Value Investing

4 Key Speeches Investors Should Read

Ushering in 2016, we see every stock market plunging. While all these steep market drops are scary and seeing all the red in our portfolios is uncomfortable, we should calm down and look at the issue again. While we adopt a bottom-up approach in investing, we believe in being macro-myopic but macro-aware. I would be sharing pointers from 5 speeches that I find useful to all investors with regards to the economy today.

left: Minister of Finance, Mr. Heng Swee Keat

(From Left to Right) Minister of Finance: Mr. Heng Swee Keat and Head of UBS Wealth Management SEA & APAC: Edmund Koh

Mr. Heng Swee Keat

  • Within Asia, countries have healthy fiscal positions, companies have stronger balance sheets and many have grown wiser through the experiences during the 1997 Asia Financial Crisis
  • With the growing middle class, Asia is expected to outperform the rest of the world by a good margin
  • 3 key opportunities within Singapore: Niche Production Activities, Consumption Spending & Modern Services
  • Healthcare & Education (domestic sector) will post steady growth
(From Left to Right)(From Left to Right) Dean, Lee Kuan Yew School of Public Policy, NUS: Prof. Kishore Mahbubani, US Ambassador to PRC (2011 – 2014): The Honourable Gary F. Locke & Head APAC Investment Officer: Tan Min Lan

Prof. Kishore Mahbubani

  • We are living in a very paradoxical world, where there are loads of uncertainties
  • Look beyond the short term and we would realise that we are living in an amazing time with the transition of China
  • 3 optimistic points regarding China: Having a strong political leader – Xi Jiping, Being not complacent over the last 30 years of growth and changing their old model & Geopolitical Stability
  • Confident that China will emerge much stronger after Xi Jiping’s policy changes
  • Have to be wary of the rise of Chinese Nationalism, it being a force much stronger than what the Communist Party anticipated it to be
  • Xi Jiping being one of the strongest world’s leaders: Strong but also listening, thoughtful and considers what China has to do

The Honourable Gary F. Locke

  • China understands the changes that are required – free markets, fewer SOEs etc. but they are worried about the slowing down of the economy and domestic uncertainty
  • Optimistic regarding the future of China, just that the pace of which is slower
  • Worries if China is able to maintain their control over the changes given the resistance faced
  • Optimistic regarding China’s long history where the people have proven to be dedicated and hardworking
Chairman of the Federal Reserve of the United States (1987 - 2006): Alan GreenspanChairman of the Federal Reserve of the United States (1987 – 2006): Alan Greenspan

Alan Greenspan

  • Regarding China, free markets are meant to be a vehicle where holders of long-term illiquid assets are able to convert them into cash, so with China’s intervention into the free markets, it resulted in people wanting to disengage even more quickly.
  • Regarding the Eurozone, the South constantly borrowing money from the North is an unsustainable model. We see Greece is tinkering on the edge and it may be better for Greece and the EU to part ways. Furthermore, the EU is a union of countries of very fundamentally different cultures put together.
  • Assuming he is 30, he mentioned that he would just invest in equities. This is further explained in his book recently written on why stocks perform much better in the really long-term. Hence, he recommends just buying stocks and forgetting them. If one is able to do that, one would do very well. It does not matter how you wish to diversify the equities, as long as the asset class is equities.
  • A key quote he mentioned – Decide on a strategy and stick to it. There are still bright spots in the World.