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How to Master Macroeconomic Analysis as a Trader — Transcript

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0:00Hello everybody, a very good morning to
0:03all of you here today. So welcome to
0:05this webinar that is titled how to
0:08master macroeconomic analysis as a
0:12trader.
0:13So this webinar is brought to you by
0:15Brussa Malaysia and managed by our
0:17company live chat. My name is Shenu. I'm
0:20the moderator for this webinar.
0:23So today we are very honored to have a
0:25guest speaker here today with us to tell
0:28us a little bit more about CRA. Okay, he
0:31is none other than uh Mr. Tasa Ner a
0:34case manager with CRA to tell us more
0:37about CRA. So we'll take a brief moment
0:39to talk about CRA before we talk uh we
0:40go to the topic how to master macro
0:42accommodate analysis as a trader. So uh
0:46good morning Tasa.
0:48Good morning Shane.
0:49Yeah, how are you today?
0:50Thank you for that kind introduction.
0:51Very good. Thank you. How are you?
0:53All right. Cool. So, I will just stop my
0:54screen sharing and hand over the control
0:56to you.
0:56Yeah, sure.
1:05All right. Just one moment.
1:09Okay. Uh a very very good morning to uh
1:14everyone. Thank you for um spending some
1:17time you know with us uh uh this uh this
1:20morning. Uh first and foremost, thank
1:22you to Shane, you know, for that very
1:24kind introduction and also thank you to
1:26uh Bura Malaysia uh for providing us
1:29with this opportunity to uh speak to all
1:32of you this morning and also a uh very
1:35big thank you to uh live champ as the uh
1:38India capacity as the organizers for
1:40this uh uh for this session this
1:42morning. So as Shane mentioned, my name
1:45is Tasa and I am a case manager from the
1:47uh securities industry dispute
1:49resolution center, SIDRA. So generally
1:53um it would come up, you know, what is
1:55SIDRA because most people who do not
1:57have a need for our services typically
1:59may not have uh may not have heard about
2:02us um before.
2:05Briefly speaking, um what uh SIDRE is is
2:08that it is a company that was set up by
2:11the uh by the Securities Commission to
2:14act as a um to act as an alternative
2:17dispute resolution center um for claims
2:22that involve um for claims that involve
2:24capital market products or services. So
2:28what do we mean when we say an uh
2:31alternative dispute uh an alternative
2:34dispute resolution center? Uh it
2:36effectively just means it is an
2:37alternative to going to court you know
2:40because rather than having to go to
2:41court and you know there's no doubt that
2:43our court system does some things very
2:45very well. Um it can be very time
2:48consuming and it can also be potentially
2:50cost uh cost prohibitive sometimes. So
2:53that's why um alternative dispute
2:55resolution centers like um CIDRA exist
2:58which is to provide an avenue for
3:00investors to file their complaints and
3:02try and achieve a kind of and try and
3:05achieve a resolution without having to
3:07expend time and money going to court. So
3:10we are effectively a component of the
3:12investor protection uh the investor
3:14protection infrastructure that exists
3:16within the capital market. And many
3:19investors often when they have suffered
3:20losses uh and they wish to file you know
3:23claims against their banks or broker or
3:25fund manager you know they think their
3:27only option is to go to court. So that's
3:30where again you know we talk about
3:32alternative dispute resolution being a
3:33quicker faster cheaper and in some
3:36instances a more efficient form of
3:38dispute resolution. So our services are
3:41free to retail investors. That means uh
3:43for retail investors up to 250,000
3:46ringit. For claims that exceed 250,000
3:49ringgit, we do have some charges
3:51involved. And the main emphasis here is
3:53that we do not have a strict uh
3:56courtroom process. It uh it will um
4:00revolve around the you know facts of the
4:02claim and uh how the and uh how the
4:05claim um is assessed moving forward. So
4:08we are ultimately an independent and
4:10impartial body that helps resolve
4:12capital market uh disputes through
4:14mediation and um and adjudication. So we
4:18are a SC affiliated company to act uh
4:23for monetary claims made by individual
4:26investors or sole proprietors against
4:29capital market uh service license
4:31holders who are members of uh SIDRA in
4:35relation to any dealing or transaction
4:37involving capital market products or
4:39services. So briefly speaking here are
4:42some of the things that you know we do
4:44provide to investors which is that we
4:46are a one-stop center that handles all
4:48capital market related disputes. We
4:50contribute towards the enhancement of um
4:53investor protection because we do have
4:55um reporting functions wherein we do um
4:58assess data and complaints that are
5:01received and we do ensure that anything
5:03that needs to be escalated towards the
5:04SC is in fact uh escalated for their um
5:08further um uh for their further uh
5:11attention and ultimately it enhances
5:13investors understanding because a lot of
5:16times we will also spend time to sit
5:18down and talk to uh and talk to
5:20investors and ensure that they
5:22understand what their rights are as
5:24investors, what their obligations may be
5:26as investors and what their
5:27responsibilities also should be as um um
5:31also should be as uh investors.
5:34So who is who is eligible to file a
5:37claim? Basically, you have to satisfy
5:40all of these um requirements. The first
5:42is that it has to be an individual
5:45investor or sole proprietor which means
5:48that if you happen to be conducting your
5:49investments through a company um
5:52unfortunately your claim would not fall
5:53under uh your claim would not fall under
5:55CIDRA's perview. The second is that it
5:57has to be a claim against a CIDRA
5:59member. So, Citra members are um capital
6:04market and service license holders, CMSL
6:06holders that have uh that have been uh
6:10that are licensed with the uh that are
6:12licensed with the SE. And for a full
6:15list of uh members, you can check our um
6:17you can check our website. So what this
6:19unfortunately also means is that we do
6:22not handle uh instances or claims um
6:25involving scam uh involving scam
6:28companies or or or uh scam entities. Uh
6:31a claim that is filed at SIDRA has to be
6:34filed against a registered and licensed
6:36member. Third is that it has to involve
6:38a capital market product or service. So
6:41this is important because a lot of times
6:43we see in banks for an example, banks
6:46may offer a wide variety of products, a
6:50wide variety of financial products. Some
6:52of them may be banking, some of them may
6:54be insurance related, some of them may
6:56be capital market related. So only if
6:58your claim involves a capital market
7:00product and we will uh get into that a
7:03little bit more towards uh in my uh next
7:06slide. I believe uh it has to be a
7:08capital market product or service that
7:10you are uh that that you are taking
7:12issue with for you to file your claim
7:14here. Fourth is that your claim has to
7:16relate to a monetary loss. So meaning
7:19that there has to be an actual financial
7:21loss that has been uh that has been
7:24suffered. A lot of times there may be
7:26instances where there are hurt feelings
7:27and all that. Unfortunately that is a
7:29claim that it also does fall beyond our
7:32beyond our purview. And the final uh
7:34requirement that we have is that we
7:37always want um investors to try and
7:40resolve it with their um with their
7:42investment providers first at least to
7:45attempt to try. So which means that any
7:48investor who wishes to file a claim at
7:49SIDRA should first have filed a claim
7:52with the um with the relevant member and
7:56where either they have received the
7:57final reply or and they are unsatisfied
8:00with the final reply or where they have
8:03received no reply after the lapse of um
8:06after the lapse of 90 days then they can
8:09proceed to bring their claim uh then
8:11they can proceed to bring their claim at
8:12SIDRA. So here are some examples of um
8:16products that we do um that we do deal
8:19with. I think the main example that most
8:21people may be familiar with would be
8:22shares and uh warrants. So allow me to
8:26just give a very short example in terms
8:28of uh in terms of the uh types of claims
8:30that may revolve around shares and uh
8:33warrants. So say for instance you are an
8:35investor and you have a uh dealer's
8:38representative. So one day you give an
8:40instruction to your dealer's
8:41representative. You say please sell at
8:43this price. For whatever the reason, the
8:46dealer's representative fails to sell it
8:48at that price and subsequently the price
8:50drops. Therefore, you can say that
8:53therefore you can you can make a claim
8:56that the DR's non-compliance with your
8:59instructions has resulted in a loss that
9:02you have suffered. Again, every I have
9:04to emphasize that every single case is
9:06different and every single case will
9:08turn on its own individual facts, but
9:12I'm trying to give a brief example so
9:14that for those of you who are wondering
9:16what what kind of cases we do handle,
9:18this is a uh this is a uh a fairly
9:21simple example. So we also handle cases
9:24involving unit trust investments,
9:26structured products invest, uh
9:28structured product investments, private
9:30retirement schemes, uh private
9:32retirement schemes as well as fund
9:34management. So if you have any dispute
9:35that that results in a monetary loss and
9:38you wish to file a claim, then you may
9:40proceed to do so at SIDRA. So how can
9:44you go about lodging a complaint? So we
9:46do um accept uh so first of all you can
9:50start by going to our website uh www
9:54www.sidre.com.mmy
9:56and you can download our dispute and
9:58claim form from the website and
10:00subsequently you can just fill in the
10:02claim form and scan or take photos and
10:05attach those uh photos or documents to
10:09us as your um as your uh supporting uh
10:13as your supporting documentation. And
10:15once your case has been assessed as
10:17being eligible, then a SIDRA case
10:19manager will then proceed to contact
10:21you. So a brief overview of what our
10:23dispute resolution process is. I think
10:25for those of you who were present at the
10:27beginning, you would have uh seen in the
10:29video. So the first thing is that the
10:32investor is to file a complaint with the
10:34member's internal complaint management
10:36system and members have 90 days to
10:38resolve a complaint through their
10:39internal systems. So where there is no
10:41response or where the claimant is not
10:44satisfied with the response, the
10:45claimant and this is important, the
10:47claimant has 180 days, which means
10:50approximately 6 months from the date of
10:52the member's final reply to file the
10:55dispute with CIDRA. So once the dispute
10:57has been filed, we will then assess the
11:00eligibility and merits of the claim. So
11:03at this stage we will normally be
11:04sending inquiries towards both parties
11:06to understand the concerns of the
11:08parties and try and help the parties to
11:10resolve the dispute. So if a case is
11:13unable to be resolved during case
11:15management then the case will
11:16subsequently proceed to mediation. So
11:19what a mediator does is a mediator
11:21facilitates communication and encourages
11:23an open and constructive discussion
11:25between the parties. But any settlement
11:28that is achieved at mediation has to be
11:31mutually agreed to by all of the uh by
11:34um all of the parties that are present
11:36there. So in the event that mediation is
11:38unsuccessful then the claim will proceed
11:41on to adjudication. So adjudication is a
11:45is similar to a uh is similar to a court
11:49process but rather than having a judge
11:51and a lot of documents and a lot of
11:53legalist to have to go through what will
11:55happen is you'll have an adjudicator sit
11:57with both parties and basically go on a
12:00factf finding mission go through the
12:02documents and ask questions and
12:04following the conclusion of the
12:06adjudication hearing the adjudicator
12:08will issue a decision based on what is
12:10fair and reasonable and the things that
12:13will be taken into consideration is yes
12:15the individual facts of the case
12:16supporting evidence applicable laws good
12:18industry practices as well as guidelines
12:21or codes of conduct or for um judicial
12:24president. So that is a brief overview
12:26of what our dispute resolution process
12:28looks like and ultimately we do strive
12:30to complete our dispute resolution
12:32process within 90 working days of us
12:35receiving complete documentation from
12:38the parties. So once parties have given
12:40us complete documentation then we
12:42endeavor to complete adjudication within
12:4590 working days from that point.
12:48So, if you would like to contact us, if
12:51you would if you have any queries or
12:52questions about potential claims that
12:54you may have, then you can always call
12:56us at zero uh 032282280
13:00or you can send your claims and
13:01inquiries to us via email as well at
13:03[email protected]
13:05or you can also uh or you can also reach
13:08out to us on uh social media. We are
13:10available on uh we are available on
13:13Facebook uh uh Facebook, Instagram uh
13:16Facebook, Instagram and Twitter. So uh
13:19with that I think that will be the end
13:22of my uh that will be the end of my
13:23session. I would like to thank I would
13:25like to thank all of you again for you
13:27know allowing me the opportunity and
13:28giving me the time and I wish you all a
13:31very productive session ahead. Uh I if
13:34there are any questions I will stick
13:36around for a bit to take them.
13:38All right. Thanks.
13:41Yeah, if any questions asked Tasia, you
13:43may write them in the Q&A box and uh
13:45we'll probably take one or two question
13:46if there are any.
