David Webb - "Avoid most of the crooks, most of the time."

[Wildreamz]

Website: https://webb-site.com/
Twitter (unofficial; tracks updates): https://twitter.com/webbhk?lang=en
Article: https://www.afr.com/world/asia/the-20-pe...103-h19nfo

The 20 per cent-a-year stock picker who wishes his edge would disappear
..
How he does it
Here's how Webb describes the basics of his investment strategy:

* Owns about 35 stocks at a time, with an average holding period of "five-plus" years.
* Long only, never short.
* Prefers large stakes in small companies and isn't afraid to take an activist role: "If you are going to be a minority shareholder, it's better to be a big one."
* Doesn't use leverage.
* Looks for businesses that are well-governed and undervalued.
* Reads the regulatory filings – almost all of them.
* Avoids large caps.
* Refuses to manage outside money: "It's a lot of hassle."
* His reports on companies to avoid are a byproduct of his stock-picking process.

"I am looking for good companies, but when you do that, you find an awful lot of rubbish," he says. "Things like the Enigma Network pop out."

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As corporate governance on SGX comes under scrutiny recently; perhaps a good time to share this old (2019) article. If only we have a David Webb in Singapore to help us weed out the companies to avoid!

[dreamybear]

The article comes at a gd time for me to reflect on my own investment strategy. Obviously, I am nowhere as prominent as Webb, but after years of experience as an ordinary retail investor, I have come to roughly similar conclusions....

However, I think given his background and standing, he wld probably have better finance knowledge and/or valuable connections which can help in his activist cause. I think other than reading regulatory filings, one has to participate in AGM actively(asking relevant questions), as well as consider the entire company's ecosystem(e.g. suppliers, customers, competitors, regulations). I even met a fellow investor who engages IR on possible new business prospects - talk abt being vested ! 

Unlike HKEX / US, there does not seem to be any timeline for SGX suspended stocks. If the average retail investor places a material amt of net worth in SGX stocks which happen to be suspended(not referring to going concern/fraud issues), it may impact the investor significantly. 

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https://www.businesstimes.com.sg/stocks/...hree-years
"The SGX appears relatively more forgiving of such troubled companies. The Hong Kong Stock Exchange, for example, gives suspended companies up to 18 months to sort out their issues, on pain of a delisting...."

https://www.investopedia.com/terms/s/sus...rading.asp
"The SEC has the authority to suspend the trading of a security for up to ten trading days......"

[r0n]

Unlike HKEX, there does not seem to be any timeline for SGX suspended stocks(article below). If the average retail investor places a material amt of net worth in SGX stocks which happen to be suspended(not referring to going concern/fraud issues), it may impact the investor significantly. 

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https://www.businesstimes.com.sg/stocks/...hree-years
"The SGX appears relatively more forgiving of such troubled companies. The Hong Kong Stock Exchange, for example, gives suspended companies up to 18 months to sort out their issues, on pain of a delisting...."

I am not sure how many companies are suspended for issues not related to going concern or fraud but if you have a material amount of net worth in those companies, you better hope the companies are well-governed. That's probably why Webb looks at companies the way he does.

[karlmarx]

I see Mak YT to be very different from Webb, for the simple fact that Mak wears only the regulator's hat (at least publicly), which mostly means criticising what has already happened (i.e. these bad things happened, we shouldn't let them happen again, here's what regulators can do to stop them from happening).

Webb, on the other hand, provides actionable 'warnings' to investors on specific cases, and in an indirect way (through his public portfolio), offers you clues on what to invest.

Fighting for better protection of retail investors in general is certainly good, but I'm not sure how much of that translates into better shareholder returns. Nevertheless, if you are truly able to apply Mak's lessons on CG, you may have a better appreciation of potential pitfalls to look out for when assessing future prospects.

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Most of the serious/pro investors do what Webb does, just not all of them publish their 'short' findings. Webb is very generous with trying to educate the market.

Webb is a classic Graham style investor who has done very well in the past decade with his picks of small cap Chinese manufacturers, and the growth of Chinese exports. Results have slowed in the past few years but I guess who cares if you have a portfolio worth more than a billion HKD.

I'm very surprised to see Giordano as one of his latest picks as I have studied it extensively as well. It is a classic quantitatively cheap stock with what I believe to possess little to no growth prospects due to an extremely competitive market and a not no so responsive/impressive leadership/management. Giordano and its smaller peers Baleno and Bossini are yesterday's clothing retailer. The PRC market will be dominated by Uniqlo and a number of small and growing 'indy brands.'