Marc Faber: 100% Chance of Global Recession

The stock market appears to be at a critical inflection point. That’s the takeaway from widely followed economist Marc Faber, author of the Boom, Gloom & Doom newsletter.

Faber’s bearish market calls have been followed closely since 1987 when he warned his clients to cash out before Black Monday.

And in a live interview on CNBC’s Fast Money Halftime Report, Faber again warned that economies of the world may be on the brink of a serious slowdown.

Faber indicated that while investors remain focused on Greece and Europe – other issues, bigger issues are looming. And they’re more threatening.

“As an observer of markets – whenever everyone focuses on one thing – like Greece and Europe – maybe they miss issues that are far more important – such as a meaningful slowdown in India and China.”

The latest reports from Beijing would support Faber's assertion.  The HSBC Flash Purchasing Managers Index, slipped to 48.7 in May from 49.3 in April. That marks the seventh straight month that the index has been below 50, a level which indicates economic activity is contracting.

Faber also cited weakness in the high-end as another key catalyst that’s very negative.
“There are more and more stocks that are breaking down – economic sensitive stocks and companies that cater to the high-end,” he said. "That suggests to me the economy is likely to weaken and the huge asset run is likely to come to an end with significant asset deflation.”

Earlier in the week Tiffany lowered forecasts citing slower sales. At that time, Fast Money trader Dan Nathan warned that results such as these were foreboding and suggested the high-end was starting to crack.

When taken in concert, Faber says all the economies of the world could take a hit from these negative developments.

“I think we could have a global recession either in Q4 or early 2013." When asked what were the odds, Faber replied, "100%."

However, in the near term Faber also sees potential for a market rally.

Faber said the bullish catalyst would be Greece exiting the EU.

“I think the market would be relieved if finally Greece exited the euro. There would be some clarity. Although it wouldn’t be good for banks and insurance (stocks) in general I think markets are oversold and with an exit – markets would rally.”

It’s worth noting that Faber is talking hypothetically; he does not think Greece exits the EU in the near future.

“What I think will happen is that Germany will show more flexibility and issue more euro bonds.”

Faber pointed to the recent decline in the euro as evidence that the currency markets share his view. “More bonds will challenge the quality of the euro. That’s why the euro has been very weak, lately."

For investors looking to navigate what could be a serious economic storm, Faber said the best thing to do is keep the portfolio in US dollars and own gold, “knowing that sentiment is negative and in the near-term it could trade down to the Dec 29 low of $1522.”


From an article on CNBC

Investors want news on asset manager probe, fear cover-up

Update: another interesting link can be found here: SelangorTimes

Worrisome article in the MalaysianInsider regarding RBTR Asset Management. Abdul Razak said that RBTR’s custodian UBB (Malaysia) Trustee Bhd had paid the monies to British Virgin Islands company Locke Guaranty Trust (NZ) Ltd (LGT). But in 2007 the Securities Commission of New Zealand has already issued a very alarming alert on this company.


Investors should be warned about the scheme because the Commission believes claims made about it are likely to deceive, mislead or confuse investors," the Commission's Director of Primary Markets, Kathryn Rogers said. LGT advertised the plan on its website. It stated that the investment is safe and risk free. All investments have a degree of risk and the Commission believes these statements are deceptive and misleading. "The website may have given the false and misleading impression that LGT has been licensed and/or approved by the Securities Commission or the Reserve Bank," Kathryn Rogers said. "LGT is not a registered bank in New Zealand and is not subject to banking regulations." If its claim that New Zealanders are not eligible to invest is true, then the offer is not subject to the Securities Act. It does not comply with the Act. The description of the scheme is confusing because it is unclear how LGT intends to use investor's money and information about this appears inconsistent.

How could RBTR Asset Management have overseen this warning?

"Bank Rakyat had once held a 20 per cent stake in RBTR and lent its “Rakyat” name and logo to RBTR, then called Rakyat BTR Capital Partners Sdn Bhd, when RBTR had solicited funds from the public from mid-2007 till mid-2008".

Syed Jalaludin and Kamaruzaman were directors of RBTR before Bank Rakyat sold its stake in 2008.
But the investors claim they were not informed of Bank Rakyat’s withdrawal, despite the fact that most had invested with RBTR due to the company’s association with the Bank Rakyat Group.

It appears that Bank Rakyat and its directors must also bare (at least some) responsibility for what happened.

