The key to excelling in 2012 is market timing and positioning.
Last year was a year filled with negative surprises and market volatilities. The global stockmarket rout was again triggered by concerns in the Eurozone and the United States. The former is still haunted by its long-dragged sovereign debt issue while the US was hurt by the fact that S&P (Standard & Poor's) has finally pulled the trigger by cutting its long-term credit rating for the country from AAA to AA+.
Financial disasters aside, the world was also hit by natural disasters - namely, the earthquake and tsunami in Japan as well as the massive flooding in Thailand.
The March 11 Japan earthquake, which had a magnitude of 8.9-9.0, some 130km from Sendai, north-east of Honshu, resulted in a 10-metre high tsunami wave. The aftershocks and destruction were widespread, with nuclear power plants also damaged, giving rise to worries of nuclear radiation.
Nonetheless, the devastation had remarkably little impact on financial markets in the rest of the world, particularly Malaysia.
At that point, it was believed that sectors - namely timber and to a lesser extent, steel - that would support Japan's reconstruction activities could somewhat get a boost. This was because many Japanese houses are constructed using significant portions of timber, particularly tropical hardwood, and Malaysia remains the world's largest exporter of tropical hardwood. Back then, timber counters were outperforming the FBMKLCI index.
In the second half of 2011, Thailand was hit hard by its worst flooding in the past half century. The crisis hit the agriculture and manufacturing sectors hard and forced the closure of many factories, including those belonging to Honda, Nikon, Western Digital, Sony and Toyota in the Ayutthaya province, North of Bangkok, where some five industrial estates were shut down. During that period, the technology and automotive sectors on Bursa were the hardest hit. These included companies like Eng Teknologi Holdings Bhd, Notion Vtec Bhd, D'nonce Technology Bhd and automakers …