1/7 – 1/9: Singapore

The third day of class in Singapore we stayed at the Conrad and had guest speakers visit us. The first was Strategic Alliance Capital, which focused on venture capital in Asia. One of the main takeaways is that in Asia you rely heavily on friends to screen potential investments and deal with local government issues. The second group of speakers was from Franklin Templeton Investments. They talked about the three ways to do value investing and doing them in Asia. The third speaker was Elizabeth Sam who held many positions in the Singapore government. She talked about the development of Singapore with an efficient government and low-tax regime. Moreover, it has the right infrastructure with a deep-water port and great transportation networks. The final speaker was Lumen Advisors who talked about how strange investments could provide large returns. The example was the Brazil law firm that finds people who have damages against the Brazil government from a previous financial crisis.

 

The fourth day of company visits was to Eastport Maritime where we heard our first negative long-term outlook on China. Mr. Shipley believes that many of the reforms will not be enough. The consumer-driven economy may not be properly setup, which could cause a bust. Also there is a lot of riding in the medium-term because there are still a lot of structural problems within China’s economy. Also if there is another global recession then China may fall into recession and civil unrest would ensue.

 

The last company visit was to Temasek International, the sovereign wealth fund of Singapore. They talked about investing in Asia where the long-term returns are higher than in the United States and Europe. Also we discussed the governance structure of how the fund is set up and how the government cannot directly affect the way the fund invests and does business. One of its biggest investments was in Alibaba group, which it has held for years. This wraps up the trip.

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