And why is the Securities Commission so terribly slow in taking action, funds were solicited in 2007 and 2008, that is four full years ago! Quickly investigate the case, interview the persons involved, follow the money trail, it all should not take that long. There is also still no news regarding SJAM, another asset manager which ran into problem.

A group of investors want the Finance Ministry and Securities Commissions (SC) to complete investigations, already delayed two years, on what they say are losses of more than RM13.5 million invested in an asset management company.

They allege that licensed asset management firm RBTR Asset Management Bhd had failed to pay them the principal sums in a Euro Deposit Investment (EDI) scheme upon maturity.
After taking over the company in October 2009, the Securities Commission (SC) and its appointed receiver, BDO Binder, informed the investors the following year that RBTR had less than RM10,000 in its bank account that once held as much as RM13.5 million.
“This is a clear cut case for the SC or Ministry of Finance to pursue an outright criminal case or criminal breach of trust against the criminal parties,” Petaling Jaya Utara MP Tony Pua told reporters at a press conference here.
“However, the investors have not received any substantive updates in the past two years, nor has any of their money been recovered.
“We are concerned that no further action was taken because the case involves Bank Rakyat chairman Tan Sri Dr Syed Jalaludin Syed Salim and Bank Rakyat managing director Datuk Kamaruzaman Che Mat,” he added.
Bank Rakyat had once held a 20 per cent stake in RBTR and lent its “Rakyat” name and logo to RBTR, then called Rakyat BTR Capital Partners Sdn Bhd, when RBTR had solicited funds from the public from mid-2007 till mid-2008.
Syed Jalaludin and Kamaruzaman were directors of RBTR before Bank Rakyat sold its stake in 2008.

But the investors claim they were not informed of Bank Rakyat’s withdrawal, despite the fact that most had invested with RBTR due to the company’s association with the Bank Rakyat Group.
“The reason my husband and I invested our hard-earned RM150,000 in the first place was because Bank Rakyat guaranteed we would receive a return,” a 64-year-old retiree told The Malaysian Insider.
“This whole fiasco has caused me so much stress, and now I can’t even pursue legal action as I barely have enough money to pay my monthly medical bills for my cancer treatment,” she added.

RBTR had told investors that the EDI was a capital-protected investment into AAA-rated
 banks in Europe with total annual returns of eight per cent payable every six months and capital to be paid upon maturity.
Although investors were assured that their funds would be deposited into two Swiss banks — Liechtensteinische Landesbank and the EFG Group — Abdul Razak said that RBTR’s custodian UBB (Malaysia) Trustee Bhd had paid the monies to British Virgin Islands company Locke Guaranty Trust (NZ) Ltd (LGT).
Pua said he would be writing a letter to the SC demanding updates on the investigation.
“It is crucial that the SC act with transparency and efficiency so that the integrity of Malaysia’s capital markets are protected,” he said.
“If the Bank Rakyat chairman can go off scot-free, investors will lose their confidence in Malaysian capital markets,” he added.

Facebook: 2nd quarter will fall short of expectations

The share price of Facebook does not exactly make a very good impression so far:

In one of the biggest IPOs in history, in which a huge amount of stock was sold to small investors, privileged Wall Street insiders once again got top-notch information...and individuals got the shaft.


Above is the conclusion from an article on BusinessInsider from Henry Blodget suggest that the reason for the weakness is that the 2nd quarter results will fall short of expectations, which was known only to a small group of insiders.


And now for some more bombshell news about the Facebook IPO...

Earlier, we reported that the analysts at Facebook's IPO underwriters had cut their estimates for the company in the middle of the IPO roadshow, a highly unusual and negative event.

What we didn't know was why.

Now we know.

The analysts cut their estimates because a Facebook executive who knew the business was weak told them to.

Put differently, the company basically pre-announced that its second quarter would fall short of analysts' estimates. But it only told the underwriter analysts about this.

The information about the estimate cut was then verbally conveyed to sophisticated institutional investors who were considering buying Facebook stock, but not to smaller investors.

The estimate cut appears to have influenced the investment decisions of at least some institutional investors, dampening their appetite for Facebook stock, and crucially, affecting the price at which they were willing to buy Facebook stock.

As I described earlier, at best, this "selective disclosure" of the estimate cut is grossly unfair to investors who bought Facebook stock on the IPO (or at any time since) and didn't know about it.

At worst, it's a violation of securities laws.