13:48[cough and clears throat]
13:53Um I just want to address uh there is a
13:55comment uh from uh SK who says that 90
14:00days is so long and I do um appreciate
14:02from an investor's perspective
14:04especially um if you have lost money
14:06that 90 days is very long but I also
14:09want to um emphasize that our aim is to
14:12resolve disputes within 90 working days
14:14which means uh we we endeavor to go
14:18through this entire process within 90
14:20working days of receiving full
14:23documentation from both parties. So that
14:25will include case management, mediation
14:28and then uh and then um adjudication as
14:31well. So I just hope that that uh clears
14:33some things up.
14:36If there's nothing else then I will just
14:38hand over back to you Shane. Thank you
14:40very much.
14:40All right. Thank you so much TA for the
14:42wonderful sharing about CRA. So now uh
14:44we have learned an alternative route for
14:46us to address our uh complaint and for
14:50us to find a mediation or to resolve our
14:54dispute with the member of the CRA.
15:01All right. So now back to our main topic
15:05for today's webinar that is titled how
15:07to master macroeconomic analysis as a
15:10trader. Now macroeconomic is a very
15:13important instruments for investors to
15:16consider um before we want to do
15:18investment. Today we're going to learn
15:20how do we incorporate macroeconomic data
15:25uh into our trading consideration.
15:29So disclaimer whatever we share in this
15:31webinar is only for educational purpose
15:33in no way that I give any recommendation
15:35for you to buy or sell any listed
15:36securities that we mentioned here. If
15:38you decide to make any investment
15:40decisions, you're 100% responsible for
15:42all your investment risk.
15:45Allow me to introduce our speaker today.
15:48Uh she's a licensed financial planner
15:50certified by the Malaysian Securities
15:52Commission Financial Planner
15:53Representative License and Bank Negra
15:55Financial Advisor Representative
15:56Licensed. Uh she is a course trainer and
15:58public speaker at Financial Planning
16:00Association Malaysia and Brussa
16:02Malaysia. over 25 years in education.
16:04She has accumulated over 3,000 students
16:07and conducted over 200 large scale
16:10corporate courses. And she's also a
16:13best-selling author who has pub uh
16:14published six books on investment and
16:17financial planning. Her articles have
16:19appeared in financial magazines such as
16:20the personal money, money compass, and
16:23many more. And she's none other than
16:25Miss Paulen Yong. So, good morning
16:27Pauline. How are you?
16:28Hi. Good morning, Shane. Hello,
16:30everybody. How are you?
16:33It's a very early morning. Yes.
16:35Yes. So, uh without further ado, let me
16:37hand over a session to you.
16:39Okay. Thank you. So, um taking over then
16:42I'm sharing my screen from here.
16:47So, today's um webinar is on um how to
16:50master macroeconomic analysis as a
16:52trader. Okay. So, we're going to look at
16:55macroeconomic
16:57um indicators. So we are always looking
17:00at trading and then we have to refer to
17:03technical analysis. But in this session
17:05we are going to look at hey perhaps we
17:08are looking at news or macroeconomic
17:11indicators that may um influence the
17:14trade and then you may have certain
17:16trades that is um profitable. Okay. So a
17:20very good morning to everybody and um
17:26um very good morning to everybody. So
17:28I'm sharing my screen here.
17:31Okay. So this is what we are going to
17:33cover. Um what is macro trading
17:35strategy? Because um today's um session
17:38is all about macro macroeconomics. So it
17:42is a trading strategy. So we're going to
17:44look at it. And why is this um global
17:46macro trading a favorite among hedge
17:49fund managers and then the macro
17:51indicators as well as a relationship
17:53between economic indicators and the
17:55asset classes? Okay. So what is this
17:59macro um uh global macro strategy? Now
18:03how many of you know um Ray Dalio? Does
18:07anybody know who is Ray Dalio? So if you
18:09have heard about Ray Dalio, you can um
18:13type a one. Okay. So Ray Dalio, I spell
18:17his name to you. Ray Dalio.
18:22Okay. Yes. Ray Dalio. Um I see that some
18:27of you have heard about him. Okay. And
18:30uh in fact he is the fund hedge fund
18:32manager for um the Bridgewater Associate
18:37and he's um he is very successful. Why
18:41he's successful is because he can see
18:43macro things. He can look into the
18:46history. He can look into the future.
18:48Okay. So he actually came up with a lot
18:50of theories and one of the um important
18:54one is on uh the weather all weather
18:57portfolio. All weather portfolio meaning
19:00that he designed a portfolio whereby it
19:01will withstand all kinds of harsh
19:03weather in the financial environment. So
19:06um what he's good at is actually looking
19:09at the macro looking at the interest
19:11rate trend looking at the US dollar
19:13trend. especially when he started off he
19:15was a forex um arbitrage uh they make
19:19money from forex um arbitrage uh
19:22strategies
19:24and now I look at him his strategy is
19:27more towards the the the interest rate
19:29and the macro as well. So um so that is
19:32why hedge funds they are so
19:37um into this um macroeconomic um
19:40strategy is because uh it can help them
19:42to make a lot of money. Okay. And um so
19:45let's see.
19:48So here these are the few strategies
19:50they have the currency strategies and
19:52then they have the interest rate
19:54strategies and the stock indices. So
19:56among these right I would say the
19:58currency and the interest rate
20:00strategies are their favorite. Uh
20:02especially when you look at the current
20:05um 10-year yield um treasury note and
20:08you see that the recently if you notice
20:11the the chart is actually forming a a
20:13big chart pattern for the 10-year yield
20:15notes and if you to look at that chart
20:18pattern you will see that most likely it
20:20will crash for that 10ear yield. So then
20:23it could be a a very good strategy for
20:25the fund managers. I mean the hedge
20:27fund. Okay. The normal fund manager they
20:29can't do um derivatives. So they we we
20:33it's not applicable for the normal fund.
20:35is for the hedge funds because they can
20:37use the derivatives, the options, the
20:40futures and then they can use um
20:43leveraging borrow and then um borrow at
20:46a low cost interest rate and then to um
20:49long at uh uh the currency whereby they
20:52think this currency is have the
20:53potential to increase. So that means
20:55they are borrowing. So this is called
20:57carry trade. Okay, at the end of the
20:59slide u I will also talk about that
21:00carry trade as well. So that is part of
21:02the currency strategy as well. So um so
21:06these are the basically um the
21:08strategies for the macro strategy. Okay.
21:12Um towards the end I'll come back to
21:14here and I just want to go through some
21:17of the um knowledge about what are the
21:19economic indicator.
21:21Okay. So
21:24um how many of you okay how many of you
21:27have actually have some knowledge or you
21:30when you are um university um your
21:33education background you have economics
21:36um background. Okay. So how many of you
21:38have economics background? So if you
21:40have economics background you put a E.
21:43Okay. So if you have economics
21:44background you put a E.
21:48Okay. Anybody? Yes. Ellen. Um
21:53and uh Mo Sing. Okay. And uh Ching.
21:58Okay. Very good. Um then I see that
22:01quite a number of you. Okay. With you
22:03have a economics background. So um and
22:07um if you are still working in the line
22:10of the financial industry, most likely
22:12you will understand better. However, you
22:14if let's say you just study one or two
22:16subject and then you were into another
22:18line and then you didn't refresh your
22:21memory perhaps this the next few slides
22:25that I'm showing to you will be a good
22:27refreshing refreshing your memory about
22:29what you have learned um last time. So
22:32among these macroeconomic data right um
22:35which of these you think will affect the
22:38stock market the most? Anybody? Which of
22:41these you think will affect the stock
22:44market the most? The second one
22:46inflation. Okay. How about others?
22:51Actually, they are a little bit linked
22:53but then you can differentiate them.
22:56Okay. Interest rate. Interest rate. So
22:58many interest rate and that is because
23:00we are currently in this environment. If
23:02I were to ask you maybe three years ago,
23:04you wouldn't tell me it's interest rate.
23:06[laughter]
23:07Okay. GDP. Yes, I'm seeing GDP here. I
23:11think GDP. Okay. Um, personally, I
23:14really think it's GDP because the GDP is
23:17actually looking at the the financial
23:21health of a country and that financial
23:23health of the country will affect all
23:25the public listed companies in our Busan
23:28Malaysia. You just imagine if let's say
23:31the country is doing well, people has
23:33higher income and the stock market will
23:36go higher. If let's say the GDP is
23:38negative, sure the stock market is in a
23:41uh a downtrend.
23:43So but how about interest rate and
23:45inflation now because we are in this
23:48current um environment whereby every
23:51month almost every month we are looking
23:54at uh what is the FOMC's um decision on
23:57the fed um rate um decision and which is
24:01from the US and also from Malaysia as
24:04well. Um but of course the US is more
24:06concerned with the overall stock market.
24:09Um but if you to look at this um the
24:12current issue right it actually come
24:15from the source was inflation. Okay and
24:18the inflation is the CPI. So it's
24:21actually coming from the the inflation
24:23problem because we have inflation.
24:27Okay. First because we have GDP
24:32pandemic. Okay. Because of the pandemic,
24:34our GDP went negative. Okay. And because
24:38of this, the government bump in money
24:41and then stimulate the economy and that
24:44created inflation.
24:46And because of inflation, then you will
24:49have to raise the interest rate to curb
24:52the inflation. So by raising the
24:54interest rate, you are actually trying
24:56to contract the GDP. Okay? So that you
25:00want to bring down the inflation. So
25:03this is a cycle. It can cycle to the up
25:06and it can cycle to the down. Okay. So
25:08it depends on how well the government
25:11um manipulate this interest rate policy.
25:16And um another thing is uh unemployment
25:19rate for the US um decision. they focus
25:24a lot on the job data and um basically
25:27they look at the majority of their their
25:30decision basis is based on the job data
25:34but however
25:36if you look at the unemployment rate um
25:39you can see that it is actually a
25:40lagging okay it's a a lagging indicator
25:43and also another thing is the industrial
25:45production okay but all in all I think
25:48the GDP will be the most important
25:52impact on the stock market.
25:55Okay. So next the different types of the
25:58economic indicators. So we are looking
26:00at leading and lagging. So there's also
26:03another one on the coincident.
26:06Coincident I think I didn't include that
26:08is because I look at it as uh a very uh
26:11gray area. So many of that I can clearly
26:14classify as a leading or lagging. Okay.
26:17I wouldn't want to put it as a
26:18coincidence. Coincident means that it is
26:20happening together with the uh real
26:23economy but a lot of time they are
26:25lagging. Okay, a lot of the time the
26:27those in economic indicators they are
26:29lagging indicators and what are the
26:32leading indicators.
26:36So okay so um if you can see the leading
26:39indic indicators will be the weekly job
26:42data. So if let's say you're looking for
26:43the US the willy job data it will be
26:45more like a uh real time because it's
26:49every week it's not like every month
26:52okay so it'll be every week and then so
26:54so you see that currently what is
26:57happening now on a week-by-eek basis how
26:59many people are claiming the uh
27:01unemployment benefits and so you can see
27:03that whether the economy are doing well
27:06okay and the PMI the PMI for example the
27:11now we are in May All right. So the
27:12April PMI will be announced on the first
27:16uh 1st of May, 1st or 2nd of May. So it
27:19will be uh quite a very fast um
27:22announcement. So immediately after the
27:24month end, you can announce the PMI
27:26reading. Okay. And the money supply.
27:30Okay. The money supply will tell you the
27:32whether the economy is having a
27:34expansionary or contractionary. So for
27:37the past two years because of the
27:39pandemic stimulus package um the money
27:42supply has been rising very very fast
27:45and then the of course the most
27:48important and the most famous one is
27:49this 10year note and the two-year note
27:52yield spread. Okay
27:55so this is the yield spread. So when you
27:58look at this y spread, you are looking
28:00at the um interest rate between a
28:03two-year um note which is the it's like
28:06a bond. Okay, two-year bond because they
28:08don't call it a a bond. The the
28:10definition for the US treasury is that
28:12um if it's more than um long-term they
28:15call it a bond. If it's medium-term,
28:17they call it a note. If it's uh less
28:19than a year, they call it treasury. So
28:21then this is just a term. So in fact,
28:23it's just a function of like a bond. is
28:26like a bond um instrument. So if you
28:28look at this two-year bond and a 10-year
28:30bond, okay, and um basically if you to
28:34look at uh a normal situation, okay, can
28:37anybody tell me under a normal
28:39situation, which one is it, the two-year
28:43one, two-year bond or the 10-year bond,
28:45which bond has a higher interest rate?
