Likely Property Crisis in Singapore- A drop of 30%?

Contributed by: The Big Fat Whale

In recent times, despite the upheaval around the world, the Singapore property market has been holding well. It is still on an upward trajectory that makes it like "Not being in the game is a fool's play".

It has been one of the surefire ways to build your golden nest by upgrading from your first BTO HDB to a private property and to another private property every 4-5 years to escape the Sellers Stamp Duty. Not many have not reaped returns using this foolproof path.

There is an interesting Tik Tok video where the content creator was mentioning that his property agent is pitching a newly launched condo as a sure-proof way to lock in profits after 5 years of holding. It is along the line of just buying the property at 1.5 million now and cashing out at 2 million 5 years later.

Then it shows the speech by our deputy Prime Minister who said no one he has known could have predicted property prices in the future. Moreover, this development is situated in a non-prime area which makes the pitch less convincing.

 

Property Price Trend

Source: Trading Economics- Singapore's Residential Property Price

From the chart above, you can see property prices have been a worthwhile holding if you. have a time frame of 10 years or more.  The two notable periods where there was a profound correction would be the Asian Financial Crisis in 1997 and the Global Financial Crisis in 2008.

During the Asian Financial Crisis, prices plunged close to 40% and it took nearly a decade for those who got at the peak to be back to breakeven in 2007. The stock market declined by 60% during this period. We can affirm this as a friend who bought a condo unit at the peak of 1997 saw his property valuation come back to breakeven only ten years later. It is his version of the "Lost Decade".

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Demystifying Singapore's Government Debt to GDP of 130%

Contributed By: The Big Fat Whale

To be frank, we were very surprised when we saw Singapore at the top of the table for countries with the highest government debt to GDP.  Is it a worrying sign? Or is there more to it than what the figures are implying?

Therefore, we decided to take a deeper look by doing some research.

Source: worldpopulation.com- Top 10 countries with the highest Debt to GDP in 2022

 

Debt Instrument Issued

Firstly, let's break down the different debt instruments that the Singapore government issued for their debt.

• Singapore Savings Bond
• Singapore Government Securities
• Special Singapore Government Securities
• Treasury Bills

Singapore Savings Bond is issued to give Singaporeans a debt instrument they could invest in to grow their money efficiently and safely to counter inflation. They are issued with a 10 years tenure and could be redeemed at any time with no loss of capital.

Singapore Government Securities is issued to promote the debt market in Singapore and could be used as a benchmark to price corporate bonds. They are issued with maturities of 2, 5, 10, 15, 20, and 30 years.

Special Singapore Government Securities are issued to provide returns for Singapore's State Pension, the Central Provident Fund. The securities earn the CPF Board a coupon rate that is pegged to the CPF rate the members receive.

Here are some details of the interest that members will receive. The member will earn 5% per year on up to the first $60,0000 of their Retirement, Special and Medisave Accounts if their Ordinary Account is less than $20,000. Also, they earn an additional extra interest of 1% per year on the first $30,000 of their CPF balances after age 55. This means they can earn up to 6% per year on the first $30,000 in their Retirement Account.

Treasury Bills are short-term debt instruments that are issued with a 1-year maturity. It is used to bridge and smoothen the cash flow from the operations of the government on a day-to-day basis.

 

Is Singapore in a Precarious Situation?

Singapore's government mainly borrow money not to fund the running of the country which is usually depicted in the yearly budget. In recent times, the UK is trying to borrow more so as to fund its proposed tax cuts and it has led to an all-time low for the sterling. 

Singapore's government borrow to fund infrastructure projects that will turn into assets once they are completed. Some notable projects funded by past government debt are the large initial costs for Changi Airport and the first MRT lines in the 1970s and 1980s,  There will be cashflow from the funded projects after completion which will lead to generating investment returns and contribute to the revenue of the nation.

Projects that will be financed by the government debt in the future will be the expansion of rail lines, major highways, other green projects and more importantly a sea wall that will protect Singapore from rising water levels due to climate change.

Based on Singapore's constitution and government securities act, it is not allowed to spend the funds raised through debt securities.  Therefore, the bulk of it is invested in infrastructure projects that have national interest. 

There are also safeguards to rein from an overdose of debt for infrastructure with a cap currently at 90 billion dollars which is around 20% of current Singapore's GDP.

