missed the boat

was scouting around for a healthcare stock to diversify my portfolio some months back and chanced upon the gem that was Thomson Medical Centre. revenue and net profit growth year on year, strong management team, numerous accolades won throughout the hospital's history which cemented their position within the industry, negative correlation to STI, were among some of the factors which checked out.

wanted to buy the share when it was at $0.78 but my war-chest had already been emptied from several earlier purchasers. unlike GIC, who has a warchest of some hundred billions, mine is a paltry, beyond pathetic, figure in comparison =x

i thought to revisit this counter when i liquidated my other investments, but i never got around to doing so. while i was dilly-dallying, the hospital did an open market share buyback to issue these as equity to its employees. this serves to incentivize their employees to work hard because their fortunes rise and fall with that of the company, hence motivation to work hard. issuing equity to employees is the hallmark of a good company.

subsequently, after the share buyback and some restructuring, the stock price rose to $1.02 per share. this counter was even more out of my reach now, partly because of my measly warchest, and partly because of my perceived expensive-ness of the change. more dilly-dallying.. more indecisiveness..

yesterday, remisier king peter lim said he would buy over all the shares in the company at $1.75 per share. owned. fate has strange ways of teaching you lessons.. such that you'll remember it for the rest of your life.

which is more superior?

Fama (1972) indicates that there are two ways for fund managers to obtain abnormal returns. The first one is security analysis, which is the ability of fund managers to identify the potential winning securities. The second one is market timing, which is the ability of portfolio managers to time market cycles and take advantage of this ability in trading securities.

Letter to Prof

Hi Prof ****,

We had a tutorial earlier.

For the industrial REIT recommendation, I was the person who presented the table with some of the financial ratios, i.e. yields, p/bv. I was also the one who said that this recommendation may be well out of our scope. I feel that as consultants, we are supposed to do a thorough and comprehensive job, and this calls for inputs from professionals from other fields.

The detailed analysis of stocks (analyst reports) are done by brokerage houses/banks with teams of people (comprising economists, statisticians, business analysts) who do everything from data crunching (study beta, do earnings forecast, study debt profile and refinancing risks, study cash balances and the possibilities of mergers and acquisitions, study manager fee structures and whether it incentivizes the manager to flip properties, e.g. divestment fees, etc) to interviewing the respective companies' CEOs to get an insider feel of the company.

Also, there are different investment philosophies, i.e. value investor versus growth investor vs contrarian investor, etc. A value investor would be hesitant to buy any stocks that are overvalued (premium to nav is one of the considerations). A growth investor would look at capital gains potential, then REITS which are typically used as defensive investment tools and have little capital appreciation potential would not be in their consideration. A contrarian investor would just buy when everyone else is selling, and vice versa.

My point is that the answer is 'it depends'. We need to consider all the factors and 2 weeks for preparation is too short a time for a report of the comprehensiveness that you request [or appear to demand :) ]. Also, we have to cope with 4 other modules (all 4MCs too) as well.

I would like to say that I've learnt a lot from you, and hope the learning continues till the end of the semester. I enjoy hearing your business stories, especially those of your overseas escapades.

Thank you.

Regards,

Jansen Ko

Dear Jansen:

Thanks very much for your email. I am realistic and do not expect any group to give a very thorough recommendation of any particular REIT. All the factors you mentioned below are correct.

The main learnings that are to be obtained from the tutorial is not about making the "perfect" or "most correct" recommendation. Rather, it was to get all of you to use your initiative, intelligence, knowledge and resources to pull together and analyse the essential information about the chosen sector of the property market and to learn from this process. For some groups, they discovered that their reasoning, recommendation and comments of their market sector were very lacking in solid facts and logical reasoning and full of loopholes. For others who put in more effort in THINKING through and interpreting the reports and tables/charts more thoroughly, they learned how to use information and link them to the lectures and readings to give a more convincing presentation.

In real life, you would likely work with other analysts or consultants to recommend any specific REIT. But because all of you will become real estate professionals, you still need to know something about the property market (and its key sectors) before you talk about the REIT. Every REIT has a portfolio of properties so you have to know how changes in the market and the economy will affect these properties in the REIT - will they pose threats or opportunities for the REIT?

It is not true that there is only 2 weeks to prepare for this tutorial. Most groups may start preparing only 2 weeks ago but in fact I uploaded this tutorial a long while back. And it does not matter whether you have 2 weeks or 2 days to prepare for this tutorial. Because in real life, you will always have datelines and time and resources constraints. The issue is, how you manage your time and how your group shares the responsibilities in order to do a good job.

My comments were meant to be suggestions on how every group can improve on using the fact, figures and analysis to build a convincing case. Where I criticise and ask for "proof" this is to encourage all of you to get into the discipline of backing up every statement you make with facts or reasoning and avoid making erroneous conclusions and imprecise description. It is also to "train" everyone to be "thick skinned" and strong so that you don't crumble or feel defeated when under attack. Eventually, when you start your professional life, you will grow you appreciate your tough clients because they force you to learn and push you to a higher standard of performance than lenient ones who allow you to make mistakes and blunders which may damage your reputation and don't help you to learn. All the tough questions that I throw at you has been thrown at me at one time or another by tough clients and bosses of high standards - GIC Real Estate, Capitaland, Goldman Sachs, Keppel Land Board of Directors, ING Real Estate, DBS Bank etc. They gave me a tough time but I learned so much from them that I can repeat similar questions on all of you to expose you to the high standards of the professional business world.

