Thursday, June 26, 2014

World Cup Funnies

Well, this is one hell of a World Cup so... the top 8 teams showed us all that they are ALL BEATABLE. If you are betting, stop betting on teams, bet on BIG/SMALL goals per match, go BIG ... must be something about the pitch and new ball. The new ball when struck do not fly all over the place, it can turn but more importantly it keeps flying low, my theory for all the goals. How to beat Argentina, just attack directly down the middle. Nobody else on Aregentina can score besides Messi, just mark the shot out of him. Brazil is beatable, not invincible at all. Germany is solid. Belgium marching on though performance is still below par, important to find teams that do not peak too soon. Still rooting for Holland and Belgium.

Cristiano Ronaldo's World Cup so far: 3 hairstyles Lionel Messi's World Cup so far: 4 goals.

Suaraz is a rich rich man when he helped create Apple's logo ...
Photo: The inspiration behind Apple's logo.

Embedded image permalink

Did you know that the current World Cup logo was modeled by Spanish supporters ...

View image on Twitter
Luis Suarez has now been banned for 34 games since 2010, despite not receiving a single red card.

Nicklas Bendtner showing boxers = £80,000 fine. Luis Suarez biting an opponent = £65,00 fine.

Sunday, June 15, 2014

The Best New TV Show

If you a fan of The Daily Show with Jon Stewart, you'd be familiar with John Oliver. Much like Stephen Colbert, who also used to be in The Daily Show, who went on to super things with his amazing political/social issue parodies in The Colbert Report. Looks like Jon Stewart will have to dig deep again to unearth new helpers cause John Oliver has gone to start his critically enjoyable Last Week Tonight, a highly sarcastic poke at major news and political figures. His show comes off as highly intelligent, highly critical and analytical and yet is able to present sharp points to ridicule the oft-stupid reality which we live in.

Here are some of his episodes, enjoy:

Friday, June 13, 2014

Need To Get To "No Par Value" Regime (Very Important Posting)

I was very excited for the entire market when news filtered out that SC/Bursa was close to adopting the no par value regime. However, till now, there has not been a date set, no more rumblings of changes or amendments to corporate laws which are needed to push through the changes. What is holding them back? I do not see any LOGICAL reason for staying on par value regime. It boggles the mind.

What is par value, it is the minimum paid up per share when you are considering to list on Bursa. Bursa is about the last of the active developed/emerging markets to adopt no par value. What kind of finance/investing masterplan we have if we do not include this as a top priority?

There are two main reasons:

1) What is even more galling is the ACE market, which is supposed to be encouraging growth companies, but there is still the par value regime which locks out many applicants. Why do you think so many smaller growth companies have been going to AIMS and Taiwan to list their companies, while you can count the number of new ACE companies listed over the last 12 months on one hand. Let me tell you that the very poor performance of the last few listed ACE companies is probably due to the paid up capital issue - these are companies, by hook or crook boost up their paid up with bricks and mortars but no solid business, so you end with small manufacturing plants and unconvincing old school products. 

The very basis of encouraging growth companies is GROWTH PROSPECTS, THE SUSTAINABILITY & LEVERAGE/SCALABILITY of the business model, and NOT par value. It is very important because as current rules stands, even Facebook could not have listed 5 years back on ACE because their paid up was too low. Even when Facebook listed recently, their par value (which still exists, but there are no rules as to how low you can go) was something like 0.0006 cents per share, and IPO price was nearly $30.00.

When you hold to the current regime, any company considering to list on ACE must at least have a minimum of RM7m - RM10m, even that will considered as low to our regulators. We all should be aware that in the evolution of business model, invested capital is a poor judge and poor guide for evaluating any company. 

If you are making a few million ringgit, with a scalable business model, why do you need to have RM10m in paid up? The new economy would indicate emphatically that the internet, new business processes/delivery of services and new marketing platforms (MLMs, network marketing, franchising) are playing critical roles in new business models. Most of these require a LOT LESS INVESTED CAPITAL, but what they do provide is more VALUE ADD SERVICES and PRODUCTS delivered in a smarter and more creative way.

The longer Bursa/SC stays inactive with the par value regime, the more we are pushing away great smaller companies. As it stands in ACE, with a minimum of RM7m-RM10m "unwritten rule" as paid up, YOU ARE ENCOURAGING THE ENTIRE ECONOMY TO STAY WITH SUNSET INDUSTRIES, YOU ARE ENCOURAGING COMPANIES TO STAY OLD SCHOOL IN THINKING, YOU ARE STRONGLY DISCOURAGING INNOVATION - all that has a strong trickle down effect, how do you think private equity investors or angel investors will feel, they will further shy away from innovative companies and rather fund companies with bricks and mortar assets or in manufacturing. The cycle is devastating, when early seed funders do not get good exit options, smaller companies get little or no funding.

