Exemption For TTB and iCapital?

In the posting: "iCapital Did Explain Why It Lost So Much Money In Axiata!" , the following comments were posted.

• Moolah said...
  
  How about this?
  
  Imagine I am an investment advisor and also I manage a couple of funds. ( LOL! That would be one big joke. However, let's just let our imagination run wild. :P )
  
  I make public recommendations that iCapital.biz (just a blunt stock example... lol.. if do not like this name, use ABC co, ok?) is an excellent stock to invest in.
  
  However... behind everyone back, the funds that I manage, were selling iCapital.biz.
  
  How?
  
  How would you seriously rate my integrity?
  
  Won't you be cursing me that my mouth said one thing but my hands and legs is doing the exact opposite?

And I got the following comments..

• invest said...
  
  LOL !If you're the advisor and fund manager, of course I would curse and scream....
  
  Reputation, respect and leadership have to be earned, not by making comments on others....

Hmmm...

Yes, it's ok that you would curse at me and scream at me but you won't do that at TTB?

Seriously.

Because what I did is simply not forgiveable.

To tell you that I am bullish while the same time I am actually selling would mean that I am less than truthful in my investment advice. Which would reflects poorly on my integrity. I would be no more than the lowlife scum of the earth!

And seriously, you should even throw your rotten shoes and eggs at me too!

:D

However ... just what about TTB and iCapital?

Now I do hope that I am not misinterpreting you wrongly and do kindly correct me if I am wrong.

It would appear to me that you would not you curse and scream at TTB but you would at me.

Rather not fair, eh? Why the double standard?

I do hope that it is not because he has reputation and respect! And I do hope that you are not saying that as long as he has reputation and respect, he as an investment advisor can be telling everyone he is bullish, while at the same time he is selling shares by the truckload! (incident happened early year!)

WOW!

I hope I am wrong in misinterpreting what you are saying.

Or perhaps you are saying that I cannot earn respect and reputation by making (bad) comments on TTB.

This one I can handle, no problem.

Is ok that you have no respect for me. Seriously. :)

Anyway, so what's wrong for highlighting this issues within iCapital and TTB?

A Quick Look At iCapital's Annual 2009 Report

Posted not too long ago: iCapital Lost 14 Million In Axiata Without Explaining Why and iCapital Lost 14 Million In Axiata Without Explaining Why

Some suggested waiting for the annual report.

Here is the link. ICAPITAL.BIZ BERHAD

I opened the pdf file in that link and did a quick find on the word AXIATA.

This was what I got.

Huh?

Huh??

Ok, what it is saying is correct but it's a rather 'nice' way that it had compiled all three disposal of shares into one.

Now if one had not followed this blog and the postings, would one have known that iCapital lost a whopping 14 Million in Axiata? And yeah they did not bother to even explain why.

By stating it had a realised gain of rm221.146 gain from those three disposals of shares, it does not tell their massive loss in Axiata, yes?

Some would even call this as twisted reporting!

Anyway, this is how they got the realised gain of rm221.146.

And iCapital's 14.163 million losses in their investment in Axiata has become nothing but a mere accounting entry.

Hey, what are you complaining?

Yeah, some would say, "iCapital made money in their 3 shares disposals what? Bising apa?"

For sure iCapital is good. Hero for many. How could it not be?

Capital Dynamics Tan Teng Boo Now Claims That Markets Have Bottom Few Months Ago!

Last month, I made a couple of postings on iCapital's quarterly earnings.

My issue was clear and simple.

I was reading it's quarterly earnings notes and I found the earnings notes lacking because the closed end fund gave a rather shockingly brief market outlook and of course the lack of disclosure was another issue.

These were the postings made.

1. A Quick Look At iCapital's Quarterly Earnings
2. iCapital.Biz Lack Of Disclosure In Their Quarterly Earnings
3. iCapital.Biz Lack Of Disclosure In Their Quarterly Earnings II
4. iCapital.Biz Lack Of Disclosure In Their Quarterly Earnings III
5. A Quick Look At iCapital's Annual Report 2008
6. iCapital's Investment In Axiata
7. iCapial And Their Potential 12 Million Ringgit Paper Losss In Axiata

And why was the earnings note shockingly brief?

Well when a potential investor or a minority shareholder of the fund reads the earnings notes, surely the would want to learn more about the current prospect of their investment.

Now since iCapital is a closed end fund, it's only right, in my flawed opinion that they give a proper account of their views on the current markets, right?

For example, if the fund reckons that the market would be in the doldrums, upon reading such market assessment, perhaps the minority investor has the option of remaining as an investor of the fund or the investor might want to cash out.

And this is what the company has to say LAST MONTH in their earning notes.

