Portfolio

Global Portfolio outperforms MSCI index and has positive absolute returns
SINGAPORE (May 20): The tide appears to have shifted once again for global stock markets. After fanning hopes of an imminent breakthrough on a trade deal for months, US President Donald Trump escalated tensions with a trademark tweet a couple of weekends ago. The US followed through by raising tariffs from 10% to 25% on some US$200 billion ($273.7 billion) worth of Chinese imports, which were ...
Labour is lowly paid but not underpaid in Malaysia
(May 13): With the one-year anniversary of the Pakatan Harapan-led government now in the rear-view mirror, one thing is certain — much more remains to be done. In particular, the issue of the rising cost of living continues to top surveys as the biggest challenge for Malaysians. Over the past year, the government has implemented various measures to tackle high living costs, including the ...
The stock market is a market for stocks
(May 6): We know that the world’s stock markets are correlated and move in lockstep, especially during periods of heightened volatility and uncertainties. For instance, if the US market suffers a massive selloff overnight, you can almost be certain that Asian markets will open sharply lower and vice versa. This positive correlation has only strengthened with globalisation and technological ...
Tech companies, network effect, universal apps: Where the future and the past are different, yet similar
SINGAPORE (Apr 29): A significant portion of the value we have seen created in technology has been credited to the network effect (or positive feedback loop) associated with digital platforms. Think Facebook, Apple, Amazon.com, Google (owned by Alphabet), Alibaba Group Holding and Tencent Holdings, all of which have cemented near-monopolistic positions in their respective businesses and generated ...
Why we sell the stocks even if we still like the companies
SINGAPORE (Apr 22): Let me start by wishing our Christian readers a blessed Easter. This week, I would like to take a bit of space to explain why we recently disposed of several of our investments, some at a loss. We make big mistakes too, and it highlights the limitations of investing based on data analytics. We decided to cut our losses in DIP Corp, a stock that we have held since the ...
We are adding three US consumer-related stocks based on our contrarian view
(Apr 12): Last week, I talked about why US consumers may well be the key driver for near-term global growth, contrary to widely held views. To very quickly recap, thanks to a decade of deleveraging, in the aftermath of the global financial crisis, US households have rebuilt their balance sheets. Household debt now stands at only 71.3% of GDP, down from the peak of 98.6% in 2007. Crucially, debt ...
US consumers may drive near-term global growth, contrary to widely held views
(Apr 5): More words of caution from the US Federal Reserve on the US economy as well as weak manufacturing data from around the world triggered yet another bout of investor panic over recession fears in March, albeit a relatively short-lived one, as it turns out. That said, we could very well see a repeat of similar volatility in the coming weeks and months. The sharp selloff in equities also ...
Perpetual securities are debts, not equity. Here's why
(Apr 1): If it walks like a duck, quacks like a duck, looks like a duck, swims like a duck, then it probably is a duck. Why are companies so intent on classifying perpetual securities (perps) as equity, instead of what they really are: financial liabilities or debts? Looking at a simplified balance sheet and profit-and-loss statement of a hypothetical company (see Table 1) provides the ...
Leverage is fine if you are not ignorant
(Mar 25): To borrow a quote from Warren Buffett: “When you combine ignorance and leverage, you get some pretty interesting results.” Followers of this column would recall that I spent the past two weeks discussing prevailing reporting standards for financial statements and how they can, at times, make it more difficult to determine the underlying fundamentals of a company. Most ...
Total compliance in financial reporting, but was it misleading?
(Mar 18): Last week, I talked about how it can be difficult to interpret published financial statements because of overly ambitious objectives of the accounting profession, evolving reporting standards and the resulting vagaries that could sometimes translate into risky propositions for those relying on them to make investing decisions. This is made worse as financial instruments get more ...