2016 Review & 2017 Outlook: The Story of Pencil
4th QUALITY
“what really matters in a pencil is not its wooden exterior, but the graphite inside. So always pay attention to what is happening inside you.’
We understand that market always move by fear and greed, that’s why it’s so important for us inside the investment team to read the market correctly no matter how the crowds behave.
Last year, when many portfolio managers, analysts, economists , media, maintain their bearish view on commodities on the back of strong USD, RMB depreciation, and oversupply issue, commodities stocks were already undervalued based on our analysis. We took our chance to bought Aneka Tambang (ANTM. IJ) around IDR 300, Tambang Batubara Bukit Asam (PTBA.IJ) around IDR 4.500, Indo Tambang Raya Megah (ITMG.IJ) around IDR 6.000, and other commodities stocks. We overweight on commodities before any bullish signs emerged.
Commodities price rallied by the end of 1Q 2016, many people still doubt the sustainability of the rally, yet we believe the bullish trend in commodities has just begin, we decided to buy commodities even more. We released our commodities piece title COMMODITIES LOVE THE UNLOVED
We also avoid buying a lot of property stocks even when all the crowds screaming about tax amnesty effect, because we believe oversupply issue and weakening economic growth is the real deal rather than just a short term sentiment.
By the end of 2016, almost all commodities stocks we bought doubled or even tripled, boosting our fund performance to top all equity public funds ranking in Indonesia.
