Anomaly

1. This is the headline of an article in Star Biz today: "Oil prices fade as storage levels hit 16-year high". (Link: http://biz.thestar.com.my/news/story.asp?file=/2009/3/26/business/20090326075337&sec=business).

2. Upon checking, I found that oil prices were still firmly above the $51 level. This is another sentence from said article: "Oil tumbled as low as $51.86 early in the day as Japan reported February exports plunged an unprecedented 49.4 percent".

3. Another drop in exports of 49.4% ... this looks really scary after a 52.9% fall earlier in January (Source: IHT).

4. The article goes on: "(Crude) Stockpiles are now at their highest level since July 23, 1993."

5. Considering the alarm all the above news should have caused, it is amazing that crude is still firmly above $50. In fact it has been steadily climbing ever since plunging from more than $140 to $30+.

6. So what can we make of this?

7. Many people think we are still a long way from the bottom (whether economic, stock market, Malaysian, regional or global). In fact, many are dead sure there will be another round of tsunami proportion bad news and price corrections.

8. Yet others are confident the markets made their respective bottoms in Oct-Nov 2008.

9. I don't know which camp is right. I only know the legendary "PermaBear" Jeremy Grantham said "beware of falling prey to the 'terminal paralysis' that often sets in after a financial crisis".

10. He also said "If stocks are attractive and you don’t buy and they run away, you don’t just look like an idiot, you are an idiot”.

11. Given the dismal returns from our FD's and the levels to which some attractive stocks (which should survive this crisis) have fallen, it would seem foolhardy not to follow at least some of his advice.

Latest purchases: (all additions to existing held counters):

MUHIBAH: +20,000 (0.73) ... Total 40,000

RCECAP: +40,000 (0.36) ... Total 50,000


/ichithekiller