Overseas investment

[karlmarx]

A common refrain of using the 'value approach' to investing is that it is too difficult to find a stock's 'intrinsic value.' Yes, it is difficult. There is no precise intrinsic value to any stock. But you don't need a precise number. Somewhere close will do.

Technological disruption has been a feature of this decade. As well as the one before. And the one before. Only a market that is adequately free can encourage companies to innovate, to compete against each other, to produce/deliver better products/services at cheaper prices. Technological disruption is a feature of capitalism. Perhaps even more so when money is cheap and aplenty.

It is also true that there are many Singapore listed stocks that are down. And a shortist of those stocks may well have made lots of money. The reason for this may be that Singapore businesses are lousy, not having the ability to defend their market and grow their bottom line. The reason for this may also be that globalisation/regionalisation has made businesses more competitive. Singapore's domestic market is small and not growing. An aggressive new-comer with capital and expertise will easily take away market share.

The trend of globalisation/regionalisation is not going away. But that can also be good for the Singapore companies expanding in the region.

Should investors thus withdraw from capital market participation, if businesses are always changing/suffering due to technological disruptions and market competitions? The game has always been like this. Individuals will have to decide for themselves if the potential benefits from such market participation makes sense.

I will say that there is no need to compete in an activity which you do not have an edge (such as technical and emotional skills, and capital) over your competitors. Why allow yourself to be someone else's lunch?

And in the case where you cannot find any business which you think will be less affected by technological disruption and market competition, and that are selling at a bargain, then you just have to look harder/further. In the case that nothing is still found, there is always the choice to not do anything. There is no rule/law/culture that says you must put your money to work. Unless, of course, you are a fund manager.

[BRT]

I think Buffet feels Apple shld be around 10 years down the road. I believe when he made an investment, he is not so short term that the a co doesnt exist anymore in 10 years time.

There are many strong USA companies that can keep growing for decades. How many Spore co can do that? Probably less than 10. Many hit a speed bump after a recession and hardly recover. It seems for past 10 years the best way to earn money is to short every stocks listed in Spore.

with all due respect to the great man, biologically and probabilistically speaking he doesnt need to care if any co is still ard 10y later. anyway i think the apple decision was made mostly by the next gen helmsmen instead of himself.

[Bibi]

I think Buffet feels Apple shld be around 10 years down the road. I believe when he made an investment, he is not so short term that the a co doesnt exist anymore in 10 years time.

There are many strong USA companies that can keep growing for decades. How many Spore co can do that? Probably less than 10. Many hit a speed bump after a recession and hardly recover. It seems for past 10 years the best way to earn money is to short every stocks listed in Spore.

with all due respect to the great man, biologically and probabilistically speaking he doesnt need to care if any co is still ard 10y later. anyway i think the apple decision was made mostly by the next gen helmsmen instead of himself.

That's not what I remember I read in articles. One of them is this. He thinks Apple will be the firsts co to hit 1 trillion valuation. He invested in it or gave his blessings (if u think the decision was one of his subordinates) when he believes Apple is becoming a service co besides being a tech co. 

http://money.com/money/4937545/warren-bu...investment

[soros]

For comparing valuation of different overseas stock markets, this website shows figures for P/E ratio at 28 June 2019 :

https://www.starcapital.de/en/research/s...valuation/

Singapore P/E = 13.7
China P/E = 9.9
Hong Kong P/E = 15.5
Australia P/E = 17.7
United States = 20.7

Academic research has shown that undervalued equity markets have achieved higher future returns in the long run than their overvalued counterparts, which holds for different valuation measures alike.

So still a good chance to win if you stay in the Singapore market. But you may win more in the China market.

[karlmarx]

For comparing valuation of  different  overseas stock markets, this website shows  figures for P/E  ratio at  28  June 2019 :

https://www.starcapital.de/en/research/s...valuation/

Singapore P/E = 13.7
China       P/E = 9.9
Hong Kong  P/E = 15.5
Australia  P/E = 17.7
United States = 20.7

Academic research has shown that undervalued equity markets have achieved higher future returns in the long run than their overvalued counterparts, which holds for different valuation measures alike.

So still a good chance to win if you stay in the Singapore market. But you may win more in the China market.

China looks interesting. Is there any ETF on SGX that one can buy to get exposure to Chinese index?

I saw that Jardine-related stocks are quite beaten down. Maybe some Hong Kong listed stocks could be worth a look. Such as Chow Sang Sang, as highlighted in another thread.

[jaco]

Maybe some Hong Kong listed stocks could be worth a look. Such as Chow Sang Sang, as highlighted in another thread.

I am looking at Lion Rock Group Ltd, Chow Sang Sang Holdings International Ltd, CK Hutchison Holdings Ltd, Future Bright Holdings Ltd, Bonjour Holdings Ltd, China Mobile Ltd and Baidu Inc with different degrees of interest.

These seem like decent, possibly even good, companies trading at seemingly low valuations. At the same time, I am afraid to hold them through a general, world-wide recession which seems to be looming. Or in other words: you might be timing the Hong-Kong crisis right at this point, but go long too early in a subsequent worldwide market drop.

[ghchua]

China looks interesting. Is there any ETF on SGX that one can buy to get exposure to Chinese index?

Got. United SSE 50 China ETF offers exposure to 50 largest stocks of good liquidity listed on the Shanghai Stock Exchange.
https://www.uobam.com.sg/china-etf/index.page

[soros]

If you are able to buy through Phillip Securities with HK Branch offering trading access to HK market , then you can consider Tracker Fund ( 02800.HK ) and ishares China ( 2801.HK ).

But at present the US-China trade war is adversely affecting investor buying confidence and many share prices are taking a bashing and are falling back to lower levels.

[D123]

China looks interesting. Is there any ETF on SGX that one can buy to get exposure to Chinese index?

There is a two-step process in selecting index funds.

1. Choose the index that fits your purpose.
The A-share market is often described as dominated by retail investors. Some sell-side research estimates retail participation to make up 80% of volume. This means that you will have a lot of people chasing the hot stocks and animal spirits will drive market behaviour more so than in mature and developed stock markets. The H-share market is dominated by state-owned, industrial enterprises who listed to raise capital from public when the govt didn't want to go all in by themselves. There are circuit breakers and short-selling restrictions in the A-share market while there isn't in H-share as far as I know. A-share and H-share participants have in various times in the past pointed fingers at each other saying the other is the "wild west" dominated by speculators but they are probably equally bad. More to read up here than what I currently know. There are also index funds for red chips, P-chips, US-listed Chinese companies etc. FTSE's Total China Index tries to capture all (large- and mid-cap) Chinese exposure regardless of listing place.

2. Choosing a good ETF provider.
Check each ETF's tracking error (how well the ETF's NAV tracks the index's performance). Then check its fees. Both should be small compared to peers. These are to a certain extent a factor of AUM, but not always. For example, one of the largest ETF's for Chinese exposure, BlackRock's MSCI China ETF (MCHI) has an expense ratio of 0.59% for an AUM of >USD 4bn, but Vanguard's FTSE Total China Index, with an AUM of RMB 150mn has an expense ratio of 0.40%. If you are into timing, you should also pay attention to when each ETF trades at a premium or discount to NAV and by how much.

[karlmarx]

Thank you all for your responses. The information here is very helpful.

I expect to be quite occupied looking into the HK/Chinese market.