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Quick Thought Of The Week: Maligned

I couldn’t help but smile when I came across a recent Bloomberg headline that read: “The World’s Worst Major Stock Market Is Really, Really Boring.

I never realised that investing was supposed to be exciting. I always thought that investing was about putting my money into companies (preferably dull and mundane one) that could deliver a good return for me over the long term.

I am not alone. Peter Lynch, who is arguably one of the best investors of our time pointed out: “Investing is fun and exciting, and dangerous, if you don’t do any work”.

The market that has been maligned is Bursa Malaysia.

It is the worst major market this year, having dropped 3.5%, when other key market around the world have rallied on hopes that the US Federal Reserve will ease off on its Quantitative Tightening.

(As an aside, who came up with the term Quantitative Tightening? It sounds like a treatment you can buy over the counter at a local pharmacy for an upset stomach.)

Flipping shares

According to the report, the gloomy outlook for the Malaysian market isn’t likely to end soon. It pointed out that the Malaysian government has been lowering public debt, as it continues to clean up government inefficiencies and corruption.

I don’t quite know what to make of those comments. It is so wrong on so many different levels.

It seems that some people would prefer governments to boost economic growth by racking up debt and condoning ineptitude and dishonesty, just so that traders can make a quick buck flipping shares.

Admittedly, the Malaysian economy might not grow as quickly, if the government continues with its austerity drive to rein in its budget deficit. But what is so wrong with fixing the roof whilst the sun is still shining.

Let’s not forget that Malaysia only escaped the Asian Financial Crisis by the skin of its teeth in 1997.

We certainly don’t want a repeat performance that saw the East Asian Miracle turn in another Asian Financial Horror Story, especially if we are long-term investors.

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.