Monday, January 05, 2009

A Sense Of Perspective


Investors, regulators, analysts, fund managers, business journalists in the Asia Pacific region .... please take note:

1) The market cap of ExxonMobil, Procter & Gamble, Pfizer, Johnson & Johnson or Wal-Mart... just any ONE of them... is larger than the entire market cap of all companies listed on Jakarta Stock Exchange, or on Bursa Malaysia, or on the SES, or on the Thailand Stock Exchange.


2) The turnover of just ONE stock in South Korea, Samsung... for most days, is larger than the entire daily turnover of KLSE stocks.

3) About 85%-90% of all funds never match or outperform their respective benchmarks.

This blog is not meant to shame or embarrass, but rather a constant reminder to all investment pros in Asia, that we have to work harder in order to make a similar level of money. The scaling and leveraging in the US or much of Europe offers scaled salaries. If you manage ten M&A transactions in Asia-Pacific (except in China, I guess), it would not yield even half of one good size M&A transaction fees in the US.


Plus to those who scream and yell, why don't they invest in Asia-Pacific
... well, Asia-Pacific is so SMALL, if you are managing a US$500 million fund, you might allocate US$100 million to Asia - how many countries will you have to cover just to manage 20% of your portfolio. While on the other hand, I can cover 40% of my portfolio in US stocks and the other 40% in big European stocks. Somehow stocks listed in the big bourses in Europe tend more to act and look similar (e.g. London, Paris, Germany) but each exchange in Asia-Pacific is a different animal on it own and require more work to understand before acting.


Of course, this is not to belittle our jobs in Asia-Pacific. Far from that, we just need to get a better sense of perspective of what we do, where we are, and where are we headed. Be aware of the pond we are swimming in, be proud of the pond we are swimming in, but also know that there many other bigger ponds out there.

Lastly, don't take ourselves too seriously:

Q: What’s the definition of optimism? A: An investment banker who irons five shirts on a Sunday evening.

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Q. What is the difference between government bonds and men? A. Government bonds mature.

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An investment banker said he was going to concentrate on the big issues from now on. He sold me one in the street yesterday.

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A man went to his bank manager and said: ‘I’d like to start a small business. How do I go about it?’ ‘Simple,’ said the bank manager. ‘Buy a big one and wait.’

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The credit crunch is getting bad, isn’t it? I mean, I let my brother borrow a tenner a couple of weeks back, it turns out I’m now Britain’s fourth biggest lender.

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Q: What is the difference between an investment banker and a pigeon?
A: A pigeon can still make a deposit on a BMW.

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Q: What is the difference between an investment banker and a large pizza?
A; The pizza can still feed a family of four.

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Q: What does a hedge fund manager with no fund to manage say?
A: Would you like fries with that sir?

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Q: What is the capital of Iceland?
A: About $3.50

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I tried to get cash from the ATM today but it said “insufficient funds.” I don’t know if that meant them or me.

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Mark Twain: “October. This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.”

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Once upon a time three people were stranded out at sea - A Japanese, a Malaysian and an Indonesian. The boat started leaking and if they do not act fast they would all die. The Japanese (as usual) was the first to take the initiative. He threw all his Japanese gizmo - CD player, hi-fi, radio etc. off the boat. The Malaysian and the Indonesian looked at him in disbelief. The Japanese said, “Don’t worry.. still got a lot more in my country.. BANZAIIIEE!”

But the boat was still sinking. The Indonesian without hesitation started throwing aboard all his baju batik, kain batik, keretek, etc., etc. He comforted the other two, “Don’t worry.. still have a lot more in my country, paknya”. But still the boat was sinking. The Japanese and the Indonesian looked at the Malaysian. Suddenly, without any hesitation and with stride, the Malaysian threw the Indonesian overboard. The poor guy couldn’t swim and drowned. The Japanese was shocked. Said the Malaysian, “Don’t worry… still got a lot more in MY country!!!”.

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p/s photos: Marsha Timothi


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