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InvestFair 2008 Review – Invest With Knowledge

August 31st, 2008 by Wai Loong (Add Your Comment)

Yeah, I know… I’m kinda late coming up with this review, but I’ll probably explain it better in another post….

Two weeks ago, I had a really rewarding weekend (16-17th August 2008) by merely attending the InvestFair 2008 at Suntec Singapore International Convention & Exhibition Center (Level 4, Exhibition Hall 402-403).

If you’re not familiar with investing in general, then this article may not be for you.  If you’re a short-term trader, this article may not be for you too.  I’m talking about long term value investment ideas and opportunities that some people may be shunning or fearful about especially with the recession in US that has already created a rippling economy impact here in Singapore.

The seminar, like some others that I’ve attended recently, showcased a broad range of vendors trying to sell you their products, services and education packages.

Instead of boring you to death with their sales pitch, I am going to do a small review on some of my own learning from some outstanding speakers.  I shall also include a mini review on a particularly battered beaten sector in Singapore.

Finally, I have a very small writeup on a currently hot foreign investment opportunity in Canada for Singapore and regional development banking investors.

The Landscape of CapitaLand REITs (Day 1):
CapitaCommercial Trust (CCT):
CapitaMall Trust (CMT):
CapitaRetail China Trust (CRCT):

Personally, I’m not familiar with Singapore REITs.  Even then, I had to struggle to get up on a fine Saturday morning and made it in time for the first seminar of the day.  It turned out that CapitaLand had sponsored the first session for the 3 speakers so there might be a tendency for them to sell themselves to retail investors.

Therefore, it will be wise to take their presentations with a pinch of salt while mostly relying on one’s ability to do independant thinking and valuation.

As most REITs market watchers already know, there has been a recent panic selling due to uncertainties in the Singapore property markets.  According to a representative from CapitaLand Trust, there are currently no major fundamental problem ahead on the horizon.  Savy investors may be likely to take this opportunity to load up.

Each presentor subsequently took turns to present their business outlook, current updates on financial performances on 2Q and projections in the years ahead.

This trust focuses on quality income producing commercial properties like Bugis Village, Raffles City Building, HSBC Building, Robinson Point, Market Street Car Park and many more.  Earnings are derived from rental, asset enhancement upgrading and asset acqusitions/development in Singapore based and overseas projects.  A near projection of renewed tenents and reveals a substaintial increase in rental income.

Since distribution is 100% tax free and payout is 100% of distribution income, it is likely to attract long term investors who enjoy REITs stable income and capital appreciation.

Similar sentimental were made on CapitaMall and CapitaRetail China Trust, both sister entities that focus on retail properties in Singapore and within large population catchment in many provinces of China.

In summary, the group’s performance may suffer a temporary loss in earnings due to expansions, acqusitions and asset enhancements.  It was projected to change once earnings return when projects are completed and demand in retail and commercial recovers as and when value will be realized on the market.

Lessons From Warren Buffett Expert: Value Investing (Day 1):

I simply loved this track.  It was delivered by Robert P. Miles, a world reowned author and follower of the world’s greatest investor (and wealthest man currently standing on earth) – Warren Buffett.

Robert Miles currently the author of the following books:

  • “101 Reasons to own the world’s greatest investment”
  • “Secrets from the Berkshire Hathaway Managers”
  • “Warren Buffett Wealth – Principles and Practical Methods Used By the World’s Greatest Investor”

To be honest, I have already been studying a few arenas of the financial markets for over a year now and I have to agree that the concept of value investment by Warren Buffett and his teacher, Benjamin Graham, is by far, is the most practical and rational people I’ve ever come across in the world of wealth creation.  The good news is, those same principles are applicable even here in Singapore!

I haven’t got a chance to read Robert’s books so far, but judging from the crowd, I suspect it is a phenomenal publication, a must-read book already on my list of to-dos.  Another thing I’ve noted too, is a hungry crowd of Singaporeans who surprised me by filling the seminar room even to the floor!

