Hi guys,
So far so good this very powerful bullrun Year for Oil & Gas Stocks, ECRL related stocks & Other laggards on rebound.
Calvin so happy for all making 100% gain. Some even made 200% to 300%. Congratulations!
Now is the time to take profit in high flyers & switch to Value Laggards. Or better still just Sell & Hold More Cash for the Following Reasons:
1) T3 to T2 WILL SAP LIQUIDITY
So very bad for day traders & contra players. From experience Calvin thinks 80% of i3 forumers are short term investors
So this withdrawal of liquidity will hit KLSE
Let me illustrate
In year 1990 Mr Gan of Speed Wheel Motor & Mr Soh were partners in selling Imported Mercedes Benz
Each Recon Merc Benz retails for Rm170K to Rm180K with profits ranging from Rm20,000 to Rm30,000 a unit when sold
So optismistic were they that they scouted for a place to sell Their Merc
Mr. Gan used to park his Merc Cars facing the Pj - Damansara Highways. But it was in his house Large Compound facing the Highway
Business was brisk. But being illegal the Majlis soon gave him summons and asked him to close down
Looking for a place hastily they found a Corner Coffee Shop in Taman Megah, PJ
He told the coffee shop Boss to let him take over the place for his Car Show Room. The rent was Rm6,000 a month
Mr. Gan & Mr Soh were willling to compensate the Coffee Shop Boss 13 months for giving way = Total Rm6000x13 = Rm78,000
Wow! Big Money in 1990/91 (recession years from 1985 to 1987 tin market crash)
Then Speed Wheels set up Shop selling Mercedes. Business was Ok and getting better
Then just one year later 1991/92 Finance Minister called for a Reduction of Car Loan Margin from 5 Years to 4 Years Repayment
Unforseen to Mr Gan & Mr Soh business collapsed over night!
From selling half a dozen Merc a month they sell only one and then dropped to Zero sales
SO THEY CLOSED SHOP FOR GOOD!!
Today for New Cars Loan can be up to 10 Years repayment
Last time It was T Plus 7
Now T Plus 3
Next will be T Plus 2 which will shrink Liquidity more
This will squeeze the pool of Liquidity & Bad for The Market
SO BETTER SELL THOSE THAT HAVE GONE UP ALOT
To be continued....
BEST REGARDS
Calvin Tan Research
Please Sell or Buy After Doing Your Due Diligence
https://klse.i3investor.com/blogs/www.eaglevisioninvest.com/203130.jsp