28:49Okay,
28:50can anybody tell me which bonds has a
28:54higher interest in a normal situation?
28:56Okay. In a normal normal situation,
28:58okay, when um basically the economy is
29:02doing well, okay,
29:0410 year, okay, 10 year note will be a a
29:08higher interest rate and that is because
29:10you are looking at you are locking in
29:12for 10 years. So for 10 years, you must
29:14have a a significant amount of risk that
29:17you are you know um um if affecting you.
29:21So comparing two year, two year you are
29:23looking at exposure for two years but
29:25the 10 years you are looking at you are
29:27much higher exposure. So therefore the
29:29risk is higher the compensation will be
29:31higher and in the long run we are
29:33looking at the interest rate is rising
29:34in the long run as well. So naturally
29:36the 10 year will be higher than the
29:392year.
29:41So always you see that in a normal
29:43situation 2009 2010 11 12 13 14 15 16
29:4817. So these normal years right um the
29:51yield spread is positive 3% 2% 1%
29:57positive. So these are positive figure
29:59whereby for example uh if you have a 2%
30:03uh positive meaning that this 10year
30:04bond is 2% higher than the 2-year bond.
30:09Okay, does that make sense? That means
30:11if you hold this bond for um maybe 0.5
30:15then this one is 2.5. Okay, something
30:18like that. So, meaning that this one is
30:20higher than this by 2%. Then what
30:23happened is, okay, let's Google for the
30:26current one. So, this chart is a bit uh
30:28outdated a bit. So, we could Google for
30:30the current um
30:332 year 10 year
30:37spread
30:39chart. Okay, we we Google and then we
30:42see um the the the latest one. Um I
30:47think the Y chart have two. Okay, let's
30:50see the investing.com.
30:56So this is um
31:00looking at this chart.
31:08Okay. Where's the chart? Maybe I go to
31:12another chart.
31:16Um, wait.
31:19This one
31:23can or maybe I go to Yahoo Finance also.
31:26Can ah, okay. This one.
31:31Okay. So, let's go for five years. Okay.
31:3710 years
31:41at all.
31:44Okay. Um this one is not easy to read
31:48because um the red color is the two year
31:51and the blue color is a 10 year. So the
31:55this thing is the spread. Okay. So
31:58histogram will become the spread because
32:00this is the um short term two-year. Red
32:03color is a short-term and then the blue
32:05color is a longterm. So usually the
32:07long-term is higher than the short term
32:09and then you have positive here and the
32:11minute whereby your shortterm is higher
32:14then you have a negative here. So this
32:16is a negative. So over the so many years
32:20right this one is starting in 1960
32:231980 okay in 1980s onwards if you see
32:28below this zero line. So this is a zero
32:30line. Below the zero line there were not
32:32many occasion you see not many occasion
32:36that you are below zero. So that means
32:37there were not many occasion that you
32:39were actually having a negative yield
32:41spread. So then people are looking at
32:44every time when you have a negative y
32:46spread then that is the um uh the the
32:50prediction of the recession. Okay US
32:53recession. So for example, if you look
32:55at this um this is in um
32:582000. Okay. So this is in the year 2000.
33:02So then that year 2000 we do have the
33:04dotcom bubble and then the US economy
33:07run into a recession. And then another
33:10one is 2008.
33:12So this one actually before the 2008 it
33:15started in um 2006.
33:22Wait 200
33:24yeah six 2006 you started to have that
33:28negative so 2008 recession two years so
33:32then they said that whenever you see the
33:35the negative yield within two years okay
33:38within two years you see that the US
33:40will be running into the economy
33:43economic recession so now we look at
33:45this when did it start
33:492020 okay so this actually started 2020
33:53when we saw that we have a uh a
33:56negative. So which means that within two
33:58years by 2022 it will be in a recession
34:00but now we are seeing that the US GDP is
34:04still positive. Okay. But however there
34:06were two um two consecutive quarter they
34:10were having a negative but then then
34:12they reverse. Okay. So now we are
34:13looking at in uh 2023 and then 2024 and
34:17beyond and see whether especially this
34:19year and they're seeing that this year
34:21um the risk of recession is very very
34:23high. Now how many of you think that
34:27this year okay for the US they will run
34:30into a recession or how many of you
34:33think that they are already in a
34:34recession or how many of you think that
34:36they haven't into a recession? Okay,
34:40maybe I just want uh you guys to give me
34:43some answers so that I can see um how
34:46you look at the economy.
34:48Okay, how the the reason why I want to
34:51ask is because I want to train your
34:54sensitivity your sensitivity with the um
34:58market with the stock market. Okay.
35:02Okay. Interesting. So I read up some of
35:06your answer and um Ching says that
35:09already. Okay. Um Muhammad says that
35:12already um
35:14uh the economic dampen damping but not
35:18recession. Okay. Because technically
35:20recession means um two consecutive um
35:24quarter of contraction. Next year
35:26recession stem say next year recession
35:29and um not recession yet m recession
35:32recovery
35:34going into okay um I I would think that
35:38they are already in a already in a
35:41recession but it's just that it didn't
35:43show in the figure okay I I would think
35:46that the figure haven't showed yet um
35:49because recently um the last weekend
35:51Warren Buffett had uh uh their annual
35:54meetings with shareholders. He in fact
35:57he himself already said that the US
36:00economy is in a recession and many of
36:03his companies um he will foresee that
36:06their earnings okay not revenue earnings
36:10means the profit the profit will be
36:12declining this year. Okay. So he he he
36:16said that uh in fact a lot of his
36:18company a few of his uh many of his
36:20companies the stock level the inventory
36:24level okay inventory level started to
36:26pile up and then they have to give
36:29discount promotion sales and then they
36:31can clear the stock. So in the past it
36:33he didn't have to do that but now he has
36:35to do that and um and which shows that
36:40and another interesting about Warren
36:42Buffett is that he is actually um piling
36:45up his cash reserve to $130 billion US.
36:50So you see if really really in the in
36:53the bottom right so he should be buying
36:56right but you see he's not buying he's
36:58actually piling up his cash reserve. So
37:00meaning that um we are expecting some
37:05um some level of recession in the US
37:08economy. Um yeah really okay. Apple
37:13results fit the expectation. Yeah. So um
37:16the results are usually um quarterly
37:19results and then which means that they
37:21are the past they are the history. Okay.
37:25So we are looking at forward which is
37:28the future. So future what do you
37:30expect? I would think that there is a
37:32possibility although it will not be 100%
37:35there is a possibility that the earnings
37:37may decline. Okay. So um it is important
37:41to know about all these um economic um
37:46like uh impact all these economic
37:49indicators and then their impact onto
37:50the economy because we are part of the
37:53market participant because we need to
37:55get this information in order to to
37:58trade or to invest either you are the
38:00trader or you are investor you need this
38:03kind of a information. Okay.
38:06Okay. So let me um continue at my slides
38:10here.
38:14So this is the I would think that the um
38:17indicators the the jobless indicators
38:21they are the lagging indicator. Okay.
38:23Although some may think that they are um
38:26leading but for me personally I feel
38:28that they are really lagging because
38:30after all unemployment happens when the
38:34economy is already in a bad shape. Okay.
38:37Why do the company want to retrench? The
38:40company want want to retrench is because
38:42they see that the uh economy is going
38:45downhill and then they have to stop
38:48hiring and not only stop hiring but they
38:49have to retrench their work workers. So
38:52therefore I I would look at it as a
38:55lagging indicator. Okay. Although some
38:57of them they may think that is a leading
38:59but to me I think it's a lagging
39:00indicator because of that. Okay. And for
39:04Malaysian unemployment rate currently we
39:07are below 4%. I think we are around 3
39:09point something. Okay. So we are about
39:12hopefully um not back to normal but then
39:15still on a unemployment rate is still
39:18high in the Malaysian context but it's
39:21better than um the last two years. Okay.
39:25And um inflation. Okay. for inflation
39:28rate. Um the US currently they we do see
39:32that inflation is um coming down. Okay.
39:35Um but in order to reach uh the Jerome
39:40P's um 2% of uh interest rate target how
39:45many more years you think we can reach
39:46there because he he said that he will
39:49not stop or he will maintain um
39:52aggressive until he see 2% of interest
39:55rate uh I mean inflation rate target
39:58right so that is his uh objective he
40:00said that 2%. So, but a lot of people
40:04are looking at he could be um pausing
40:06the interest rate. Okay. Whether he's
40:08pausing or um reducing, I do not know.
40:11But then the fact is that how many years
40:13you think that we can reach that 2%.
40:16Anybody
40:18now we are uh 4.9 right? 4.9
40:23uh not achievable.
40:25Okay. In history, in history, right? It
40:27will be achievable. But then how many
40:31years? How many years? In history it
40:35will be achievable. Okay. When you look
40:37at the history whenever the uh fat fund
40:40um they raise the interest rate to an
40:42aggressive level and then they pause and
40:45then they reduce the interest rate and
40:47then something will happen and then the
40:50inflation will be back to 2% level.
40:53Okay. In history we do see that but then
40:55the question is how many years that we
40:58will see that happening in how many
41:00years time anybody
41:03okay based on the history okay once
41:06trade war between China is over okay so
41:09that's also another thing um based on
41:12the history
41:15okay some say 2024
41:18okay based on the history right uh in
41:20the 1980s
41:21the 2% didn't achieve shift until 8
41:24years later. the minute the Fed raised
41:27the interest rate in um 1978
41:31or 79 and then the inflation reached 2%
41:34in um 19
41:38uh 86 okay from 79
41:43to 86
41:45many years right and um for 2008
41:50inflation reached 2% within um so the
41:55the Fed actually raised the interest
41:57rate and then until 206
42:00206
42:02the the the Fed funds uh the Fed
42:05chairman stopped pause the interest rate
42:07he hike so it was under Alan Greenspan
42:09and then later passed to Ben Bernaki so
42:12they paused the rate height and until
42:152008 the stock market crash along with
42:17the commodities crash and then only you
42:20reach that 2% level so 2008 and then it
42:23reached about 2009 about three years
42:25time. So now we see that um started last
42:29year um the Jerome Powers aggressively
42:33raised the interest rate um 2022
42:36and um this year first half we are still
42:39looking at raising the interest rate and
42:40then people are looking at psing the
42:42interest rate and then um perhaps
42:45reducing the interest rate. So um with
42:49this happening right so my my guess is
42:51that it could be what um shall shall say
42:56um 2024 second half of the year 2024
43:00okay it could be uh along that line or
43:03it could be 2025 okay if it's about 3
43:06years time that will be 2025 so which
43:09means that um currently what we are
43:12experiencing now uh it is not uh a quick
43:16solution thing. Okay. It's not like a
43:19recovery quick recovery thing. No, it's
43:22not. It's going to be drag a little
43:24until um you see that the um they will
43:28be still be volatility in the uh CPI
43:32figure. Okay, the CPI figure will still
43:34be volatile because because of the
43:36interest rate um reducing and then
43:38increasing and then pause and then all
43:40this effort, right? The CPI will be
43:43adjusting. Okay. But however,
43:46you need one dramatical event. You need
43:51a dramatical event to bring the CPI down
43:54to 2%. And what is that dramatical event
43:59that is according to the history? Okay,
44:01if you to see look back at the history,
44:04that dramatical event uh is recession
44:07along with the stock market crash along
44:10with the commodity market crash. Okay,
44:12you must have these two condition then
44:14you can reach that 2% level.
44:17So when will that be? Um not sure. Okay,
44:20I'm not the like a fortune teller or
44:22anything. Nobody can predict the market.
44:24Okay, but uh along this few years you
44:28you will see you'll be able to see.
44:30Okay,
44:31then um we look at
44:34uh annual GDP. So energy as you can see
44:39we are always looking at um the economy
44:43okay as a whole and then what's the
44:46financial um like the health of the
44:49country. So um in the past many years
44:52there were not many occasion that we
44:53were actually below that 0% which is
44:56negative and um in this case the the
45:00last negative was 2020. Okay. So that
45:04was uh very abrupt. Okay. So, it was a
45:07flash kind of a negative and then it
45:09bounced off because of the stimulus um
45:13package. So, these events happening and
45:17um the stock market is usually at the
45:19bottom. Okay. So, that's why the stock
45:20market has a very very close
45:23relationship with the GDP figure. Okay.
45:25In fact, if you were to do some
45:26modeling, okay, let's say you are in the
45:28line of a research analyst and um
45:31research analysts, they do modeling. So,
45:33when you do modeling, right? Um I would
45:36think that you will include this GDP
45:38into your modeling feedback because this
45:41is uh the the main driver of the stock
45:44prices. Okay.