I suspect a few reasons may explain this phenomenal…

  • People want to learn what Warren did to stand as the world’s richest man in the world right now.
  • Battered speculators who lost money in the market, wanting to know what else they don’t know.
  • Heard about Robert or read his books and wants to meet him personally.
  • Join the crowd
  • Want to know what value investing is all about…
  • etc

As most audience may realize then, it was probably the best wealth lessons ever delivered in InvestFair 2008…

Robert is a humorous and humble speaker.  Unlike most speakers whom I have encountered (and most of them are traders by the way), he sound genuine.

According to Robert, most folks have totally confuse the concepts of value investment and trading.  By trading, the focus is on price.  On the contrary, value investing focus on evaluating the value of what you’re getting out from the useful and remaining life of a business.

Here’s the essence of Warren Buffett’s teaching:
Price is what you pay
Value is what you get

Instead of focusing on price, investors are significantly better off in the long run by focusing on the value; it’s about the value a stake holder gets from a well managed, long term, sustainable and profitable businesses.

Robert emphasized that Warren Buffett’s geniuses is best summarized in Albert Einstein’s famous equation E = m*c*c.

E can be best referred as Earnings, M referring to management, and C the character of the CEO.

Noticed the emphasis on management and character?  Warren Buffett does not do businesses with people that has the slightest problem with integrity.  By merely reading an annual report of a company, he can almost immediately if he will investigate further about the company, or take a pass on it.  As a business owner himself, he stresses the importance of being honest and that all shareholders of Berkshire Hathaway are long term partners, as would anyone expect in a marriage.  Therefore, he is entirely accountable to them, even to the extend of admiting his mistakes – while he joked about them, he made his promise never to repeat them again.

Practical and useful even here in Singapore?  You bet!

In closing his presentation, Robert left us all a humorous but profound joke, “The Genius and The Moron”.

The genius and the moron comes into an agreement to bet such that the moron will have to pay $5 for any questions that the genius ask that he cannot answer.  On the other hand, the genius will have to pay $50 for any questions that the moron ask that he cannot answer.

Genius (Full of confidence), asked a very complicated problem related to space navigation.  Obviously, the moron did not know the answer.  He reached into his pockets and handed over a $5 note.  Then the moron asked, “What goes up the hill on four legs and come down on three?”.

The genius scratched his head and think really hard.  After half an hour, he gave up and handed over a $50 bill and asked, “I don’t know.  So what’s the answer?”.  The moron handed him a $5 note and replied, “I don’t know either.”

Lessons From Warren Buffett Expert: Value Investing (Day 2):

Day 2 was just as phenomenal!

I got there an hour early just to have a good seating in room 3.

As you probably may know if you were in that room an hour before Robert showed up, it was a presentation by Ron Ianieri from Options University.  Surprisingly, there were so much fewer audiences who are interested in options trading than value investing.

As I took some useful points off the presentation, I noticed that the room was beginning to fill up… and I suspect it was not because of the Options speaker, but for the fans of Robert who came slightly earlier to grab a good seat.

And when the presentation was finally over, the room was already jam packed with people!  They have come for Robert!  You will be simply impressed by the mere crowd even sitting on the floor right under the incoming speaker’s feet!

According to Robert’s analysis, Warren Buffett generated some of his best record returns in the past bear markets and most likely to continue doing so.  Warren Buffett has what we call core competencies that he has been ranked as genius (top 1% of 1% of 1%) in 4 areas of intelligences (out of a total of 8!).  Read that again:  the are 8 forms of intelligence, and Buffett’s genius-level mastery is 4 out of 8 of them!  I trust I will not offend Robert by merely quoting this from his site:

Genius of any kind is a gift bestowed on a rare few; individuals endowed with multiple areas of genius are even rarer. Throughout history, both scientists and artists have advanced human achievement; but there are few, if any, advancements made by someone who was both a scientific and an artistic genius. Warren Buffett is one of the few exceptions. Gifted with a phenomenal memory, astonishing mathematical abilities, and highly developed interpersonal skills, he has accomplished what few others have done.

