In the past, I wrote an article for Busy Weekly investment newspaper, talking about if KLCI drops 5% before election, it is a good chance to buy in.
http://www.danielloh.com/2012/12/klciby-daniel-loh-for-busy-weekly.html
Amazingly, KLCI did just that! It actually drop 5% in 2 trading days. It drops from 1700 to 1605 a drop of slightly more than 5%.
And I think short term wise, things might get better from this sudden panic. Fundamentally the reason for the drop is that there is a rumor on earlier election, which I think all Malaysians should have heard of.
Today the panic may have subside a bit, retracing strongly into the closing bell.
But having said that, the uncertainty to the election outcome still remains. And stock market HATES uncertainty.
Our opinion is that this rebound is a chance to make very short term money ONLY. If the election fails to produce a favorable result for the ruling party, get ready for a volatile time again.
Mid term to long term wise, try not to hold too many positions at hand.
Rgds
Daniel
www.danielloh.com