45:47And um where do we get all this
45:49information? We can get from the bureau
45:52of these are the US um economic data.
45:54The the reason why I'm sharing with you
45:57um these US economic data is because the
46:00US economic data affect the US market
46:03and the US market affect the rest of the
46:05world. So that's why um my you see that
46:08my focus is usually on the US um
46:10economic data because that is affecting
46:12the market the most. Okay, I'm looking
46:14at affecting the stock market the most.
46:17So what is that will be the US um
46:19macroeconomic data and the World Bank
46:22International Monetary Fund trading
46:24economics. So this is my favorite
46:26website. I always get information from
46:28trading economics.com and uh OECD
46:32investing and uh Yahoo Finance. Okay.
46:35And um among these Okay. So let's take a
46:38look at the trading economic.
46:43Yeah. the tradingeconomic.com
46:45this website it is really very um
46:49comprehensive okay so it has
46:52all the countries in the world economic
46:55data including Malaysia okay
47:00so here we are looking at this country
47:02list so at the one glance we'll see that
47:05um the GDP year on year quarter and
47:08quarter on quarter interest rate
47:10inflation jobless government budget debt
47:13over GDP current account deficit and the
47:16population. Okay, the population is for
47:18you to calculate your GDP per capita. So
47:22when you look at one glance here right
47:24you see here is green and then here is
47:27red. Okay. So when you see red color
47:30means that alarm okay alert alarming. So
47:34why what is alarming? The inflation rate
47:37is alarming and then the jobless
47:39unemployment rate is rising and the
47:42government budget is negative.
47:45So this is alarming right in red color.
47:48Then this one the interest rate interest
47:50rate it will be interesting. So when you
47:52see that this is in in blue or in green
47:56okay blue or green it means what? It
47:58means it is rising. So when it is rising
48:01it may not mean good it means bad also.
48:04So this one if it's green or blue it is
48:08rising so it is also bad for the
48:11economy. So this four column and this
48:14GDP has to be good. Green means okay no
48:17problem. Okay. So the green means that
48:19it is actually quite okay. So then where
48:22is Malaysia?
48:24So let's look at the GDP quarter on
48:27quarter and then you can see that all
48:28these country uh they are having zero.
48:32The Euro zone are all zero. Okay. And um
48:37some are negative here. Russia and
48:40Malaysia
48:42we are yeah quarterly it's a negative
48:46GDP. Okay. So um but year on year we
48:50have a positive GDP.
48:52So which means that
48:55quarter to quarter is negative and then
48:57the year on year is positive. So meaning
48:59that this quarter to quarter we cannot
49:01have another negative for the next
49:03quarterly. If let's say we have uh
49:06another negative okay Malaysia
49:10if let's say we have two consecutive
49:12negative okay two consecutive negative
49:14of the GDP quarterly GDP so we are
49:17technically in recession that is the
49:19word called technically in recession
49:22okay meaning that um you are just
49:24technically in recession but may not
49:26means that you're in recession so they
49:27are just arguing so but anyway it is a a
49:30good reference point for you to see that
49:32the economy is actually slowing down
49:34Okay.
49:36And there's also another one about the
49:38inflation data. Okay. Uh I want to ask
49:41you guys about the inflation. Okay. So
49:43the inflation data that we always know
49:45is called CPI, right? But have you ever
49:47heard that sometimes they do talk about
49:50the core core inflation? Okay. So can
49:53anybody tell me what do you mean by core
49:56inflation?
50:00What does that core include or exclude?
50:04Ah, okay. So, yeah, Shelly. Yes. No food
50:09and energy. Okay. No energy and then no
50:12food. No food and energy. So, which
50:14means that they want to exclude those
50:16volatile um ingredient into this basket
50:19of that um CPI basket. So, you have a
50:23basket, right? So, you want to um
50:24exclude those um volatile things. So,
50:27they think that the food and the energy
50:28are very volatile. So they do not want
50:30to include and then then this basket
50:33will include only the
50:36um other than food will be like your
50:38utility bill, your education, your
50:41rental, your um whatever you buy on a
50:45daily basis. Okay, on a daily basis
50:48whatever you pay for it uh those will be
50:50under this um basket of goods. And so
50:52that will be the core inflation. Okay,
50:55and um what is the difference? The
50:57difference is just that if let's say you
50:58want to know the inflation level exclude
51:01the energy price because now we say that
51:03the C price is always rising right so if
51:06we say that we want to exclude the
51:07energy price then we we want to look at
51:09that poor inflation then to see that
51:12what is the uh difference and if we see
51:14that the um the difference is actually
51:17very minimum. So meaning that it could
51:19be um there are other things that are
51:22also in increasing in the prices. It
51:25could be the rental, it could be the
51:28utilities, it could be many many things
51:30that are increasing. Okay. So, have you
51:34ever heard of uh another inflation data
51:36is called the um personal consumption
51:39expenditure, PCE? Okay. How many of you
51:42have heard about PCE?
51:46Anybody? If you have heard about PCE,
51:48you put a yes. Okay. Anybody heard about
51:52personal consumption expenditure? H
51:55shalley again. Okay. So yes PCE stand
51:59for personal consumption expenditure. So
52:01if you were to refer to that PCE their
52:04inflation is about 4 something and then
52:06the core I mean the uh CPI is about uh
52:094.9 or five right and this PC is
52:12actually lower than the inflation data.
52:15Now then what does this PC include or
52:18exclude? What do you think
52:22the PC include or exclude? What
52:26actually it exclude the rental the
52:29shelter okay meaning the the cost of the
52:31housing and if you look at the um the
52:36our expenses our expenditure so our
52:39day-to-day expenditure is surrounding
52:41with our rental our mortgage and our um
52:46utilities our food transportation and
52:49then um education and all these many
52:52many things. So if you are looking at
52:54this right and if you look at the CPI it
52:57will include everything every of all of
52:59these it will include all of this but
53:02however if let's say you want to exclude
53:05certain things if you think that the
53:07house prices it will um uh like a skew
53:14skew your um data too too way too much
53:17then you just take out the house data.
53:19Okay. So for example, if let's say your
53:22country is running uh like a property
53:24market boom.
53:26So then this um property prices will
53:28increase a lot and that will uh affect
53:30your CPI. So but however you want to
53:33exclude that um you think that it's like
53:35a short-term short-term event it may not
53:38last long and then you want to exclude
53:40then you have to look at the PCE okay
53:43personal consumption expenditure whereby
53:45you do not want to look at such a big
53:47ticket item to be in the um expenditure.
53:50So but to me I think the CPI will be the
53:54best because that will include
53:56everything. Okay. So I would think that
53:57the CPI will be the best indicator. So
54:00we will just focus on the CPI. Okay. So
54:03then um we go on.
54:11Okay. So now we come to the strategies
54:13part. Okay. Because we have been looking
54:16at um talking about the knowledge thing,
54:19right? So what is this economic
54:21indicator? What does that do? The
54:23knowledge thing. Okay. Then the next
54:25thing is about strategies. So when it
54:27comes to the strategies um there are two
54:32types okay basically there are two types
54:34now whatever you do there are basically
54:36um two major thing okay um one is that
54:40you want to follow the trend okay and
54:44then another thing is that you may want
54:47to um do a risk um management as well
54:51okay either you are on a offensive
54:55attack mode or you are on a defensive.
54:58Okay. So, whatever it is, okay, whatever
55:01it is, um you can do both at the same
55:03time as well. So, whatever it is, your
55:06objective is to you want to maximize
55:08your portfolio return and then you want
55:10to try to reduce the chances of a draw
55:13down or negative. Okay. So then um the
55:17first one that is very common is called
55:19the trend following.
55:22So this trend following strategy is to
55:25identify the main trend. Okay. And then
55:29you believe in this main trend and then
55:30you just go ahead. Okay. So for example
55:35um you look at the the trend of the
55:39interest rate. Okay. So what is the main
55:41trend of the interest rate at the
55:43moment? Anybody? You think the interest
55:46rate is up? Pause or down? I ask a lot
55:50of questions.
55:52If you you think the interest rate is
55:54up, pause or down.
55:59Okay.
56:02Uh many say up and then one say pause.
56:07Okay. Many many say up. Okay. Uh at
56:10least you didn't say it's dollar.
56:12[laughter]
56:13Okay. At least it's pause or up, right?
56:16For the US, they recently they still
56:18increase the interest rate. Okay. And a
56:21lot of people they said that it they
56:22will be pausing by next um FOMC meeting
56:26but this didn't happen yet. The pausing
56:29of the interest rate have not yet
56:31happened. And even for Malaysia we just
56:34raised our OPR. Okay. Although um we
56:37said that we're going to pause the
56:39interest rate.
56:42We have to wait until the next meeting
56:44then only we know that it will be a
56:45pause. Not yet happened. Okay. So that's
56:48why we all of you say that we are still
56:50up. Okay. So when you are looking at the
56:52interest rate um going higher right
56:57but however we also understand that they
57:00are going to pause the interest rate in
57:02the near future. Okay so that is the
57:04market consensus. So sometimes when you
57:07look at the trend and then you look at
57:08the indicator um you are looking at the
57:12what is being published what was being
57:14announced okay what was being released
57:18but it didn't um look at this all this
57:21macro economic data right it didn't
57:24really looking at the what is looking
57:27ahead forward looking it didn't really
57:31um tell you so much about what is the
57:33future okay So when you are looking at
57:36this um trend following right we a lot
57:39of the analysts they will incorporate
57:42their own uh expectation so their
57:44expectation will be coming in and this
57:47expectation become the trend following
57:52okay the expectation
57:54become the trend following. So if
57:56everybody expect the same thing then
57:59everybody will will will will create a
58:02trend and then the rest will follow that
58:04trend. For example, if you think okay if
58:09you think that the interest rate is
58:12going to pause and maybe in the some
58:17months ahead it may reduce. Okay. So if
58:20you think that the thing is expectation
58:22is going to be like that then a lot of
58:25the people they will be looking at
58:27buying into the bond market because
58:30interest rate go uh down and then the
58:32price will go higher they buy into the
58:34bond market and then another thing the
58:36US dollar they will short the US dollar
58:39okay because they think that um if
58:42everybody think the same the interest
58:44rate is pausing the US dollar will stop
58:47rising and then it will start to
58:49decline. time. Okay, then that will be a
58:51turning point for the USD and where that
58:54turning point happens then you develop a
58:57trend. So that trend will be a falling
58:59dollar trend. Okay. So so the the
59:04importance here is that you identify the
59:06the economic um indicator like the
59:10interest rate. Okay. And then what is
59:12the expectation and with this
59:15expectation then you develop uh a trend
59:18and then this trend if more and more
59:21people believe in this trend then it
59:23will happen and then it become a trend
59:25following. Okay. So once um for example
59:30the 10-year yield okay if once this
59:33trend develop you see the 10-year yield
59:35will crash and then the US dollar will
59:39crash and yeah okay basically these two
59:42will will come down okay and then the
59:44trend will develop okay so so if let's
59:48say you are a hedge fund manager okay
59:50given knowing that this um the trend is
59:54um developing what would you do if
59:55you're a hedge fund manager Actually
59:58later I have a H uh
1:00:02I think
1:00:03one report.
1:00:06Yeah,
1:00:08somebody say something.
1:00:10Is it from my from my from my here?
1:00:14Okay, wait. Anyway,
1:00:16okay. So, um so if let's say the hedge
1:00:19fund, right? When they know that if they
1:00:21are doing the arbitrage uh then they
1:00:23will do the carry trade. Okay. So, later
1:00:24I'll go into that. Okay. Never mind. So
1:00:26the next one, the next strategy
1:00:28microeconomic strategy is the mean
1:00:30reversion. So if you know that in
1:00:33general, okay, if a certain um asset
1:00:36drop too low, okay, for example, um
1:00:39before the pandemic or during the
1:00:41pandemic
1:00:43uh 2020, okay, the middle middle of May
1:00:462020, what happened to the crude pro
1:00:49crude oil price is that it crashed. the
1:00:52futures uh the futures market for the
1:00:54crude oil actually crashed to a negative
1:00:56value. Okay, so that was unprecedented.
1:00:58I have never seen the oil futures to
1:01:01crash to a negative and it's uh not a
1:01:03small negative is a big negative of
1:01:05minus 37. So that was unprecedented but
1:01:08nevertheless the the spot market also go
1:01:11down.
