Betting the unknown

I am talking about investment as a tiny minority shareholder:

If we done our homework, by reading news, forum or company annual reports, most of us knows the fundamental of a company or industry. No matter how well you dig into detail related information, there is always somebody else knows better and act faster. And that somebody is really a lot of experts, and the experts comes from all over the world. It is almost impossible to outrun their wit.

If you want to outperform the market, what you can do is betting the unknown. The unknown is really the unknown, either is a breakthrough, secret innovation, future business, where even the top executive is unsure of the success. Or you can form your own believe or idea where majority of people will not believe. That means you are silly in the eye of public. Most of the time, you are. Even you are proved right, it is hard to turn around people view of your silliness. If you got it correct once or twice, you may be lucky. If you got it wrong, it is expected. So between the 2 ways: betting the unknown, and be a contrarian, which way is better to outperform the market?

Anyway, i believe its better to continuously learn, dream, set your own trend and believe, refine it. It is better worth to bet your own idea and prove it right. Investment is just one of an exciting process for me to learn about the world.

Timing dilemma again

While waiting for Malaysia election approaching, I notice that the interest of stock seems to be diverse. The investor don't favour any of stock. Sitting sideline become obvious. And the market become highly sensitive now. Any election movement, news, rumours can move the market. Looking at the level of index which is over 1600, it is still at high point. I believe most of other investor thought the same. This high index certainly make a lot of people uneasy. There are certainly a lot of uncertainty in market right now.

But looking fundamentally, it is getting cheap in someway. More and more company is having free cash flow to equity above 10%, some even is in the grow industry. Although now the term is "cheap", it may get "ridiculously cheap", and even "insanely cheap". The timing issue always come back to hunt me when decision to buy is so tempting and I sometimes may act irrationally too quickly.

Housing price reality

To maximise the selling price of malaysia property, property developer strategy is to push the affordability of Malaysian to its limit, but in the same time, emphasis on quality and lifestyle to attract foreign buyer from Hong Kong, China, Singapore, South Korea, Japan etc. In their homeland, the house is so expensive which easily 2 to 5 times more expensive than Malaysia most expensive house. If Malaysia property developer can offer similar quality but lower price, they will likely to take up this bargain.

Now consider every property developer in Malaysia, Thailand, Indonesia is doing the same strategy to attract rich foreign buyer. It is hard for a single government to control price of housing (by building houses that are truely affordable to different class of income range,) if all other regional countries in neighborhood isn't doing the same. Because it is just not worth building: not profitable, letting go foreign investment to other countries, lower GDP.

So, fellow Malaysian, we are competing against the rich from countries all over the world now. Even if our salary fail to keep up, the trend and force of globalisation will keep the housing price high in foreseeable future. Unless, our salary keep up, or there is another serious crisis happen here in Asian countries, or less people is viewing house as an investment and more view house as purely a place to live, I don't think house will become affordable for most Malaysian.