Author: Eight percent per annum

Top Five Myths about Investing Busted!

We had discussed a lot about investing myths in the past and here’s a post to really bust them once and for all. 1. Investing can make you filthy richI think this notion deserves a lot more analysis and the way I would think of it is to look at the top 10 or even the top 100 richest people in world, in each region and also in Singapore. Investors seldom get featured on these lists. The most famous rich investor remains to be Warren Buffett. In Asia, there is no equivalent. Most of the richest Asians are either...

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Charts #17: Billion Dollar Club

Found this recently on WSJ. Most interesting.The global QE created this. Hundreds of billions of dollars in valuations of companies with no earnings. Surely it would have been unthinkable for Ben Graham. The father of value investing only bought stocks trading below its book value. His most famous strategy was buying net-nets: companies with market caps that were less than the company’s current assets minus its total...

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Book Lessons #4: Best Books Ever

I went through my readings and decided to write down the list of best non-fiction books I had ever read. It spans across genre and is listed here in no particular order.1. Guns Germs and Steel by Jared Diamonds2. Sapiens by Yuval Harari3. The Snowball by Alice Schroeder4. The Selfish Gene by Richard Dawkins5. Fortune’s Formula by William Poundstone6. Liar’s Poker by Michael Lewis7. When Genius Failed by Roger Lowenstein8. The Most Important Thing by Howard Marks9. Freakonomics by Steven Levitt and Stephen Dubner10. The Enzyme Factor by Hiromi Shinya Remember all the book reviews we had to write in...

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Minimum Wage vs U.B.I.

This was a planned post for the last General Election in Singapore where some debate surrounding minimum wages sparked my interest. It was stated that 90% of all countries have minimum wages and why is Singapore not in that group. Five years on, the world has progressed and today we are talking about U.B.I. or universal basic income and not minimum wages. So like our beloved SAF still conducting training based on WWII tactics, our economic argument on minimum wages had fallen way behind. Economic health is of vital importance to Singapore. We were very fortunate to survive as...

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Chart #16: Millennials

This is a recent chart from WSJ which shows that millennials while carefree and internet savvy faces some difficult problems vs the older generations. They have more student debt and would likely earn less than their parents. This is a reflection of the higher cost of education as well as pay stagnation. As most types of work get commoditized, we see that only 50% of millennials will get the creative work and get to make more money than their parents. This ratio would continue to go down… “The best investment you can make is an investment in yourself. The...

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The Essence of Value Investing

Here is a good analogy on investing and the concept of margin of safety from Buffett some time back. If you see that a man is very fat, it makes little difference that you are able to precisely calculate his exact weight to enhance your conclusion. Is he 102kg or 110kg? Does it matter? Similarly in trying to determine the intrinsic value of the company, it doesn’t matter if you get it at $102 or $110. What is more important is where is the price now? If it is $98, it means that you are aiming for 4-12% upside....

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Thoughts #11: The Capital Cycle

Capital Account by Marathon Asset Management published in 2004 gave a good analysis of how global capital moved and why alpha or value add could be generated if we invest well in the cycle.The Capital CycleThe capital cycle move along with investors’ interests which create competition at the peaks, driving down returns. Essentially a more academic way of saying, “be fearful when others are greedy”. It doesn’t do justice to the book by over-summarizing it here. Do read the book for some good investing stories!”The best investment you can make is an investment in yourself. The more you learn, the...

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Minimalism, Decluttering and Portfolio Concentration

According to Wikipedia, Minimalism in art began in the 1960s and the 1970s when a group of artists decided to protray art using the “Less Is More” concept. In New York’s Museum of Modern Art, we can see a section dedicated to minimalism. One of the famed artists Robert Ryman painted only with white. He is considered as one of the fathers of minimalist art today. Robert Ryman’s celebrated work Seriously, I could paint this. My 11-year-old son probably could do better. But I guess it is about articulating the idea, being the first and being able to put...

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Why Do Companies IPO?

This post came from a request from Gerard who recently joined our chatgroup. I thought it was quite an interesting question and a Google search didn’t really address the core of it so I thought I could a better job! Hehe! Btw, if you are interesting to join the chatgroup, do whatsapp to +65 8119 6429! Please take a moment to read about the rules also thanks! For the un-initiated, IPO stands for initial public offering which is the first time a company sells its share to the public so that anyone who has a brokerage account and money...

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Thoughts #10: Correction or Capitulation?

Global markets fell c.6-10% this week. The US markets finally cratered after months of strength despite markets in Hong Kong, China, Japan, Europe correcting, led by the internet names that had done so well. The question is then whether this is just a correction or is this leading to capitulation? Well, the markets seem to be saying this is just a correction for now. Stocks started recovering slightly on Friday (12 Oct) after the dramatic fall on Thursday. But we need a few more days next week to be sure. Valuations are always good gauges, with global PEs of...

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It’s the Blue Ocean, not the Blue Whale Game!

I felt very compelled to write this post as I believe this would save lives. If readers here ever feel there is a need to repost this, tell someone about this, please do so asap. Our lives are very precious and there is never, I repeat, never a good reason to end it prematurely. We are connected to everyone (and all animals and all of nature) the day we are born. Every connection is very important. You are very important. More than you know it. The blue whale is the largest animal that has ever lived. It is a...

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Chart #15: Singapore’s Richest

Found this a few weeks back. Putting the source of wealth here for easy reference. 1) Far East (Property) 2) Facebook 3) Nippon Paint 4) CDL (Property) 5) Stanchart and Goodwood Park 6) UOB 7) Pontiac Land (Property) 8) Chandler Group (Investing) 9) Royal Group (Property) 10) Hotel 81...

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Monster Monsanto & Other Risks!

This is a continuation of the previous post on Bayer / Monsanto. In the last post, we postulated that Bayer is a buying opportunity because it is the world’s largest player in crops and seeds which is growing at mid single digit and its stable cash cow businesses in pharmaceutical and consumer drugs would provide huge free cash flow to investors. At its low, Bayer traded at EUR 68 billion market cap while generating FCF of EUR 7-8bn. Salivating right? Bayer / Monsanto’s Biggest Risk As promised, today we discuss Bayer’s risks. Bayer didn’t crash and burn for no...

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Monster Monsanto & Other Risks!

This is a continuation of the previous post on Bayer / Monsanto.In the last post, we postulated that Bayer is a buying opportunity because it is the world’s largest player in crops and seeds which is growing at mid single digit and its stable cash cow businesses in pharmaceutical and consumer drugs would provide huge free cash flow to investors. At its low, Bayer traded at EUR 68 billion market cap while generating FCF of EUR 7-8bn. Salivating right? Bayer / Monsanto’s Biggest Risk As promised, today we discuss Bayer’s risks. Bayer didn’t crash and burn for no reason....

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Funny Quote of the Day

Look up this post when you are feeling down ;) To just type it out: if anyone is having a bad day, remember that today in 1976, Ronald Wayne sold his 10% stake in Apple (AAPL US) for $800. Today (Sep 2018) it is worth 1,081,130,640,000 dollars. Remember: compounding is the eighth wonder of the world. Huat...

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