1:01:13So when you see that uh a certain asset
1:01:16class going down so rapidly in a short
1:01:20period of time then this reversion of
1:01:23the mean will come in. Okay reversion of
1:01:25the mean is that when things get too
1:01:27depressed sell down over overly done.
1:01:31Okay the sell down was overly done then
1:01:33you believe that uh eventually you will
1:01:37revert to your mean your mean will be
1:01:39your average price. Okay. So let's say
1:01:41the mean price for the um crude oil is
1:01:45about $40 during that time. Okay. $40
1:01:47$50. Then that minus 37 is a buy
1:01:52opportunity. It's a golden buy
1:01:54opportunity because you know that you it
1:01:57cannot be deviate from that mean for too
1:01:59far. It it can't be too far from 50 to
1:02:04you know minus 37. So it's a great um
1:02:07golden opportunity. So whenever the um
1:02:10the asset price either it move up too
1:02:13high or it crash down too low um that
1:02:16those are the um strategies. Okay. So
1:02:19buying strategies whereby people will
1:02:22take this opportunity and then they will
1:02:25buy on these assets and then wait for
1:02:27these assets to revert to the mean.
1:02:30Okay.
1:02:32Then another one is the news trading. Um
1:02:37a lot of people they think that the
1:02:39technical analysis
1:02:41um of course is the only thing right to
1:02:44the trading world but however we also
1:02:47see that there are a lot of traders they
1:02:49also listen to the news they trade on
1:02:52the news okay and um one of the major
1:02:55news will be the non-farm payroll and
1:02:58inflation data and now is the interest
1:03:00rate interest rate um data okay so in
1:03:04the before the pandemic it was a
1:03:06non-farm payroll. Everybody was talking
1:03:07about non-farm payroll. Now in the in
1:03:11this one and half years, everybody is
1:03:14eyeing on the interest rate now. So the
1:03:16interest rate become the mainstream
1:03:20the most important economic data to
1:03:24watch out for. So sometimes um people
1:03:27want to wait until 2:00 a.m. in the
1:03:29morning. Anybody here wait until 2 am in
1:03:31the morning just to wait for that
1:03:33interest rate announcement? Anybody?
1:03:37Okay, you guys are still okay. Not so
1:03:39crazy about the stock market. Okay, so
1:03:42sometimes really [laughter]
1:03:44shi okay um yeah so that means you are
1:03:48really traders already because you
1:03:49really really follow the the trends so
1:03:52closely. Okay. So it it shows that you
1:03:54are a very um trend following person. So
1:03:59if you are looking at this um news right
1:04:02it will definitely affect the portfolio
1:04:05if you are trading position right it
1:04:07will affect it a lot. Okay and uh Sha
1:04:10Shazi Shazila says that prefer to read
1:04:14in the morning. Okay so I need my beauty
1:04:17sleep. Okay. Yeah I also need my beauty
1:04:20sleep. Okay. So um so the news also
1:04:25include the um economic calendar. Okay.
1:04:28So when you talk about trading with the
1:04:30news, it will include the economic
1:04:32calendar and also I want to say is that
1:04:35um when we talk about the news, right?
1:04:38This news report
1:04:40sorry.
1:04:41Oh wait. Yeah.
1:04:45Um I
1:04:47do you hear any noise? Okay. I didn't
1:04:49share the Okay. Because
1:04:51Yes. Yes. I I heard it. I think it's
1:04:53from from your laptop. I guess
1:04:55from my slide. from my slide because
1:04:57this slide is supposed to be a video but
1:04:59anyway I will mute this video I try
1:05:02there's all
1:05:04okay never mind um okay so whenever you
1:05:08want to trade news right there are many
1:05:11types of news okay so economic news is
1:05:13the major major thing okay but however
1:05:15besides the economics news there's also
1:05:16another news can anybody tell me what
1:05:19other news is also impactful to the
1:05:21stock Okay.
1:05:26Politics. Ah, okay. This one is good
1:05:28because it's Malaysia, right? Okay.
1:05:30Malaysia politics. Okay. Um, war. Yes.
1:05:36Um, earnings. Uh, okay. My earnings are
1:05:39considered microeconomic data. War.
1:05:42Okay. Uh, anybody talk about natural
1:05:47disaster?
1:05:49Natural disaster. Okay. Now what
1:05:51happened was that in um 20 uh two wait
1:05:571995 okay 1995 where I think it was uh
1:06:01Brazil or Mexico where they had a very
1:06:05severe um drought okay the harvest
1:06:09affect the harvest so therefore that
1:06:11affect the uh commodity prices so that
1:06:14was 1995 and then the year 20 um one it
1:06:202011 or 2012 in um Japan. Okay. In Japan
1:06:25it was a March the month of the March
1:06:27and um there was this place that was a
1:06:31tsunami
1:06:32earthquake. Okay. And uh that affect the
1:06:36nuclear plant and the nuclear plant was
1:06:38um affected and that caused a lot of uh
1:06:41destruction. Okay. So that was um
1:06:44because of the natural um disaster it
1:06:47affect the stock market and sometimes um
1:06:51because that was in Japan. So Japanese
1:06:54is the Asian market. So Asian market may
1:06:56not be affecting so much but however if
1:06:58it is a natural disaster in US market US
1:07:02market
1:07:05heat wave now it's heat wave natural
1:07:07calamity.
1:07:09Do does anybody remember there was one
1:07:11natural disaster happened in the US that
1:07:14caused the stock market to uh shake a
1:07:17little bit as well. Okay. It's not like
1:07:19a severe um stock market crash but it
1:07:21does uh affect for about um one or two
1:07:24weeks time. Did anybody recall? Uh I
1:07:27think it was the year 2005.
1:07:302005 there was a natural disaster in the
1:07:33US that affect the stock market.
1:07:36Anybody?
1:07:38No, it's not earthquake.
1:07:40Hurricane. Yes. Uh what's the name of
1:07:42the hurricane? Can anybody remember? Is
1:07:45it something to call Katrina?
1:07:48I'm not sure whether it's Katrina or
1:07:50something. Okay. So, but that was my
1:07:52memory that uh it was a hurricane um
1:07:55that caused uh massive massive
1:07:57destruction into a lot of the cities and
1:08:00that caused the stock market Sandy.
1:08:03Okay, it could be Sandy. I cannot
1:08:04remember the name. So, it could be
1:08:05Sandy. So that caused effect on the
1:08:08stock market. So therefore, hedge fund
1:08:11managers nowadays if you look at what
1:08:14else do they read the news right they
1:08:16are looking at the news trading on the
1:08:18news right what else do they read so
1:08:19they read about the natural disaster
1:08:21where where do where where where is the
1:08:24possibility of the next possible um
1:08:26natural disaster and then they also look
1:08:28at of course the war you can't control
1:08:31okay the war the war is because um the
1:08:34conflict between countries and that has
1:08:36been long ongoing And then it's just you
1:08:40need uh some trigger and that trigger
1:08:42will will make a war happening. So for
1:08:44example the the US keep in um making the
1:08:50Ukraine and then making the Russia angry
1:08:52and then finally Russia send the troops
1:08:54to conquer the Ukraine and that's
1:08:57because somebody triggered it. So then
1:09:00similarly if let's say um you China and
1:09:03Taiwan. Okay. Okay. So if let's say US
1:09:05keep
1:09:07triggering the the between these two
1:09:09country then maybe there's a possible
1:09:11war as well and another possible war
1:09:15will be u between the North Korea and
1:09:17the South Korea. Okay. So but all this
1:09:21it doesn't happen until there is a
1:09:22trigger. So all this will be the news
1:09:25and then it will affect and you have to
1:09:27look at where if it's happened in the US
1:09:30it will be more. Okay, the effect will
1:09:32be more and if it also happen in the
1:09:33Asia also effect will be more and
1:09:36another thing is that for Malaysia
1:09:38political news okay it will affect the
1:09:41most. So next we look at the economic
1:09:44news. So when you look at the economic
1:09:46news um we are looking at the
1:09:48investing.com trading economic and then
1:09:51um Bloomberg um news. Okay. So all this
1:09:54we will see those economic uh figures
1:09:57released or even CNBC you'll see um
1:09:59breaking news right it will flesh out.
1:10:01So, so then the dates, okay, the dates
1:10:04of the announcement.
1:10:06So, for example, before the pandemic,
1:10:08people look at the non-farm payroll
1:10:10because that was basically uh everybody
1:10:12was trading around the non-farm payroll
1:10:14and um that was um first week of first
1:10:18Friday of every month. Okay, the the job
1:10:21data and now it is the FOMC meeting. So
1:10:25I'm sure all of you know that um there
1:10:28are eight um in the calendar there are
1:10:30eight FOMC in a year. Okay. So all of us
1:10:34who are into the stock market we will go
1:10:37in and then search which are the date
1:10:40what are the dates. Okay. So we just had
1:10:42one on the 3rd of May and then the next
1:10:45one will be I think on the 13th of June
1:10:47and then after the 13th of June there'll
1:10:48be another one in the July and then
1:10:51subsequently another one in September
1:10:53and then another one in somewhere in I
1:10:55think October or November. So you are
1:10:58looking at uh so many more FOMC meeting.
1:11:01So if there is still rising of the
1:11:03interest rate you could have potential
1:11:05keep raising the interest rate. Okay. So
1:11:08then you when you are looking at trading
1:11:10the economic news especially trading the
1:11:12interest rate okay then there are two
1:11:14strategies okay either you trade before
1:11:17the news announce or after the news
1:11:20announce okay now let me ask you would
1:11:23you prefer to trade before the news
1:11:25announce or after the news announce in
1:11:30uh in this case will be the interest
1:11:31rate announcement
1:11:33actually there's no right or wrong both
1:11:35also can make money okay I have to say
1:11:36that both also can make money it's just
1:11:38your your personal preference. How much
1:11:39is your risk appetite only? Okay. How
1:11:41much is your risk appetite? Um I can see
1:11:45that um Albert say before and then
1:11:49Muhammad say after and then um
1:11:53Paul say before
1:11:56and then Julie say after.
1:12:00Okay, there's no right or wrong. Both
1:12:02also can make money. So um if let's say
1:12:05you trade before. Okay. How can before
1:12:07make money? So for example
1:12:11um last
1:12:13um I mean last week okay last week on
1:12:15the 3rd of uh May okay 3rd of May um we
1:12:21had the FOMC meeting okay before the 3rd
1:12:24of May and the market consensus they are
1:12:27looking at if you ask 10 people nine
1:12:30people will tell you 0.25%.
1:12:34Okay. So that was the market consensus.
1:12:36It was so obvious, too obvious. Okay. So
1:12:39sometimes when the expectation is very
1:12:41obvious thing. Sometimes expectation is
1:12:44a surprise and then sometimes uh you
1:12:47know um you you you can't tell you can't
1:12:51predict you can't tell what is going to
1:12:53happen but sometimes you can predict
1:12:54very well. So for for this May uh it was
1:12:58quite a predictable outcome.
1:13:00Okay. So it was quite a predictable
1:13:02outcome. So in this predictable outcome
1:13:04you can either um go before or after
1:13:07because it's rather predictable. Okay.
1:13:10However, if let's say it is
1:13:12nonpredictable, you think that the risk
1:13:14is too high. Okay. The risk is too high.
1:13:16Then I would think that before will be
1:13:18better. Okay. Before is better is
1:13:20because um you buy on rumors and then
1:13:24you sell on fact. But the thing is that
1:13:26before the fact you see the profit
1:13:28there, you keep take take profit
1:13:30already. Okay. So for example you think
1:13:33that the interest rate uh is going to
1:13:35increase the interest rate.
1:13:38So what you do is that um before leading
1:13:41to the interest rate you can long the US
1:13:43dollar. Okay, you long the USD long long
1:13:46long long and then before you see before
1:13:50maybe days before maybe two days, three
1:13:53days before you see that you already
1:13:54reach your target, you can start to take
1:13:56profit already because you you don't
1:13:58want to um see any surprises because
1:14:01your risk appetite is not that big.
1:14:04Okay. But however, if you want to wait
1:14:06for after the announcement, then usually
1:14:09this risk is much higher because you
1:14:11have to make a guess and your guess has
1:14:13to be better be correct.