 

Singapore is One of the World's Top Net Creditor

Source: Brookings

From the computed statistics shown, Singapore is one of the top net creditors according to the share of GDP in the world. Therefore, based on our earlier discussion, if we take the value of the assets that were financed by the debt, and deduct the debt amount, we are in a very healthy position.

 

Summing Up

Headline figures of 130% of government debt to GDP for Singapore would send uneasy signals if we do not look deeper into the figures. 

So based on our research, the debt is used to finance mainly infrastructure projects that would generate investment returns in the future once completed.  With these turning into cash-generating assets, the implication would be that Singapore is actually a net creditor when we take the assets minus the debt. 

On top of that, the reserves of Singapore which are managed by MAS (S$510 billion), Temasek (S$381 billion) and GIC (In excess of S$100 billion) as of 31st March 2021, which would put us in good stead to face any turbulence ahead with a trillion dollars of a buffer.

 

We hope you liked this write-up and do subscribe to our website to receive insightful articles whenever they are published.

 

Disclaimer:

The content here is for informational purposes only and should NOT be taken as legal, business, tax, or investment advice. It does NOT constitute an offer or solicitation to purchase any investment or a recommendation to buy or sell a security. The content is not directed to any investor or potential investor and may not be used to evaluate or make any investment. Do note that this is not financial advice. If you are in doubt as to the action you should take, please consult your stockbroker or financial advisor.

 

US Treasuries- A Screaming Buy?

Contributed By: The Big Fat Whale

The skyrocketing interest rate environment where fixed deposit promotional interest rates in Singapore have crept up beyond 3% for some banks is unheard of.

The last time the fixed deposit interest rate went up above 3% was in 1998. Savers and property owners on mortgages have been used to a low-interest rate environment for a long time.

With any hints of a crisis, the central banks have been very proactive in their quantitative easing policies that have flooded the financial markets with excessive liquidity.

That has led to euphoric bubbles with most now being tamed. The surprising element was inflation was accommodative during this period as it just nudge nicely along.

However, what changed the overall game plan in recent times was inflation is turning into a beast with the US latest figures hitting above 8%. The parallel scenario would be the 1970s period when the overall economy was in a stagflation mode- High inflation but low growth.

They only managed to finally curb the inflationary pressures when the US central bank go all out by increasing the interest rates to 20% in 1980. The current Federal Interest Rate is at 3.25% with the expectation of it reaching 4% in the near term.

Not taking into consideration the recent ultra-low interest rate environment over the past decade, the normal sweet spot for interest rates would be around 2%-5% region. Therefore, if you look at it, we are just back to a normalised situation.

 

US Debt	Current Yield
2 Yr	4.35%
10 Yr	4%
30 Yr	3.95%

Source: Investing.com- US Treasuries Yield

Given the backdrop, it is no surprise that US Treasuries are looking attractive with 2 Years Bills giving a yield of 4.35%.

Giving some perspective, a decent corporate bond in Singapore in the pedigree of AllGreen and Straits Trading is currently giving a yield of 4%-4.5% and has an expiry date of close to 3 years.

The latest Singapore Treasury Bill auction in October for 1-year yields 3.7%.

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https://thebigfatwhale.com/us-treasuries-a-screaming-buy/

Investing in the Cinema Business at Good Value- Orange Sky Golden Harvest

Contributed by: The Big Fat Whale

The cinema business has weathered an unprecedented crisis brought by the pandemic. The massive plunge in patrons to the cinemas has drastically fallen off the cliff with all the measures by governments to contain Covid 19. However, things seem to be picking up with an about-turn to better days with the unwinding of earlier tough measures.

From Singapore's scenario, there is now no safe distance requirement and capacity could go back to 100%. With the pent-up supply where movie companies have held back launches of their blockbusters, the return of the good old days of the cinema business could be on track.

In recent times, the screening of Top Gun (meant to be released in June 2020), Jurassic World Dominion, and the upcoming Minions- The Rise of Gru, would generate the buzz for moviegoers to revisit the cinemas and get things back to normalcy.

Given this backdrop, an investment in the cinema business would be a way to ride this recovery thesis of the sector. Moreover, we have spotted a well-known company that is trading at a deep value which provides a good margin of safety.

 

Deep Value Play

The stock that we are considering would be no other than Orange Sky Golden Harvest which is listed on the Hong Kong Stock Exchange. They are owners of the Golden Village chain of cinemas in Singapore (14 cinemas) and also have exposure to the Hong Kong (10 cinemas) and Taiwan (16 cinemas) cinema industry.

