Jump to content

theasiareport

Member
  • Posts

    58
  • Joined

  • Last visited

Everything posted by theasiareport

  1. Chinese companies on the other hand are completely different ball game - especially if you factor in the ones that are listed overseas and listed within China. The thinking behind corporate governance, minority interests etc is completely different and I would be highly sceptical of superficially cheap companies. In the case above, I wouldn't be too worried about the assets were real but that they won't being deployed in a satisfactory fashion to generate good returns for shareholders. In the case of chinese companies [non SOEs]... there's a high chance the assets don't exist OR if they were there, the shareholder would find a way to tunnel it out anyway [China Hustle on Netflix is a great documentary on this]. SOEs on the other hand are an interesting bunch given that they aren't profit maximising... At the same time, the intent on reformation and improvement of efficiency is very real.
  2. I am Chinese (Singaporean). I am doubtful of the genetic claims. However - I think there are strong cultural norms which exert a push towards working hard. If you look at the history of China, individuals who wanted to "leap above their position in society" had option of the Gao Kao (National Examination) to become selected as a public official. This narrative feed strongly into what we are taught from young (same stories for other overseas Chinese in Taiwan, Hong Kong etc) - and why its so necessary to study hard at school to succeed in life.
  3. With regards to many family owned companies (Hong Kong & Singapore - going to exclude China from this group), the thinking among family members is that the company is still pretty much "in the family". The presence of large controlling stakes and illiquid markets makes institutional ownership among these stocks negligible. If you don't like the management - the default thinking is that the right thing to do is just to sell your stock. Many of them take AGMs and Investor Relations as a chore that has to be done. This is not to say that there aren't great companies - I just find that there corporate governance issues are quite acute and there's no real way around it without any sort of institutional ownership to drive reforms. Activism is rare given the non confrontational culture that pervades (Singapore & Hong Kong are small places after all). That explains some situations whereby the company sits a pile of cash/assets and really does nothing for years and years. Remember that the controlling shareholder is probably independently wealth as is and quite content to do nothing. --
  4. Hi everyone, Little background on me. I grew up in Singapore, studied in London and spend a large part of my time here and in Hong Kong now. I've seen the odd post here or there about Hong Kong or Singapore stocks (mostly cheap on P/B basis). Investing into the US has been reasonably easy given the level of disclosure, discussions on forums and various articles especially into large caps for me. US markets have been pretty frothy and we've allocated a lot of our portfolio back into Asia. Flipping it around, I was curious how comfortable you are investing in Asia (and how that translates into portfolio allocation), and what kind of challenges you face as an investor going in are. If not, I am curious as to the reasons why you give is a miss too. Thanks!
  5. I live in one of these far flung "overseas markets" where net-nets and heavily discounted companies exist - Singapore. I completely agree that investing in these co's from overseas is very very hard. There are plenty of local financial news sites detailing insider buy/sells, and especially in Singapore, its not hard to know whose out to screw you, or which companies have perpetual discounts because of historical/political reasons. But you need to be on the ground to get comfortable with the situation. Real estate in Singapore and real estate in Hong Kong is vastly differently... but the impression I get from my friends overseas is that its taken in the same brush. There's a huge information asymmetry - but I get the impression plenty of formers are flying blind when I see some of the posts.
  6. I don't think DB is a good investment for obvious reasons... But on the reverse side, do we really think Germany will not step up and back-stop DB in the case that confidence is lost, considering the political consequences, and its financial ability to do so?
  7. Just to add on a P/B basis, the only time where Asia ex Japan has been cheaper has been 1998. Period now is comparable to 2003 (SARS), 2008 (GFC).
  8. Cloning has received quite a bit of flack recently... but lets look at history From Buffett The Biography, by Roger Lowenstein: "Buffett was fanatical about following Graham's footsteps. He invested in stocks held by Graham-Newman Corp, Graham's investment company, such as Marshall Wells and Timely Clothes". Of course I doubt cloning is, or isnt good objectively speaking. As Graham said... it was not so much the idea but the reasoning and line of thought that led to the idea. In other words, no substitute for hard work!
  9. I subscribed to the archive issues of OID... but I cant even seem to login. Anyone facing the same problem?
  10. I think its pretty different situation if you have control (as majority owner), and hence power over the future of the company.
  11. How long do people consider "enough experience"? My own understanding of Buffett is that he spent years accumulating experience in the "Graham" camp before slowly transitioning out of it.
  12. Read an article from Kiplinger which was surprisingly frank from a hedge fund manager who is winding down his operations after 15 years. Managing OPMI is a completely different ball game. http://www.kiplinger.com/article/investing/T052-C018-S002-why-this-hedge-fund-manager-is-shutting-down.html Here's the bit which I liked: First, that I took a big risk when I created a portfolio that was wildly different from Standard & Poor’s 500-stock index. That was especially problematic in 2014, when hardly anyone beat the index. Magnifying the problem was my decision to put too much money into my favorite ideas. I totally bought into the notion that it was foolish to invest in my 60th-best idea. What I overlooked was how bad things could get if I was wrong about my second-best, third-best and fifth-best ideas at the same time.