If a company is making RM2m-3m profit early in its life with a paid up of less than RM500,000 ... why stop them from listing on ACE? These are the very companies you need to encourage and foster. When they can do that with minimal capital, it show their business model is SCALABLE ... which is to say if you provide further capital by allowing them to tap the ACE market, say another RM5m-10m, they have a good chance to churn out 3x, 4x, maybe more profits.

And you know smaller companies will always find funding very difficult in their early days, banks... fergedaboudit, with minimal exit options, angel investors and private equity would be hesitant as well.

Let me give you a real example, a company that makes RM3m a year with a paid up of RM500,000 in its 3rd year of existence. No way can they list on ACE. They have to put in another RM7m-10m cash into the company as the minimum par value is 10 sen. So, if you have RM10m PUC, you can have 100m shares listed, and then issue another 25m shares to the public to raise funds.

In a no par value regime, the company can capitalise their profits and bring it up to say RM3m in PUC, and issue 100m shares with a par value of 0.3 sen a share. You price IPO shares no on par value, you price based on earnings potential,  ...historical and forward. Say for the same company making RM3m a year, you may even attribute a 15x PER as growth is paramount for sustainable growth companies = a market cap of RM45m, or an IPO price per share @ 45 sen. (If you force these companies to put in RM10m cash to get listed on ACE, what is the point ... if they have RM10m, they need not tap ACE for funds).

When you move to a no par value regime, you will be able to greenlight more exciting companies with scalable and creative business platforms - isn't that the very aim of ACE, isn't that the best way to encourage entrepreneurs, innovation, maintaining competitiveness and assimilation into the new economy?

Bursa/SC/EPU/Finance Ministry ... please consider how the current regime is holding us back. We were early adopters of the new economy, of the internet, of the MSC ... all great thrusts ... and yet we have an archaic system holding a large bulk of entrepreneurs back. Something needs to change and very quickly too.

2) Do you realise how many listed companies on Bursa are trading below their par value? We only have just over a thousand listed companies and I can safely say that there are between 250-400 companies, my estimates based on a brief perusal of a couple of sectors.

What happens when you trade below your par value? You get there usually because of accumulated losses over the years. Say your par value is RM1.00 and your share is RM0.70 sen now, there is no way you can issue new shares below par value to raise funds or to use new shares to buy some other businesses.

In a no par value regime, par value doe not count, the value of your shares is the last traded price. Hence even when you are at RM0.70, you can issue new shares around RM0.70 to existing shareholders (rights issue) to raise funds for new ventures, or you can issue new shares at around RM0.70 to take over some business which you thing will add value to your current platform or help to reinvent/recharge your business model.

In the current regime, these companies no longer have those options. Plus, for 99% of them, they would probably have MAXED out their available banking facilities as well ALREADY. So what is left for them to do?

With limited options, and a deteriorating business model, no access to funds, you can do zilch. Hence for many of them, they resort to speculative price "management" or what some of us refer to as rampings by syndicates, to bring forth some "profits" for themselves or stakeholders - I mean, they have to try to make money somehow.

They cannot even consider a RTO by a profitable and bigger company. In the cited example, no company will want to take new shares issued at RM1.00 for a company with a market price of RM0.70. Hence the only way left is to do a capital reduction. That is a fair path since the company has not been doing well, and shareholders are supposed to benefit and be punished alongside with company's fortunes. However, many are not taking up that option because they can very well make good pocket money by appointing syndicates to ramp up their shares once or twice a year. By limiting the options to these companies, Bursa/SC are indirectly condoning/encouraging these speculative share ramoings. (Especially when there IS ALREADY a viable, prove, global best practice that the authorities can adopt IMMEDIATELY ... ist not that their hands are tied or there are no options for Bursa/SC to take).

When the no par value regime is enacted, you will also energise the market enormously, which will have tremendous trickle down benefits. These companies below par value will be more active in scouring for good companies to buy to reinvent their business models (to help them get out of the slump). They could also do rights issues, and maybe even sweeten them with free warrants (which they could not do in a current regime).

The end result is they need not turn to syndicates to ramp their shares to make money, they can turn their attention to more genuine plans. It will reinvigorate investors as well as they can see some light at the end of the tunnel. Its like a patient with a terminal disease slowing rotting away, suddenly turning into a patient with new drug cures possibility.

Change it already ...