Golden Village is an iconic name in the Singapore Cinema scene with the first multiplex (Numerous cinemas) established in Singapore on 27th May 1992.

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https://thebigfatwhale.com/investing-in-the-cinema-business-at-good-value-orange-sky-golden-harvest/

Food Crisis and Protectionism- Boom for the Cold Storage Industry

Contributed by: The Big Fat Whale

The recent ban on exporting live chickens- 3.6 million a month- from Malaysia to Singapore has been unprecedented. It shows the vulnerabilities of the supply chain issues for a country like Singapore which is highly dependent on others for their food and energy sources.

The current situation is due to the cap by the Malaysian government on chicken prices at RM8.90 per kg since Feb 5, 2022, which has led to losses or minuscule margins for the chicken breeders. This has affected the supply of chickens as some would rather not breed given a loss-making situation where costs of breeding have shot up due to the world's inflationary environment.

The government did try to cushion and provided support to the breeders through a subsidy of RM730 million. However, to date, only RM50 million have been paid out.

The ban on Malaysia's export to Singapore could help stabilise the prices of chickens in Malaysia as there is a good possibility that prices the breeders managed to secure from Singapore would be higher than the ceiling price set by the Malaysian government.

However, if prices are not set by market forces, sustainability would be questionable, especially with subsidies not efficiently handed out.

Source: The Straits Time

From the chart above, Malaysia should form the bulk of our live chicken supply due to the geographical and logistical aspects of the supply chain. 

Going forward, with a huge dent in the supply of live chicken stocks, we might have to make do with frozen chicken till the ban eases.

Click Here for the Full Article:

https://thebigfatwhale.com/food-crisis-and-protectionism-boom-for-the-cold-storage-industry/ 

Investing in the Recovery of the Public Transport Sector- SBS Transit and Transport International

Contributed by: The Big Fat Whale

There seems to be no safe haven in this current economic landscape with runaway inflation and plunging stock prices. Gold could be one asset class to look at and digital gold- Bitcoin- seems more attuned as a speculative venture that mirrors the drop with the once-mighty growth stocks.

Despite the challenging environment, we feel that these 2 stocks should hold well and even be a beneficiary of the current woes. All of us know the prices of oil and the prices of cars in Singapore's case are shooting up. The certificate of entitlement for a car is reaching almost 72k USD in Singapore and that is even before the cost of the car is factored in. In this double whammy scenario, many could be turning to public transport.

In a discussion with a friend, he suggested for those who are used to a car, would rather dine out less so as to enjoy the convenience of having a car.  So we have different sides to the notion of the shift towards public transport. If prices remain sky-high, we believe our thesis could be the more likely scenario.

Moreover, the prices of cabs have also been rising in tandem with inflation. Nowadays, it seems hard to flag a cab and they are usually available only through the different booking platforms. A normal trip could easily top $20 nowadays where it could be in the mid-teens previously.

 

What are the 2 Stocks?

So today we are covering 2 stocks namely, Transport International and SBS Transit. They are looking attractive given the tailwinds towards their business in this current inflationary situation. It is not only recession-proof but an essential industry.

Just a brief overview of their business, both of them are in the transportation business mainly as a provider of public bus services. Transport International is also a property play (Investment Properties make up 35% of the book value- Leading Hong Kong Property Developer, Sun Hung Kai, has a 33% stake in TIH) whereas SBS Transit has the train and commercial segment (Advertisement and Rental of Shops in the Train Stations) from their managing of the North East and Downtown lines in the Singapore MRT network that have 6 lines.

Source: TIH Annual Report 2021- TIH's Property Holdings

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https://thebigfatwhale.com/investing-in-the-recovery-of-the-public-transport-sector-sbs-transit-and-transport-international/

When to Sell Your Stocks?- Return Trip is Terrible

Contributed by: The Big Fat Whale

The bloodshed in the markets especially in the growth and technology sector has made some investors' saneness go overblown, it would further exacerbate the situation if they are on financing or borrowed funds.

As the saying goes:

"The Market moves up like climbing the stairs but comes down in an escalator"

Some of the stocks have done a return trip which is giving back all the great gains and even worse, you are underwater and in deficit. A good example will be one of Ark Investment's favourite stocks, Teladoc.

The feeling of letting go of a 3-4 bagger gain and making a loss is a terribly tough situation to handle emotionally.

