Datuk Seri Cheah Cheng Hye giving investment survival tactics during his keynote speech at the Penang Premium Business Enterprise anniversary dinner.
By TEE LIN SAY
linsaytee@suketv.com
11 March 2026
PETALING JAYA - The world must be prepared for an era of rising inflation, slowing growth, geopolitical conflicts and an unpredictable United States that can break any rule it wishes, says Datuk Seri Cheah Cheng Hye, the co-founder of asset management firm, Value Partners Group, which has an asset size of roughly US$6.2 billion.
Due to the United States being so big and powerful, what it does will affect everyone.
Cheah believes that stagflation is coming. Stagflation is an era of high inflation, combined with high unemployment and low growth.
“In this sort of environment, assets that have a chance to go up are commodities that are in short supply. Therefore in Malaysia, it may be worth taking a look at that old sector, the palm oil sector,” said Cheah during his keynote speech at the Penang Premium Business Enterprise anniversary dinner attended by the state Chief Minister on March 4.
Cheah is ranked as the 2,623rd richest person on the Forbes World Billionaires List in 2025, with a net worth of US$1.2 billion as of 14 April 2025.
In Malaysia, he is ranked 20th on Malaysia’s 50 Richest List. He has been on the Malaysian list continuously since 2019.
Cheah today manages his own personal single-family office, Cheah Capital, in Hong Kong and Singapore.
He said that the investment environment today is shaped by two key factors – the first being the growing instability of the United States, while the second is the rise of China.
“America is becoming a very unstable, unpredictable and aggressive country. We live in the shadow of that. The issue in America is structural, not cyclical,” said Cheah.
As an example, until recently, it was considered unacceptable for a leader of a country to attack or kill the leader of another country.
This was the unspoken rule in international politics. Now though, this rule has been broken.
Israel assassinated Iran’s Supreme Leader Ali Khamenei on Feb. 28, the first day of the joint U.S.-Israeli attack on Iran. This has now spiralled into a regional war.
“A superpower that is walking away from responsibilities but insisting on keeping all of its privileges. Power without responsibility – unfortunately this means trouble for all investors, and this includes us in Malaysia,” said Cheah.
The US economy is too big to ignore
Like it or not, investors across the globe cannot ignore the US.
Firstly, the US stock market alone is two thirds of the entire world’s stock market capitalisation.
About 55% of the world’s trade is carried out in US dollars.
Some 57% of foreign exchange reserves held outside the United States are held in US dollar assets.
US military spending is about 37% of the world’s total military spending. This is more than three times the size of the Chinese defence budget.
Meanwhile, the US Department of War maintains more than 750 military overseas bases around the world.
The US federal deficit has been growing like a balloon, where some 25% to 30% of this debt is held by foreigners. This is due to the low savings rate in America.
In terms of purchasing power parity (PPP), the US makes up 15% of the world’s economy.
Making matters worse, the entire US system is increasingly financialised.
In the old days, the financial markets existed to serve the real economy.
But today in the US, it is the other way around.
“The demand for stocks and bonds comes first. Real companies making real goods and services are increasingly in a junior position. They exist to serve the needs of financial markets.
“The result is a society that is unstable and short term,” said Cheah.
HALO is in, FOMO is out
Cheah said that investors will need to position themselves for continuous instability and volatility, arising from problems that originated in the US.
“We have to invest really defensively. The attack on Iran last week might only be a manifestation of the increasingly out-of-control USA. So we are definitely looking for safe havens.”
Therefore, HALO is in, and FOMO is out.
HALO stands for hard assets with low obsolescence.
These are basically assets that won’t become useless quickly.
“Until recently a lot of people were buying a lot of artificial intelligence and software stocks. Now, people are moving to hard assets.
“Assets that can last and are defensive. Assets that can withstand the broken global order,” said Cheah.
FOMO stands for the fear of missing out. If a stock goes up, people believe it will go up further because everyone will rush in.
Until recently, this was the typical way most fund managers thought.
Cheah’s Model Portfolio
In constructing his model portfolio, Cheah chooses to put 20% of his assets in Malaysia, since he is Malaysian.
Cheah considers Malaysia a safe haven because the government has been able to position itself as neutral.
He is not saying that Malaysian stocks are a sure win, but he expects the Malaysian market to continue to rise at the 7% to 10% level, in line with corporate earnings growth.
Buy Physical Gold, not Paper Gold
On buying gold, Cheah said that it has to be physical gold, not paper gold.
“I am looking at an asset that is in very short supply, where what you own doesn’t have counterparty risk. That would be gold.”
“Almost everything else you buy, including treasury bonds, is somebody owing you money. Your asset is somebody’s liability.”
“When you own physical gold, you don’t have to collect something from somebody. This is very important when the world is breaking down,” said Cheah.
Meanwhile, he likes commodities, agriculture and strategic metals for the same reason he likes gold. It has the HALO effect. These are assets that can withstand uncertainty and conflicts.
Bullish on China
As always, Cheah remains extremely bullish on China, having covered the market for the last 35 years of his life.
China is increasingly positioned as a safe haven. It is, to a certain extent, one of the few countries that can stand up to the US.
China has tried to carry out a vision of Common Prosperity for its people. It is pro-people but also pro-business.
“Under President Xi Jinping, he has very much kept corruption under control. This has strengthened my faith in putting my money into the Chinese Renminbi,” said Cheah.
Lastly, Cheah said that in times of uncertainty, always have some cash in your hand. It doesn’t have to be in US dollars, it can also be in the Renminbi.
“This cash will give you a lot of flexibility. The most important thing here is you must have holding power. In this era of super roller-coaster financial conditions, it’s very easy to get shaken out,” said Cheah.
Web Edited by YAN PHENG LIANG
yanphengliang@suketv.com