Gold Price Rebounding

Gold Price Rebounding : Live Charts from FXCM

So much for wanting to collect Gold at a much lower price! I've been recommending friends and family to collect at below USD1400, but looks like it is heading to USD1500 soon! Expect more volatility before it heads vertical!

The smarter strategy is to buy half of your investment amount now, and another half later. There might be a possibility of collecting at a much lower price, some estimates put it at USD1100. It is wise to bear in mind that most gold producers have a production price of around USD1200 to USD1300, and at current prices they are barely scraping a profit. 
When prices are so low, they have to close shop and stop producing!!! 

So, when shortages happen.....BOOM! Prices go VERTICAL. Make your own conclusions. 

Malaysia Decides 5th May 2013, Money Printing to Continue Regardless

Flags, Banners, Flyers are abound in the days leading to Malaysia's 13th General Elections. 
While I don't particularly have a preference in any of the political parties, I would say that the focus would be on "Corruption Issues", followed by Economic Prospects. Whoever's able to address the issues, in my opinion will be able to fish the most votes.

Regardless, the printing press will continue to crank up more money to pay for unsustainable promises of state welfare, as well as other benefits. Don't worry, let the youngsters who are working pay for them, while the seniors enjoy for years to come. GE 13's results will be decided by mostly first-time voters. So, by forgetting to handout goodies to the mostly new voters, could the incumbent have made a grave miscalculation?

Start protecting yourself from uncertainties. Own global companies, with diversified operations and customer base. It's not a secret that I love Glove makers lately, not only for its defensive characteristics, but due to the "avian flu" outbreak. All signs are pointing towards an epidemic. Buy precious metals, buy good companies, and buy masks & rubber gloves. 

Election Jitters, and My Prediction

Well, in case you didn't already realize, the retailer market in Bursa is just pathetic. 
Since people already expected a "bad" market since last year February, they have already left the market more or less.
A lot more lost money in Genneva Gold as well. Now that Gold prices have tanked, I wonder what they have to say for themselves.

Thus, the idea of investors selling off before elections, are quite "low in likeliness" as the funds have been supporting the market. 
Foreign and local, all are buying and pushing the markets higher, as Malaysian stocks are considered "safe haven" historically speaking.
And our blue chip counters pay good dividends. 

The search for yield highlights Malaysian companies' ability to stand tall during crisis. 

Election jitters aside, even if incumbent loses majority, the market might still go up. 
Why? The parties related to the new power will push it up, to show "the people's support"
If incumbent retains majority, the market will go up even more to also show "the people's support" 

That said, you should be looking at worldwide situation where corporate profits are shrinking, and think to yourself, where else can funds search for yield? 

Answer is "emerging markets" like Malaysia. Stay away from Airlines, and Property developers for now. Time to move in to more "defensive" stocks.

But definitely, own rubber glove counters.

Supermax Berhad & Other Glove Counters

Since beginning a buy coverage on the primary glove counters in Bursa Malaysia, the prices have skyrocketed and fell back down.

Nevertheless, there's no signs that the avian flu H7N9 have subsided. Infact, number of infections and deaths have steadily climbed. Also, what caught my eye is EPF's (Employee Provident Fund of Malaysia) action of continuous selling of (Supermax Berhad) shares into the market.

Perhaps its just election jitters, something big is coming. Either way, investment banks are starting to upgrade Supermax's target price to at least 50% more than its current trading price. Also, the continual depression of latex prices, and lower than average fuel prices can only prove to benefit glove makers, helping to bump up its profit margins.

Today's post should also serve as a reminder that if this outbreak extends into an epidemic, stock markets will be expected to fall. Could this be the straw that breaks the camel's back? The world is already seeing falling factory productions and consumption. Some economists believe we are already in a depression. A severe epidemic like the avian flu will only serve to amplify the effects of the slowing economy. 

Either way, Supermax Berhad, in my opinion will serve as a good hedge on the underperforming economy, potentially falling stock market, and avian flu outbreak. 

If anything, BUY! 

Gold & Silver Prices Rebound, Rubber Glove Counters rise

After the historic waterfall tumble in Gold & Silver prices, it seems to have stabilized. Gold is again challenging the $1400 per ounce range, while Silver the $24 range. More news to come from Gold producers going broke. At such a low price, it is simply challenging to make a decent profit to pay for operations. Thus, logically this presents a good buying opportunity, as supply decreases in the market.

Also, recent increased reports of bird flu infections and deaths is not UNEXPECTED, when I made my buy call. TopGlove and Supermax made significant gains since my call. Further upside? Let's wait for it to fully play out. Now's just the beginning...

Supermax Berhad

TopGlove Berhad

While precious metals bombed, so did Boston

The single-day biggest drop for Gold in 30 years? Boston bombed? Coincidence? Distraction? False flag?

One can certainly make a killing in the market, or lose his/her pants. I'm going to be holding on to my Glove counters, as talks of the avian flu going epidemic! My heart goes out to the victims of today's incidents. 

Silver/Gold Prices & Recession

Massive Waterfall in Silver Price

As Asian markets opened this morning, news of China and Japan's economy weakening drove prices lower than when US markets closed for the weekend. Gold should prove to be a superb entry between $1300 and $1400, while Silver should prove to be a superb entry between $21 and $25. Prices are just becoming too out of wack! Own physical!