• Although the stock market remains depressed, as a value investor, iCapital.Biz Berhad with its Fund Manager and Investment Adviser will continue to seek stocks that are attractively priced.

Today, on Business Times, there is an article. 'Stock stampede coming and it's no bull'

• Managing director Tan Teng Boo believes that stock markets have bottomed "a few months ago" and that the global economy is on course to a V-shaped recovery.

Huh??????

Ok, so a month ago, Mr.Tan's iCapital remarks in iCapital.Biz earnings notes that stock market remains depressed. (see screen shot)

Now, he goes on media and proudly proclaims that stock markets have bottomed a few months ago?????

Well... how lah?

Still the same old same old eh?

LOL!

• 'Stock stampede coming and it's no bull'
  
  By Adeline Paul Raj Published: 2009/05/06
  
  A major bull run is under way in global stock markets, says the Capital Dynamics group, a fund manager with one of the most optimistic views of the market yet.
  
  Managing director Tan Teng Boo believes that stock markets have bottomed "a few months ago" and that the global economy is on course to a V-shaped recovery.
  
  "The global stock markets are on a major bullish reversal," he told reporters yesterday at the launch of a global unit trust fund.
  
  Economic data in almost every part of the world, including the US, is beginning to look much more positive, he said. Yet, investor sentiment has continued to remain negative.
  
  "I've never seen so much pessimism in my life. I want to go on the record as being bullish, amid pessimism," he remarked.
  
  Tan emphasised that this is not a bear market rally that the world is seeing. With economic fundamentals improving, global fund management firms will realise that if they don't start investing soon, they'll be under-performing the market.
  
  They then start to panic-buy, he said, and this sets the stage for sustainable market rally.
  
  "The current stock market rally will be sustained by the institutional lemmings which are still loaded with cash and the banking giants which have too much hoarded liquidity," he said.
  
  The same will happen in Malaysia, but here, there is the complicating factor of political uncertainty in certain states, he said.
  
  "Politically, Malaysia is still in a very uncertain phase, but what will help the stock market is the global economic recovery," he added.
  
  He thinks the Kuala Lumpur Composite Index (KLCI) will likely test the 1,400 to 1,500 point level within the next two to three years.
  
  The KLCI closed at 1008.87 yesterday, down by 0.49 point on profit-taking activity after three days of strong gains.
  
  Capital Dynamics has been on a stock-shopping spree over the last few months, Tan said. It owns shares in KL Kepong, Keppel Corp, Parkson, Tesco and Bank of East Asia, among others.
  
  The group's recently-opened Australian office Capital Dynamics (Australia) Ltd will manage the iCapital International Value Fund that was launched yesterday.
  
  This is a global open-ended fund denominated in the Australian dollar, meant for retail investors here and Down Under.
  
  Tan said the fund, which will be invested in value stocks in 42 markets, is targetting an annual return of between 15 per cent and 20 per cent. The minimum initial investment is A$20,000 (A$1 = RM3.00).
  
  Capital Group also has offices in Malaysia and Singapore.
  
  On the global financial crisis, Tan said the severe economic contraction can be almost entirely blamed on the collapse of US investment bank Lehman Brothers last September.
  
  "Without the policy flip-flop of the previous US administration in not rescuing Lehman, it would have been pretty much 'business as usual' for us," he remarked.
  

Has Global Markets Decoupled From US Economy?

Mentioned by iCapital's Tan Teng Boo.

• Meanwhile, Tan said Malaysia and many other countries had been decoupled from the US economy.
  
  “Although the US economy has affected some sectors of the local market, it has not affected others, such as palm oil, oil and gas and tourism. It (the US economy) would not drag Malaysia into recession,” he said.

Decoupled?

I am simply baffled.

Has the world suddenly turned into a NOT globalised world?

All our exports, all China exports, all India exports and all the other exporting countries, their exports, where do they go?

Can all the exporting countries consume all that they manufacture themselves?

On today's FinancialSense market wrap, market commentator, Michael Panzar, made the following comments on his editorial, The Experts Continue to Be Wrong

• For a long time, there was a popular delusion among highly paid Wall Street “strategists” that the rest of the world would be relatively unaffected by an economic downturn in the U.S. Even though America accounted for a quarter of global gross domestic product, they rejected the longstanding reality that when the U.S. sneezes, the rest of the world catches a cold -- favoring instead a dubious theory known as “decoupling.” Based on the data included in the chart below, it looks like the so-called experts -- who have been wrong about virtually every aspect of what has taken place over the past year or so -- are turning out to be some of the world’s best contrarian indicators.
  