 

Click here for the Full Article:

https://thebigfatwhale.com/when-to-sell-your-stocks-return-trip-is-terrible/

Recession Oncoming- Forecasted by the Inverted Yield Curve

Contributed by: The Big Fat Whale

If the financial markets have a crystal ball, it would be everyone's dream to grab hold of it.

Today, we are going to share with you, an indicator that has successfully preceded a recession since 1955 except for once in the mid-1960s. There was an economic slowdown rather than a recession but the forecasting prowess should not be undermined.

Uncannily, the latest inversion was in 2019 that preceded the market crash caused by Covid 19 in March 2020.

Source: JP Morgan Asset Management - For the 2020 recession in April, it took 8 months to recession after the inversion.

On April 1st 2022, the 2 years and 10 years of US Treasuries rate saw an inversion again. It would be foolish to ignore it given their track record of predicting a recession and economic slowdown.

Click Here for the Full Article:

https://thebigfatwhale.com/recession-oncoming-forecasted-by-the-inverted-yield-curve/ 

 

Dollar and Cents- Reliable Handyman Services

Here is another post for the Dollar and Cents series, where we have touched on cost-effective and good recommendations for things like Scrapping a Car, Buying a Piano, Repairing a Car in JB, Renovating a House, and Kid's Golf Lessons previously.

Given the numerous providers of handyman services, I thought it would be great to share a good provider who is able to not only provide quality work, at a reasonable price and gives a professional diagnosis.

The usual route when we have some handyman issues is to google for service providers and get quotes from at least 2 to 3 companies. For those who are not too savvy, you could be fleeced and it is not a good feeling after you discovered it.

I have engaged this company for a number of works and their price is reasonable (could be 30% lesser than those who are trying to carrot me) and quality of work have been satisfactory:

1) Replacing Water Tank (There was a 30% price difference from another vendor but waited 2 weeks for the appointment)

2) Rectifying Leakage from the water pipe (Needed drilling as pipes are hidden while another vendor suggested putting up exposed pipe that will uglify my bathroom lol)

3) Light Switches- Use the Honeywell Brand where the previous vendor use the MK brand that is not durable ( Got a quote of $129 for 2 switches as compared to another vendor that quote $130 for just 1 switch)

The downside is that their appointment slots would at times not be immediate and so for those situations that cannot wait, they might not be suitable.

I am not getting any benefits from doing this recommendation but just want to recommend a good provider and give credit when it is due.

Here is the link to their website:

https://www.everyworks.com/

Anyone who has other good and credible vendors can share in the comments section as sharing is caring. :)

Interview with the Dean of Valuation- Aswath Damodaran

Those who are into value investing would likely have heard of Aswath Damodaran. He is the Professor of Finance at New York University and has generously shared his lectures and valuation spreadsheets online for all to benefit from it.

In this podcast interview by We Study Billionaires- The Investor's Podcast Network on Spotify, he shared many of his thoughts on valuation and going to even philosophy of life.

Some interesting nuggets of knowledge I gathered from this interview will be:

1) To value a company, you just have to split the information gathered into 3 baskets. These are namely growth profile, operating margins and reinvestment needs.

2) In order to come up with a good valuation, you have to curate a story which you can do it better by talking to the stakeholders- tesla owners or Airbnb hosts.

3) His thoughts on Tesla which I would disagree with as his valuation is more towards Tesla just as a merely auto manufacturer.

4) The hype of ESG is overblown and focusing on it would not lead to drastic changes in cash flow and valuation.

5) His thoughts on crypto as an alternative investment and also on Alibaba.

6) Portfolio allocation and When to Sell your Winners?

7) How to keep your serenity under extreme market conditions?

There are many more snippets of sound advice that you could benefit from in this interview.

Here is the link to the full interview:

https://open.spotify.com/episode/2BAxBluC9l0VfytwzyEohQ?si=qahZpMx5S7unR0Nb0gZpfg

These are some old videos with him at the Google Talks that are also very insightful:

https://www.youtube.com/watch?v=Z5chrxMuBoo

https://www.youtube.com/watch?v=uH-ffKIgb38

Buffett’s Analysis of Geico in 1951- Why was it attractive then?

Contributed by: The Big Fat Whale

Here is a look into the mind of Buffett when he was just 21.  He was still a student at the University of Columbia embracing the teachings of Benjamin Graham.

In 1951, as Geico was one of its key holdings of Graham (Graham is also Chairman of the Board), Buffett would want to know more about the company. He took a train down to Washington on a Saturday when the Geico office was closed. He was persistent enough to get the building janitor to lead him to Lorimer Davidson who was the only one working that day. Davidson would eventually be the CEO in 1958.