Red Hong Yi - World Cup 2014 Tribute

The amazing (Malaysian) Red Hongyi ...timely work of art ...

Her other amazing stuff:

Tuesday, June 10, 2014

My Predictions For The World Cup 2014

Readers might recall that i predicted correctly the last winner of Euro 2012 and the last World Cup in 2010. While everyone likes Brazil, it will be very hard for them. The home ground advantage may actually be too much self induced pressure not to lose. Once behind, it will be quite devastating for a team like Brazil as the weight of the nation may be too hard to bear, a one goal down scenario may actually be a lot worse to the Brazilians. If you look at the tables below, if all goes accordingly, Brazil will be facing the Dutch, and if that does not trips them up, next will be probably Uruguay (big dark horse)/Colombia, next it will be Germany before they make the final. So, you can see there could be pitfalls for Brazil, whereas countries like Holland and Germany while good, they are not favoured to win the Cup, hence less pressure.

I like the Dutch from the top half, as they will have less pressure and the in team squabbles are a lot less this time around. The Dutch team has been self imploding for the last few major tournaments, but this team is less combustive. The one secret weapon why I think the Dutch will perform better this World Cup is that their biggest fear (that Belgium may outperform them or worse, win the Cup). Belgium is to the Dutch what Liverpool is to Man United (if we don't win, please don't let it be that guy). More on Belgium later.

 Looking at this table's bottom half, Belgium is going to be a very strong contender. They have sufficient brilliant players that are not the main focus of the media or superstar status, yet they have the numbers to make for a very decent team. This is the strongest team Belgium has fielded for the longest time. Argentina is getting too cocky. I favour Belgium toppling them.

Hence my predictions in the semis will be Dutch/Germany vs Belgium/Spain, I know thats almost inconceivable that I consider none of the South American teams will make the semis in a World Cup that is played in South America.

Following through my prediction, I wish for a Holland vs Belgium final. ... and for Holland to finally win.

Monday, June 09, 2014

Why The Bulls Got Legs (Still)

A revealing chart below mapping the recovery in employment from a crisis/recession till pre-recession levels. Its revealing in the sense that once they got back to pre recession levels, there is usually a good time to be had by bulls for at least 5-7 years before they next correct.

Hence while I believe the current global markets are a little frothy, we will have to learn to live with that kind of froth for some time still. Jeremy Grantham, whom I respect a lot as a value investor, said it best:

"We are not even that close to a bubble. With the S&P 500 at around 1860 (now 1949) recently, we are at about a 1.4- to 1.5-sigma event. Another way to say that is that we are between one and two standard deviations outside the normal distribution of stock-valuation levels. A two-sigma event would put the S&P 500 at 2350. So using the standard definition, it has to go up another 30% from here to get to a bubble. But you don't know when an ordinary market move is a bubble; you only know that in hindsight. "

Embedded image permalink

Sunday, June 08, 2014

Bill Watterson's Back (Temporarily)

I don't know what childhood/teenage life you had, but if you had a great one, you must be a die hard fan of Calvin & Hobbes. I do not see any cartoon strip having that kind of influence ... it was smart, very funny, imaginative and irreverent. The author Bill Watterson was almost a recluse, below was the only available photo of him on the internet. 

He made good money for sure just from his books and reruns of his strips, but he could have easily made hundreds of millions more if he had agreed to: licensing deals on mugs, t-shirts, and movie deals. He never commercialised Calvin & Hobbes, and that's something to shout about. I have a couple of Calvin & Hobbes t-shirts which I bought (pirated of course) many years ago in Bangkok.


Out of the blue, the creator of a lesser known comic strip, Pearls Before Swine, revealed that Bill had authored three strips of Pearls Before Swine incognito, till now as revealed by Stephan, the author of Pearls Before Swine. It all started when he scripted the cartoon below, masquerading as Bill Watterson to get the girl.

Then Bill got in touch with him to try and do something together, making him promise not to reveal anything till way after the cartoons has been published. They created Libby, a young kid who thought she could draw better cartoons than Stephan, and its magical cause you know the frames can only be drawn by Bill Watterson.


Pearls Before Swine

Pearls Before Swine

Sigh ... I am all for not being too commercialised, but I cannot wait for a Calvin & Hobbes movie, but it must be done with Bill's final vouch of approval.

Garfield Meets Zen Master

When Garfield reincarnates as a Zen Master, you get Shironeko. Bitch, please ... attitude.

zen cat

zen cat2

zen cat4

zen cat5

zen cat9

zen cat8

Tuesday, June 03, 2014

Qatar Should Lose The World Cup For 2022 & USA Should Be Awarded

As the World Cup looms larger, more and more pressure will be exerted to take away Qatar's seemingly successful bid for 2022. As FIFA was launching its own investigation into the bribery claims against Qatar, pressure was mounting to stage a redo of the bidding process and find a new host for the 2022 World Cup. It's a path that could lead to the United States playing host.

