Seng Hock Tan, Aegis Portfolio Managers (Asia) – ‘(Tech investing) -Value Investing in Asia’
Seng is the Founder and CEO of Aegis.
- 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
- What about Buffett and Tech?
- 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.)