Those Squiggly Lines on the screen

I’ve come to realize that I get very excited waiting for the stock market to open every morning!! Is it because I work in a Bank? or perhaps because I learn as I watch them? I don't know. The latter sounds more like it. I have colleagues who get so driven by the stock market and with so many people around me who plays with stocks and shares, I have observed that it has been so focused a lot on the oil and gas sector lately.

Today, focus has been heavily placed on certain oil and gas stocks. ETP and EPP efforts were channeled in the oil and gas industry. Prices of oil and gas shares are rising.

Is there a possibility that the oil market might enter into a bubble?

Blurt out “bubble”, and most investors will become very attentive! Amazing isn’t it? It seems to me like watching the market rise and fall is more interesting than the Malaysia-Indonesia football match :P It definitely stirs strong emotions, often adding more heat than light to a debate about asset or commodity prices. So, the spot price has risen to almost RM 73 per barrel in FIVE months. 33% is a speedy growth indeed.

Bubbles are more about expectation and behaviour. There is heightened media and investor attention to price moves, a focus on new highs, and talk about long-term scarcity and price discontinuity. Typical fundamental analysts often insist that instances of asset mispricing are small, rare and unlikely to last beyond a trading day – not long enough to trouble traders and investors. What more when they are commodities! An everyday-used item, they are more firmly grounded in the tangible fundamentals of supply and demand.

Remember the 1997 crisis? Ask people about it, and the fingers you see would be pointing towards either Soros or Thailand or anything except ourselves. Come to think of it, maybe it’s because our credit analysis was weak, you reckon? Our stock markets. We had holding companies that had big borrowings but you have no nuts about where these money was channeled to. RM600 million was it in borrowings but commitment was a mere RM100 million and cash flow from operations was about RM50 million. Where was the other RM550?


You do the maths.


Debts rose, doubts created, and Soros was merely taking the advantage. Now that, is an intelligent INVESTOR.

Eventually, he propounded a theory of “reflexivity”, in which fundamentals shape perceptions and prices, but likewise, perceptions and prices also shape the underlying fundamentals. No one is perfect and neither is this place where we stand on. In a world of incomplete data and uncertainty about the future, prices are driven by perception and expectations about supply and demand. Technically, we think this stock is good, we buy. So does him and her. So demand rises. Eventually, so will the price! All because we initially THOUGHT about the good side of the stock.

I find it interesting reading the market and human behaviour, and sometimes I am thankful for being where I am, where I can learn about all these. It’s only through experience that you understand. However, given my position working in a financial institution, with the highest integrity, I don’t say out my thoughts on stocks and market trends. Not because I know, not because I don’t know. But well because I understand my position and that I have to be careful not to allow for people to find a space to misquote me in any way. Better be safe than sorry huh? 

So, you’d figure by now that I am totally a different person inside and outside of office. I speak nothing about work outside office, nothing about deals or what I’m working for and who I’m working with. I shut down and sometimes I become so blur when people work talk outside office, after working hours. Haha! ;) I honestly think that if you work in a Bank, it’s only fair that you have a significant level of integrity. Afterall, you’re the custodian of public’s fund! Trust is never a playful matter in this case.