Investing in foreign market (在外国市场进行投资)
How many of you are only investing in Malaysia market? We all know that the benefit of investing in your own country is that you get to know all the first-hand information. If US investors want to know any information about Malaysia market, they will probably need to wait for another 8-12 hours since we have different time zones, and they will be sleeping by the time this first-hand news was released. If so, why do we still want to invest in other countries if we are unable to obtain the information or news as soon as possible?
First, the writer is talking about investing here, but not trading. Obviously, some trading will need to base on their latest news, where they sell when bad news incoming, and buy when there is good news. However, investing is more of a long term approach that can disregard any temporary news, as investors are relying more on the company’s future and prospect. Secondly, let’s take technology stocks as an example. In Malaysia, most technology related stocks are involved in upstream or midstream process, where they may be assembling, testing, or outsourcing the chips, electronics, or components. They do not have the market to sell their end product to all over the world like Apple and Samsung.
Once again let’s use technology stock as an example. Malaysia’s technology stocks have their PE ratio between 30 to 80, and that is extremely overvalued even in terms of growth investing. However, APPLE and FACEBOOK only have PE ratio of 31 and 40, respectively. We can see that most stocks in foreign market is not that overvalued, well, besides some exceptional case such as TESLA. Besides, although components from Malaysia are essential for giant companies such as TESLA and APPLE, but the establishment is far behind from these giant foreign companies. For example, asking a random people one electric car brand, no doubt that they will say TESLA, but asking one of the ATE companies in the world, the writer doubted that they will answer PENTA or GREATEC.
Furthermore, there is political issues in Malaysia where no other countries have. US’ general election is not a political issue but a procedure, hence the aftermath is expected. However, there will randomly be a political issue in Malaysia that causes the market to crash for few days before rebounding back. For that, KLCI index is almost restricted to stay uptrend when their fellow peers have been rising from the March dip. China’s market had rebounded since, and never looked back, while US market is more bullish that they broke their historical 30,000 points few weeks back. Meanwhile, Malaysia is satisfied for touching back 1600 points.
In short, there are obviously some good companies in Malaysia to invest, but only limited amount, hence why their price and PE ratio are that high. It will be a good chance to try to diversify your investment journey to foreign countries, and try their performance. This is something that the writer would like to try for a while now, and it seems to be rather interesting trying to understand some terms and wordings that they used in their reports.
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