From a corporate governance point of view, Facebook is also not exactly a shining example, here is an excerpt from another article from BusinessInsider:


1. One-man majority rule: Zuckerberg holds 28.2 percent of the voting power ahead of the IPO, and he controls another 30.6 percent. That’s the majority he needs, although there are some restrictions, including the ability to vote for an issuance of stock that is more than 20 percent of what is outstanding already. Some of the voting rights end with the sale of the stock by its owners, the death of Zuckerberg or his giving up active management of Facebook.

2. The back-up plan: even if Zuckerberg loses or surrenders some control of his majority, Facebook continues to be heavily influenced by all owners of Class B shares. As long as these shares represent 9.1 percent of all shares outstanding, this group will control a majority of the votes. According to the S1: ‘This concentrated control will limit your ability to influence corporate matters for the foreseeable future.’

3. Board dependence: Facebook is taking the ‘controlled company’ exemption to corporate governance rules. As a controlled company, it won’t have to maintain a majority of independent directors on its board, and it won’t need to have a compensation committee or an independent nominating function. Zuckerberg’s designees have voting control, and if director Peter Thiel gives up his board seat, the board itself will decide who should fill it, increasing Zuckerberg’s control further.

4. Special situations: Facebook has taken specific measures to protect itself from acquisition. A transaction that would lead to a change in control of the company requires a majority of Class B votes (with these shareholders voting as a separate class). If Class B shareholders lose their overall majority, some ‘certain amendments to our restated certificate of incorporation or bylaws’ will call for a two-thirds majority of Class A and Class B shares. Simply put, the Class B shareholders – mostly founders and early employees – will retain majority control in certain situations with only a third of the votes. Also, when Class B shareholders lose their majority voting rights, the board will fill its own vacancies.

5. Meeting lock-down: what else happens when Class B shareholders lose their majority? Well, shareholders will only be able to ‘take action at a meeting of shareholders’, not by written consent. And only the CEO or a majority of the board can call a special meeting of shareholders – so any change would have to come with Zuckerberg’s consent.

While the corporate governance limitations at Facebook are not as seve re as those at the Carlyle Group, and the voting structure isn’t as favorable to Zuckerberg as Zynga’s, the net effect is straightforward: shareholders are surrendering themselves to Zuckerberg’s genius.

11 Macro Investing Insights from Barton Biggs

Article on BusinessInsiders website with insights from hedge fund manager Barton Biggs:

"Macro investing is "simple, but never easy." You need good information and quick reactions

"It’s not just about wrestling with the global environment and getting your asset allocation positioned. Good information, thoughtful analysis, quick but not impulsive reactions, and knowledge of the historic interaction between companies, sectors, countries, and asset classes under similar circumstances in the past are all important ingredients in getting the legendary “it” right that we all strive so desperately for. "

"There are no relationships or equations that always work"

"Quantitatively based solutions and asset allocation equations invariably fail as they are designed to capture what would have worked in the previous cycle whereas the next one remains a riddle wrapped in an enigma."

Read, read, read...

"The successful macro investor must be some magical mixture of an acute analyst, an investment scholar, a listener, a historian, a river boat gambler, and be a voracious reader. Reading is crucial. Charlie Munger, a great investor and a very sagacious old guy, said it best:

I have said that in my whole life, I have known no wise person, over a broad subject matter who didn’t read all the time – none, zero. Now I know all kinds of shrewd people who by staying within a narrow area do very well without reading. But investment is a broad area. So if you think you’re going to be good at it and not read all the time you have a different idea than I do."

Being able to immunize yourself from the psychological effects ot the swings of markets is just as important

"But the investment process is only half the battle. The other weighty component is struggling with yourself, and immunizing yourself from the psychological effects of the swings of markets, career risk, the pressure of benchmarks, competition, and the loneliness of the long distance runner."

"A personal investment diary is a step in the right direction"

"Such a diary has to be written in the heat of the moment, in the fire and agony of the time, not retroactively or retrospectively. Its value comes from reading your thoughts and emotions later in the context of events and seeing where you were right and wrong."

Remember there is always a possibility of a "catastrophic outcome"

Jack Bogle, a veteran of many battles, said in a speech in 2009: “We must base our asset allocation not on the probabilities of choosing the right allocation but on the consequences of choosing the wrong allocation.” He is completely and absolutely right!"

"In the long run you want to be an owner, not a lender."
"The history of the world is one of progress, and as a congenital optimist, I believe in equities. Fundamentally, in the long run you want to be an owner, not a lender. However, you always have to bear in mind that this time truly may be different as Reinhart and Rogoff so eloquently preach."