The encounter gave him a huge head start in the business of insurance that would be one of the key foundations for his future investment framework. Free float in the form of premiums if successfully invested would unleash the power of compounding.

Buffett came up with the thesis of investing in Geico after the meeting and have it published.

Click Here for the Full Article:

https://thebigfatwhale.com/buffets-analysis-of-geico-in-1951-why-was-it-attractive-then/

The Warren Buffet of UK- Terry Smith

Contributed By: The Big Fat Whale

Terry Smith is known as the Warren Buffet of the UK and his fund have posted stellar returns of close to 18% per annum since inception in 2011. Like Buffet, he is into investing in good quality companies at a reasonable price. However, unlike Buffet, he never invests in oil and gas companies and also the banks. We got to know about him when we read his book on his investment philosophy.

Would highly recommend everyone to read through this insightful book which is full of investment wisdom and more importantly, it gives you a good guideline on how to choose good quality companies.

These companies are currently under Fundsmith's top 10 holdings:

Their fund is positioned to have their interest align with their shareholders where there will be minimal turnover which will lead to a lower expense ratio- 0.01% in 2021. The management fee is at 1% with no performance fees embedded in the structure. The Fundsmith Fund could be a potential investment alternative once Buffet and Munger are no longer around- Terry Smith is just 68 years of age and hence there is still a long runway.

The stocks Terry choose are usually those that have a long track record - decades- and have experienced several downturns. This is necessary to validate the resilience of the business that he buys. His main focus would be on healthcare, consumer staples, consumer discretionary and technology.

Just like Berkshire, they also hold annual meetings where they discuss the fund's performance and their views of the market. For this year, it was a virtual event. They shared about the merits of investing in Amazon, Unilever and Meta. The effect of war and inflation was also covered. 

Here is the link for the full video to the annual meeting:

https://www.youtube.com/watch?v=Ha2zG4sVTeo&t=8s

In a nutshell, this is a fund that we could consider for our retirement funds. It is only available to accredited investors for those based in Singapore.

 

We hope you liked this write-up and do subscribe to our website to receive insightful articles whenever they are published.

 

Disclaimer:

The content here is for informational purposes only and should NOT be taken as legal, business, tax, or investment advice. It does NOT constitute an offer or solicitation to purchase any investment or a recommendation to buy or sell a security. The content is not directed to any investor or potential investor and may not be used to evaluate or make any investment. Do note that this is not financial advice. If you are in doubt as to the action you should take, please consult your stockbroker or financial advisor.

 

 

 

How to Invest in a Bear Market? - Advice from a Veteran Fund Manager with 54 years of Experience

 

If you are heavily invested in China Tech, it is not an easy time in the past few weeks. Baba has fallen by 30% within a week and the end seems not in sight. Even the almighty Tencent was not spared from this perfect storm.

The reasons for their drop could be from the possible implications of delisting from the US, China's regulatory claw and the more likely cause which is similar sanctions imposed on Russia slapped on the Chinese companies.

Would the US and its allies impose drastic sanctions on China? Based on a realistic assessment, it is unlikely to happen as China is playing the neutral role well so far. However, it was also unlikely too for Russia to wage a war on Ukraine without negotiations so it is anyone's guess in this crazy world.

It has been a long while since I saw HSI testing 18000 levels, the way it is going, it looks like they are going into bankruptcy administration. Many of the companies are currently trading close to value stocks status despite their growth characteristics. Tencent at PE of 12 and Baba at PE of 11 (excluding one-off writing down of goodwill).

The Chinese Government have to step in soon unless they want to have a crumpled capital market which will not be in line with their goal of China being strong, independent and vibrant. Statements to provide support for the Chinese market would be most welcome in such dire conditions.

They have shown their prowess and proven their point that no one is on top of the powerful government. Jack Ma is nothing but just a cloud in the sky. Is it perhaps time to spare the rod and shower some care and concern?

The merits of being able to do valuation of a company based on financials rather than concepts would come in useful at this juncture. If we are convinced China would not let their titans fall, this is the time to be brave and accumulate the "best of the class stocks" in China.  

The Graham crowd would be excited to hunt for gems in this current massacre of China's market where Mr Market is getting moody and throwing bargains at us. Even strong names like Ping An is not spared this time around.

