Keep in mind the megatrend

For fundamental investors, some focus solely on the company fundamental and pay little attention on the economy or industry condition. Some will combine the technical analysis or other factor in analysing the company. Although I am fundamentalist, I also take note of the megatrend around us.

A simple example and also my favourite will be China. China is going through the urbanization process and there is no turning back. Through this process, when consumer become more wealthy, they will spend more. China consumer story is my constant favourite. Beside this, China property looks good on the long run. More people living in the city will mean more demand for housing. As more people get richer, the demand for luxury goods or housing will rise too.

Analysts have been talking up the commodity story and emerging market story for past few years. I believe that is true but the timing is quite tricky. Commodity sector has been volatile all the while, I think it make sense to buy only when there is bad news and wait for turn around, buying cheap and keep for longer term. Beside China, Indonesia might have turn the corner, the Asia growth story is very much alive and on track.

Once you have identified the megatrend, what can you do to leverage on it? Buy stocks that are beneficiary of it. For example, China consumer stock, I wish those listed on HK exchange is easily accessible to SG investor. Those strong player like Tingyi and Want Want listed in HK. I am quite reluctant to pay the month custody fee. I observed there is a trend for Indonesia company to list in Singapore. This is an opportunity to the investor here as Indonesia is a big market. Hopefully more quality company will come.