Month: May 2013
Flexible ‘bamboo’-style value invesment approach
Came across an interesting article by THE EDGE (The week of May 20, 2013), under the section of Personal Wealth. The title of the article :
Asian-style global investing – Capital Dynamics founder and fund manager Tan Teng Boo uses a flexible ‘bamboo’-style value approach towards international equity investing (By Kelvin Tan).
Below is an excerpt (gist) of the article.
To achieve long-term gains, Tan bascially uses a value investing approach with a global macro overlay. Like most value investors, the fund manager evaluates the attractiveness of companies by comparing their long-term intrinsic value and current traded stock prices. Companies which are traded at a deep discount to their intrinsic value are said to offer ‘a good margin of safety’, he says. But for stock-picking in emerging markets, Tan – differing from traditional bottom-up value investors – takes into account macro-economic factors such as GDP growth, inflation rates, interet rate, and politics.
He reasons that using a pure value investing approach in Asia and other emerging-market regions does not work because there are many other external macro factors that influence the price of stocks. “If you invest in the US, you don’t have to worry about capital controls and you don’t have to worry about who will be the next prime minister. If you apply [the] Fishers/Graham [value investing] method in Vietnam, South Africa or Malaysia, you will be dead,” says Tan.
A classic case is Malaysia, where politics is a crucial factor that could impact the prices of stocks, according to the Capital Dynamic founder whose company manages a Bursa Malaysia-listed, closed-ended Malaysia equity fund called iCapital.biz Berhad. “If you see a new government the next day, all those existing government-related companies would have been bashed. So, in emerging markets, you cannot take the typical Benjamin Graham and Warren Buffett value investment approach because valuations of companies are not just a function of how well they are run. The social and political milieu should also be taken into account,” says, Tan, who describes his value investing approach as “intelligently eclectic”.
Interview with Andrea Unger
Trading Insights From Three-Time Winner Of World Cup Trading Championships Andrea Unger – by Louis Kent Lee and Ong Qiuying (31 Oct 2012)
I have read this article from Shares Investment and felt that the part on risk management is particularly important. Decided to keep a record of this article for reference and as a reminder of proper risk managment.
Market Comments (DJI / HSI / STI) For Week of 20 May 13
DJI – The index has made new high again. Its previous resistance of 15,100 to 15,200 only held for 5 days and was broken. The momentum is strong. These resistence levels have turned into its immediate support now. The next strong resistance level is at 15,600.
HSI – The Hang Seng Index has made a nice recovery but was slightly retracing for the past 1 week. A nice support will be at around 22,520 and the next one at 22,180. The index will likely to take a break now and consolidate before continuing its direction.
STI – Ever since the Straits Times Index broke out of its trading range (that lasted for a few months), it has been inching its way up. It closed at 3,449 on 17 May 13 and reached a high of 3,458 on 20 May 13 (Monday). Concidentally, STI’s next resistance is a round number of 3,500 and the immdiately support is at 3,400. Besides technical, these are also psychological support. But prior to reaching the next level, expect some profit taking and consolidation. There are 5 little red candles for the past week although each of them edged up slightly by a few points a day.
Invest Fair 2013
The Invest Fair for this year will be held in Aug 2013 at Suntec.
I guess the organisers have not finalised the programme and at the moment, we only know that there are a few speakers. Among them are Roger Montgomery and Hu Li Yang. I have attended a talk by Roger Montgomery and I can say that he is a good speaker and is able to capture his audience well with his very good presentation. Roger has always been a fundamentalist with focus on value investing.
As for Hu Li Yang, he is a famous speaker for the stock market in Asia and beyond. I have read his chinese books and his comments on TV. Hu Li Yang is being looked upon as the father of investment education in Taiwan. His talks are entertaining and he is always able to explain his financial concepts in a easy to undersand manner to the retail investors.
Attending invest fair is good for people who just started out to gain more understaning in terms of investing, investment education. Bascially to gain exposure to the various instrutments. Sometimes you can get some good deals, just like Travel fair or the NATAS fair.
Good to attend if you are a beginner or new to investment or if you would like to attend some free talks in your spare time.
Market Comments (DJI / STI) – 16 May 2013
DJI – The index once again has broken new high. The resistance of 15,100 – 15,200 was held for a few days. Although DJI has reached a high of 15,301 on 15.5.13 (Wed), it closed at 15,275 yesterday. It is stil difficult to confirm that the resitance has been broken since it is only 75 pts above 15,200 for only 1 day. To be sure, I would observe for another day or so to see if it is not a false breakout.
STI – The Straits Times Index will likely to be range bounded between 3,400 and 3,500 for the rest of the week till early next week. We need to give time for the index to gain momentum to go up again or to give time for people to realise that it is time to take profit. Nonethless, the support level will be the psychological level of 3,400.
Market Comments For Week Of 6 May 13
Was unable to post earlier due to some personal commitment.
Nonetheless, my last market comments is still relevant for this week. I shall repeat and keep it short.
DJI – making its way to next resistance level of 15,100 – 15,200. And it did makes its way to 15, 077 as at now.
HSI – riding on DJ making record high, hang seng will continue its reversal.
STI – will stay above 3,400 after a small pull back.
After Blogging for sometime, I am wondering if my comments benefited you. It will be good if you can leave your comments or email me so that I can roughly guage if it is still worthwhile to continue writting weekly.
STI on 2 May 13 – Bullish
If you read the finance news below without looking at each market individually, I bet you will be confused.
SINGAPORE, May 2 (Reuters) – Singapore shares touched a five-year high on Thursday, with DBS Group Holdings rising over 4 percent, its biggest daily gain in more than three years after posting a record profit for the first quarter.
The Straits Times Index gained 0.9 percent to 3,401.00, while the MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.3 percent.
Shares of DBS, Singapore’s biggest lender, jumped nearly 5 percent to S$17.59, the highest since May 2008. It was trading at S$17.51 at 0435 GMT, on course for its biggest daily climb since April 2010.
DBS reported a record quarterly profit of S$950 million ($770.32 million), up 2 percent from a year earlier, boosted by annuity businesses and stronger capital market activities.
“DBS remains an Outperform and our high-conviction top pick in Singapore banking,” said CIMB Research.
Shares of Genting Singapore Plc rose 4.23 percent to S$1.64, matching a peak in February, after casino operator Las Vegas Sands Corp posted better-than-expected first-quarter earnings on good results in Macau and Singapore.
Genting Singapore is due to report its quarterly earnings after market close.
AFP (2 May)- Asian markets slipped Thursday after US stocks tumbled on the back of weak employment and manufacturing data, as dealers eyed a policy meeting of the European Central Bank later in the day.
Tokyo closed down 0.76 percent, or 105.31 points, at 13,649.04, Seoul fell 0.34 percent, or 6.74 points, to finish at 1,957.21, while Sydney ended 0.70 percent, or 36.2 points, lower at 5,130.0.
Hong Kong fell 0.30 percent, or 68.71 points, to 22,668.30 while Shanghai was down 0.17 percent, or 3.79 points, at 2,174.12, a day after official data showed that manufacturing activity in China slowed last month.
US markets fell Wednesday following the release of separate reports showing that job growth eased to its slowest level in seven months in April and that manufacturing activity had slowed sharply in the same month.
The data came as the Federal Reserve gave a tepid economic outlook at the close of its two-day monetary policy meeting.