in the asian trench
Interest rates near vanishing point are proving very difficult for many savers (not to mention institutions), and we suspect that a new generation of Singapore investors may soon learn the hard way that they should not have believed the assurances of bond salesmen and private bankers
For the last few decades investors have enjoyed a compelling growth story in Asia-ex-Japan: a leveraged play on global growth (which may no longer exist), abundant natural resources (frequently squandered), cheap and productive labour (increasingly expensive / rare), low tax rates (sometimes enabled by vanished windfalls), a relative lack of bureaucracy (now being replaced by a tangle of international conventions in a foreign language), and adequate prospects of legal protection (never universal, and now under threat).
These great advantages were offset by some deficiencies of governance, so overall market returns were frequently less than hoped; but the markets were also inefficient, and disciplined investors could do well. Now the macro story is much less compelling, a huge increase in the numbers of investors-like-us has removed some of the helpful inefficiencies of pricing, and loose monetary policy has ensured that bargains are few. The balance of prospective returns and likely costs / errors is less favourable than before, but there are few alternative safe havens, and it still seems worth trying to achieve positive returns through equity investment. In the absence of better ideas we continue to attempt this in the same way as before, searching for well-managed and sensibly-priced businesses with reasonable cashflows and prospects and rational capital allocation.
The rule of law is essential infrastructure for a modern economy;
Malaysian readers now have restricted web access, so may be glad to hear of the many international legal associations expressing support for the independence of the Malaysian bar. We follow the example of Naked Capitalism and introduce an Antidote des Vacances: by way of holiday inspiration, Malaysia’s special elephants.
Interest rates near vanishing point are proving very difficult for many savers (not to mention institutions), and we suspect that a new generation of Singapore investors may soon learn the hard way that they should not have believed the assurances of bond salesmen and private bankers
For the last few decades investors have enjoyed a compelling growth story in Asia-ex-Japan: a leveraged play on global growth (which may no longer exist), abundant natural resources (frequently squandered), cheap and productive labour (increasingly expensive / rare), low tax rates (sometimes enabled by vanished windfalls), a relative lack of bureaucracy (now being replaced by a tangle of international conventions in a foreign language), and adequate prospects of legal protection (never universal, and now under threat).
These great advantages were offset by some deficiencies of governance, so overall market returns were frequently less than hoped; but the markets were also inefficient, and disciplined investors could do well. Now the macro story is much less compelling, a huge increase in the numbers of investors-like-us has removed some of the helpful inefficiencies of pricing, and loose monetary policy has ensured that bargains are few. The balance of prospective returns and likely costs / errors is less favourable than before, but there are few alternative safe havens, and it still seems worth trying to achieve positive returns through equity investment. In the absence of better ideas we continue to attempt this in the same way as before, searching for well-managed and sensibly-priced businesses with reasonable cashflows and prospects and rational capital allocation.
The rule of law is essential infrastructure for a modern economy;
Malaysian readers now have restricted web access, so may be glad to hear of the many international legal associations expressing support for the independence of the Malaysian bar. We follow the example of Naked Capitalism and introduce an Antidote des Vacances: by way of holiday inspiration, Malaysia’s special elephants.
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