Top Reads this Week (26 Jan)


Rounding up top reads from around the web, including articles shared by fellow investors in the Financial Horse Facebook Group.

China stocks tumble on Wuhan virus spread but other Asia markets steady (Straits Times)

Asian stock markets recovered on Wednesday (Jan 22) as China’s response to a virus outbreak tempered fears of a global pandemic, although Shanghai shares slipped amid worries about a hit to domestic demand and tourism. Fears of contagion, particularly as millions travel for Lunar New Year festivities, has pushed stocks from record peaks.

Time to Short Airline Stocks as Coronavirus Spreads (CCN)

  • Global markets strategist David Rosenberg warns it’s over for airline stocks. Fliers are visibly jumpy over fears of an emerging SARS-like virus.
  • Rosenberg saw “fifty people turn around when somebody sneezes” at the airport Tuesday. He’s “long the manufacturers who make those masks.”
  • The 2003 SARS outbreak cut global airline traffic in half. The 2009 swine flu pandemic was a rough time for U.S. airline stocks.

Future Returns: Investing in China in 2020 (Barrons)

Winnie Chwang, co-manager of the $902 million Matthews China Fund (MCHFX), says the negative headlines belie a big-picture story: The long-term drivers of growth are still in place. Rising consumption continues to be a powerful force, and an increasing push among Chinese businesses to become domestically reliant is fueling innovation and creating opportunity for selective stock pickers.

Across sectors, due diligence and selectivity is critical—there’s likely to be no rising tide that will lift all boats in Chinese business. “Competition between companies is very intense,” Chwang says. “You may have the industry right in your portfolio, but you have to continually ask if you’ve got the right stock—the wrong name doesn’t serve you any good.” 

3 Pros and Cons of Investing in U.S. Pot Stocks (Motley Fool)

Things did not go as planned in 2019 for marijuana stock investors. It was supposed to be the year pot stocks put it all together and proved to Wall Street that they deserved their lofty valuations. But visions of industry maturation and profitability were quickly dashed by persistent supply issues in Canada and a resilient black market throughout North America. In other words, the blazing-hot start to 2019 for cannabis stocks quickly turned into a nightmare for investors.

However, this precipitous decline in marijuana stocks has some folks questioning whether now is the time to invest in this fast-paced industry. The buzz surrounding cannabis stocks has been especially notable in the United States, where 33 states have legalized weed in some capacity and a majority of residents support medical and/or recreational legalization.

16 New Year Money Moves To Start 2020 Financially Smart (Forbes)

  • Automate your finances
  • Make a spending plan
  • Negotiate or cancel unwanted subscriptions
  • Aggressively pay off debt
  • Invest in alternative asset classes

5 ways to keep from making these top common money mistakes (CNBC)

Unused gym memberships are estimated to cost Americans some $1.8 billion annually. Before committing to months of payments, check your benefits package for any freebies, says Wilson, whose employer gives employees free classes at a local fitness club. “Your insurance may offer subsidies on gym equipment or memberships,” she said.

Learn from your bad choices so you can stop repeating them. “It’s the definition of insanity,” Wilson said. “A big part of my journey is recognizing when I’ve done things stupidly and sharing them — both for accountability and to help other people not make the same mistakes.”

How Money Now Tries to Bury the Truth (American Prospect)

When people with money and power want to keep the truth from getting out, they have an ample arsenal of weapons to ensure silence, and they usually get their way. The exceptional moments when journalists overcome that arsenal to root out exploitation and corruption are exhilarating. But those moments also ought to be occasions for examining the weapons themselves, and trying to limit their use.

Singapore charts path on green finance (Business Times)

Last November, Singapore’s central bank announced a US$2 billion green investments programme (GIP) to drive growth in sustainable finance. Under the scheme, MAS will channel funds to asset managers who are committed to deepening green finance activities in Singapore. These managers will in turn invest in public market firms with a strong green focus.

Aramco IPO proceeds to fund Saudi industry, including defense: finance minister (CNA)

Saudi Arabia will pump the proceeds from last month’s listing of oil giant Saudi Aramco into the local economy over several years, including building up the domestic defense industry amid tensions with Iran, its finance minister said on Tuesday.

Singapore private home prices up 0.5% in Q4, 2.7% for 2019 as take-up drops 13.5% for year (Straits Times)

Even as private home prices in Singapore rose 2.7 per cent for the whole of 2019, beating flash estimates of a 2.5 per cent gain, the total number of private residential units sold fell 13.5 per cent to 22,139, according to data released by the Urban Redevelopment Authority (URA).