At least one official said he is on board with a re-vote if, as reported by the London Sunday Times, Qatar won the bid with the assistance of bribe money.
"I certainly as a member of the executive committee would have absolutely no problem whatsoever if the recommendation was for a re-vote," FIFA vice-president Jim Boyce said. 

If (FIFA chief investigator Michael Garcia) comes up with concrete evidence and concrete evidence is given to the executive committee and to FIFA, then it has to be looked at very seriously. The FIFA executive committee are 100 percent. He will be allowed to go and speak to anyone from around the world to complete his mission.

Nearly four years ago, the U.S. finished second to Qatar in the voting to host the 2022 World Cup, ahead of South Korea, Japan and Australia. The U.S. is also in the unique situation of being able to host the tournament on short notice with the necessary infrastructure already in place.

Greg Dyke, the chairman of Britain's soccer federation, described the evidence as "pretty damning. It clearly has to be investigated as a matter of urgency by FIFA," Dyke told a British TV station. "If it is shown that the process was corrupt, or corrupted, then I do think there will have to be a discussion about whether you take it away from Qatar. It was always seen as a strange decision to give the World Cup to a country where it is so hot in the summer you can't possibly play it. The advice from FIFA's own safety group was there are real safety problems, and yet that was ignored by the people who were voting."

The latest allegations outlined in The Sunday Times in London focus on disgraced former Asian Football Confederation president and one-time rival to Blatter, Mohamed bin Hammam. Bin Hammam helped Australia become a member of the AFC in 2005, making qualification to the World Cup easier. Before the 2022 bid vote, bin Hammam allegedly used his role in charge of FIFA's goal program to channel more than $800,000 to Ivory Coast, which had a delegate entitled to vote on the 2022 bid.

Michel Platini, one of the most powerful men in world football, was on Monday night under pressure to explain a secret meeting with the man at the centre of the Qatar World Cup scandal.

The Telegraph has unearthed evidence that Mr Platini, a former leading French international and the president of Uefa, European football’s governing body, had a private discussion with Mohamed Bin Hammam, the controversial Qatari who paid millions of pounds to football officials around the world.

The emergence of the meeting means that France has become the first European nation to be drawn into the World Cup bribery scandal, which has so far been limited to African and Caribbean countries.

It is understood that the meeting took place shortly before Fifa awarded the 2022 World Cup to Qatar, and that Mr Bin Hammam personally lobbied Mr Platini to support the Emirate’s bid.

Fifa executive committee members vote in secret, but Mr Platini has disclosed that he voted for Qatar in the ballot, which was held in 2010. He has also supported the proposal to move the tournament to the winter to avoid Qatar’s summer heat.

Crucially for Australia, he also allegedly paid more than $400,000 for legal and private detective fees for Reynald Temarii, who was the Oceania delegate until he was suspended for telling an undercover journalist he had been offered $14 million for his vote. Bin Hammam's alleged intervention helped Temarii appeal and keep his vote, thereby denying the replacement Oceania member a vote for Australia.

As it turned out, Australia was knocked out in the first round with just one vote out of 22. Japan and South Korea were knocked out until Qatar won 14 votes to eight for the US.

Bin Hammam is also alleged to have made more than $5.5 million in payments to African nations, which could influence the four African delegates who had a vote on the 2022 bid.

FIFA's rules ban bid committees, or any of their associates, from "providing ... any monetary gifts [or] any kind of personal advantage that could give even the impression of exerting influence, or conflict of interest, either directly or indirectly, in connection with the bidding process".

Nonetheless, the Qatari bid team denies bin Hammam was linked officially or unofficially to their efforts. Indeed, a benefactor acting on his own and promoting his nation may fall outside the weak FIFA rules. It will be hard to prove. 

What's more, many will say generosity is the currency of bidding for all nations.

The only positive from the latest allegations is that any re-vote would probably select the US as host and spare players the risks of extreme heat and migrant workers the dangers of joining the 1000-plus colleagues who have died on Qatari construction sites in the past two years.

Monday, June 02, 2014


Honest Japanese retailers ...

Birds who do art with their poop ...

Puns aplenty ...

Margin Valuation Prices As Price Targets

What a novel idea... the supposedly latest share margin valuation prices for glove stocks MAY actually present itself as a ready-easy targ...