Here is some advice from a veteran portfolio manager with 54 years of experience from Royce Investment Partners as he gives his input on how to invest in a bear market. I hope you will find it useful to navigate the current challenging conditions.

What’s your take on the sharp market decline?

I think it was overdue and I believe we have more to go. The reason that I think more drawdowns and declines are likely is the Fed has yet to implement the measures they need to take to restrain and hopefully bring down inflation.

I feel that they’re dramatically behind the curve, meaning that they have to catch up to do. They should have been removing stimulus and should have been raising rates earlier. They haven’t done so. And that’s ahead of us.

Do you think there are other parallels in your career?

I’ve been doing this professionally for 54 years, which means I was actually a young portfolio manager managing a pension fund in 1972-75, also known as the Nifty Fifty era. And this was at a time when, much like the FANG stocks of today, there was an anointed group that sold at very high valuations. We’ve obviously seen this in the dot.com bubble. It repeats itself. So history is a good instructor in these matters.

And the market, from top to bottom, went down 50%. That insight that I learned then was instilled in me by a veteran trader. And he says to me, Charlie, hold your horses. This is the beginning of a bear market. What you’ve got to do is you’ve got to pace your purchases, dollar cost average. You don’t know how long this is going to take.

So what I learned then was a pyramid. What you do is you buy, think of the top of the pyramid, you buy a little. And as the price declines, you buy more. And on days that market goes up, you stop buying, on the presumption, it’s going to go down tomorrow or the day after.

Here is the link for the Full Article:

https://www.royceinvest.com/insights/2022/1Q22/how-a-veteran-pm-invests-in-bear-markets

Navigating the Investment Landscape in a Stagflation World- Revisiting the 1970s

Contributed By: The Big Fat Whale

Stagflation is the buzzword in recent times. The definition of stagflation will be persistent high inflation combined with high unemployment and stagnant growth in a country's economy.

The most relatable period in which we can have insights into the impact of stagflation would be a relook into the 1960s-1970s period. This was the only time in modern history(20th and 21st century) that this economic phenomenon has happened.

Inflation was persistently above the 8% mark throughout the period from 1972 to 1981.

History Rhymes

As Mark Twain famously quoted:

"History does not repeat itself but it certainly rhymes"

There are many market analysts and commentators that dismissed the possibility of stagflation happening and argue that the situation is different this time. One of the main arguments is that stagflation is caused by the oil shock in the 1970s which send oil prices spiralling up and the US was heavily dependent on it.

Currently, the US is a net exporter of oil as they have the largest shale oil reserve in the world and with the advent of alternatives (Solar, Wind and Nuclear), the impact of oil on the economy would be less pronounced.

But we might not have an oil shock but a debt shock could be on the cards which have been built up from trigger happy Quantitative Easing in the past. Debt to GDP is at a record of 124% versus 35% in the 1970s.

Click Here for the Full Article: 

https://thebigfatwhale.com/navigating-the-investment-landscape-in-a-stagflation-world-revisiting-the-1970s/

Investment Opportunities in the Gene Editing Field

Contributed by: The Big Fat Whale

The birth of the first genetic edited twins, Lulu and Nana in November 2018, has brought the gene-editing field into the spotlight.

This was made possible by He Jiankui who was at first lauded for this achievement by China's government but after a day, they changed track as there was international attention to this controversial milestone.

The scientist was trying to rid the twins of the HIV virus, where one of the parents was a carrier. He was eventually jailed for 3 years for this feat.

Bill Gates has highly recommended the book, The Code Breaker, which follows the events leading to the invention of the CRISP gene-editing technology by Jennifer Doudna.

For this breakthrough, Jennifer Doudna and Emmanuelle Charpentier earn the esteemed Noble Prize. This technology was also utilised by He Jiankui for the birth of the gene-edited twins.

They have opened the floodgates for the launch of this field and the different applications could lead to possibilities that will allow us to cure diseases, fend off viruses, and enhance our children.

 

Gene-Editing Industry Outlook

We will look at the potential of the sector outlook through the lens of the different market research companies' insights.

The global gene editing market is expected to grow from USD 4.2 billion in 2020 to USD 13 billion by 2028, at a CAGR of 15.2% during the forecast period 2021-2028.

Source: Fior Markets

According to Emergen Research, the global gene editing market size was USD 5.20 billion in 2020 and is expected to reach USD 18.50 billion in 2028 and register a revenue CAGR of 17.2% during the forecast period, 2021-2028.