  13. The transactional costs and information asymmetry are definitely a problem. I felt that acutely when I was based in London for a couple of years. I am now based in Singapore, making life a lot easier. Over the years, I've felt that the best places to look at are still Singapore, Hong Kong and to a certain extent South Korea. Singapore & Hong Kong have in place common law jurisdictions, making life a lot easier. Of course, there are plenty of "value-traps" around... but that's the same in every country. The trade off is that valuations are by far cheaper than the developed markets. I really recommend taking a plane down to Hong Kong or Singapore to get a feel for the place. Or ever Japan for that matter. On the reverse, I almost never invest in a country that I've not been to before. There's only so much you can get from Western Media and Bloomberg. There are plenty of local news sources that you just miss. I recommend these places: Shareinvestor.com (Singapore) Quamnet (Hong Kong) Thaistocks.com (Thailand) Cheers,
  14. Article link here: http://on.ft.com/1hHRUZL via @FT Quote: Analysis by JPMorgan Asset Management shows that the benchmark MSCI EM index was trading on a price/book ratio of 1.28 as of late August (see the first chart), suggesting that even if a company went bankrupt, investors would get back almost 80 per cent of their money by selling the underlying assets. This ratio is now below the troughs witnessed during the global financial crisis and has only been lower twice in the past 20 years: fleetingly after September 11, 2001 and more tellingly during the 1997-98 Asian financial crises. JPM AM went on to analyse the returns investors who bought in at similarly low price/book ratios enjoyed over the subsequent 12 months. In every case during the past 20 years they have made money, often as much as 50-60 per cent (see the second chart). “Emerging markets have only been this cheap 3 per cent of the time since 1989. Now is not the time to become more negative on the asset class,” says Richard Titherington, chief investment officer, emerging markets and Asia Pacific equities, at JPMorgan AM. Comments: Plenty of really cheap stuff in EM. On a micro level, I am seeing plenty of stocks trading at 2011 valuations. And its not limited to small cap, highly leveraged entities. Just take a look at Samsung or Hyundai in South Korea!
  15. Wouldn't you have gone bust in the ensuing craziness of the Chinese stock market bubble?
  16. I can second Boom. I've used them to get Preferred shares of Hyundai and Samsung pretty easily.
  17. There are a lot of professional qualifications around... But if the goal was to gain some training on accounting to aid the general investor in getting a formal education on accounting and financial statement analysis (as opposed to getting it for a career), which qualification do forum members think or have experience in that they think will be more useful to what we as value investors normally do? Cheers,
  18. Seeing that Graham maintained pretty much the same investment style throughout his career... at what point did he transition out of "investing" into "value investing"?
  19. Is this a Japanese company listed in Japan, or a Japanese company listed in Singapore? If its the former, I don't think there's a lot that can't be done. There have been several high profile activism efforts by international investors, but that route doesn't seem to go down well. Steven Towns seems to have some effort, and you can check out his book. If its the latter, I still think its almost impossible to effect change if management is hostile, especially if management owns 40% of the firm. The only way I can see activism taking effect is if management owns a small stake in the company, and you're able to with several people accumulate a large enough stake to put on a board member and work change from there.
  20. Median P/E ratio of the S & P 500 is at a all time high so the US market is definitely a harder market to work with. Plenty of compelling bargains around the world in South Korea, Hong Kong and Japan IMHO. Hong Kong has English financial statements and a couple of companies have been discussed here. South Korea has two large cap stocks that look deeply mis-priced, and that you can trade on the London Stock Exchange - Hyundai and Samsung. The world is a much bigger place these days.
  21. That's my instinctive reaction. But that's probably why they out-perform seeing that even us bargain hunters avoid them. Reversion to the mean at play here.it I wouldn't pick them individually, but as a group, there seems to be plenty of evidence they out-perform. The only question is whether someone has the emotional capacity to implement it.
  22. I am a big proponent of net-nets, operating in South East Asia and they are quite common. One thing I've learned researching this particular "strategy" is that its really a group operation. I've seen net-nets with excessive compensation which go on to triple. I've seen net-nets that look great on paper, but never re-value (talking about 3 years here). All I can say is that its a group operation. I haven seen little by way of correlation and causation. Also, there's a study which shows that net-nets with negative earnings out-perform those with positive earnings... so there you go.
  23. Freddie Mae and Fannie Mae Common Stock and Preferred offer a really interesting risk/reward ratio. There's a huge thread and a wealth of information from the interviews from Bruce Berokwitz and Bill Ackman. Best of luck
  24. I thought it was a great discussion but how far are we going to take the "Great Depression Thesis". We had two major incidents including the GFC. Why not extrapolate the Great Depression further into a a meteorite storm that wipes out half the world. Than just about no one will do well. I've always found the doom-day scenarios to be fascinating, but it just seems that you can create any kind of factual situation (that sounds plausible too) to justify whatever you want to prove. Secondly, I just like to note that the principles which underlie our craft were borne out of a man who survived the great depression. Admittedly Ackman has a much more optimistic view of the world, but so did Buffett when he started out in the 1970s. I think Walter Schloss did an interview where he remarked that Graham's failing was that he was always looking at the rear-view mirror. Arguably, in the great lens of history, the problems we face now don't seem to more serve that the problems that humanity has overcame. Call me an optimist, but we are living in an era that has never had it this good... especially if you take into account that we were worried that we were going to nuke each other out of existence only 30 years ago.
×
×
  • Create New...