Author: The Asia Report

Why People Lose Money in the Stock Market

Talk with almost anyone who has been invested in the stock market, and you will hear stories about losing money.  There are several reasons why investors are faced with the possibility of losses in the market.  Examining the root causes of these reasons is essential to overcoming them and becoming a more successful investor. The emotions of fear and greed dominate the stock market.  These emotions lead to instances where the price of a stock will depart, often significantly, from the true value of the company itself. If fear becomes rampant in the stock market, many investors will sell...

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Why Invest In Stocks?

Before we delve into the world of value investing, it is vital to gain an understanding of why people should even bother to invest their hard earned money in stocks.  There are other options of where you can invest your money, such as bonds and gold, so why should stocks even be considered? Source: Credit Suisse The answer is simple – stocks have shown time and time again to deliver higher returns over the long run than other asset classes. Thinking of stocks as a part-ownership of business Viewing stocks as a part ownership of a business is in...

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Top Reads From The Web – Week #41

“I read and think,” Buffett once said. “So I do more reading and thinking, and make less impulse decisions than most people in business.” A little bit more about our Weekly Round Up Series… Our weekly roundup aims to bring the best of investment blogosphere from around the web and timely analysis to readers. Readers understandably face a shortage of time in their own daily lives to read widely and our weekly round-up aims to help curate timely articles and analysis to you. In response to a query about how to become a better investor, Buffett told the students,...

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The Seven Worst Words In History – Key Takeaways from Howard Mark’s Latest Memo

Howard Marks has recently released his latest memo – The Seven Worst Words In The World. PS: – They are “too much money chasing too few deals”. Here are my key takeaways: 1. Howard Marks believes that investors knows that the future is unknowable. However, he also believes that investors can also enhance their likelihood of success if they adapt their investing stance based on where the market is in the cycle. Knowing where are you are in the cycle will help investors decide their investment stance. Should you be taking more risk, more leverage? Or should you be...

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Is Traditional Retailing Dead?

I’ve found over the years that retailing is a sector where value investors have trouble generating returns from. Consider Buffett’s comments: “I think retailing is just too tough for me, just generally,” Buffett said. “We bought a department store in 1966, and I got my head handed to me. I’ve been in various things in retailing. … I bought Tesco over in the UK and got my head handed to me. Retailing is very tough, and I think the online thing is hard to figure out.” In 1993, Warren Buffett acquired Dexter Shoe Company with Berkshire Hathaway’s stock. Dexter...

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[Case Study] The Rise and Fall of H & M… and Rise Again (?)

Readers will be familiar with Hennes & Mauritz AB (also known as H & M) – the Swedish multinational clothing-retail company known for its fast-fashion clothing for men, women, teenagers and children. It is the second-largest global clothing retailer, just behind Spain-based Inditex (parent company of Zara). In this episode of our Company Case Studies Section, we cover its rise and subsequent fall. [embedded content] You can also get our slides here. H & M Case Study: It was not too long ago in 2011 where H & M opened their flagship outlet in Orchard road. Hundreds flocked to...

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Great Investor Series – Howard Marks, Oaktree Capital

I am happy to announce the launch of our new Great Investor Series with today’s spotlight on Howard Marks, founder and Chairman of Oaktree Capital. The series is intended to provide an introduction to some of the world’s top investors and the investing principles that guide them in their work. The thinking behind the Great Investor Series intent is simple. To “level up” in the knowledge – simply study the brightest in the field and work backwards for there. This week, we introduce Howard Marks, founder and Chairman of Oaktree Capital. In the 2017 Forbes rankings of the wealthiest...

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What Can We Learn From Hyflux & Starhub?

For every financial report which comes our way, the key disclaimer of “Past performance does not predict future returns” is peppered throughout the report. While we can never be certain of whether past successes would repeat themselves, past failures tend to have an uncanny habit of rearing its ugly head when we least expect it. One of the key trends persisting over the last few years was the phenomena of investors stretching for yield as interest rates remained at record low levels. Investors have been searching for investments opportunities which could yield them high yields. Corporations rode the wave...

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Investment Opportunities Re-Emerge 1.5 Years on

It’s been almost one and a half years since my last blog post. Markets had until late been overwhelmingly positive after Trump’s elections despite initial concerns. All this led to a dramatic decline in me writing as the markets roared ahead. Singapore underwent something unique only to it – the enbloc craze. This development swept to the property sector too and listed property stocks faced a dramatic uplift in prices. Fast forward to today, the mood has darkened considerably. We had some real volatility at the start of the year, as well as some real sustained price declines focused...

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Looking Back To 2015 – What Happens When Bubbles Burst?

With a difference two years makes. The Chinese stock market was truly something to behold. I recall vividly watching on CNBC one particular segment where farmers remarked that trading the stock markets was far easier than farming. Warning signs don’t come more vividly than that. As always, the party in China soon ended as markets deflated. I was a value investing seminar in Italy where a fellow investor asked me just what was going on in China. After all, trading activity had dropped dramatically with a multitude of the largest companies being suspended for falling too much. I was...

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Reflections on Brexit & The Presidential Elections

  I decide to take the events of the past two weeks to reflect about the mis-priced events and expectations. This year has seen two such situations present themselves – namely Brexit in the UK and the Presidential Election in the United States. Both situations had binary outcomes. Markets mis-priced the outcome wrongly in both instances, and reacted violently initially when it became apparent they had misjudged the situation. There are a couple of points I like to draw from these two events. Firstly, predicting the outcome of major events and taking huge directional bets on it is a...

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Updates From 6 Months Later… The Pendulum Has Swung

It’s been 6 months since my last update, and how the pendulum has swung. Just look at the headlines on Bloomberg in January. Contrast this to the headlines earlier this month. The pendulum has swung strongly to the other end of the spectrum. Back in January, I posted an article which I’ve reproduced here which captured my thoughts on Hong Kong developers. Many of my comments still remain valid. You can check out the original article here: Here’s a snippet of one of the key points raised: Still, this says nothing about the short term price movements and if...

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Updates: Book Give-away Lucky Draw + Top Reads From The Web

Book Give-away Lucky Draw The Asia Report has always been practical, actionable knowledge. There’s a huge gulf between theory and practise, and my goal has always been to bridge that gap. In the spirit of this, I am happy to announce the start of our Book Give-Away project. From time to time, I will be giving away to readers books that have had the most influence on my own education. To kick it off, we have a copy of Warren Buffett’s Biography by Roger Lowenstein. It got me started years ago, and its fitting that this is the first book...

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Sharing The Yeoman Experience: Applying Value Investing in Japan

Regular readers will know that we are big fans of Yeo Seng Cheong of Yeoman Capital, which we regard as extremely disciplined practitioners of value investing in South East Asia. We had the pleasure of interviewing them last year, and you can check out some extracts at the end of the article. Their long term track record speaks volumes: For those not lucky to attend the previous Asia Value Investor Conference in Hong Kong, he has kindly agreed to share his video of his experience investing in Japan at the last MOI Asian Investing Summit. [embedded content] Looking Beyond the Numbers Mr...

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Investment Journal 12/02/2016 – Charting the Markets: The 2016 Equities Sell-Off Continues

Note: For the title of each post, I have now decided to use an article from Bloomberg that describes the current sentiment of the day: Charting the Markets: The 2016 Equities Sell-Off Continues Its a day more before I leave for London, and much has been accomplished. We had an intensive reshuffling of our portfolio, trimming positions of stocks that had appreciated significantly since our purchase, and adding to our current positions. I am not too keen on portfolio churning, but in this instance, I find it necessary for us to take small losses on our positions given the...

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