You must have been hearing some financial experts saying MYR will hit 5 against USD. That is probably true but WHEN? All these so called experts, do nothing but to tell you regarding the opinion on what they wanted you to believe instead of giving you the overall picture.
 
Frankly speaking, the chance for MYR to go up and down is fairly equal. Why people keep focus on depreciation? Simple reason, FEAR! We are human, we fear losses, we are not train to digest and understand the economy …
 
No economy class today but I will use some examples to tell you.
 
First, let’s refer to the chart (history) for year 2016. The year started with the previous closing price of 4.29, then during the year (May 2016) hit the lowest at 3.84. From there, it rocket to 4.48. What a run!
 
Wait a second, let’s see the facts here. Don’t just focus on the highest and lowest… they are just numbers. We are human, we must understand what the history(chart) telling us. MYR strengthen for 5 months during 2016, hit the lowest, then for 7 months it goes to 4.48. So, in statistic wise, we are seeing quite even play here. 5 months of appreciation follow by 7 months of depreciation. Different magnitude, as you can see.
 
Again, year 2015 closed with 4.29, year 2016 closed with 4.48 how much is it? 0.19 difference. So, is it really that bad? Or we are just blind folded by the “High” covered by Fear.
 
I hope the above give you a sense of the past year performance. At least, you know what happened and the impact. Set your focal point on the right things, not only the high and low.
 
*Real meat here, read further*
 
I cannot forecast the future accurately. Same thing, I will give you a few scenarios (cover everything) so you won’t panic and cheap sell your MYR.
 
Scenario 1
If USDMYR break above 4.8, we may see it advance to 6.0 at least in year 2017 or early 2018 depending on the timing it break above. (This has not happen, 4.8 is still a small steps away but not yet…)
 
Scenario 2
If USDMYR cannot break above 4.8, it will use the closing price of year 2016 to be the foundation of year 2016 with plus minus of 15% range.
 
Scenario 3
If USDMYR appreciate to 3.8, we may see more appreciation to 3.5 or 3.6.
 
 
The last scenario (3) sounds illogic right? Why you will feel illogic? You don’t believe MYR will appreciate? Or you think scenario 1 will happen?
 
In fact, scenario 1 is far more ridiculous scenario compare to scenario 3. From 4.48 to 6, it need depreciation of 1.52. From 4.48 to 3.5, it only need an appreciation of 0.98! But No One challenge me before on how MYR6 vs 1USD can be derived… Somewhat, people are doubtful on how can MYR appreciate back to 3.5.
 
Like I said earlier, the chances of up and down is about the same. It is a fair game. The fundamental of the country matters!
 
Foreign investors been selling our currency, our stock market, cashing out their investments and park money else where… Including you who doing investment in foreign country.
 
We are yet to see the light, but I can tell you. Foreign investors will be back to Malaysia. When there is nothing to sell, they will start to buy again. When? I am seeing they will return on 2017, exactly when, I don’t know. I do not have their numbers to call, neither of them call me too :(
 
Scenario 2 is applying now, the plus minus 15% range. My opinion is scenario 3 can happen. MYR6 vs 1USD may come but not 2017. We will witness a recovery in currency this year BUT how long MYR will stay appreciated compare to year 2016 closing price, that I cannot tell or I really don’t know.
 
Pray for no-shit-happen in year 2017, a simple panic will depreciate MYR further. Yes, we are in this extremely fragile state! Undeniable!
 
Where to invest?
Answer will be similar to last year, since I am a story teller with consistency! The simplest answer(s) I can give you without months of lectures are.
1. Keep your money in USD.
2. Buy property or land.
 
 
No gold, no silver, just don’t do or trade something which you can lose.
 
You can find out my old post on the same topic last year…
 
Again, I am nobody, do not base on my view to trade any financial instruments. One thing is so true that I must also say to you. “If KM is so good, he no need to tokok blow water with you la. Why he dont quietly earn all the money and go vacations!”
 
Trust no one but yourself in any investment!
 
Be safe, be good and be generous in spending! Malaysia needs your support!
 usdmyr.tiff


 

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