Author: Eight percent per annum

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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Ready Bayer One!

Bayer was a EUR 100 billion market cap industrial conglomerate that has collapsed big time from a recent high of EUR 120 per share to EUR 73.5 today. There were two reasons. Firstly, the firm is being sued in the US for selling cancer causing fertilizers. Well, actually it’s Monsanto, the world’s largest GMO seed seller and pesticide and herbicide manufacturer that was selling bad products but hey, Bayer is going to buy Monsanto, so Bayer and its investors are on the hook! Next, Bayer announced disastrous results warning of lower full year sales and profit blaming higher integration...

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Tangible Thoughts #8: Trade War Beneficiaries

Trade wars happened before, when Japan rose to power in the late 1980s and the 1990s. The beneficiaries were the neighbouring countries that had the capacity and the education level to capture that demand. In the Japan era, it was Thailand, Korea and to some extent China itself. In the Americas, it was Canada and Mexico.   Today, if the same scenario happens, it would be the whole of ASEAN that would capture the shift of manufacturing from China. It would be Vietnam for high end manufacturing and Myanmar, Cambodia and Laos for mid to low end manufacturing. Indonesia...

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Book Lessons #3: The Selfish Gene Part 2

This is a continuation of the Book Lessons #2: The Selfish Gene Part 1. Unfortunately, I cannot find any investment lesson in this post, only life lessons!   In the later part of the book, The Selfish Gene, the author Richard Dawkins introduced how altruism sometimes work in nature as it becomes beneficial to both the giver and the taker. The simplest example is what we had learnt in Biology 101 – symbiosis, the direct opposite of the parasitism. It was a good reminder that in struggle between good and evil, there are always examples of good triumph over...

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Chart #14: Live Concerts!

Happy National Day Singapore! Here’s another interesting chart. Sales of concert tickets had quadrupled since 2000. The top concerts bring in $100-200m just in North America alone. Live Nation (LYV US) is just racking it in! This is the Experience Era. Since internet took over the world, reality now has a different meaning. We treasure what’s left that cannot be done on the net more than ever. Hence concerts, live events, theme parks even going to the movies is different...

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Value Investing Is Really Like Cave Diving

About 18 months ago, we discussed that value investing could be compared to riding a bicycle up a Finnish mountain. It was a really stretched analogy that was perhaps too difficult for most people to understand. Two weeks ago, the successful rescue of 13 Thai boys trapped in a cave caught the world’s and my attention. As with many others, I followed the saga closely. I was woefully saddened when one of the rescuer died and jubilantly rejoiced when they were finally saved! It was truly a triumph for human innovation and a story worthy for Hollywood! It also...

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Tangible Thoughts #6: Contrarian Thinking

Sometimes the best opportunities come when most people don’t agree with you but the one or two trusted smart friends do. Or maybe they also didn’t agree but you are smart enough to figure out they were wrong. Here’s two quotes reflecting this: John Malone: Most of the money I’ve made in my life has been when other people don’t like what’s going on. When things are cheap, that’s opportunity. Jack Ma said something to the same extent. If 10 out of 10 people agrees with you, then nothing needs to be done. If there is just one or...

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Book Lessons #2: The Selfish Gene Part 1

I just read the seminar work of Richard Dawkins, The Selfish Gene. I would say this is a must-read for everyone. Not just investors, but everyone. Amazingly, this book was listed as the most influential science book of all time in a poll to celebrate the 30th anniversary of the Royal Society Science Book Prize. To think that it was published in 1976 and I only read it now. This book put forth so many concepts that it’s actually quite daunting to absorb everything. Hence this post serves to really crystallize some the important ideas. Interesting, Dawkins also coined...

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Germany Tak Boleh!

“Tak Boleh” = “Cannot” in Malay Last night, Germany, the champion in the last world cup was eliminated by South Korea, the worst player in its group. It is now advised that Mongoloids should not visit Germany in the next one month lest we get beaten up by soccer hooligans in Europe’s strongest economy. If you really have to go, wear a T-shirt proclaiming you are not Korean. Maybe this is all planned. Both Italy and Spain were also eliminated in group stages after they won the World Cup previously (see below). So, Germany is just keeping the tradition!...

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Chart #12: Why Property Keeps Booming

Here’s another chart that explains why property keeps rising, globally. Since the Global Financial Crisis of 2009, the central banks flooded the world with liquidity to prevent a Great Depression type catastrophe. But this created heaps of cheap money in the system, which had to find its way into assets. Hence private equity, bitcoins, art, wine and needless to say, property. $7.4trn into real estate in no joke. This is larger than Japan’s economy and almost as large as China’s economy. It is a wonder now why Singapore property doesn’t correct enough for you to buy? URA property price...

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