Be wary of the "human tendency" to fight the last war

"As investors, we also always have to be aware of our innate and very human tendency to be fighting the last war. We forget that Mr. Market is an ingenious sadist, and that he delights in torturing us in different ways.
…Mr. Market is a manic depressive with huge mood swings, and you should bet against him, not with him, particularly when he is raving."

Buffett says it's as though you're in business with a partner who has a bi-polar disorder

"It’s as though you are in business with a partner who has a bi-polar personality. When your partner is deeply distressed, depressed, and in a dark mood and offers to sell his share of the business at a huge discount, you should buy it. When he is ebullient and optimistic and wants to buy your share from you at an exorbitant premium, you should oblige him. As usual, Buffett makes it sound easier than it is because measuring the level of intensity of the mood swings of your bipolar partner is far from an exact science."

Don't "sacrifice higher returns for lower volatility"

"Buffett put it best when he said he would always pick an investment strategy that over five years could give him a 12% compounded annual return, but that was volatile over one that promised a stable 8% return annually."

But mostly, "Know thyself and know thy foibles" and make sure your facts are right

"At the extreme moments of fear and greed, the power of the daily price momentum and the mood and passions of “the crowd” are tremendously important psychological influences on you. It takes a strong, self confident, emotionally mature person to stand firm against disdain, mockery, and repudiation when the market itself seems to be absolutely confirming that you are both mad and wrong. Also, be obsessive in making sure your facts are right and that you haven’t missed or misunderstood something. "

A govt of national unity could bridge the divide

Great article in the Business Times (Singapore) by S Jayasankaran, recommending Malaysia to form a government of national unity. It would be even better to have many non-political linked professionals in it. Doing away with the corruption, the wastage, the "nonsense" projects, Malaysia would quickly flourish.

Abdul Razak, PM Najib's father, took the lead over three decades ago, and returned the country to normalcy; his son should follow suit

 

 

 

 

Waving the flag: A Bersih rally in Johor last month. The country is riven by race and religious suspicions, made worse by politicians from both sides. Many M'sians are sick and tired of the politicking

Several weeks after the 2008 general election, this reporter met up with Professor K S Jomo, one of Malaysia's most renowned economists and, at the time, a deputy secretary-general with the United Nations.

Mr Jomo, who had been in New York during the election, worried that the divisions in the nation would become greater over time and felt that what was needed was what Abdul Razak Hussein, the country's second premier, did in the early 1970's - the creation of a government of national unity.

Such a government is an ideal and hideously difficult to implement, but as Mr Razak, 38 years ago showed, not impossible. Essentially, it means a broad-based coalition of the major political parties in the legislature of Parliament coming together for the common good.

It is also formed for very specific reasons, usually during a time of war or some national emergency and must involve the disbandment of coalitions and the creation of a singular political entity.

Is Facebook a Bubble?

Friday, finally, after much hype, Facebook was listed on the Nasdaq. After (rather embarrassing) initial technical problems the stock ended where it started: at around $38, its IPO price. Rather disappointing for a much touted tech stock.

The IPO turned many employees in millonaires and multi-millonaires and some into billonaires or even multi-billionaires. And Singapore has one more very rich resident since 2009: co-founder Eduardo Saverin.

Dan Ariely, writer of well known books like The Upside of Irrationality and The Honest Truth About Dishonesty, writes about the fees that Morgan Stanley and the like make on the IPO. He estimates it at $ 660 million of investment bank profits. However, friendly parties who receive the IPO shares might make more money (although with hindsight not that much, since the stock traded only a few dollars above its IPO price).

At $38 the market cap of Facebook is $108 Billion, giving it a PE of about 108. Priced to perfection, not leaving any room for disappointments down the road.

With close to 1 Billion users currently, there is still some growth left. However, in a country like China Facebook is simply barred (Tencent is the leading player), so that is already 1 Billion potential users less. And a country like Japan has its own, highly successful social/gaming websites (GREE and DeNA).

Well known Professor Damodaran finds Facebook overvalued:

I think that the hype is overdone, that disappointment will set in sooner or later and that the stock has far more downside than upside. You can put me in the last group (long term sell) though I am still searching for the most efficient (and least costly) way to execute this.

Facebook, in spite of its ubiquitous presence in our lives, is just one company and not a very big one (at least in terms of revenues and earnings) yet. The market will obsess about it tomorrow but it will move on very quickly to the next worry, fear or fad.  

