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Showing posts from September, 2009

New Way To Look At Risk In Emerging Markets

As of the end of August, the MSCI Emerging Market Index have gained 48% year to date, while MSCI global equities have increased 18%. High global liquidity, improvements in risk appetite, falling core markets volatility (VIX), rebounding commodity prices and relatively stable emerging markets fundamentals in comparison to past episodes of crisis are behind the recovery. Moreover, EM countries' policy response to the crisis has been relatively aggressive, planting the seeds for a positive domestic demand story. However downside risks remain in place due to uncertainties about the shape of the global recovery, profit taking, revival of global risk aversion, and higher US Treasury yields. Moreover, corporates may post worse-than-expected earnings reports as Q2's improvements were largely driven by cost-cutting efforts not by a recovery in demand. Since it reached bottom in November 2008, EM equity markets have jumped 81%.

In August, EM equities lost some steam (-0.8% m/m vs. +14.6…

I Kinda Like Marc Faber

Even though he is know as Dr. Doom, usually bearish, he does talk sense most of the time. He is best known for the Gloom Boom Doom newsletter. He was a managing director at Drexel Burnham Lambert Hong Kong from the beginning of 1978 until the firm's collapse in 1990. In 1990, he set up his own business, Marc Faber Limited. Faber now resides in Thailand, though he keeps a small office in Hong Kong. Faber's company, Marc Faber Limited, acts as an investment advisor company concentrating on value investments with tremendous upside often based on contrarian investment philosophies. Faber also invests and acts as a fund manager to private wealthy clients. Faber is a regular speaker on the investment circuit, often quoted in the financial press for his non-conformist viewpoint and alternative investment philosophies.By WSJ StaffEconomic provocateur Marc Faber joined a chorus of commentators picking on Paul Krugman’s recent state-of-economics magazine article. Krugman “thinks it wou…

Jamie Dimon, Sandy Weill, John Reed

I am giddy, usually most of the business and finance books I read are just above average. I am only starting to sink my teeth into a pretty good one in The Partnership - The Making of Goldman Sachs by Charles Ellis (updated and revised version), and guess what, another very exciting sounding book on my "hero" Jamie Dimon is to be out soon. Fortune magazine has been featuring excerpts from the book, and its voyeuristic and exciting (if business and finance is your porn diet). I am often amazed at what transpires between bigwigs when they decide to merge mega companies. How much of it is due to placating egos? The Citigroup that we know of now was made up of the acquisitive Travelers, led by Sandy Weill but with Jamie Dimon bringing in much of the growth and consolidation towards the last few major pieces of acquisition, in other words, the top guy really at Travelers. John Reed did well but was at the end of his career and probably wanted to go out with a bang but without sho…

Purchasing Managers Index - More Impetus For This Rally

Since March, every time the markets rallied, you get a growing chorus of naysayers calling it a bear market rally. Why bear market rally - it implies that it is temporary, shortlived, ... and usually those who called that were cashed up or failed to go long. We are in the 5th or 6th month of a 'bear market rally', I think its time people just stop calling it that. Its a recovery rally. A bear market rally implies things in the real world may get a lot worse. Actually, the worst is already behind us, and that in itself is a big statement. While I think the worst is behind us, it does not mean all is rosy. We have turned a corner but there are still a lot of people unemployed, even if you find employment it may not be at the same pay as before. Then there is the constructive employment which is people staying in their jobs even amidst pay cuts or no raise for the past 12 months. The markets are not hot enough for people to jump ship or trade their jobs for another position. That…

Selamat Hari Raya To All Muslims

Maaf zahir dan batin ....

Should We Worry About The Chinese Banks

Thanks to the current financial combustion, many of the usual top banks have been cut at their knees. Many China banks have been elevated up the biggest bank ladder. The strong equity run up over the past 6 months in China has pushed their valuations even further ahead of the rest. But just how solid are the Chinese banks. We all know that many of these banks still have tons of "unsettled loans to state owned companies". Their recent aggressive bank lending, exhorted by Beijing, meant that their loan portfolio cannot be too pretty.

China's banks posted relatively flat profit growth in H1 2009 as new lending more than doubled. The surge in liquidity meant that non-performing loans decreased as a percentage of assets (mostly due to an increase in the denominator). Regulators have indicated that lending standards will tighten in H2, which along with the need to meet new capital adequacy requirements could eat into profits. However, a shift toward longer-term loans and and …

Hari Ini Dalam Sejarah - Happy MALAYSIA DAY!