Robert P. Miles
The Genius of Warren Buffett

Buffett's house front 2Image by TEDizen via Flickr

We were shown pictures of Warren Buffett’s little house showing the car that he drives and Berkshire Hathaway’s HQ.  Unfortunately, we were not allowed to take pictures, but we’re lucky enough to find creative common licensed photo of Buffett’s house and linked them in here.

Buffett attributed most of what he accomplished so far to his university teacher, Benjamin Graham.  In fact, when people ask if he will write the best value investing book in history, Buffett dismiss them by stating that the best book in stock investment has already been written: “The Intelligence Investor” by Benjamin Graham.

In case you’re wondering if Buffett will ever write a book, the first of his writing will be coming up soon, and it’s entitled “The Snowball” to be published by John Wiley & Sons.

There were a few gems about value investing that can be applied to everyone’s life.  For instance, Robert did a calculation on whether college education was a smart investment for his daughter.

An average American pays $30,000 per year in a good 4-year college education.  If you work out the maths, that will be $120,000 in total.  You’ll probably want to know what value the education has by figuring when a college graduate breaks even in an average job.  According to, an average college graduate is paid $50,000 pa.   Assuming one saves 20% of all that money, it will take at least 12 years to pay off just the principles, excluding interest!

Of course, we are assuming no salary review which is not realistic.  Factoring an annual upward salary adjustments of 10% and an average 3% inflation (ie. 7% growth), it will still take at least 12 years to pay up all college debts and bank interests.  Beyond breakeven and assuming another 30 years of useful working lifespan, you can work out your maths to figure out if the college education is worth it.

On the other hand, if you skip college education and save on $120,000, would it be worth it?  Bear in mind that college education will rise to match inflation to no less than $300,000 in the next 10 years.

Assuming you invest the same $120,000 in a low cost index fund and allow it compound at 15%pa (let say we have dividend reinvested) for 15 years, you will have $642,0000 from that investment!  Not bad for doing nothing and it definitely beats a college education!  Let’s assuming that the same $120k compounds realistically at 10%pa over 40 years (a graduate’s useful working lifespan), it turns out that the same investment will yield $5,431,110!  Not bad for doing nothing and allow you to retire at 60 years old!

No wonder Einstein said that compunding is the 8th wonder of the world!  And that according to Warren Buffett is the single key reason why he love stocks.  No other investments he know of can allow him to build wealth better than investing in the stock markets over long term.

In closing his presentation, Robert had the permission of the time keeper to leave us all, yet another humorous, but profound joke:

Once, there was this very successful investor who toured the country and giving speeches and was highly regarded as an intellectually and inspirational man.  He had a driver who drove him around as he traveled.  Over the years, the driver became so familiar with his speeches that he had them memorized inside out and he could even deliver them all by himself.

One day, the investor wanted to take a break and got his driver to swap their roles.  The driver took on his position on the stage and went on to deliver the most spectacular speech ever.  No one suspected anything until a smart audience on the floor asked fire a really technical question.  There was complete silence in the hall as everyone awaits the reply anxiously.  The driver was obviously stunned and sweat started to trickled down his brow.  At that critical moment, he replied “That was the most stupid question I’ve ever heard.  I’ll let my driver answer that one”.

Development Banking with Edgeworth Properties

Recently, Alberta Calgary land has been booming because of the fast pace in tourism expansions, oil sands and natural gas mining opportunities.

If you’ve been living under the rocks, it’s hard not to miss Edgeworth Properties on your investment radar dish.

A lot of people have recently ask if this investment is sound.

Frankly speaking, I have no idea.