You notice that I do not expect any fixed "model answer" for this tutorial. Fact is, there is no one fixed answer because any investor can invest in any sector of the property market depending on his investment objectives. This tutorial is about whether you and your group can apply everything that we covered in this module and also to use your THINKING, REASONING, and READINGS / RESEARCH to explain the market and to encourage you to read a variety of real estate consultant reports so that you know the manner in which they report and market and also the limitations and misleading analysis that some consultants make. It also exposes the limitations of the URA data which tend to be rather macro in nature (more useful for urban planning) and too general to be totally useful to explain any specific sector for business purposes. It does not mean URA data is useless. It means you cannot take all their figures lock, stock and barrel without understanding their basket, their definitions and what exactly they are measuring.

If you learned how you presentation can be improved, what can be emphasised and stated and what NOT to say and if, after the tutorial you had a better understanding or idea of any specific property sector and how to handle difficult questions, this tutorial would have achieved its objective.

Still, I appreciate your being motivated and perturbed enough about this tutorial to write to me. This shows you care.......far better than being indifferent or uninterested!

Best wishes,

Prof ****

19/10/10 Schedule

9-12pm: Real Estate Market Analysis Tutorial 4 Presentation
(Presentation for make-believe Saudi Arabian businessmen looking to invest in industrial real estate sector in Singapore, formal attire.)

12-2pm: Real Estate Finance and Investment project meeting
(SAS Programming. Testing Jensen's Alpha on REITS. Comparison of other performance evaluation measures.)

2-4pm: Real Estate Market Analysis project meeting
(Analysis of Luxury Condo Market in Singapore. Plugged data into model. Model not applicable for Singapore.)

4-6pm: Introduction to World History tutorial
(Why is a real estate student doing history!? Go into history class wearing formal and sticking out like a sore thumb.)

6pm-Late: Human Resource Project Meeting
(Case Study on Lee Kim Tah. Prepare/rehearse 20% presentation on Friday)

Late - Even Later: Finish up History Book Review due 25/10/10.

hell week. my complexion is a function of stress levels.

Complexity in Defining Good vs Bad Concepts

By Damon Linker

Is religion is a force for good? It is a tough question. Like most efforts to make sweeping judgments about human affairs, this one at first seems to run aground on complexity.

Consider: is science a force for good? In many ways yes, since it has contributed enormously to the sum total of human knowledge and opened up technological innovations that have greatly benefited humanity. But of course science and technology have also brought us eugenics, nuclear weapons and numerous forms of environmental degradation.

What about war: is it a force for good? At first blush, with images of millions of dead and maimed soldiers and civilians flashing through our heads, the answer would seem to be an obvious no. But what if we are fighting Hitler? Or defending ourselves against an unjust attack by an aggressor out to steal our resources, enslave us, or even exterminate us? In such cases, I would submit, war can be a very great good indeed.

Religion is much the same. It has unified societies, given them a sense of collective meaning and purpose, and inspired enormous feats of creativity (good). But it has also stood in the way of scientific inquiry and treated ignorance as a virtue (bad). It has encouraged great acts of collective charity (good). But it has also provoked pious cruelty (bad). It has stirred people to challenge injustice and undertake political and social reform (good). But it has also allied with tyrants to quash dissent and ignited spasms of furious violence (bad).

The same ambiguity prevails at the individual level. Believers will line up to testify about how much they benefit from their faith. They reside in a profoundly moral universe overseen by a providential deity who rewards the righteous and punishes the wicked. This creator cares about each and every one of us—and perhaps about each and every hair on each and every one of our heads. He is our heavenly father. He hears and answers our prayers. He is the author of human history and guides it towards divine ends. He miraculously intervenes in our lives. He comforts our anxiety and redeems our suffering and sins.

But religion also makes its own distinctive contribution to human suffering. It can be terrifying (and psychologically devastating) to believe that the creator of the universe sees and judges—and will punish with eternal hellfire—our every transgression. (Renowned atheist Christopher Hitchens aptly describes this aspect of piety as consigning us to a celestial North Korea.) Religious practices can also involve the infliction of pain on ourselves and others. Male and female forms of circumcision, Christian mortification of the flesh, self-flagellation in Shia Islam, the radical renunciation of worldly goods demanded by Buddhist and Hindu monasticism—each religion has its distinctive forms of asceticism.

Of course those who engage in these practices usually deny their cruelty. "This is how God intends us to live," they will say, "and following his dictates is the only path to holiness." And here we run into an added layer of complexity—namely, the difficulty of determining whether religion is good without first determining whether it is true. After all, if there is in fact a God, then we had better do what he wants—and the goodness of his commands would seem to follow necessarily from their divine origins. Raising the question of religion's goodness presumes that we have already raised doubts about, or even denied outright, religion's truth.

But the relationship between the truth and goodness of God runs in the other direction as well. Would anyone continue to believe in a deity whose commands appeared to be consistently, indisputably evil? The disturbing fact is that when believers maim and kill in the name of God, they do so not simply because that is what they think God wants them to do, but also because they think those divine edicts are morally justified. Belief in the existence of God stands or falls with belief in the goodness of God.

And that might provide hope for the future of humankind no less than the future of religion. As our moral sensibilities evolve, perhaps human beings will find it increasingly difficult to believe in the existence of a God who sanctions the mutilation of female genitalia or the murder of innocent civilians in explosive acts of suicide-martyrdom. If so, religions may face a choice between extinction and adaptation to the moral norms of liberal modernity. In that case, the religions that survive will do so by slowly shedding many of their worst aspects while expanding on their best, providing humanity with comfort and spiritual sustenance while no longer cultivating ignorance, cruelty and fear.

Is religion a force for good? Not as much as it will be.

http://www.economist.com/debate/days/view/595

First Ascent - Patagonia Promise

I watched the above film, and cried and cried and cried.

Life is so short, I must live it to fullest.

The conflict between the mind and the heart - will I be able to resolve? Who can give me the answers? The more I learn, the less I know.