1:14:16Okay? Have to be better be correct. But
1:14:18however, however, you have options. You
1:14:21have the derivatives market. The options
1:14:23is that there you can do a strategy
1:14:26whereby it can go for um long a call and
1:14:29long a put whereby in two ways you can
1:14:32still make money. Okay? Unless you do
1:14:34that then you are still okay. But if
1:14:37let's say you are taking one position
1:14:40then you have to be careful because you
1:14:42have to be correct then only you can
1:14:44make that money. If you are not correct
1:14:46you have to cut loss. Sometimes what
1:14:47happen you have a gap down. Okay. So gap
1:14:50down cut loss is very difficult to cut
1:14:52loss in a gap down situation. So so that
1:14:55is trading with the economic news. Okay.
1:14:58Okay.
1:15:02So here we come trade. Par trade is a
1:15:07strategy that involves borrowing in a
1:15:10low interest rate currency. So what it
1:15:13means that can anybody tell me um maybe
1:15:16last year. Okay. Last year if you want
1:15:19to do a carry trade for J Japanese yen
1:15:22and US dollar. So what what kind of a
1:15:25you will long which one short which one?
1:15:28You will you will borrow which currency
1:15:30and then you will what what would you do
1:15:33if let's say you you are looking at the
1:15:35Japanese yen and the US dollar? Anybody?
1:15:39Last year. Last year. Okay. Not this
1:15:41year. This year turning last year.
1:15:45Anybody?
1:15:48Okay. Okay. What what this mean trade?
1:15:51It means that ah okay lily you borrow
1:15:54Japanese yen and then invest in the USD.
1:15:58Yes. And last year so happened is that
1:16:00the Japanese uh central bank
1:16:04yes we also correct and last year the
1:16:07Japanese central bank they didn't follow
1:16:09the US to raise their interest rate.
1:16:11They reduce their interest rate.
1:16:12Remember they didn't increase but they
1:16:14reduce. So they are doing opposite and
1:16:18this opposite right is very good for the
1:16:22forex trader. Okay, it's very good for
1:16:24this carrying trade because you borrow
1:16:27at a cheaper interest rate at a cheaper
1:16:31yen and then you invest in the rising
1:16:34USD. Okay, so that was last year and
1:16:38this year I think you better have to do
1:16:42the reverse or at least you don't do
1:16:44anything. Okay. You you don't um I
1:16:46wouldn't um think that you should
1:16:48initiate uh the reverse first because we
1:16:51haven't stopped we haven't stopped
1:16:52raising the interest rate. This action
1:16:55haven't happened. Okay. The the interest
1:16:58rate haven't paused yet. Okay. So, we
1:17:00cannot assume that the reverse is going
1:17:02to happen. What if June 13 the interest
1:17:06rate hike again? Then your strategy will
1:17:09be affected. Okay. uh isn't reverse
1:17:12trade like gambling or betting against
1:17:14um well there is in fact trading is
1:17:17about all this I mean there is a risk
1:17:20you you have to calculate a certain
1:17:22amount of risk it's about probability
1:17:25okay so um however if you're
1:17:28knowledgeable and then you after you
1:17:30assess analyze analyze and then you have
1:17:34uh come up with the conclusion that I
1:17:37see that the probability of having this
1:17:39outcome is
1:17:4275%
1:17:43okay 75% then I will go ahead with my
1:17:46strategy
1:17:48okay so then of course you must have a
1:17:51um alternative solution what if it
1:17:53didn't happen then what is your cut loss
1:17:54point and things like that so yeah we
1:17:57have to guess we have to make certain
1:17:58guesses but it depends on your risk for
1:18:02me personally I am more on a risk averse
1:18:06person okay I dare not take on too much
1:18:09risk
1:18:10So that is why um for a lot of situation
1:18:14I will just stay on the sideline and
1:18:17I'll just observe okay because I dare
1:18:19not take on the unless I see that the
1:18:21chances of winning is like almost there
1:18:24okay almost you will you will get it
1:18:26then I will go in okay so I'm more on
1:18:29the conservative side so so it depends
1:18:32on your risk um preference so if your
1:18:34let's say your risk preference is more
1:18:36on a higher side then you can always um
1:18:40um do um something that you anticipate
1:18:44and then you act on that anticipation
1:18:48and there are also other form of a
1:18:49investment. So something like this kind
1:18:52of a carrying trade. So if let's say you
1:18:54have a a zero cost or like a arbitrage
1:18:59opportunity whereby your borrowing cost
1:19:02is a very very low interest rate. Let's
1:19:04say your company okay let's say you work
1:19:07for a company that can give you personal
1:19:09loan of uh 2% or 1.5% or 2% okay and
1:19:14then there is a sure gain bond of uh
1:19:18let's say this bond is a government bond
1:19:21which is a sure gain which is um no risk
1:19:24zero risk bond and u is giving you 5%.
1:19:28So your cost is 2% and then your your um
1:19:32return is 5%. So then 5% minus 2% then
1:19:35your net gain is 3%. So therefore this
1:19:38is a uh zero cost kind of a um sure gain
1:19:43opportunity arbitrage opportunity. So if
1:19:45let's say you happen to see this all the
1:19:48um by all means you go and grab it okay
1:19:50because this is a zero risk opportunity.
1:19:54But however, if let's say we are looking
1:19:56at the open market, you are borrowing
1:19:58and from the bank whereby this bank
1:20:01interest rate is fluctuating.
1:20:04It's not a company. Yeah, it's a bank
1:20:05whereby interest rate is fluctuating. So
1:20:07then your risk is higher because who
1:20:10knows they may increase the interest
1:20:11rate after you have enter into this
1:20:14agreement. They may increase the
1:20:15interest rate and then it may um make
1:20:19this um the whole thing not profitable.
1:20:21Okay. So all this risk but anyway so
1:20:25this carry trade is a very very good
1:20:27strategy and in fact it is um one of the
1:20:30hedge funds um favorite strategies as
1:20:33well especially um when they are dealing
1:20:35with the currency um foreign I mean the
1:20:38forex okay so that's why I I told you
1:20:41just now in the beginning Ray Dalio Ray
1:20:43Dalio he started his hedge fund by doing
1:20:46um forex arbitrage there are many forms
1:20:48of arbitrage so forex arbitrage is the
1:20:51most um popular um strategy. Okay. And
1:20:54of course this um when anything to do
1:20:57with forex right anything to do with
1:20:59forex it will be on the macroeconomic
1:21:02data because after all what affect the
1:21:06currency value is the fundamental of the
1:21:09country okay so can anybody tell me okay
1:21:13so if let's say what's the relationship
1:21:16between the interest rate and the
1:21:18currency can anybody tell me the
1:21:21relationship between the interest rate
1:21:22and the country's currency See let's say
1:21:26um
1:21:30what money supply okay if let's say our
1:21:35bank nagara increase the interest rate
1:21:38in theory what happened to our our
1:21:41valuation of the ringit
1:21:44direct relationship currency up divian
1:21:48yes up increase sheila yes Okay. Um,
1:21:55Stephen, yes. Okay. So,
1:21:58in theory, okay, I I have to say in
1:22:00theory because in theory when interest
1:22:02rate increase the the value of the
1:22:04dollar will increase in theory. But
1:22:07however, there are so many factors. Uh,
1:22:11okay. So, I say money supply. So, there
1:22:13are so many factors affecting the the
1:22:17valuation of the currency. Okay. So,
1:22:19money supply is one. Another is the
1:22:22political news, political instability
1:22:26and all these news and others are like
1:22:29um your macroeconomic financial GDP
1:22:34figures and all this. Okay. And all
1:22:37these will actually affect your currency
1:22:40but the most is the interest rate.
1:22:42However, however you if you would like
1:22:45to think of this interest rate have a
1:22:47direct relationship with the currency,
1:22:50right? But
1:22:52after a certain level, the interest rate
1:22:54may not be useful anymore. For example,
1:22:59Argentina,
1:23:02Venezuela. Okay. So, what happened to
1:23:05Argentina and Venezuela?
1:23:08Anybody?
1:23:10They are their problem. What's their
1:23:12problem at the moment? Argentina and
1:23:15Venezuela
1:23:17devaluation. And if you check the
1:23:19trading economic right currently their
1:23:22interest rate is almost like 30 to 40.
1:23:25Their inflation is about 30 40% and same
1:23:27as their interest rate. So they are
1:23:29having a hyperinflation. Yeah that's
1:23:31right. It's a hyperinflation.
1:23:34So then with a hyperinflation um their
1:23:37currency will also depreciate because of
1:23:39inflation and and another reason is
1:23:41because they are raising the interest
1:23:42rate. So because they are raising the
1:23:46interest rate too high.
1:23:49Okay. Because they are raising the
1:23:50interest rate too high. It didn't help
1:23:52the economy but in the end the um
1:23:56currency depreciate further.
1:24:00Imagine you want to save your currency.
1:24:03If let's say your currency is being uh
1:24:05depreciated and then you want to raise
1:24:07your currency by increasing your
1:24:09interest rate. But I have to tell you
1:24:11that is only up to a certain level that
1:24:14you can increase beyond a certain level.
1:24:17No matter how high you increase no use
1:24:20the currency will keep dropping and
1:24:22dropping and dropping because people saw
1:24:23that you have increased your interest
1:24:25rate too much. You contract your economy
1:24:27your GDP everything your everything will
1:24:30be down so your valuation will be down
1:24:32as well. Okay. So there are so many
1:24:36factors affecting all these economic
1:24:39data and their inter relationship. So uh
1:24:42it is not so direct although in theory
1:24:45there are some direct relationship but
1:24:47um there also other factors. So that's
1:24:50why we need to read more and then
1:24:52increase improve our knowledge. Okay.
1:24:56And another one is the event driven.
1:24:59event driven is something that um a lot
1:25:02of the fund managers as well as the
1:25:04traders they are also very much into it.
1:25:06Now for example Malaysia has some uh
1:25:10last year
1:25:12election okay during the election before
1:25:14the election so that was event driven
1:25:18and um budget before the budget uh that
1:25:21is event driven so if let's say you want
1:25:24to have a position before all these
1:25:26important event make sure that your
1:25:29prediction is correct
1:25:33so I remember there was one year 2021 1
1:25:37um budget. Okay, it was a October
1:25:39budget.
1:25:41It was um pandemic budget under our
1:25:43previous prime minister.
1:25:46So I was thinking okay I was thinking uh
1:25:48because I was trading the the futures
1:25:51the FKI the futures um the derivative
1:25:53market. So I was um looking at the
1:25:56situation I said okay now we are in a
1:25:58pandemic and the current government is
1:26:00so generous in giving out the goodies to
1:26:04the people and then um so most likely
1:26:07this budget is going to be people
1:26:09friendly. Okay. So that was my my p my
1:26:13analysis and then my prediction and then
1:26:16you you know I'm always um if I if I
1:26:19think that the outcome didn't is not
1:26:21more than 75% I wouldn't enter into that
1:26:23position. So meaning that I must think
1:26:26that the outcome has to be more than 75%
1:26:29then I may I will enter. So which means
1:26:32that this analysis to me it is a very
1:26:36natural and a common analysis which
1:26:39means that this current government
1:26:41generous you will give a lot of goodies
1:26:43and then it will be a people friendly um
1:26:45budget and then then I long I long the
1:26:49um FKI before the budget and then after
1:26:52the budget I will take profit. Okay. So
1:26:54that that that was my
1:26:58so guess what happened. Can anybody
1:26:59recall what happened that year 2021?
1:27:022021 budget. What what was the highlight
1:27:06of that year?
1:27:08Anybody recall
1:27:112021 budget?
1:27:14Cannot recall.
1:27:16Do you follow the budget? Because for
1:27:18the stock market,
1:27:21uh
1:27:23more money. No. Yeah, more money. But
1:27:25there was one thing that caused the
1:27:28market to get down the next day on the
1:27:31Monday.
1:27:32More money. No.
1:27:36Uh tax. Okay. Uh what tax? What tax?
1:27:40Um clean. What tax? What what's the name
1:27:43of the text?
1:27:46Yes. Okay. Very good. Oh, that's that
1:27:50was the text. Okay. Okay. So that
1:27:53prosperity oh um no it's uh no it's not
1:27:58the windfall tax okay winfall tax is for
1:28:00the glove industry but this prosperity
1:28:03taxu
1:28:05is actually aiming for those big
1:28:07corporation
1:28:09with 100 million and above um profit
1:28:12will be taxed 10%.