As I’ve recently turned myself to looking things at value, I have to pump a lot of healthy skepticism into investments like development and land banking.  As I’ve been briefed, development banking is quite different from land banking.  As for the details, I’ll leave it to the experts.  🙂

What I do know is Edgeworth Properties is just slightly 3 years old and need cash to expand rapidly.  It was during the InvestFair seminars that I got to personally met the founder of this organization.  Since they are extremely young (a company in the Canadian property industry is considered young even having a solid track record of 20 years).  They are now aggressively marketing a plot of development land what they call it
Jasper Ridge in an area just outskirt of a very popular tourist attraction around  the rocky mountains of Alberta.  This project had been selling like hot cakes and it’s likely to be sold out by now, if not by next month.

Fundamentally, Alberta is a great place to invest at this point of time.  Alberta has the richest natural resources in Canada.  Furthermore, its tourism industry is booming and immigrants from both within and outside the country is increasing to support the oil and gas industry there.

Even Warren Buffett and Bill Gates were caught just last week around the state – or so I’ve read, and they were probably checking out some potential energy trusts.

As for Edgeworth Properties, I had some reservations.  There are a few potential reasons which I
believe I should avoid this investment, but please do not let that become your basic investment decision.  Always exercise your own independent judgements.  I am merely sharing my own personal opinions; and by the way, opinions are the cheapest things on planet earth.  🙂

  1. Jasper Ridge is a development land and has not officially declared as a zoned land from the Canandian government.  The worse thing that can happen is that you’re stuck with a title deed proving you as a proud owner of a fraction of an acre of a plot of land.
  2. I don’t like their marketing.  They are now on many ordinary investor’s radar and that to me is a red flag.  Furthermore, I had collected no less than 10 namecards on which they call themselves as “consultants”.  When I start drilling one representative for more information into the company, he couldn’t answer some of them on the spot.  They appear more like salesmen rather than consultants, whom you entrust your money to; in other words, they may or may not be in a best position for your interests.
  3. There is a hidden sales charge of about 15% on the valuation of the land if you decide to liquidate and sell it back to Edgeworth.  That to me is a big discount (Remember Buffett’s rule #1?  Never loose money).  Alternatively, you can always sell your stake to another person yourself and save yourself from the commissions.  This means you either have to pay for all the charges of the transfer of the title, or you can convince your buyer to pay them.
  4. Remember the saying “Cash Is King?”  I prefer to keep more cash on hand right now as I’m about to identify some businesses that may be selling at a big discount – soon!

Of course, I may be wrong, but that’s alright… I’m much more comfortable now that I’ve sold myself to the sound principles of value investing.

In Summary:

Financial seminars like InvestFair 2008 are quickly flooding Singapore as financially smart citizens now come to realize the importance of education and savy actions.  Personally, I prefer investments that are stress free, that allow me to sleep well at night, and most importantly, earn reasonably returns over the long term.

Do yourself a favor by attending some of these exhibitions or seminars and learn as much as you can.  Only then can you discover what you may be have completely missed out from your formal education like I experienced (what your school does not teach you about money).

If all else here does not seem to make sense to you, just simply consider the following profound yet enlightening statement from a famous financial crusader:

“If you think education is expensive, you should try ignorance”
– Robert T. Kiyosaki, author of “Rich Dad Poor Dad” and “Cashflow Quadrant”

Good Investing!
Stay hungry, stay foolish, and live a life with passion!

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About Insights, Inspirations, Tranquility, Peace and Harmony

Ng Wai Loong

Wai Loong is an electronics engineer by profession. He currently resides in Singapore, a thriving hub at the heart of South-East Asia. When he is not so stress out on the computers or laboratory, he enjoys value reading, jogging at his own pace and blogging in his spare time. Other times, he likes to catch up with some close friends over a cup of latte or teh tarik. As a gift from this friend, you are invited to interact freely with him on his personal blog.

PS: May the person reading this blog transforms his/her businesses, finances, relationships and life for ALL to WIN!