3 Tech Stocks to Buy In 2020 and Hold for the Next Decade (Motley Fool)

StoneCo (NASDAQ:STNE) is a leading player in Brazil’s payment-processing market and a standout stock for investors looking to profit from “the war on cash” trend. Despite relatively weak economic conditions for the Brazilian economy over the last few years, StoneCo has been posting stellar growth, and the payment-processing market in the country has huge long-term growth potential. (NASDAQ:JD) is China’s second-largest e-commerce company, trailing only Alibaba in terms of market share. Investors concerned that the much-larger Alibaba will tamp down on JD’s growth potential should know that the smaller company is backed by Chinese multimedia giant Tencent and has distinct competitive advantages that should allow it to thrive in China’s fast-growing online-retail market. 

If you’re looking for a growth stock that’s worth holding on to for the ultra-long term, Activision Blizzard (NASDAQ:ATVI) should be on your short list. The video game company has already delivered stellar performance over the last decade, but it has a variety of favorable operating tailwinds and business strengths that suggest that it still has huge potential.

Before You Change Your Investment Portfolio, Consider These 14 Things (Forbes)

1. What is your portfolio’s purpose?

One thing I feel every investor should consider before making significant changes to their portfolio during times of volatility is to remember the purpose of their portfolio—they are investing to achieve their goals within their respective timeframe. The markets will go up and they will go down, but over time, the pluses and minuses average out to our expectations.

3. Will you miss a market rebound by changing now?

Changing things up when the market is volatile is an unwise choice that can cause investors to miss bull markets and rebounds. Markets tend to rebound quickly and with more vigor than when they pulled back. The biggest risk we face as investors is pulling out of the market and letting our fears, rather than data and logic, control us. 

7. Are you being proactive or reactive?

Ask yourself if you’re being proactive or reactive in your decision to sell. Stocks drop and spike often. If you feel as though your decision to sell is an immediate reaction to a sudden drop, take a moment to do some research. Review the company’s sales history and listen to their latest quarterly conference call. Spending a little time to review the stock will help you make a proactive decision. 

13. Are you staying true to your long-term goals?

It can be very easy to panic in times of turmoil and want to change all of your investments. If you prioritize your long-term goals and stick to investments that are congruent with those goals, you should not be reactive based on market changes. Pulling money out of the market every time it goes down can be extremely detrimental to your financial health. 

China’s tech services are a top investment pick amid decoupling with the US, says CITIC Capital CEO (CNBC)

  • Chinese consumption is growing faster than GDP, making the sector a bright spot for investing in, said Zhang Yichen, Chairman and CEO at CITIC Capital, at the World Economic Forum in Davos, Switzerland.
  • Health care is also an important sector as the Chinese society is aging rapidly, so there’s robust demand for good health-care services, Zhang said.
  • Another potential area to invest in is technology services due to the potential decoupling with the U.S. in that area, Zhang said.

Trump calls Boeing ‘a very disappointing company’ as 737 Max crisis grows (CNBC)

  • Trump called Boeing a “big disappointment” after the company pushed back the 737 Max’s return to service.
  • The crisis over Boeing’s 737 Max planes after two crashes has already cost thousands of jobs.
  • Treasury Secretary Steven Mnuchin recently estimated it could cost half a point of economic growth.

Singapore needs to remain open despite protectionist wave: PM Lee Hsien Loong (CNA)

Speaking on a panel discussion on multilateralism at the World Economic Forum in Davos, Switzerland, Mr Lee said that Singapore’s population needs to understand the need for an open policy, noting that such a system provides “great help to a small country like Singapore”. “Without that, if I am arm wrestling one on one, Singapore versus whoever the other side is, chances are the other party is bigger than us,” he said. 

He cited how FAANG companies – a term referring to tech giants Facebook, Amazon, Apple, Netflix and Google – had set up engineering teams and data centres in Singapore. “In an uncertain world, if you have a capability, despite the uncertainties, people will find that they want to do business with you and put their business in Singapore,” he said. 

Second, Mr Lee also pointed out how the Government is working to protect businesses and workers affected by changes in the global economy. He cited efforts such as SkillsFuture, which is aimed at helping people upgrade themselves, enhance their employability and transition to new jobs if necessary. 

There is still a lot of uncertainty and doubt surrounding the direction of the world economy, he said.  “I think that is holding back business confidence and investments, it’s bound to. If I was a businessman, I would be very watchful too.”

A member of the audience asked if it might be possible that the world be led by a country other than the US. Mr Lee replied that such leadership would require the consensus of major players  such as the US, the European Union and China as well other countries such as South Africa and Brazil, which he said were not yet major participants in the multilateral system.  Although new participants now make up a bigger part of the global economy, they do not yet have a “commensurate influence” because they are largely focused on safeguarding their own interests, said Mr Lee. The right mechanism has not yet been worked out to reflect the new balance in the world economy, he noted. 

Looking for a comprehensive guide to investing? Check out the FH Complete Guide to Investing for Singapore investors.

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  1. My favourite: “Before You Change Your Investment Portfolio, Consider These 14 Things (Forbes)”, as I have the temptation to change my portfolio at times.


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