Sunday 19 February 2017

Tan Teng Boo now sees KLCI and S&P 500 hitting 2,400 and 3,000 in medium term

This is on hindsight.

Tan Teng Boo had been bearish since April/May 2011.
"Since April/May 2011, I have been bearish on equities globally, including that of Bursa Malaysia. My bearish views have not changed one iota" (source).
He was still bearish on the equity markets last week, foreseeing KLCI possibly hitting  800-900 points and S&P 500 touching 1,350 in medium term. Just a week later, he made an unprecedented and very drastic revisions in index forecasts, revising his KLCI mid term possible target to 2,400, and S&P 500 to 3,000 from 1,350.

(See previous posting: another extreme forecast that went wrong.)

He was persistent on his bearish view and missed the the run-ups in stock markets.

Icap's average return since inception is still decent, thanks to exceptionally strong performance of the fund in the initial years.

Personally, I prefer a semi-log graph to linear graph in fund performance chart like this. It gives better depiction of a fund performance as the fund size grows. (In linear chart, a 30sen increase in NAV from a reference price of RM3 looks more impressive than a 10sen increase in NAV from a reference price of RM1, even though both having the same 10% growth.)

His global fund is not that lucky.

After about 9.5 years, the Global Fund generated a cumulative return of 5.9%, or at an annual compound rate of 0.6%. The fund's performance dipped below its benchmark, giving up the outperformance the fund had been enjoying since inception.

The International Value fund has a moderate cumulative return since inception, at a CAGR of 4.21%. It underperformed both benchmarks.

He had been reminding us the investing rule of never lose money. For a 50% loss in an investment, you need a 100% to make up the earlier loss.

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