The New York Times made this graph, to put things in perspective versus previous tech IPO's:

There have been similar companies that faded in history, MySpace comes to mind.

On the other hand, the company is now cash rich, and can use its sky high shares for acquisitions. That is what Cisco did for a long time in the nineties, and got away with its high valuation for many years:

But in the long run the valuation came down and it could not play the acquisition game anymore. People who bought the stock around 2000 and held on to it will not be happy lot.

A free press is essential to democracy

Excellent article in The Malaysian Insider by Dennis Ignatius.

The examples given are political, but might also have been related to business. Where can we read some thorough, critical analysis regarding the well known businessmen, blue chips or government related companies, pension funds or agencies?

Malaysia ranks only 122nd in the Press Freedom Index, really a shame.


Marina Mahathir, one of our nation’s most inspiring figures, recently wrote how her article in The Star was spiked for fear of incurring the wrath of the powers that be.

As a columnist for the same newspaper myself, I understand Marina’s angst.

Recently, I submitted an article about democracy in Myanmar. It ran on Monday, May 7. One line was, however, deleted. In referring to Prime Minister Najib Razak’s promise to support the transformation process in that country, I said, “We may not have much to teach them about democracy but we can help in other ways.”

It seemed such a small thing but even such references are now deemed too sensitive.

I thought it was really ironic that here I was writing about democracy in Myanmar, long considered a dictatorship, while being censored in a country that is assumed to be a democracy.

The last article I wrote in response to bizarre allegations in the national press that American and Zionist groups were plotting regime change in Malaysia was spiked with no explanations given.

It seems newspaper editors in Malaysia, at least the ones who don’t behave as government servants, have to constantly play by ear, shutting down criticism when the government is nervous and allowing some measure of it at other times.

Commentators, for their part, quickly learn that it is prudent to write about developments in faraway places than to touch on the issues that really matter at home. And so we wax eloquent on why Nicolas Sarkozy lost the elections or why Barack Obama supports gay marriage instead of the beaten and bloodied demonstrators on the streets of our capital. It’s the journalistic equivalent of Nero fiddling while Rome burns.

Having been brought up on the notion that some issues, particularly those relating to race and religion, are “sensitive” issues, we came to accept a measure of state censorship. There are signs, however, that things are changing. People are less willing to accept such censorship today, particularly as the so-called “sensitive” list has been expanded to include other national issues.

Furthermore, it is quite obvious that the mainstream media has become far too one-sided for the liking of most Malaysians. Perhaps that may account for the gradual decline of newspaper sales in the country.

Our prime minister recently introduced legislation amending the Printing Presses and Publications Act and other repressive laws. He promised that it would lead to greater freedom, including press freedom.

However, it appears that while Parliament may have changed the letter of the law, the spirit of control behind it has survived intact. In quiet and hidden ways, the press continues to be subjected to manipulation and harassment in an effort to drown out dissenting opinions and differing views.

A culture of self-censorship has also emerged where the press learns to anticipate the reaction of the powers that be and acts accordingly. When the press ceases to write “without fear or favour,” to use the title of the late Tan Sri Dr Tan Chee Khoon’s column in The Star, we have truly lost one of the essentials of our democracy.

History tells us that without a free press, truth dies and the lie prevails while mismanagement, corruption and the abuse of power fester in the dark with terrible consequences. As well, it creates an unhealthy environment where rumours and gossip quickly become fact.

Just these past few weeks we have seen how one of the most significant events in our country’s history has been reframed and recast as a communist-inspired coup attempt, as nothing more than mass hooliganism, as something contrary to our religious values.

What about the other side of the story or the personal narratives and firsthand accounts of hundreds of ordinary citizens who were there that day? Is there no space in our national newspapers for their story?

Journalists have a responsibility to capture such events in all its dimensions to help the public understand what took place. If they do not, they will soon find themselves irrelevant to the national conversation on these issues.

History also teaches us that to sustain itself, repression and control, by its very nature, must keep on expanding to be effective. Already we are seeing signs of censorship creep and manipulation — BBC and al Jazeera newscasts edited and an Australian senator’s remarks blatantly distorted.

And then there’re the shocking remarks by our minister of Home Affairs that it is standard operating procedure for the police to smash cameras and harass journalists who cover such public gatherings!

How long will it be before all criticism of government becomes illegal and treasonous?

It is tempting, of course, to blame the editors and journalists for not standing up to censorship but that misses the point.

