Seng Hock Tan on Tech Value Investing

Seng Hock Tan, Aegis Portfolio Managers (Asia) – ‘(Tech investing) -Value Investing in Asia’

Seng is the Founder and CEO of Aegis.

 

Crossroads Capital up 55.8% YTD after 32.5% in 2019 explains how it did it

Jeffrey Aronson Crossroads CapitalCrossroads Capital is up 55.8% net for this year through the end of October. The fund released its 2019 annual letter this month after scrapping its previous 2019 letter in March due to the changes brought about by the pandemic. For 2019, the fund was up 32.5% net. Since inception in June 2016, Crossroads Capital Read More


  • Value investing in Aisa
    • Horse (business model)
    • Jockey (Entrepreneur)
    • But first…. must look at the track (Asian environment)
      • ‘Booby track’
      • Possibility of cash and assets disappearing
  • International Business Machines Corp. (NYSE:IBM) – ‘Lion Infrastructure’ to ride Asian growth
    • 24% revenue growth in Asia
    • P/B = 11.7x
    • Recurring services 36% of Revenue
    • Software analytics 59% of Revenue
    • Techs that BRK bought
      • Verisk Analytics
      • Intel
      • DirecTV
      • Liberty Media
      • Mal Mart
        • Sharing information back and forth with suppliers is critical to the model and success (must use IT)
        • U.S. is homogeneous & more scalable
        • Asia is heterogeneous & harder to scale
          • China will have more e-shoppers than U.S. by 2015
          • Asia has 4 of the 5 top ‘app’ crazed countries
          • Chinnovation not equal to value creation
          • Uses copycat models
          • India much harder (not as well organized, many languages)
          • Asia incentives 2010 (distorted)
            • Carrot of easy money, property & stocks
            • Neglect knowledge accumulation in core business
            • Think Munger (incentives and opportunities)
            • Governance critical
              • Not only quant numbers in Asia, must look at more
              • Knowledge of other business models as business is often diversified
              • Hard to invest from afar because of the ‘track’
              • Law of the land – to collect a winning ticket
              • Right People
                • Follow company and management for a long time
                • Only invest slowly
                • Wait a long time for results
                • Good opportunities with trust, horizon, and Mr. Market
                • ‘Lions’
                  • Ethical
                  • World class institution
                  • Leader/Entrepreneur
                  • Thirst for knowledge
                  • ‘Hyenas’
                    • Just want to ‘win the game’
                    • ‘Survivors’ – for themselves

 

  • Q&A
    • What about Buffett and Tech?
      • IT is recurring income
  • Mistakes & lessons?
    • Getting management wrong, must be patient and slow

 

Value Investor Conference: Omaha, Nebraska – May 4th, 2012

Dustin Hunter, SunRift Capital Partners (www.sunriftcp.com)

 (These notes are to the best of my recollection.)