  
  
  Indeed, many of the same “experts” who claimed that the rest of the world was an unstoppable locomotive also argued that emerging market equities would continue to power ahead, virtually regardless of what happened to share prices in more developed economies. Unfortunately, that assertion has proved to be wide of the mark. In fact, the MSCI Emerging Markets Index is currently down around 25% from its late-autumn peak, which is more than the loss in the S&P 500 index over the same period. True, emerging market equities have performed far better than other markets during the past several years, but if the recent price action in other speculative trading arenas is anything to go by, there may well be a lot more downside to come in this very trendy asset class. (do read rest of his editorial here )
  

How?

Decoupled?

How many wish this is it but let's not kid ourselves for the last I checked we are still living in planet Earth and this is still the very same global Earth and the world will not be isolated from the ills in the US economy!

Bashing iCapital and Tan Teng Boo for No Reason?

Received the following comments on the following posting, A Look At iCapital's Buy Call on NasionCom!

• 廖福深 said...
  I feel sad for TTB because some people here just like to bash people on some small mistakes. TTB has been in the market for a long long time and I don't think his record is anything is be ashamed of. Depending on how you look at your portfolio, I believe you can allow for some 100% writeoffs in your stocks (just like structured warrants expiring worthless). For every Nasioncom, our friend has a few LionDIV. If you strcutured your investment to allow for such eventuality, no need to say sorry!

Dear 廖福深,

Let me explain what has transpired here on this blog.

I had been noticing that Mr. Tan Teng Boo has been rather bullish on the mass media early this year. Several articles have been quoted that Mr. Tan had declared himself to be bullish on the markets. And in his OWN subscription editorial, he had stated that he was a long term bull on the local markets and that his long term targets for the KLCI is at 2000 pts.

(ps if you see this posting here one would notice that in iCapital own words "Instead of boring our subscribers with our LONG-HELD and CONSISTENTLY BULLISH VIEWS...!" )

Which was fine with me.

That's his opinions and views as an independent investment advisor.

I am not even challenging whether his views are correct or not.

Now what I found discovered in the quarterly earnings during this very same period that he had been telling the Malaysian public he was bullish, he contradicted what he said by selling some rm50 million worth of shares.

Everything else aside, is such actions correct?

Why tell everyone one you are bullish when you are actually disposing a lot of shares?

If it wasn't Mr. Tan and it was me. Imagine me blog about Hai-O and imagine me saying that Hai-O is a wonderful stock. And while I am singing my praise to you, I sell my shareholdings in this very same. Now is this correct?

Don't you think that this shouldn't be?

Now if I am wrong, then what about Mr.Tan Teng Boo?

Let's not judge who I am but judge the actions!

Which is why What Do You Think of ICap's Recent Disposal Of Shares Held? was posted. And then followed by More Rumblings On Tan Teng Boo's ICapital's Disposal Of Shares. Which lead to a blogger commented that Tan Teng Boo Declares Warren Buffett to be a lousy Economist! and Is iCapital Views Consistent? Is Warren Buffett a Lousy Ecomist?

Which comes to NasionCom, a stock that I had blogged a couple of times before. NasionCom Founder Charged With Bribery!

And I was shocked to read iCap recommended a BUY call on this stock.

Why was I shocked? I knew NasionCom was a terrible stock. That was a fact.

Let me repeat what I had posted on More on iCapital Buy Call On NasionCom

• A lot of folks like to rate investment advisors based on their accuracy, which is bench marked against the said stock movement.
  
  I do have a differing opinion.
  
  When one is focused on benchmark issues like accuracy and the performance of the said stock, then it renders the actual usefulness of the investment analysis/report. Focus is on performance, right? So what's the difference between a report/analysis with the basic stock tipster?
  
  Is there any difference?
  
  I see zero difference then because everyone is judged on how that stock performs, which ultimately renders the analysis/report useless.
  
  And more so when one considers that in the market, sometimes some stocks go mysteriously higher after a report is published. Which makes one wonder if the analysis was really good or perhaps the dark force was simply stronger?
  
  So what do I prefer?
  
  I prefer to rate the analysis/report based on the reasoning why a certain call is made on the stock.
  
  Yes, I do not want to see contradictory buy calls made despite the glaring issues within the stock.
  
  In short, it's not about how the stock call or recommendation performs but how the call is made.

Yes for me, most important is how the call is made.

Look at NasionCom.

The BUY call totally contradicts the glaring weakness in the stock. How could one well known and good independent investment advisor company like iCapital not able to acknowledge the weakness in the stock?

Am I bashing without a reason?

Or am I merely pointing out what is happening here?

Is it wrong for me to point this out?

ps... I actually feel sad to see all this happening.

Is iCapital Views Consistent? Is Warren Buffett a Lousy Ecomist?

Got the following screenshot from a reader on the recent iCap commentary.


WOW!

Instead of boring our subscribers with our LONG-HELD and CONSISTENTLY BULLISH VIEWS...!

