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Quick Thought Of The Week: Predictions

According to Feng Shui experts, the year of the Earth Dog is supposed to be good for so-called “fire” industries. These are said to include the internet, utilities and technology.

Some say pharmaceuticals are supposed to be good, too.

This time last year, the Fire Rooster took centre stage. That was supposed to augur well for the gaming, transport, oil & gas, utilities, technology and telecom industries.

With the benefit of hindsight, Genting Singapore (SGX: G13) did, in fact, have a good year. Its shares were up by almost a third in the Year of the Rooster.

It was a mixed bag for the transportation sector, though. Singapore Airlines (SGX: C6L) and SBS Transit (SGX: S61) just about held their own against the Straits Times Index (SGX: ^ST).

But it was a very different story for ComfortDelGro (SGX: C52).

Utilities were unconvincing. Sembcorp Industries (SGX: U96) kept its head above water. Telecoms did badly. Both Singtel (SGX: Z74) and StarHub (SGX: CC3) lost more than a-tenth of their market value over the 12 months.

Given their patchy record, what should we make of geomancers’ fondness for the internet, utilities and technology sectors in the Year of the Dog?

Within any sector, there will always be some good and some not-so-great businesses. I am sure some will do well. The same goes for dogs.

So, our job as stock pickers is to always find the best of breed. That is how we achieve alpha and beat the market.

Just as it can be wrong to dismiss an entire sector, it is equally remiss embrace an entire sector without doing proper research.

Peter Lynch once said that investing without doing research is like playing stud poker without looking at the cards.

None of us would ever dream of doing that. It would be barking mad to do so.

Gong Xi Fa Cai! Have a prosperous Year of the Dog.

A version of this article first appeared in Stock Advisor.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore Director David Kuo doesn’t own shares in any companies mentioned. The Motley Fool has recommended SBS Transit.