Wise investors let compounding work its magic

[pianist]

what about sembcorp? r they in the same line of business?

[VIChris]

what about sembcorp? r they in the same line of business?

SemCorp is the parent company of SemCorp Marine, holding over about 61% stake in Sem Corp Marine. They are into utilities(Energy and water), urban development, etc. Yes, they will be affected by SG economy, but the impact will be not that great since their into energy sector which all economies required everyday.

One point to note, they are also a global player but not as big as the global giants.

My 2 cents.

[Nick]

If I am not mistaken, don't Sembmarine and Kep O&M have a 70% global market share of jack up rig building and FPSO conversion ? How will it be impacted by a SG slowdown ?

[VIChris]

If I am not mistaken, don't Sembmarine and Kep O&M have a 70% global market share of jack up rig building and FPSO conversion ? How will it be impacted by a SG slowdown ?

Its doesn't as they are global players. The only impact they will have is on government polices on land usage and labour policies.

However, if you noticed they are opening or acquiring more shipyards overseas, spreading their wings. In addition, in recent years, SG government is supporting the industry, with the intention of making SG a maritime hub.

[Temperament]

If SG slowdown, it is usually the world has slowed down. So?

[VIChris]

If SG slowdown, it is usually the world has slow down. So?

Yes and No. What if it is structural change?

[Temperament]

If SG slowdown, it is usually the world has slow down. So?

Yes and No. What if it is structural change?

Even if it is structural economic change, it's still due to the world economic change. i think we are too small to really affects the world.
Example:-
Many people think it is only a matter of time China will overtake our ship/rig building position. Then it will be "structural change" for this industry. No?

[VIChris]

Even if it is structural economic change, it's still due to the world economic change. i think we are too small to really affects the world.
Example:-
Many people think it is only a matter of time China will overtake our ship/rig building position. Then it will be "structural change" for this industry. No?

Same answer yes and no. It might be true that it is matter of time when China will overtake our ship/rig building position, but the change will not be that fast.

In short summary, they are still at least 5 years apart from now not even mentioning that the 2 local players are also evolving and improving on their technology, venturing into even more sophisticated rig build design such as ultra deep sea or extreme temperature drilling, the only 3 players that is capable to do so with good project management are Keppel Corp, Sem Corp Marine and perhaps Samsung Heavy Industries.

Lets go back to the question, I am trying to understand what yeokiwi mentioned on "I do not think any of the blue chips in Singapore actually qualified to be a global blue chip company".

Cheers

[georgelee]

Even if it is structural economic change, it's still due to the world economic change. i think we are too small to really affects the world.
Example:-
Many people think it is only a matter of time China will overtake our ship/rig building position. Then it will be "structural change" for this industry. No?

Same answer yes and no. It might be true that it is matter of time when China will overtake our ship/rig building position, but the change will not be that fast.

In short summary, they are still at least 5 years apart from now not even mentioning that the 2 local players are also evolving and improving on their technology, venturing into even more sophisticated rig build design such as ultra deep sea or extreme temperature drilling, the only 3 players that is capable to do so with good project management are Keppel Corp, Sem Corp Marine and perhaps Samsung Heavy Industries.

Lets go back to the question, I am trying to understand what yeokiwi mentioned on "I do not think any of the blue chips in Singapore actually qualified to be a global blue chip company".

Cheers

China may be the biggest industry now. But sometimes do you really believe the papers? Or is china just being overrated?

[TheMillennium]

I find this compounding article very very interesting.

How do I put this into practice myself?
Do I invest in a company that after I have done my homework in valuing it properly, simply reinvest my dividends in the company over and over again? Is this what it means?

By starting with a small capital and receiving small dividends, keep reinvesting the small dividends back, and by the 7th year onwards (mentioned from the article), this small dividends would have played a significant role into increasing the portfolio size and thus small dividends will become bigger dividends? And continue in the same pattern?

Is this compounding method still applicable now and will continue to work for the next 100years?