Wednesday, October 20, 2010

Random thoughts

Was talking to a university professor about KLSE's market efficiency. He mentioned that the Malaysian market is a rather inefficient one, meaning investors are slow to bring mispriced stocks to their appropriate value, which I think it's quite true. This actually bodes well for investors who has the ability to lead the rest of the investors in identifying under-priced stocks and have the guts to go in when nobody else is doing it yet. Besides, there are plenty of opportunities to accumulate stocks (owing to the longer time taken for the stocks to reach their fair value). Therefore, I find it is easier to make money (or lose less money) in Malaysia's stock market as compared to other markets (which my peers probably don't agree). This also makes Malaysia a low-beta market which provide a rather stable market for investors to invest in amid the current volatility in markets worldwide.

A Pakistani friend just asked me how much it costs to buy an Altis in Malaysia. I gave the number RM130K. He was totally shocked and said that he could buy two back in Pakistan. I can't help but to think about the abolishment of car APs in Malaysia which could benefit Malaysians so much more as compared to the current situation. Nonetheless, the auto industry is so intertwined that it will be hard for Proton to wind up or to let all the foreign car prices to drop by half. Has anyone studied the effects of Proton teaming up with a major carmaker (It would not be politically correct here to say the word 'demise of Proton') which allow for lower car prices (by probably 40%) for foreign makes owing to the abolishment of APs, on the economy in general? Maybe someone could write a thesis on this :p Do let me know if you've come across any. Thanks :)

No comments:

Post a Comment