Showing posts from April, 2019

Stock picking and discipline.

Stock picking and discipline As my portfolio performance and cash position reached an all time high, I felt that I have achieved a significant milestone in life. Certainly, keeping a cash hoard in a bull market rush seem foolish to momentum driven investors especially in the REIT space, but Howard Marks memos are still ringing re-soundly to me. Too much money chasing too little opportunities, especially in an low interest rate and high risk environment. Warren buffet own take to this is the larger the cash position, the greater the pressure to piss it all away.  The sorry fate of the LYFT IPO could be a sign of things to come for the upcoming IPO of money losing tech companies. Even china is coming up with a tech board to allegely support innovation based companies. Betting on a high growth industry sounds fantastic on paper, but value destructing growth seem to be the norm rather than the exception for some of the fresh IPOs, and the existing successful Tech companies are not a

Values and value

Integrity is a virtue that is often celebrated in religious dogma. The basis of trust and integrity is the foundation block for human civilization as well as the financial markets. However, boring messages based on integrity can hardly sell in a competitive market, and people often have to dress up their products and ideas in flowery language as well as marketing hype to drive revenue and sales.  Greed can act as a powerful motivation tool to drive people to put in extra hours, innovate on new products and ideas, and inspire people to think out of the box to achieve excess returns. However, poorly designed incentive schemes can influence the best to commit the worst misdeeds, to justify their actions for short term immediate needs, and crowd out those with moral fiber, to be replaced with the morally ambiguous whom are more eager to [change with the times].  Active stock picking based on fundamental analysis is a immensely difficult task. Basing your analysis on accounting kno

A tale of 2 exchanges

A tale of 2 exchanges The economics of stock exchanges vary from country to country and depend on the trading volume, investor perception about future prospects, ease and cost of transactions (Capital Gain Tax, Dividend Tax, Stamp duty, Capital Controls), developed market infrastructure and established market practices etc. Countries like Sri Lanka, Mauritius, Philippines, Bangladesh will have noticeably smaller trading volume than the major exchanges above. Not all exchanges are created equal.  My interest in stock exchanges stemmed from UnN post about the Intercontinental Exchange . That led me to do some bedside reading on Chicago Mercantile Exchange and eventually led me to HKEX and SGX, whereby I initiated a large and mid conviction position respectively. They are largely similar in their key risks and prospects although the economics of these exchanges are vastly different. As an investor in SGX and HKEX , I am impressed by the high profit margins and balance sheet