Subjective Analysis

After reading so many news, each with different opinions and statistics to support themselves, I come to a subjective conclusion that this inflation will not dissipate this year, nor next year. We live in a "I want it right now" era.

Historically, monetary policies on inflation takes 2 years for its maximum impact to be felt. But nowadays, everyone just wants an immediate impact.

In times of inflation, especially now, where wages do not rise in expectation of inflation, companies cannot pass down the cost of production to consumers unless they have monopolistic power. Therefore stocks will be on a stagnant growth and rising cost phenomenon - stagflation. Those that are in low debt or no debt and have sufficient cash to tide over this era are the winners in the long run provided their management are solid.

These are qualities that Warren Buffet look into when investing in businesses.

Defensives such as Telecoms(ST/SH/M1) and monopolies(SPH/SPost) in singapore are good buys and currently, their technical indicators are "oversold". However, they are not exciting growth stocks, thus diminishing the demand for their shares.

Thus in inflationary times, our cash are turning worthless with each passing day. Imagine 100,000 becoming 86490 after 2 years of 7% inflation.

Furthermore, the market is currently weakening. stocks with earning visibility such as KCorp, which received US$922 mil worth of contract in the past 1 week are seeing their share price fall. Warren Buffett would be so glad if he can use $0.50 to buy $1 worth of business. Who won't?

Talk about Kiasi, Kiasu and Kiabo LOL.