1:28:16Okay, I'm looking at 2021 budget, not
1:28:19this year uh budget. I'm looking at
1:28:212021. So that was uh a news a very um
1:28:26surprise news to me because when I was
1:28:29listening to the news and then I was
1:28:32reading the the budget and then I keep
1:28:36repeating what
1:28:3910% on the 100 million and above um
1:28:42company then I was like oh no okay so so
1:28:46the next day I have to um not only I um
1:28:50I did another thing Okay, I didn't cut
1:28:52loss. Actually, I short another um
1:28:55contract so that I want to freeze my
1:28:58equity. So, I continue to long but then
1:29:00I short another contract because that
1:29:02contract is a many months contract. It's
1:29:04not a same month contract. It's a many
1:29:06months contract. So, so, so that
1:29:09happened to be the the strategy during
1:29:12that time. So, what happened is that
1:29:15after this news breakout the next
1:29:17Monday, okay, next Monday uh gap down.
1:29:20So get down and then it continue to go
1:29:22down and then for one whole week it was
1:29:24down down down down down. Okay, down
1:29:26about 100 over points before it
1:29:28reverses. Okay, when it reverses it was
1:29:31very um strong as well. It was up up up
1:29:34100 points as well. So that's how um I
1:29:38managed to prevent my losses and then I
1:29:41managed to make some small gains only.
1:29:44Okay. So, so that was the the situation
1:29:46whereby you you you were expecting
1:29:50something that sure almost like you know
1:29:53think you think that it's going to be
1:29:54happening but then in the end there's a
1:29:56surprise so then you have to react with
1:29:58another strategy. Okay. So, so this is
1:30:00uh event driven. Okay. So event driven
1:30:03is something that we are um we are
1:30:06definitely having some opportunity.
1:30:08Okay. It could be um election also.
1:30:11Okay. So during that time um a lot of
1:30:15rumors they say oh this party that party
1:30:17but to me I feel that at that time the
1:30:20probability of a hung parliament was
1:30:22very very high. Okay. So that was the
1:30:25the thing that actually happened. Okay.
1:30:28So so the next event that we are looking
1:30:31at is the state election. Okay. So
1:30:35hopefully there's no surprises in the
1:30:36state election. Okay.
1:30:41So another thing about all this um
1:30:44macroeconomy right we can use it just
1:30:46now I in the beginning I said that we
1:30:47can use it for profit right to try to
1:30:50take advantage of the news and event but
1:30:52at the meantime we can also use that for
1:30:54risk management okay so um identify the
1:30:58potential risk for example if the
1:31:01interest rate keep rising we identify
1:31:03this potential risk then maybe we need
1:31:05to do some hedging okay if let's say we
1:31:08see that the um commodity prices keep
1:31:12rising then we also need to do some
1:31:14hedging in the derivative market and um
1:31:18you have to anticipate the market
1:31:20volatility. Okay. So market volatility
1:31:23is something that we can manage. So just
1:31:25now I did mention one um strategy is the
1:31:28option strategy whereby you can do a a
1:31:30long a put and a uh long a put and long
1:31:34a call. Okay, a bull spread. You can
1:31:36long a put call and long a put and then
1:31:39if there is any volatility you can still
1:31:42make money. Okay. And your loss is just
1:31:44your premium and uh divers you can
1:31:48diversify your trading portfolio because
1:31:51um when you know that certain sector um
1:31:55is losing value so maybe you need to
1:31:57diversify into another sector. Okay,
1:32:00let's say um or you identify that
1:32:02certain sector are increasing value then
1:32:04maybe you need to diversify into that
1:32:06sector. So for example um you see that
1:32:09the um gold price okay the gold price at
1:32:13the moment um what is the market
1:32:16consensus you think the gold price is
1:32:18going up or down
1:32:22get ho yeah [laughter] okay
1:32:26uh Lily say up okay so actually yeah
1:32:28that's what I'm thinking too the gold
1:32:30price I think um they are they are gener
1:32:34in terms of the commodity because gold
1:32:36is a commodity And then the um crude oil
1:32:39is a commodity. But why is it that the
1:32:41crude oil is not doing well but then the
1:32:44gold is still managed to do well and
1:32:46that is because um if you look at the
1:32:48gold uh very much um one of the main
1:32:51factor there are many factors um one is
1:32:54that number one inflation fear of
1:32:56inflation. If people think that this
1:32:58inflation is going to persist then the
1:33:00co price will increase because we want
1:33:03to find for alternative to preserve our
1:33:05valuation of the currency.
1:33:08Another thing is the um US dollar. Okay,
1:33:11because when people central banks
1:33:13currently US dollar is a um common
1:33:16reserve currency value, right? So if
1:33:18let's say you are looking at this
1:33:19reserve currency status, they are trying
1:33:22to cut down because the US dollar is
1:33:25going to depreciate because of the
1:33:26lowering of the interest rate. You are
1:33:28thinking that the US dollar may go down.
1:33:30So then people will have to switch to
1:33:32other alternative. So other alternative
1:33:34will be the currently it is still the
1:33:36gold but in the future it will be uh
1:33:38another currency which is called the
1:33:40bricks B R I CS. Okay. So the bricks um
1:33:44stand for Brazil um Russia
1:33:49uh I India uh C China and um South
1:33:54Africa. Okay. So these five country and
1:33:56it could be more. So we are looking at
1:33:59the these countries they form a block
1:34:01and then they will create their own
1:34:03currency and when you're looking at
1:34:05trading among these countries and they
1:34:07are trading using the bricks currency.
1:34:09So this bricks is going to replace the
1:34:11US dollar.
1:34:13So you see all these are happening
1:34:16and we are going to see that the US
1:34:18dollar will lose its shine. Okay. So
1:34:21when you you you identify this
1:34:23macroeconomic condition in the market
1:34:26you identify then you have to do some
1:34:28risk management. So what are the risk
1:34:30management then you will have to cut
1:34:31down on the dollar dollar denominated
1:34:35assets and then maybe you want to put
1:34:37into gold or you want to put into other
1:34:40assets that you want to protect your uh
1:34:42even if you put into a fixed income is
1:34:44also okay because you just want to
1:34:46protect your um portfolio. Okay. And um
1:34:49of course the hedging is always good.
1:34:52Okay, hedging and how you can do the
1:34:54hedging is usually done by the
1:34:55derivatives the futures options and um
1:34:59all these derivatives um instruments.
1:35:03Okay. So I think we have uh about 15
1:35:08minutes um for the Q&A session. USA uh
1:35:13happier.
1:35:14Oh, why USA is happier? You mean when
1:35:17the US dollar
1:35:20uh go down is happier or what do you
1:35:23mean Albert?
1:35:25What do you mean by USA is happier? I I
1:35:28would think that um USA they are
1:35:31worried. So that's why they want to keep
1:35:34um pressing the China and um yeah no
1:35:40less USD
1:35:42uh held overseas. Okay.
1:35:46Um actually oh doesn't mean that okay I
1:35:50want to say is that when you when I say
1:35:52that the potential for the US dollar to
1:35:54reduce right doesn't mean that you want
1:35:56to um sell all your US currency. No no
1:36:00no no no
1:36:02what I want to say is that you have to
1:36:04maybe instead of um buying into a US
1:36:07denominated you still have some US
1:36:10denominated. Okay. But however, you need
1:36:12to diversify into other currency perhaps
1:36:15um China yen or um sing dollar.
1:36:19Okay. Yeah. So it's it's not like
1:36:22totally out of that USD. How do you see
1:36:26the Busan market? It is boring.
1:36:29Yeah. Indeed. But however, I believe in
1:36:31Assean. AEAN 10 countries. I believe in
1:36:36this economic trading block whereby in
1:36:40the next few years it will be doing very
1:36:41very well. Okay.
1:36:43Before we address the Q&A, can we look
1:36:44at the shall we look at the equity
1:36:46trading simulator?
1:36:48Oh, sure. Sure.
1:36:51Okay.
1:36:53So, um sorry about it. I forgot about
1:36:56in the meantime, if any question, write
1:36:58in the chat. Write in the Q&A box. Don't
1:37:00write in the chat box. Write write your
1:37:02question in the Q&A box.
1:37:04So okay so we address your question for
1:37:06you guys and um u I will teach you step
1:37:10by step how to open this account okay so
1:37:13this stimulation um uh platform is a
1:37:16very very important uh for beginners
1:37:19especially if you're new beginner okay
1:37:21what you need to do is that you need to
1:37:22register register with your Gmail okay
1:37:26after you register and then you can log
1:37:29in so this one is called Busa
1:37:31marketplace okay so I give you this um
1:37:36uh link and then you can click on your
1:37:42can click here. Okay. So then you click
1:37:44here then you go into that USA academy
1:37:49simulator. Okay. So here there is this
1:37:52simulator on the equity simulator.
1:37:56Okay. How many of you have uh already be
1:38:00uh become the member of the Busa uh
1:38:03marketplace? How many? Okay, you put a
1:38:06one. Okay, if you are already the Busa
1:38:08marketplace um member, you put a one.
1:38:12Okay, if you haven't, you put a zero.
1:38:14So, I want to see how many is zero.
1:38:16Okay, so I want to see how many is zero.
1:38:18So, if you are in, you put a one. Okay,
1:38:22so Okay. So, Albert, Janice, Elvin,
1:38:26Ivonne. Okay, you do this registration
1:38:29now. Okay, you do this registration now
1:38:32and then you log in using your Gmail.
1:38:35Okay, Ivan Elvin um Singh Hawk. Okay,
1:38:40you you log in. You you click the link
1:38:43that I share with you and then you log
1:38:45in register using your Gmail. It can be
1:38:48any of your Gmail. Okay, so or it can be
1:38:50any of your email address. So I usually
1:38:53use a Gmail and then after you log in
1:38:56then you come to this uh Busa Academy
1:38:59and then under busa academy equity
1:39:01simulator. Okay. So here we are in this
1:39:04platform. So this is a live trading
1:39:07platform. So what you can do you can um
1:39:10you're given 100,000.
1:39:13How's that? You're given 100,000 paper
1:39:15money. So with this 100,000 you can
1:39:17start to learn how to trade. Okay. So
1:39:20Ivonne Elvin and uh Singh Hawk is it is
1:39:24it okay? So it is a very good uh
1:39:27simulator
1:39:28um platform for you to train your um
1:39:32knowledge. Okay. So the very first thing
1:39:35usually I will do a watch list. Okay. A
1:39:38watch list is whereby you can um put
1:39:40everything that you want to monitor in
1:39:42the watch list. So let's say you want to
1:39:44buy the banking stock. Okay. So then you
1:39:47key in May Bank.
1:39:50Then you clean Maybang and then the
1:39:52Maybang will come out and then you right
1:39:54mouse click and you um add to the
1:40:01um add to watch list. Okay. So you
1:40:03create a watch list first.
1:40:06So create a watch list.
1:40:10Create watch list. Okay. So then this
1:40:13one will be the banking stock.
1:40:18Okay.
1:40:21Here. So then you click here and then
1:40:24you add to the watch list. Yes. Then you
1:40:28click add. Okay. So Maybang is added to
1:40:31your watch list. So then you can also do
1:40:34that for public bank.
1:40:39So the next one is public bank and then
1:40:42you put it in your watch list. Okay.
1:40:46And um recently um another friend of
1:40:49mine he he said there are a lot of
1:40:51people buy into the MBSB and then feel
1:40:53that the NBSB is very boring. But
1:40:55however I I told him if you notice the
1:40:58the dividend is very good NBSB right. So
1:41:03you just hold on to it when the market
1:41:06recover it will um you will have your
1:41:09price appreciation but at the meantime
1:41:12you just focus on the dividend. Okay.
1:41:15And um then so here will be your watch
1:41:18list. Okay. So
1:41:22so view your watch list.
1:41:26So here will be your watch list. Okay.
1:41:28So then when you want to monitor you
1:41:29just monitor your watch list and then
1:41:31you see whether the price has reached to
1:41:33a level that you are willing to buy.
1:41:36Okay. Because some of you say um the
1:41:38market is very boring. But however these
1:41:41are the time for you to accumulate some
1:41:43good value. um dividend stocks. Okay.
1:41:46So, uh maybe last two years I've been
1:41:49talking maybe I will say okay buy the
1:41:51technology stock right but this year I
1:41:53don't talk about technology stock
1:41:54anymore. I talk about dividend stocks.
1:41:57Okay. So this year I've been sharing
1:41:59that try to buy into the dividend stocks
1:42:02because now although the market is
1:42:04boring but you still receive your
1:42:07dividends.