Market Dynamics:

The global gene editing market revenue growth is majorly attributed to factors such as the growing prevalence of chronic and genetic disorders globally, increasing research & development activities in the field of genomics, continuous advancements in gene therapy, and increasing applications of genome editing technologies in the pharmaceutical, biotechnological, and agricultural sectors. Technological advances in gene-editing tools, the rapid spread of the novel coronavirus worldwide, and the increasing use of CRISPR-based diagnostic tools to detect the SARS-CoV-2 virus are among the other key factors expected to drive the global market revenue growth over the forecast period.

Source: Biospace

Click Here for the Full Article:

https://thebigfatwhale.com/investment-opportunities-in-the-gene-editing-field/

Food Economics: Rustic Pet Haven Food Hub

It is always exciting to discover new places that will create a different experience, especially if gives a laidback and nostalgic feel. We were looking for a place that is pet friendly for a relaxing weekend outing.

It brings us to Faber Drive which is in the Clementi vicinity with Nanhua Primary School as a good landmark that is nearby. The cafes and eateries are nestled in the middle of a private estate in a possibly 1980s building.

We went to the gelatolabo which is famed for its mochi waffle with ice cream. There were 2 more eateries, a pub and a cafe situated in this hub. The prices are generally reasonable and the waffle from gelatolabo is indeed unique as mochi was embedded inside the waffles.

There are seatings outside the eateries and cafes where pets are welcomed. It gives me a feeling of being transported back to the 1990s or 2000s when the pace is slower and brings our heartbeat down a notch.

You can choose to sip on a coffee and just idle your afternoon away while reading a nice book or you could take your dog for a stroll around the estate.

It is indeed a great find and would be back to try out the other eateries and cafes where the food looks great and prices are friendly to the wallet.

Have a great week ahead and Faber Drive could be a chill-out place for you to check out this weekend!

Would you wait for a deceased for 9 years?- Story of Hachi

In the midst of the current gloom and doom of the war coupled with the fear of economic armageddon- tech and innovation stocks have already felt the ripples, it is good to take a step back and reflect on what really matters.

Over the weekend, I have caught this 2009 movie, Hachi: A Dog's Tale, featuring Richard Gere. It is based on a true story in Tokyo during the 1920s of a Japanese college professor and his dog. The professor passed away in 1925 due to a brain haemorrhage. The dog continues his daily ritual of waiting for his owner at the train station for 9 years before passing away.

There is a statue erected in memory of Hachi at the Sibuya Station where he has waited for his owner.

It certainly brings many thoughts such as life could be really simple with a simple goal such as for Hachi; which is to see his owner once again. The devotion, dedication and determination are what every one of us could learn from.

So if we desire a simple lifestyle, we could gain financial freedom earlier and do what we love and desire instead of it being another job. With the ever-increasing expectations- a bigger home, a better car and an ideal lifestyle- that society is piling on us and with simple goals- owning a home- fleeting away due to it being out of reach, it has even inspired the "Lying Flat" movement in China.

The advent of technology and social media, it has led to their own set of problems such as cyberbullying, wastage of productive time, scams and misdemeanours. Nonetheless, from the productivity angle, it has really helped to boost up the economy and address workers shortage issues.

I would strongly recommend this show as it would evoke not only emotions but hopefully self-reflections in these challenging times. It will make us more appreciative given that there are many that are worse off than us- imagine those in the war zone now.

Hope everyone would enjoy the show as much as I do. 

Life could indeed be very simple and meaningful.

Here is the link to the actual Hachi story:

https://www.cesarsway.com/hachiko-story-hachi/

Is Meta a Buy Now?- Not at Maximum Pessimism

As chronicled by John Templeton's famous bet in the Great Depression, he put in $100 on all the stocks listed in the stock exchange, which was 104 stocks that cost him $10,000 dollars (Equivalent to $185,000 today).

His bet was on the basis that the market has reached maximum pessimism. His good foresight has proven prescient and it netted him close to a 5 times returns when he eventually liquidated all of his positions years later.

The point we are trying to highlight is that the market tends to overreact and therefore, we do not feel Meta have reached the optimal entry-level despite the huge decline in recent times. The bearish trend might just have started and it would need some time to play out.

