12/2017-
As a New year begin, I have a dream and wishes for 2018.
The song “I Have a Dream” was made famous by the Swedish pop group ABBA in 1979. It became a top hit, topping the charts in many countries and peaking at No. 2 in the UK over the Christmas week of 1979. Twenty years later, Irish pop group Westlife released a version of the song which also hit No. 1 in the UK over the Christmas week of 1999.
Almost 20 years later and now into 2018, it does seem that “I Have a Dream” continue to resonate in both my ears and analysis as I look at the markets:-
“I have a dream, a song to sing
To help me cope with everything
If you see the wonder of a fairy tale
You can take the future, even if you fail”
Topping the charts as we ended 2017 were 3 very different reference points which captured both the mood, depth and breathe of markets globally – cryptocurrencies like Bitcoin racing pass US$17,000, the Dow marching seemingly relentlessly towards 24,000 and our local FTSTI just within 100 points shy of challenging the all-time high of 3,570 reached on 11 Dec 2007.
I wish and dream that 2018 will continue to enjoy the synchronous global recovery paved by the Fed’s decade of easy money policies which have resulted in US$4.1 trillion of money printing. That money needs a home and it continue to home in from Emerging Markets to technology stocks like FAANG (Facebook, Alphabet, Amazon, Netflix and Google) in the US and BAT (Baidu, Alibaba and Tencent) in Hong Kong, China. The intrinsic value of these technology stocks are indeed like “fairy tale” valuations.
In my mind, we’ve clearly enjoying a boom like never before in the past 40 years which may have become a bubble running on Wall Street.
Bubbles nonetheless, can continue if the Fed continues to be dovish and raise rates like 3 times in 2018, in line with market expectations.
My second wish is that the big global disruption as seen in FAANG and BAT which now have a total market value many multiple times the total market value of our local FTSTI of about S$1 trillion will spread and Spotify the other lackadaisical sectors as hot money continue to find a home.
My third wish is that the SREITS which we have predicted correctly in our investment classes and media interviews, continue with their go-gangnam performance in 2018, powered by predictable interest rates increases, higher reversionary rentals and occupancies as the economy latches up a higher level of growth.
In this regard, I wish that some of the SREITS where I am ranked as the Top 20 shareholder like Frasers Centrepoint Trust and First Reit, will continue to outperform the REIT index, as they have in the past 15 years.
And if the markets which are indeed in “fairy tale” land and valuations start to crumble and fall, I wish that I would be the first to know and act (as I did in before the last 2 market crises in 1997 and 2007).
“I believe in angels
Something good in everything I see
I believe in angels
When I know the time is right for me”
While I like to see “something good in every stock I see”, I wish that the angel in me certainly knows “when the time is right for me” to exit.
Angel Gabriel
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