Value Investing - Making it work in China and Asia by Mr. Cheah Cheng Hye

[Qiaofeng]

For those interested.....
http://webb-site.com/articles/peacemark.asp

On page 46 of its 2008 annual report, the company said:

"We are proud of having 14 analysts and brokerage firms cover PM with a Buy recommendation. They are ABN AMRO, BNP, Cazenove, China Merchants Securities, Daiwa, DBS, Deutsche Bank, Goldman Sachs, HSBC, JP Morgan, Kim Eng, Merrill Lynch, UBS and UOB. We sincerely thanks for their support."

Oops! It would be unfair to single out any one of these firms for poor judgement or failure to do their homework.

The implosion at Egana, one year earlier...
http://www.thestandard.com.hk/news_detai...con_type=1
which gives Webb a huge following.

There was no way Stanchart & others could proceed with the syndicated loan after the events. Ha, I did not know Stanchart were the sponsors for their IPO!!

I am not defending VP and I agree, as I have said in previous post that I also have my doubts-- on VP's mass producing approach .

My reason for bringing out my experience in PM was to share that in accepting the cash for the Sincere delisting, I got complacent and did not do a check on the B/S as you have done. That oversight caused me to lose 20% of potential profits.

As I said, I relied on a qualitative analysis and a reliance on "others" to do that due diligence. Those "others" collectively failed to detect the warning signs picked up by David Webb & yourself.

Your style resembles Webb.... any connection?

[d.o.g.]

Your style resembles Webb.... any connection?

No. But I respect the work that Webb puts into his investments. In the early years I found his annual Christmas gift (one free stock pick) very interesting. In the last couple of years I came across a few companies where he is a significant shareholder. He is a small cap specialist and has done very well for himself.

[Qiaofeng]

No. But I respect the work that Webb puts into his investments. In the early years I found his annual Christmas gift (one free stock pick) very interesting. In the last couple of years I came across a few companies where he is a significant shareholder. He is a small cap specialist and has done very well for himself.

I respect, the work you put into in analysing PM. No wonder, you have such a following in this forum (fyi, I am newbie here)
Wonder if you had "skin in the game" for PM?

But, I do find the PM and Egana write-ups instructive for value investing. There is a huge danger for group think in the research analysts and financial circles in the asian context and guys like VP seems to think that they have advantage (code for clout) when it comes to investing.

Once the leaders (say VP or even PEs like Carlyle or even a market leader like LVMH ) comes out and make certain moves, the whole ecosystem seems to adulate and be wowed.

My point that "you can connect the dots looking backwards and not forwards" was very much also for myself, and that is the danger of doing qualitative analysis w/o crunching numbers.

I do subscribe to the point that by looking at a series of years of a company's financial report , U can gain insights into the management "think" N behaviour and should be the fundamental plank of value investing.

[mrEngineer]

Very interesting debate guys. thanks. its been some time since I have seen quality discussed around here. My respect goes to both of you!

After going through a couple of analyst reports myself, I am used to find the same kind of information being circulated around between different brokages or investment promoters. I personally do not trust the due diligence work done by banks as they have limited exposure to the data room or even the expertise or resources to conduct a proper due diligence work. Its more of packaging.

I think VP has understand the crux issue in investing in China, if all companies out there are crooks, the only choice they have is to choose a better crook whom can make louder noise or share information on middle to long term strategies that we retail investor do not have access and bet on them.