You can contact the author (Teguh Hidayat) by email, teguh.idx@gmail.com. The author live in Jakarta, Indonesia.

See my pictures in Instagram, @teguhidx.

About the Decline in Oil Prices..

For nearly a decade, we almost always seeing oil prices to rise steadily until around US$ 100 per barrel, except on 2008 which it dropped to US$ 45, but later went up again to the range of US$ 100 – 120 per barrel. Entering 2015, oil prices began to fall and.. all of a sudden, it is now on the level of about US$ 30 per barrel. The question, what happen? Does the decline in oil prices related to the decline in the stock markets in China, United States, and also the Jakarta Composite Index in this early of 2016?

‘Qualitative Value’ of Stocks

As an investor, I regularly read the Berkshire Hathaway Annual Letter written by Warren Buffett, which usually published in January or February each year, to gain a lot of investment wisdom directly from Buffett himself. In the latest edition of 2014, Buffett shared his experience when acquiring See's Candies, a manufacturer of candy, sweets, and chocolate, in 1972, which after a few decades later, this investment successfully generate huge profits for Berkshire.

Elnusa

The Jakarta Composite Index (JCI) began its journey in 2016 through a bumpy road. When this article was written, the index is still dropped 1.5% in year to date. Although the decline is still much better than the decline in China and United States, where the Shanghai Index and the Dow Jones fell 18.0 and 8.2% respectively, but several stocks in the oil and gas and mining sectors had fallen significantly, in line with the decline in price of oil to as low as US$ 30 per barrel. One of the stocks, Elnusa (ELSA), recently closed at Rp200 per share, dropped almost 20% since the beginning of the year.


After the Despair, Then What?

Last August, precisely August 24, 2015 when the Jakarta Composite Index (JCI) dropped 4% in a single day and closed at 4,164, and triggered a moment of panic selling, I wrote an article entitled Between Euphoria and Despair. In the article I presented several phase of the period of bear market, namely denial, bull trap, return to ‘normal’, fear, capitulation, and finally, despair. And by referring to the fact that JCI had tumbled significantly from its peak, ie 5,500’s until reached 4,100’s, and also has passed through several phases ranging from denial to fear (or capitulation), then at the end of the article, I ask, are we in the phase of despair yet?

Impairment of Rupiah = Crisis of 1998? Maybe Not

Indonesia experienced a severe economic crisis in 1998, which was preceded by the fall of Rupiah against US Dollar since August in the previous year (1997). And currently, as the Rupiah continues to dropped from Rp9,000’s to now Rp14,000’s per USD, some people may ask: Will we see the crisis like in 1998 once again?

About ASEAN Economic Community..

ASEAN Economic Community (AEC), is an integration/unification of economic activity of the member countries of ASEAN (Association of Southeast Asian Nations), where trade and import-export activities between countries, including the movement of labor and investment, are no longer constrained by country’s regulations (or is still constrained, but the regulations are much looser than before). For example, if you go to Singapore and came home to Indonesia with a souvenir, you may have to pay import duties at the airport in Indonesia, so that some people may be unwilling to buy goods from abroad. But after this AEC applies, the duty tariff can be lowered, or even removed altogether.

2015 Evaluation: A 'Grown Up' Market

In evaluating the investment performance in last year of 2015, most of analysts and investors in the Indonesia stock market usually only focus on the fact that the Jakarta Composite Index (JCI) had been dropped significantly, in this case about 13% year on year, and it makes 2015 as a bad and difficult year. However, there are several reasons that 2015 was actually one of the best years in the history of the development of the capital market in Indonesia. Related to this, I’m comparing 2015 to 2008, ie the year in which the stock index also fell significantly (JCI also dropped in 2013, but the decline was only 1%).