Author: The Asia Report

Tay Fund Semi-Annual Letter

Our macro thesis for investing in financial institutions was laid out earlier on in the following posts: Tea with a macro-investor, thoughts on the financial sector Tay Fund Commentary 2011 , and more specifically, our investment thesis for Bank of America, The Compelling Case for Bank of America – Research Report I feel somewhat vindicated that our scenario has played out as it has been thus far. However, let us not get too far ahead of ourselves as the recent run-up in banks has in large been due to (1) the apparent orderly restructuring of Greek debt, (2) the success hence...

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Tay Fund Portfolio NAV Update March 2012

Accurate as of 17 March 2012 Initial Net Asset Value: $10.00 Net Asset Value as of  March 17 2012: $12.02 Hypothetical Growth of $10,000 invested since September 2011 (NAV at September 2011 was $9.71) * A total return index is an index that measures the performance of a group of components by assuming that all cash distributions (dividends) are reinvested, in addition to tracking the components’ price...

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Warren Buffett: Why stocks beat gold and bonds

Adapation from his 2012 shareholder, Warren Buffett explains why equities almost beat alternative investments most of the time. I hope you enjoy it. By Warren Buffett FORTUNE — Investing is often described as the process of laying out money now in the expectation of receiving more money in the future. At Berkshire Hathaway (BRKA) we take a more demanding approach, defining investing as the transfer to others of purchasing power now with the reasoned expectation of receiving more purchasing power – after taxes have been paid on nominal gains – in the future. More succinctly, investing is forgoing consumption now in order...

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What Should You Do With Your Money?

Since the blog’s inception in December in 2010, it has garnered over 15,000 views – something which I am both amazed and humbled at. Looking back, it has been an exhilarating journey of refining my mental models that I use to approach investing. Although the basics of what I do is still grounded firmly in the work of Graham and Dodd’s The Intelligent Investor & Security Analysis, experience has allowed me to refine their methodology to form my own investing style. The fact that The Intelligent Investor, which was published in 1949, is still relevant today is testament to...

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Tay Fund Portfolio NAV Update February 2012

Accurate as of 17 Feb 2012 Initial Net Asset Value: $10.00 Net Asset Value as of  Feb 17 2012: $11.31 Hypothetical Growth of $10,000 invested since September 2011 (NAV at September 2011 was $9.71) * A total return index is an index that measures the performance of a group of components by assuming that all cash distributions (dividends) are reinvested, in addition to tracking the components’ price movements Portfolio Net Asset Value will be updated monthly at the end of the third week of each...

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Tay Fund Commentary 2011

As investors, it’s easy to get caught up in the hysteria and follow the herd. And yet, to earn a return that is excess of the market’s requires us to act against conventional wisdom. Markets are whimsical and it is my firm belief that it should never replace independent thought, especially when it comes to the critical process of capital allocation. As we are a value based fund, we tend to invest in unloved and controversial companies that are trading at a depressed price compared to what we think they are conservatively worth. Many of these securities continue to...

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Tea with a macro-investor, thoughts on the financial sector

I was very lucky to meet a good friend of mine, Daryl Chia, for tea to pick his mind and share ideas. He’s a very talented and hardworking investor who was featured in the Business Times. You can check out his site here. You can expect great things to come from him in the future. Even though he and I share different investment philosophies, having a chat with him is refreshing. I focus on investments on a much more “micro” level whereas he takes a much more “macro” approach to investing, which leads to interesting discussions. To me, there...

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Update 1 – Presentation – Why Hong Leong Finance is significantly undervalued at today’s price

Hi guys, just a quick update on my previous post on HLF. I am afraid that I have left out certain information regarding how banks work etc, and that it might be new looking at the balance sheets & profit and loss statements of bank. There’s an active discussion at Value Buddies, a local investing forum, which I recommend you check out if you need clarifications. I have already covered some key points over there such as: How HLF generates its revenue What drives the earnings of HLF (and other banks) Why book value is used as a approximation of intrinsic...

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Presentation – Why Hong Leong Finance is significantly undervalued at today’s price

Here’s a presentation I prepared personally outlining the compelling case for investing in Hong Leong Finance. It’s my second best idea with regards to Singapore equities this year and I hope you enjoy it. The underlying idea is simple, Hong Leong Finance (HLF) trades at a significant discount to book value. If you look at the long term track record of the company, it is not unreasonable for us to expect the company to earn at least a 1% return on assets, and trade at at least tangible book value. Check the presentation out for more...

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Portfolio & NAV Updates December 2011

Here’s a quick update on NAV of the fund and its current holdings. There will be a follow up post in the coming week where I discuss the changes in the portfolio and the general market condition. Accurate as of 18 Dec 2011 Initial Net Asset Value: $10.00 Net Asset Value as of  Dec 18 2011: $9.76 Hypothetical Growth of $10,000 invested since September 2011 * A total return index is an index that measures the performance of a group of components by assuming that all cash distributions (dividends) are reinvested, in addition to tracking the components’ price...

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The Compelling Case for Bank of America – Research Report

The Compelling Case for Bank of America Bank of America is probably one of the most hated and reviled corporations in America right now. They are the poster boy for just about everything that’s wrong with the American financial system – from corporate greed, TBTF banks, excessive compensation etc. However, with all the emotions involved, it is important for us to take a step back and examine whether the relentless pressure on BAC is truly deserved. Market Capitalization of BAC – Has it really lost 2/3 of its value in a year? Here’s a disclaimer, if you’re going to...

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Portfolio & NAV Updates

In order to track my performance throughout the years, I will be posting updates regarding my portfolio, and to share my current thoughts about the market. I intended to post this much earlier but work caught up with me. Readers can expect me to update this quarterly, and they reflect the current NAV of my holdings at the end of the second week of each quarter. Accurate as of Sep 18 2011 Initial Net Asset Value: $10.00 Net Asset Value as of  September 18 2011: $9.71 Fund Prospectus & Philosophy: Our Aim To engage in investment operations that upon thorough analysis,...

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Spotlight on Starhub – Why I Think It’s A Bad Investment Despite The 7% Yield

Really short post. I have noticed that the share price of Starhub has been rising significantly in the recent weeks, and that quite a few people have been recommending Starhub based on its yield. Although I think the company is fundamentally sound, I feel that investors are focusing too much on the yield and ignoring the valuations. Currently SH trades at a PE ratio of 18.65. Owner Earnings (Reported Earnings + Depreciation, Amortization & Other Non Cash Items – Capital Expenditures), which is similar to Free Cash Flow was 250.3 Million in 2010. With its market cap of roughly...

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Investing In US Equities..But What About The Devaluation of the US Dollar?

One of the questions I hear about investing in the US Market (as an international investor) is the recent devaluation of the US dollar. While I agree that its a valid concern, I would like to highlight something to my readers to put this in perspective. First off, lets look at the graph: * The Horizontal Scale Represents The Number of Weeks Since The First Week of January 1998 It’s interesting to note that anyone buying USD now with SGD will be buying it at a 10 year low. Bear in mind that this doesn’t mean that it has...

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