1:42:08So the strategy for a boring market is
1:42:11dividend stocks. [laughter]
1:42:13Okay? Does that make sense? Okay. Then
1:42:16um the next thing is that you want to
1:42:18learn how to make a buy order, right? So
1:42:20this buy order is um you see you make a
1:42:25buy order.
1:42:27Um let's say you buy okay you click you
1:42:30you right mouse click and then you click
1:42:32a buy. Then this thing will happen.
1:42:34Okay. So see you have a 100,000. Okay.
1:42:37So of course you don't put all money
1:42:39into one basket. So to me I usually will
1:42:43go for um sectors. I will identify five
1:42:47sectors that I want to invest. So can
1:42:50anybody tell me which factor uh which
1:42:52sector has dividend?
1:42:55Can you type in the chat which sectors
1:42:58are dividend stocks sector? Okay. RIS
1:43:01very good.
1:43:03Banks. Okay. I said banks already. Okay.
1:43:05One more. Um three more.
1:43:07Utilities. Very good.
1:43:11No energy. No [laughter]
1:43:13consumer. Okay. Okay. Rips, banks,
1:43:18utilities,
1:43:20consumer and one more.
1:43:24Okay. One more it could be industry. And
1:43:26then this industry maybe is those um uh
1:43:30stable industry. Okay. that are
1:43:33supplying to the um uh factories on a
1:43:37long-term continuous basis chemicals or
1:43:41whatever. Okay. So, plantation also can.
1:43:45Okay. Plantation also can. So, these are
1:43:48the dividends and then you can um make
1:43:52100k maybe 20k into each of these
1:43:57sector. So that means that your banking
1:43:59stock cannot be more than 20k because
1:44:01it's 20%.
1:44:03So if let's say you want to buy these
1:44:05three um stocks May Bank, public bank
1:44:08and MBSB let's say you want to buy these
1:44:10three then you have to divide your 20K
1:44:12among these three you get what I mean so
1:44:15meaning that um you are trying to
1:44:17diversify even if you are in a banking
1:44:20right you are diversifying into three
1:44:21stocks then you look at the um RITs the
1:44:25RITs also you can diversify into three
1:44:27RITs and then you look at the um
1:44:31consumer three consumer consumer stocks
1:44:33and sometimes you also want to do some
1:44:35speculation like the oil and gas right
1:44:37like what um um whole um Singh hawk is
1:44:41um suggesting oil and gas so then you
1:44:44assign like a 10% into others others
1:44:48whereby it could be oil and gas it could
1:44:51be uh glove stocks it could be any other
1:44:54things that you think that there is a
1:44:56potential for a a price appreciation in
1:44:59the short term okay you can assign like
1:45:0210 to 20% into this kind of a
1:45:04speculative and then the rest all
1:45:06dividend. Make sure it is dividend. No
1:45:08dividend don't buy. Okay. So that means
1:45:11no technology already because technology
1:45:13stock doesn't give dividend. So here we
1:45:15are looking at the buy side may bank you
1:45:19buy limit price at this certain price.
1:45:22Okay. So you buy how many? Um this is in
1:45:25terms of 100 uh shares, right? So one
1:45:28lot is 100. So you buy um 2,000 shares.
1:45:32Okay. So maybe 1,000 share first. Okay.
1:45:361,000 share. It's um 8,000 plus. Okay.
1:45:40So we buy. Okay. Buy order.
1:45:45And then okay. Buy. Okay. So that's it.
1:45:49Very easy. You click the buy order and
1:45:52then you go to the um order
1:45:57order status. Okay.
1:46:03Um, can you see my you can see my order
1:46:09status, right?
1:46:12Okay.
1:46:14So, order status you will see that okay
1:46:17it's by and it is queuing. Okay. So, if
1:46:23it's done then it will say it is done.
1:46:26Okay. So, I think it's done. Okay. So
1:46:28it's done field already. So the status
1:46:30is filled and then so it's done. So when
1:46:33you see the status is filled then it is
1:46:34done. Okay. So that's very simple and um
1:46:38it is uh you feel uh like when you buy
1:46:42all these dividend stocks like breits
1:46:44and a banking and as long as there's no
1:46:47severe kind of a recession. Okay we just
1:46:50came out from that pandemic right when
1:46:52everything is locked down. So as long as
1:46:53there's no like severe like war thing or
1:46:56recession uh these dividend stocks they
1:46:58are operating in a relatively stable
1:47:01industry. So then there are the
1:47:03dividends will be quite um consistent.
1:47:06Okay. So while the stock market is
1:47:08boring okay we understand then we just
1:47:11focus on collection of the dividends.
1:47:14Okay.
1:47:16So I think
1:47:19um any question about this uh opening
1:47:22account for this Busa Academy?
1:47:25Any question?
1:47:29Okay. So this trading okay or not?
1:47:36Okay.
1:47:38Yeah, I think so far it's okay. Looks
1:47:39like no question on active trading
1:47:41simulator as of now.
1:47:43So then maybe I will answer some of your
1:47:46questions.
1:47:47Okay, let me take those questions. Of
1:47:48course, if you have any questions to ask
1:47:50Pauline, you may keep the questions
1:47:51coming. Type the question in the Q&A
1:47:52box. Yeah, not the chat box.
1:47:54So the first question is, is non-farm
1:47:56payroll same as unemployment rate? Um
1:48:00it's different because unemployment rate
1:48:02is a general generic term that include
1:48:05non-farm payroll job data um
1:48:08unemployment benefit claim and then you
1:48:11have many many sub um employment data.
1:48:14So unemployment you is more like a
1:48:17general term. Okay. Yeah.
1:48:19Yeah. Actually unemployment means how
1:48:22many people
1:48:23are not and unemployed at the at this
1:48:26month and non-farm payroll typically
1:48:29tells us uh how many jobs are created in
1:48:32that month?
1:48:33Yeah, that is that belong to non-farm.
1:48:36Okay.
1:48:37The next question by Shazilla is with
1:48:39the current economic situation which may
1:48:41be quite volatile what would be the most
1:48:43appropriate strategy to trade in this
1:48:45current situation from your perspective?
1:48:48Okay. Um I think this one I just now I
1:48:50have mentioned which is um you need to
1:48:52diversify and then at the moment um to
1:48:55me I find that dividend stocks are still
1:48:58okay. So while the market is very boring
1:49:01and uh I feel that we don't look at the
1:49:03price at the short term for too much and
1:49:05then we just focus on the income income
1:49:07stream and that will make you feel
1:49:09better otherwise you'll feel very or
1:49:12another thing is that you may also
1:49:13invest in fixed income okay fixed income
1:49:17um to get the higher um interest rate.
1:49:20Yep. We also have a fixed income
1:49:22security that listed on Busa Malaysia
1:49:23and that is exchange trader bonds and so
1:49:27uh the next question is by Sheila which
1:49:30is the market is usually 6 to9 months
1:49:32ahead and have already factored in
1:49:34recession in America and with the
1:49:37anticipation of a pause or a tapering in
1:49:40interest rate hike in US moving forward
1:49:42do you see the market to start rising in
1:49:44the second half of 2023?
1:49:47Um okay that is a possibility. Okay,
1:49:50because with the news of a pause of
1:49:52interest rate, then the short-term
1:49:54effect is that oh, there's a a relief
1:49:57and then the market will rally and after
1:49:58all the market has been down for the
1:50:00first half, right? So naturally, the
1:50:01chances of the second half to rally is
1:50:04high. But after the rally, what's next?
1:50:06So that's the thing. So it this rally
1:50:09could be temporary. Yeah.
1:50:11All right. Let's do one last question
1:50:13before we wrap up the session. So would
1:50:15you be able to share you know what do
1:50:17you think about the
1:50:18uh Japanese yen outlook that's by Lily?
1:50:21I I I feel that okay the Japanese yen
1:50:24didn't perform as good as my prediction
1:50:28because I'm looking at the um inverse
1:50:32relationship right so meaning that when
1:50:34the US dollar is weakening then the
1:50:36Japanese yen normally will be um better
1:50:39but however when I look at the chart um
1:50:41it didn't go high enough to my
1:50:43expectation so it is like still on a um
1:50:47still facing some resistance so I think
1:50:51Maybe we just have to wait until the the
1:50:53next FOMC
1:50:55whether there is a red pause or there is
1:50:57a continuation or red high or whatever
1:50:59until then then it will be a better or
1:51:01clearer picture for the Japanese yen. Um
1:51:05it it will have to be at least a pause
1:51:07first. Okay. Then the Japanese yen may
1:51:09be improving.
1:51:11All right. Let's do one last question by
1:51:13KS. Uh with the looming recession, will
1:51:15property investment be a better hedge? M
1:51:18okay the property investment um there
1:51:21are a lot of factors um of course
1:51:22interest rate is one of it but the
1:51:24recently I do see that the supply is uh
1:51:28another issue of the property I see that
1:51:30this year I don't know why so many um
1:51:32new developments are launching their
1:51:35property so all are happening this year
1:51:37so the competition will be very stiff
1:51:40and then you are looking at um probably
1:51:43the price may not have a a price
1:51:46appreciation within this um few years
1:51:48because of over supply.
1:51:50So I I I'm worried about that over
1:51:53supply issue.
1:51:55All right. So that's your view. Yeah. So
1:51:56what how do you see the China market in
1:51:59the next two years?
1:52:01Um the China market
1:52:02next two quarters. Yeah.
1:52:04Okay. Oh, next two quarters only. Okay.
1:52:06um will be good because I'm looking at
1:52:10the with the current um the new leaders
1:52:15leadership especially the Shanghai um uh
1:52:18Li Chang he was from Shanghai before and
1:52:21he's actually a person who is pro
1:52:23business so and um but we want to see
1:52:26whether how pro he's towards a business
1:52:30and um recently we do see Jackmar coming
1:52:32back to the limelight and um hopefully
1:52:35we want to
1:52:36um the tech stocks to increase further
1:52:39but at the moment the tech stocks are
1:52:40still not doing too well but it has gone
1:52:43up ever since you know they took over
1:52:45but they have gone up but still um now
1:52:47it's having some correction but I would
1:52:49think that the China economy should be
1:52:51improving okay because it's a very large
1:52:54economy so unless they have a bad policy
1:52:58the the only problem with China is their
1:53:00policy and that policy is controlled by
1:53:02the central one person so that that is
1:53:04the only risk
1:53:06Yeah.
1:53:07Okay. Let's do one last question. Do you
1:53:09see oil price maintain or increase
1:53:11moving forward in 2023?
1:53:13Um I think it was just horizontally and
1:53:16then it will not go higher. It will not
1:53:18go higher but then just horizontally and
1:53:21until there is much um
1:53:24use. Yeah.
1:53:25Okay. All right. Thanks Pauling for
1:53:27sharing your perspective and I want to
1:53:29reiterate that all these uh views are uh
1:53:31presenters view. So of course you take
1:53:33uh you have to do your own due
1:53:35diligence. All right.
1:53:37Okay.
1:53:37So uh so in a nutshell the equity
1:53:40trading simulator is a risk-free
1:53:43simulator for you to practice your
1:53:44trading strategies
1:53:46uh in a virtual trading platform. But of
1:53:49course the price movement is real time.
1:53:51You can create a portfolio uh you can uh
1:53:54do uh test the market order. So you can
1:53:57practice your portfolio management or
1:53:59money management strategies in a
1:54:01risk-free virtual environment where all
1:54:03the prices are real time. So so this is
1:54:06a virtual simulator that can help you to
1:54:09gain experience for to improve your
1:54:12trading performance and your to
1:54:14understand your trading system. All
1:54:16right. So uh so ladies and gentlemen,
1:54:19you just heard from the director of
1:54:22Sigma Wealth who is Miss Paul Young.
1:54:26Thanks Pauline.
1:54:27Thank you. Thank you.
1:54:30Thank you everyone. Bye.
1:54:37All right. So our for our next webinar
1:54:39it is titled uh Russia strategy
1:54:43golden cross.
1:54:47consistent. So the next session is going
1:54:50to be in uh Malay. So it is happening on
1:54:52the 15th May 2023 is a Monday 8:30 to 10
1:54:56p.m. So I've just given you the
1:54:58registration link. So yeah, if you want
1:55:01to learn how do you use golden cross to
1:55:05create consistent profit, you may
1:55:07register for our um session on the next
1:55:10Monday. I've just given you the
1:55:12registration link in the chat box. All
1:55:14right. So thanks everybody for uh
1:55:16joining the session until the end. So
1:55:18hope you all have a great rest of the
1:55:19day. Okay, bye everybody. Hope to see
1:55:21you in our next webinar.

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