Tuan-tuan dan puan-puan, mari kita belajar sedikit tentang sejarah negara kita hari ini.From Wikipedia: Malaysia Day is held on September 16 every year to commemorate the establishment of the Malaysia federation on the same date in 1963. It marked the joining together of Malaya, North Borneo, Sarawak and Singapore to form Malaysia. The formation of the new federation was planned to occur on June 1, 1963, but was later postponed to August 31, 1963, in order to coincide with the sixth Hari Merdeka. Several issues related to the Indonesian and the Filipino objection to the formation of Malaysia delayed the declaration to September 16 of the same year. The postponement was also done to allow the United Nations team time to conduct referendums in North Borneo (now Sabah) and Sarawak regarding the two states participation in a new federation.The formation of Malaysia was made possible through the introduction of the Malaysia Bill to the Malayan Parliament on July 9, 1963, and consent from …

Nazir Razak's Interview

Nazir Razak, in my view, one of the top 10 CEOs Malaysia has ever produced in the past 50 years, was awarded the prestigious Lifetime Achievement Award by FinanceAsia for his contribution to Asian banking and finance. What makes a good CEO? If you trace the history of CIMB and Bank Bumiputra, you will appreciate the fact that he has put in plans to move the group continuously up the value chain by creating innovative products, taking calculated risks, drive at a meticulous utilisation of capital and enforcing strict minimum returns on operations. The culture and mindset is very progressive, he convinced the board of the need to pay for top talent and to reward them greatly when they perform.

Critics will say that the group has nurtured strong ties with the government to be the first in line for first bite at any cherries - but they still had to nudge Maybank aside. Investment banking is not based on ties alone, you have to think "value-driven", "value-add" and pers…

Buffett Made $1 Billion In Paper Profit From BYD

There are a lot of benefits when you are Warren Buffett, a lot more people want you to invest in their companies. Of course, you have to achieve a lot before you get to where Buffett is. It is true that when you have "made it" the money making will get a lot easier. To be fair to Buffett, he has a lot of bankers showing him deals or alerting him on interesting companies all the time. Plus he has the capital to do things immediately, I remember being shown deals that I thought would be more than decent but would have had to go around trying to convince people with money to invest in them - its a drag. By the time you line up some interest, there will be issues on how to get the commission and then who gets what and among how many people - its really a drag.

Back to BYD, it probably took a lot of foresight and guts to invests in BYD because no matter how good the battery is, there are plenty of competitors out there. The technology could be surpassed in the blink of an eye. Eve…

Most Expensive Cars

World's Most Expensive Cars
What is the most expensive car in the world? The 1931 Bugatti Royale Kellner Coupe was sold for $8,700,000 in 1987. However, that car and many alike will not be included in this list because it is not available on the market today. It is hard to imagine someone would actually spend 8 million dollars on a car instead of using it for something more productive.

1. Bugatti Veyron$1,700,000. This is by far the most expensive street legal car available on the market today. It is the fastest accelerating car reaching 0-60 in 2.6 seconds. It claims to be the fastest car with a top speed of 253 mph+. However, the title for the fastest car goes to the SSC Ultimate Aero which exceed 253 mph pushing this car to 2nd place for the fastest car.

Lamborghini Reventon $1,600,000. The most powerful and the most expensive Lamborghini ever built is the second on the list. It takes 3.3 seconds to reach 60 mph and it has a top speed of 211 mph. Its rarity (limited to 20) and …

Me Doggie At 4.5 Months Old

My doggie at 4.5 months old .... the bulldog has been mistook as an aggressive and unfriendly dog. That cannot be further from the truth. Their faces may have caused some opportunist to use their image as "warning guard dog signs" but they are actually incredibly friendly and loyal.

Marketocracy Portfolio Update - 10 September 2009

For the period ended 31 March 2009, my Marketocracy fund beat 97.8% of the participants. Thankfully, the record for the period ended 30 June 2009 saw my fund improving furtherto beat 99.5% of the participating funds.

On a year to date basis, the S&P 500 recorded a 16.48% return, while the Nasdaq secured 30.65% and the Dow notched a 8.78% return. My Marketocracy portfolio obtained a 69.36% return.

SMFm100 S&P 500 DJIA Nasdaq
Sigh... I should really get back to fund mgmt ... ok head hunters, email me at

recent returns vs. major indexes

MTDQTDYTDSMF4.08%12.73%69.36%S&P 5001.31%12.91%16.48%DOW0.54%13.02%8.78%Nasdaq2.55%12.28%30.65%

recent returns

RETURNSLast Week7.00% Last Month4.12% Last 3 Months4.13% Last 6 Months87.67% Last 12 Months36.33% Last 2 YearsN/A Last 3 YearsN/A Last 5 YearsN/A Since Inception22.04% (Annualized)19.30% S&P500 RETURNSLast Week