Let's first revisit some main points that led to Meta's plunge:

1. The fall in Daily Average Users (DAUs) for Facebook- an important barometer of growth.
2. Apple Privacy Policy would cost Meta 10 Billion a Year
3. 10 Billion a year to be spent on research and development for MetaVerse
4. Credible Competitor in Douyin (TikTok)

 

Source: Meta Corporate Presentation

Click Here for the Full Article:

https://thebigfatwhale.com/is-meta-a-buy-now-not-at-maximum-pessimism/

Russia War with Ukraine- Brinkmanship or For Real?

Contributed by: The Big Fat Whale

With the latest developments looming around the Russian and Ukraine region, where there have been other players such as the US adding fuel by giving intelligence that Russia is going to wage war in a matter of days. 

So is Russia really bent on taking over Ukraine?

Source: BBC

What is Happening?

The threat is real with more than 150000 troops stationed near Ukraine borders. Adding some perspective, there was just close to 5000 troops deployed in 2014 when they seized Crimea from Ukraine.

Understandably, Crimea is much way smaller than the whole of Ukraine. The seizure could be a strategic move given the geographical location of Crimea as could be seen from the map.

Click Here for the Full Article:

https://thebigfatwhale.com/russia-war-with-ukraine-brinkmanship-or-for-real/

No Cash, No Bonds, Good Geographical Diversification for the New Norm- Ray Dalio

Chanced upon this latest interview by Ray Dalio that give advice on the current economic outlook and the geopolitical situation. It is worth your time to digest.

Just a little introduction on Ray Dalio:

Ray Dalio, founder and co-chief investment officer, Bridgewater Associates — the world's biggest hedge fund — manages $150 billion in assets. With over 50 years of experience in macro investing, 72-year-old Dalio has been successful in creating a practical investing template by analysing patterns in history and has helped Bridgewater’s flagship Alpha Fund clock net gains of $46.5 billion since inception in 1991. Dalio’s book, Principles for Dealing with the Changing World Order, examines the big cause-effect relationships of economic events that have shaped the world we live in.

In his latest interview with Fortune India, Ray Dalio discusses his macro-investing template. Here’s an excerpt from the interview:

Dalio: I want a highly diversified portfolio of assets that are not cash and bonds.

I want geographic diversification as much as I want asset class diversification. Regarding my geographic diversification I want to favour countries that have three characteristics and are healthy in the ways we talked about:

First, they are financially strong, that is, their incomes are greater than their expenditures and their assets are greater than their liabilities.

Second, I want countries in which there is internal order rather than internal conflict so that then they can be productive.

Third, I don’t want to invest in countries where there are significant chances of external conflict.

I create two portfolios — first, a portfolio of assets that perform best in bad times and retain their value in the worst of times. And second, a diversified portfolio of the investments.

You can read the entire interview here:

https://www.fortuneindia.com/long-reads/the-conversation-ray-dalio/107064?fbclid=IwAR3SWyRBM-gycDOEivZEvDMFwGo_IEtj5Gi8jgVNgBgIX-LtH0_NFxmqDns

Investing In Women's Best Friends- Luxury Bag Brands

Contributed By: The Big Fat Whale

Just as Marilyn Monroe famously declared, "Diamonds are a Girl's Best Friend", her song was released in 1953.

Since then, there are now a few more additions to the best friends list, namely the luxury bags. We are not too well versed but based on our research, the few that would add a smile to a girl if they are able to add to their collection would be top of the list, Hermes, followed by Chanel, Christian Dior and Gucci.

We are going to analyse 3 companies that never have a price discount and are able to hike prices consistently, yet there is great demand for their products. The 3 companies we will be touching on would be Hermes, LVMH and Christian Dior. Chanel would be a good candidate but unfortunately, they are privately owned.

For Hemes, they have positioned themselves nicely as it is almost impossible to get a Birkin bag if you walk into their stores. Most have to get it from the secondary market.

Source: Seeking Alpha

Of the 3 brands, LVMH is the most complicated in terms of ownership structure as could be seen from the diagram above. They have a minority stake in Hermes and a majority stake in Dior. 

Luxury Goods Outlook

The growth outlook for the luxury goods market would be likely in the single digits of 6%-8% and could reach EUR360- EUR380 billion by 2025 based on the forecast of Bain and Company.

The revived luxury market has been powered by the resumption of local consumption, the dual engine of China and the US and the consistent strength of the online channel. Younger customers (Gen Y and Gen Z) continue to drive growth and together are set to make up 70% of the market by 2025. 

Source: Bain and Company

Click Here for the Full Article:

https://thebigfatwhale.com/investing-in-womens-best-friends-luxury-bag-brands/