Category Archives: Uncategorized

Adjusting EPS numbers for foreign borrowing

As analysts, we’re supposed to dig deep in a company’s accounting. For example, we might make adjustments to income statements so that they better reflect economic reality: Adding back D&A and deducting maintenance capex Adding back non-cash impairment charges Capitalising … Continue reading

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Some random thoughts on shorting

Good shorts have three main characteristics: We have a high conviction of where the price will end up Low volatility in the stock price from today until that point Large negative price movement in a short period of time To … Continue reading

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Why some ETFs may blow up

Oaktree Capital’s Howard Marks warned in a recent memo that liquidity can be elusive. Financial instruments that trade with a narrow bid-ask spread today may be virtually impossible to sell tomorrow. Particularly troublesome are structures that are meant to enhance the … Continue reading

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OCBC and other Singaporean banks

OCBC probably wishes it hadn’t put this picture on the first page of its 2014 annual report. OCBC is known to be one of the best run banks in Asia. But much like the rest of the Singaporean banking system, it has … Continue reading

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Leverage: the long-term perspective

The recent McKinsey report “Debt and (not much) deleveraging” is well worth a read. It shows that we are still in a global credit boom with global debt/GDP rising at a very fast pace: from 220% in 2008 to 260% in 2014. Given … Continue reading

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Yandex: We Have Seen This Before

Recency bias is a strong force. When investors start associating a country, sector or stock with negative thoughts, undervaluation is likely to be the result. That is one of the reasons I believe there to be decent value in Russian … Continue reading

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Why Vietnam is the best stock market in the world

Two weeks ago the Vietnamese government announced that their curbs on foreign ownership limits will be eased. The story has always been: “I like the market and Vinamilk/Masan, but I cannot get my hands on any stock. All because of … Continue reading

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