal has plunged 89% this month after a surge in orders for metal from warehouses in Europe. Stockpiles have also been falling fast on rival bourses and in private storage, and LME spreads have entered historic levels of backwardation, with near-term contracts trading at record premiums. The slumping global stockpiles and resilient demand for copper stand in stark contrast to mounting worries over the macroeconomic outlook, and the risk that stagflation and power shortages could derail the world’s strong growth trajectory. The last time that type of dynamic developed was during a historic squeeze in 2006, when a buying spree early on in China’s industrial boom drained LME on-warrant inventories to a near-record low. LME inventories are now at even lower levels than was the case then, while Chinese inventories also dropped Friday. Shanghai Futures Exchange stockpiles declining to 41,668 tons, the lowest level since 2009.  https://www.bloomberg.com/news/articles/2021-10-15/copper-spread-spikes-to-record-in-latest-sign-of-tight-supply

Of course there is angst over inflation, as you should. We also know that there is a fear that the recovery might just be a surge and nothing more, hence governments will be wary of that by not being too aggressive in turning off the taps just yet. These considerations will be debated, or else business media will have nothing to write about. But to have these considerations will help to "prolong and sustain" good market conditions going forward.

Catalyst - Every move up requires catalysts. The ground is fertile as exemplified by the above factors and developments. The catalyst - Malaysian equities is on track for a broader rally as the recent opening up has shown strong promise to get the ball rolling again. 8 months of tepid markets is a lull long enough. The record number of new retail accounts over the past 18 months will be ready to move in a big way, once the "activity" restarts.

The above chart shows the confirmed signs of an early stage massive bull for the market back in 2019. This mega trend will not be broken as long as the index stays mostly above 1500. From the chart, it will not stop till it tries for 1900 level. Likely to be from 2019-2024. It will spike and ebb but the longer term trend will be there.

Why SQUID GAME

 

On the outset, let me state that I think Squid Game is the best series I have watched since Breaking Bad. So, that's saying something, I guess. Why has it shot up to becoming the most watched series globally?

What is more significant is that culturally, for entertainment, cinematic industry in particular, it was always a Western thing. For the first time, its Asian fare. It tells us that the world is quite flat now. Politically correct casting and minorities representation are more than catchphrases now - they are being "mainstreamed".

Cultural FAD? - A fad, trend, or craze is any form of collective behavior that develops within a culture, a generation or social group in which a group of people enthusiastically follow an impulse for a short period. ... Fads are often seen as sudden, quick-spreading, and short-lived.

I dislike some people who pooh-pooh things like Squid Game as cultural fads. You can choose not to participate in them, no need to sit on your high horse and diminish others' delight. It is like a non drinker opining what a waste of money to drink expensive wines - its unnecessary, irrelevant and reveals more about your insecurities that you need to put people down in order to bring yourself up.

There are cultural fads that I did not latch on to but I keep largely quiet about it. I have only ever watched the first Star Wars movie (and didn't like it). I have not watched a single Star Trek movie franchise. I have not read or watched Harry Potter with his Excruciating Opaque Glasses. I have not watched The Game of Thrones. But it is ok not to participate in all things and everything.

Squid Game is 10x better than Hunger Games, and Hunger Games copied too liberally from Battle Royale. All movie concepts are borrowing something that has been done, so don't get too worked up over it.

Cultural fads or not, these things are stuff to get a bit excited about cause "its life". Let's collectively enjoy them... World Cup, Olympics, moon landings, etc... do you also pooh-pooh the World Cup as a cultural fad?

Why SQUID GAME Is So Good:

a) The premise is interesting, rich person creating games for betting and testing a person's limits, morally and tasting mortality. It is very relevant for the current pandemic times - when a lot of people are in debt, facing bankruptcy, prolonged unemployment, investments being wiped out ... the desperate lives which most of us can fathom and empathise. The twist when they voted to get out, only to realise the real world is a lot worse than the "games".

b) Stories such as Battle Royale, Hunger Games ...etc. should not have been movies. Squid Game took the right path in making it a series as characters needed to be fleshed out. Soon every of the top 6 characters has a strong affinity with us - we feel for their anxieties, fears, apprehensions, betrayals, futility, and dances with the devil.

c) Casting & Details - what brilliant casting. Every one of the top 6 roles were brilliantly casted. Even in your desperate lives, every one's story is different, and heart breakingly so. Note the use of classical music for most of its background - deliberate, classy and funny at times.

d) The games are those we played when we were young. The innocence of it all. The mind boggling part is when those games came with death when you lose. The innocence collided with harsh reality and unnerving mortality of it all.

e) The framing of those games was a killer. You could be playing solo, or be in teams, or in partnership of 2... because you don't know the games ahead of time, your best pal teammate could very well be a one on one winner takes all game. Nobody's a true friend when chips are down. Makes us question our relationships in real life - are we friends/family because we have not been "tested"?

The gory part of it all is to ask if we are celebrating the "gore". I don't think so. But the serpent's throne of capitalism, the evil that can permeate when capitalism islet unchecked and unabated - that's all over Squid Game, when too much goes to too few, bad things can happen.

The spectacle of the games, the selfish voyuerism of those millionaires with masks on, betting and delighting with the on-goings. Are we, the audience, no better than these VIPs with their masks on?

The Redemption Of Louis CK

Louis CK is my all time favourite stand up comedian. A few years ago he had to own up to some sexual shenanigans. But I have to say his was a lot more tamer than Kevin Spacey. Google it, I think its wrong but not beyond redemption. That's a tough one, when your idol does something or reveals something utterly reprehensible. You question whether he/she is still your idol.

To me, the misdemeanours are not vile or evil. It has more to do with slight sexual perversions (hey, who doesn't have some). It is certainly forgivable. Moreover, there is only one Louis CK. His comedy is at a couple of levels above the rest. He is brutally hones
t, he will discuss thoughts that should have been filtered by us all, knowing that he will be judged for saying it, and we will be judged for laughing at them. Watching Louis perform is like a long session at therapy... you go and discuss your dreams and nightmares with utter honesty. Worse, you discuss your fears and prejudices as well.

You either love Louis CK, or despise him, because he is so honest and forces you to consider things which are flying through your minds. Some disgusting, some blatantly racist, some uproariously true and wonderful ... mainly he forces us to be totally naked as a human and be frank with is.

Absolute genius, welcome back Louis CK.