Brent Crude Price

Oil price failed to breakout upwards, but instead is falling. Shortage of demand in many previously big consumer markets, could mark impending weakening market, paving the way to indicate that recession is already in place for many countries, and will kick-in for many more countries. However, it is worth noting that prices might still stay higher than 2008 levels due to increasing difficulty in petroleum extraction. The same is true for Gold & Silver mining. Ore qualities are diminishing fast, and coupled with higher oil prices, cost of production will stay high. Thus, low prices for both Gold, and Silver will not stay forever.

Gold and Silver prices slammed down!

Gold Price Chart

A definite must-not-miss opportunity to really get into Gold and Silver investing. As of this weekend, Silver closed at USD25.85/oz and Gold at USD1477/oz

I previously mentioned that there could be a potential that Silver could hit a low before shooting upwards, in a short squeeze scenario. However, even at current prices, Gold and Silver has hit the support lines, and are at 2010 lows. Collection should be done now, but one should only invest up to half the amount they had in mind, and leave the remaining to collect at prices lower, should it  go lower. Silver at any price below USD35 is a good buy, and Gold at any price below USD1800 is a good buy. 

Predictions however put Silver at USD21 and Gold at USD1200-1300 range, should the support line be broken.

Silver Price Chart

My personal prediction is that Silver will be pushed just a little below USD25, to wipe out the paper contracts taking a long position, before the price heads upwards. Good buying opportunities for Gold & Silver in between the two support lines. 

Bitcoin Hits $200!

Meanwhile, in other news...Bitcoin has hit a high of $200!!!

For KLSE, watch out for:

1. WTK Berhad -Trading above its lows, but still way below previous highs. With fibreboard companies heading for highs (Heveaboard Bhd), WTK could prove to have further upside, trading at slightly over RM1.00

2. Supermax and TopGlove- With avian flu spreading like wild fire in China, it could prove to be a good bet, considering that today, prices fluctuated downwards, which presents a good collection opportunity. The last time the avian flu epidemic happened, prices of both Supermax and TopGlove rose multiple times. A sector to watch!

Update Thursday 11th Apr 2013

1. Bitcoins began to crash to below $100!!! At BTC-e it's trading at $60. So is it a ponzi scheme like many opponents have mentioned? One thing's for sure, I started out in Bitcoins just to speculate. Thus I didn't lose much. It's just play money. 

2. Stay safe, and stick to REAL assets: precious metals

Star Publications Berhad (STAR)

Looks like a good buy now that it has hit an all time low. Price has been quite stable on the low side. Buying activities are seen. Perhaps an election play coming? After all, it is linked to the Barisan Nasional component party, MCA. 

Earnings from the previous financial sheet has projected upon me that earnings are improving. Moreover, Star is actively promoting their new jobs site. They are introducing a revolutionary new way for job seekers to gain attention of employers, via Visume (Video Resume). Job seekers can upload their pitches to improve their standing in landing a job.

So far so good.Additionally, the reduction in number of newspaper copies sold, is balanced well with The Star's online news presence, being one of the top sites that Malaysians visit daily. I also like this company due to it being held by strong hands (MCA, Big funds in Singapore). I expect some upside for this company's share price. 

Have a happy weekend! 

Malaysian General Elections

So it's official! 

Parliament is being dissolved, and some parties say that elections will be within a week or two! 

The KLSE dropped 2 percent today, but managed to close green. Possible intervention by major institutions. After all, retailers have long since left the market. Any major selling or buying should be done by the big boys.

Now's the time to do some shopping. I would personally stay away from Telcos. Expected squeeze in earnings.

On the bright side, Litecoins have since risen from USD0.55 to over USD5.00 since the time I mentioned it.

Litecoin

Since I've written about Litecoin, its price has rose from a mere USD0.55 to over USD1 in a period less than a week.

A lot of people are expecting it to reach at least 1/10th of Bitcoin's market capitalization of a Billion dollars. 

It is probably still not too late to purchase Litecoins. You can also exchange your Bitcoins for Litecoins to expose your money to further upside. For Bitcoin to double in value from USD90, should take more time, than for Litecoin to double from USD1 to USD2. Thus, Litecoins might be a better bet.

Again, this is not investment advice. Only play with money you have. 

Malaysian Airlines

Of late, MAS's stock price has been rising steadily, from bottoming at around 68 sen.

Trading volume has increased but it seems like market is still not confident. After all, the share issuance has not been done yet. I do think that the market expects the share price to fall further after the issuance of additional shares. 

However, it is important to bear in mind that the main shareholder Khazanah, will most likely hold on tight to their shares. Thus, selling should be only by retailers.

So, taking a little punt on MAS may not be such a bad idea. 

We should also not discount the possibility of privatization of MAS.

Why?

MAS has subsidiaries that could potentially be gold mine (Firefly, Freight Business, Aircraft Maintenance). With some reorganization, and re-listing  its businesses, it can potentially bring in more money than to keep MAS listed. Debt can be reorganized, and proceeds from listing of its profitable businesses, can help uplift is financial condition. 

Airline business is very much dependent on debt, debt, debt, and the need to continuously grow revenue and profits. If profits cannot stay ahead of repayments, then the company is screwed. 

MAS could potentially be operated as a smaller entity, after having spun-off its other more profitable businesses. Operating MAS as a lean machine can potentially help revive the brand, and keep costs in check, while maximizing profits. 

So, who's taking it private? Anyone?