My favorite manager, as I’ve mentioned elsewhere, is Claire Barnes of the Apollo Asia Fund. She writes simple quarterly letters, is completely unknown to most of the financial world, and has utterly demolished the market averages since she started back in the late 90’s. She’s a shining example of a long-only, value-driven international manager focused in Asia.
I would also say that David Webb’s entire ouevre should be required reading for anyone who’s thinking of investing in SE Asia. He now just runs his own money and publishes 0 stock picks a year (down from an all-time high of 1 pick per year - here are the results of those). He’s still worth reading, just to see some of the fraud he uncovers - very illuminating… You can’t invest with him, but thanks to required disclosure laws, you can see when he accumulates a 5% stake or more in listed companies in Hong Kong (there are several such positions at present).
(also, my earlier comment interrupted your really useful post with what came across as trivialness… really it was just me typing it in on a mobile phone so I didn’t have a chance to read your stuff before).
Ideas in general, I don’t give, because I’m lame like that. Ideas about investing in Asia? Be prepared to view some of the worst Engrish offenses you’ve ever seen in your life. Also, a great deal of ridiculous hype:
-CORPORATE OBJECTIVE: MAKE MAXIMUM VALUE SATISFY FOR GREAT ADVANCEMENT OF SOCIETY, WORKERS, AND SHAREHOLDER.
-BE #1 PRODUCER OF LEFT HANDED RATCHET SCREWDRIVERS WORLDWIDE BY 2016.
-LEVERAGE R&D EXPERTISE TO EXPAND INTO LEFT-HANDED SCISSORS, POTHOLDERS.
And so on. Also, you’ll find lots of WTF moves by management - a company that has done a great job in business A (for example, making copper wire) decides to spend a big chunk of shareholder money going into business B (OWNING / OPERATING NIGHTCLUBS IN DOWNTOWN KUALA LUMPUR, YEAAAAAAAAAAAAAAAAAAAAAAAH), in which they have no experience. Bizarro stuff like that happens way too often, but it comes with the territory. Microcaps have little institutional following in Asia, and you’ll usually find that the founder still controls like 30-60% of the business, so any outside investors are just along for the ride with no real power.
i have invested in two asian equities myself (HKex, China Mobile). i have also looked on the surface of a few major chinese companies (listed on HKex)…however, i have a huge trust issue with companies out of China…most of them are also in industries i dont’ want to go near due to my ignorance (real estate, chinese banking, oil/gas)…
i’m sure there are a few great hidden gems waiting, but getting into asia is not a priority for me…
i definitely noticed the huge amount of control by the founder which i actually see to be a positive depending on the circumstances…also found instances of “appropriation by management” as well…
I think you have to be in asia to do it successfully…
This. I could write a small book about how much I hate researching Asian small caps, but this does just fine. My favorite Engrish misquote of all time is a company that made fire extinguishers ==> “Fire distinguishers” LOOOOOOL. I’m sure there are better ones but that’s the best one I have personally seen.
Value destruction is pretty rampant – it’s hard to appreciate just how little regard for shareholders some of these companies have until you see management issuing shares below liquidation value for useless capital tie ups. I’ve also seen MASSIVE shareholder value destruction in pointless deworsification (this one company paid like 4x tangible book for a portfolio of nail salons in a mature, shrinking market and then proceeded to run the business so poorly that they lost money – WOWZERS). Management seems pretty clueless at most of the companies and has little understanding of basic capitalist principles (maybe because most of the countries are not really capitalist in orientation). It’s sad when you go meet a company and realize that the stock is going to be a zero in the next 3-5 years and that the people working there have no clue what is in store for them.