I have met a number of journalists and editors, including from The Star, and I know them to be honourable men and women who have dedicated their lives to their profession. You cannot be committed to journalism, as they are, and not yearn for the freedom to write, to explore issues, to investigate a lead no matter where it goes. My sense is that they deeply resent the censorship and the constant harassment.

They are forced to make choices that they shouldn’t have to make: To yield in some areas in order to keep at least a modicum of free expression alive in other areas and to compromise or close, to give up or somehow keep hope alive.

The real focus of our indignation should instead be the system of control and manipulation that makes good men and women bow their knee to what their hearts deny, that forces them to choose between their principles and their livelihood, between what they know to be right and the wrong they are often compelled to accept.

It is no secret that our nation now faces many critical challenges; press freedom is one of them. I hope that the voices clamouring for this fundamental right will grow louder in the days ahead. The future of our democracy depends upon it.

“If a nation expects to be ignorant and free… it expects what never was and never will be. The People cannot be safe without information. When the press is free… all is safe.” ~ Thomas Jefferson

Singapore: Ferrari taxi crash

Horrific and tragic crash between a Ferrari and a taxi in Singapore that is the talk of the town.

Newspapers were very slow to suggest who was wrong, until another taxidriver came forward with the below images, which are quite shocking, but make it very clear: the Ferrari was driving through the red light and at a crazy high speed.

After the accident the taxi driver with the mounted camera went home, uploaded the data, and only then noticed the Ferrari. That is how fast everything happened.

The Ferrari driver died (but not many people will sorrow him), the taxi driver and his passenger (a Japanese lady) died, a motor driver is injured as is the passenger in the Ferrari.

Live is fragile.

SEGi: minorities are most welcomed to stay along, really?

Interview in The Star with Nicholas Bloy, managing partner of Navis:

"While minority shareholders of SEG International Bhd (SEGi) will eventually determine whether the company remains listed or gets privatised, Navis Capital Investment Ltd, the party intending to privatise SEGi, isn't too concerned about the final outcome of its bid.

“The outcome of the general offer does not matter to us, as I'm sure we are going to do very well in the next five years regardless of whether the company is public listed or privately held,” said Navis managing partner Nicholas Bloy after SEGi AGM.

On April 25, Navis, together with SEGi group managing director Datuk Seri Clement Hii (who is a party acting in concert with Navis) made a mandatory general offer (MGO) to privatise SEGi at RM1.74 per share and RM1.214 per outstanding warrant.

Bloy said the MGO was a technical matter of securities law, and Navis was obliged to make the offer to the rest of the shareholders.

“We are embarking on a more extensive phase of SEGi, which would incur more costs, and we might see some losses before profits and might even have short-term compression in earnings.

“If minorities are concerned about short-term profitability, they should sell. However, if they are looking at the long term like in five years, they should stay,” he said.


Bloy said he was not an advocate for a single solution for all shareholders as it depended on their own sensitivities and personal circumstances.

“For those who want to accept the offer, we have the liquidity to pay them. However, those who want to go along the ride must keep their eyes wide open and recognise the change in the company's strategic direction and possibly the short-term financial performance of the group.

“If they are aware of these changes, they are most welcomed to stay along,” he said."


Nice and friendly words regarding this General Offer. But the harsh reality seems to be rather different. In the announcement to Bursa Malaysia the following text can be found:

"Does not intent to maintain the listing status" puts a lot of pressure on minorities.

And how can one combine "they are most welcomed to stay" with "compulsory acquire any remaining shares"?

These statements seem to contradict each other.

Again, this is a case of the "infamous" General Offer with "Delisting Threat", so often used in Malaysia, against which minorities hardly have any chance at all to fight.


MSWG had recently questioned the fairness of the offer price, with MWSG chief executive officer Rita Benoy Bushon saying the price should not be less than RM2 as there is a lot of growth potential in the education sector and in SEGi.

SEGi had also released its quarterly results, which saw a 12% higher net profit of RM21.8mil for the first quarter ended March 31 compared with the previous corresponding period.

Revenue rose to RM77.8mil from RM68.47mil previously.

James Montier, the Flaws of Finance

James Montier (currently asset manager at GMO) is one of the good guys who calls it as it is. He has warned many times for wrong incentives (rewarding short term profits but not punishing long term losses), blindly following financial models, etc.

His latest presentation "The Flaws of Finance" about what went wrong in the GFC (Global Financial Crisis) can be found here and a resource page about his previous papers/presentations and books can be found here.