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The way I see it

Author: omione   |   Latest post: Tue, 23 Feb 2021, 2:48 PM

I am a top-down-bottom-up investor. I spend time reading news from around the world to understand the facts and reasons behind the stories. This helps me discern the shifting sand of world economies at any point in time. It is integral to my stock selections. I use fundamentals to regularly update stocks on my watch list that have the potential to outperform. I make full use of technical tools to determine the timing of entries and exits.

With the vaccine narrative, the market sentiments have decidedly swung against the glove stocks, never mind that the big four will continue making billions. In the short run, fundamentals are no match for sentiments. Case in point, AirAsia. It's a business that will continue to lose hundreds of millions quarter after quarter. Airlines depend on the economy of scale to make money. Even in the best of time with high load factor, AirAsia managed to make only wafer-thin profits. In terms of fundamentals, Supermax and AirAsia are poles apart. So are the investor sentiments on them right now.

The mitigating factor is sentiments on stocks don't stay constant forever. They change over time. I firmly believe that the day will come (measured by months, not years) as the vaccine narrative settles and the glove profitability remains buoyant despite the declining spread of covid-19, the glove stocks will once again become the darling of the stock market. The fundamentals of Supermax are rock solid. But the market can remain disconnected from reality for a long time. For those who go long, time is on your side. Hold on to your shares if you are underwater and don't loan them to the IBs. The shorties will have nothing to sell.



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