August 05, 2021

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To Glove With Love, Merry Christmas

Dear all, it has been difficult year for most. It is especially tough for the B40 and those who have lost their job or had to undergo a salary cut / VSS. In these trying times, many struggled to get by and provide for the family. Even those with emergency funds set aside (The rule is minimum 6 - 9 months saved for rainy days) would probably have dried up by now in the event one is not able to find a job or for business to return to normalcy. Such is the state of the economy in the face of adverse pandemic circumstances. This is truly a shocking start to a new decade. 
 
During the height of the pandemic, I was having a meeting with one of the listed Singapore glove makers. It was a work meeting but I had the chance to ask him "how do you feel that glove stocks are now deemed beneficiary of Covid-19". He said "no money in the world, can replace the lost of loved one or having to see your love one suffer due to sickness, if I had a choice, I would like to see the pandemic end yesterday." 
 
In another interview with the IR present, my close friend who is a research analyst had a management meeting with one of the big 4 glove makers' son. During the management interview, my research analyst friend asked "why is your company increasing the ASP for gloves at much slower pace than your competitors?" The answer given simply "Gloves are PPE, which is meant to protect front liners and end users against this deadly pandemic. If we were to hike ASP of Gloves too arbitrarily, and in turn our distributors do the same, the one that suffer would be the end consumer. Those who can afford, it is ok. Those who cant afford, will then switched to alternative self-made PPE which are not effective against this fight."  
 
Both of these true stories was a humbling experience to me. It made me respect both glove makers entrepreneurs more and learnt that not all business was about profiteering or bottom line. There are entrepreneurs and owners who cares. This is probably due to the fact both of these founders did not come from money and build their business from ground up through hardship of life and poverty. They are rare but they do exist and they placed the importance of the welfare of their employees, end users far above even that of shareholders or investors like me. Ironically, my investment philosophy being a fundamentalist is choosing companies like this which has management that values employees, customer relationship as part of my investment portfolio. I always tell my readers, I rather pay a premium for wonderful management of good companies than pay cheap price for ordinary companies. 
 
It has been a whirlwind year for those who invested in the stock market be it out of passion, interest, need, desire or simply opportunity. I believe with the record high retail participation rate, many who invested in the market is because of the glove makers. I also know many institutional funds, retail investors and foreign funds have many a handsome profit from investing in glove stocks. EPF too, recorded commendable investment income from equities which would definitely go to help towards those who need early withdrawal from iSinar & i-Lestari programmes. 
 
I did mention I have written too much on the sector even though Glove stocks are only part of my all weather diversified portfolio. There are 2 reasons I am writing this article today : 
 
1. To give my gratitude to the glove sector as I did benefit from the stellar performance in share price like most others through 2020 and also the lessons learned from the glove sector be it in life and investment. I am actually very proud as a Malaysian that the glove sector can play a role putting Malaysia in international limelight in the fight against Covid-19. For once, not everything used by global population was manufactured in China or Vietnam or India but Malaysia.

2. Is to correct a misconception in today's news article below by the Executive Editor of Focus Malaysia, Mr Cheah Chor Sooi, who selectively highlighted one paragraph from my 14th December 2020 commentaries, calling it "Deceitful". I do not know you Mr Cheah, and I have nothing against you. But if you had the chance to read my blog, and all my past posting be it glove or non-glove related (I think there is no less than 50 articles in 2020 alone), you would probably realise I built my reputation over the past 6 years on transparency, accountability and objectivity. I am not some fly by night writer. My belief is not very much different from you who was an award winning Writer of the Year by Minority Shareholders Watchdog Group’s (MSWG). Of course, I am no where as successful as you, I am just a financial blogger.  
 
You probably did not like the fact that my "Friendly Advice" came across as a generalisation that there is a concerted effort by various parties including the media to witch hunt the glove sector. I actually do not think there is a concerted effort by anyone. I only seek fairness, objectivity and no double standard in scrutinising across all industries. I cannot blame you as you probably didn't read my past writings. If you did, you would know I have been critical of Top Glove handling of labour issue and Covid-19 outbreak. If you did you would know that my favourite glove stocks are Hartalega and Riverstone which are my Long Term Value Picks who are true champions of ESG. If you did you would have read my letter published in Nayang calling out Koon Yew Yin's call on Dayang in view of protecting the small retail investors. If you did read my writing properly, you would know I am not absolving any law breakers of responsibility but if scrutiny is imposed it should be fair across industries like plantation, construction, steel, agriculture. 
 
I am an independent, objective writer who have firmly said NO to offers by syndicates to "goreng" stocks for pump & dump operations because I care very much about the little guys (retail investors) and hope the stock market can be an avenue for the pursuit of happiness just as it has been to me. I believe you are a reasonable man. Just as you do not like media being called out as bias or sensationalising news on the glove sector, I do not like being called "Deceitful" by you. It is a wrong choice of word unsubstantiated by facts. I would like to put it to you, personally, I have utmost respect for journalist, nurses and teachers who have the most underpaid but noble profession in the world. However, if having an objective, independent and differing view from you is regarded as "Deceitful" in your context, I would gladly stand firm in my belief and take it on over and over again. 
 
Merry Christmas and May 2021 be a better year for us all.  
 
 
Food for thought: 
 

 
 
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