Well, are these views truly consistent?

If the views are consistent and if iCapital Long-term view of the KLCI is valued at 2000 pts, then tell me WHY DID iCap.Biz sold some rm50 million worth of shares recently? ( Do refer: More Rumblings On Tan Teng Boo's ICapital's Disposal Of Shares )

How?

Truly consistent?

And then more comments were made on Warren Buffett again!

Now this irks me a lot.

Why the need to use Warren Buffett as reference?

Has Warren Buffett ever claimed to be an economist? Did Warren Buffett ever claim to be a good economist? And what has Warren Buffet known to have said all his life? Who has been quoted too many times saying "I don't read economic forecasts. I don't read the funny papers." Wasn't it Warren Buffett?

And yes in Berkshire Annual Meeting, Warren Buffett has fielded questions on this issue. ( see previous posting here! )

• Q3: Sam from Fort Lee. Recession, stock market up in April. What next?
  
  WB: I could expand on that question, but I couldn’t answer it. Charlie and I haven’t the faintest idea where it goes next week, next month or next year. We are not in that business. It isn’t our game. We see 1,000s of companies priced every day. We ignore 99% of what we see. Every now and then, we find an attractive price for a business. When we buy it, we would be happy if market was closed for a few years. Wouldn’t get a price quote daily on a farm. We look at expected yield, cost of taxes. If you buy a farm, you would look at cost of fertilizers, what a farm produces relative to purchase price, price per acre, production per acre, etc.. We make judgments.

And the following article was published on CNBC: Buffett Says US in Recession, Banks to Face Pain

"Warren Buffett, the world's richest person, said on Sunday the U.S. economy is in recession, putting him at odds with a government report that showed weak growth.

Buffett offered his assessment during a wide-ranging news conference, a day after a record 31,000 shareholders of Berkshire Hathaway attended the insurance and investment company's annual meeting in Omaha."

• Last Wednesday, the Commerce Department said the economy grew at a 0.6 percent annual rate in the first quarter. But Buffett said the nation's population also grew, making the real growth rate lower. He also said that, even if the data do not show the economy retracting, people feel as though it is.
  
  "The U.S. is in recession as I define it," Buffett said. "I would define that as a situation where people are doing less well than they were three months, six months or eight months earlier and most businesses find themselves in that position too.
  
  "If were are in a non-recession, I don't think people want to see it going in the same direction as it is and saying it's wonderful."
  
  Weakness at Berkshire units that sell bricks, carpets and other products dependent on a healthy housing market contributed to a 64 percent decline in overall first-quarter profit.
  
  Housing remains a critical problem, he said, as hundreds of thousands of homeowners find their mortgage payments heading higher, or that their homes are worth less than they owe.

Note what Buffett is saying and addressing here. It's a fact that the US national population also grew.

So does Warren Buffett knows what he's talking about?

Here are some other articles.

Take this other editorial by FinancialSense market commentator, Frank Barbera, Mad Cow & Economics Mumbo-Jumbo Media Babble, who focuses on the job loss issue.

• All of this sounds very mild, nothing to be concerned about, but unfortunately, all of this is just a statistical mirage. In the official release from AP, the total job losses of 240K were obtained by adding up the prior reported figures for March –81K, Feb –83K, and Jan –76K. However, what the media are not reporting, and what is not getting sufficient attention is the BLS Birth-Death Model. Yes, we have written about this in the past, and perhaps it is asking too much of reporters to actually look for the ‘numbers behind the numbers,’ but the end run effect is disingenuous at best, and an outright lie at worst. In the case of the BLS Birth-Death Model, this is a complex ARIMA Model that seeks to extrapolate prior cycle job gains and losses for the current cycle on the premise that prior history can be used to impute/refine today’s data. Unfortunately, this is not the case as the American economy has undergone traumatic fundamental changes in the last two decades, with the rise of Corporate Capitalism and the exportation of the US Manufacturing base. Call it the 'Return to the Guilded Age,' or more euphemistically, a ‘Transnational Restructuring of the American Economy,’ or simply, ‘The Rise of Globalism;’ any way you slice the baloney, today’s US economy does not resemble anything seen in the 40’s, 50’s, 60’s, 70’s or 80’s. (Well, OK. I’d have to concede that we do have a revival of the late 1970’s stagflation, except, before we are done, this is likely to prove an even stronger brand, but that’s a story for another day).

And here is John Mauldin's editorial on this job stats issue, Lies and Other Statistics

• Without that addition from the birth/death number, total private employment would have dropped by 296,000. Now, if that had been the headline number, the market would have tanked. Now, I have no doubt that the economy did create a lot of new jobs last month. But when the final revisions are in, we will see that job losses were well south of 100,000. If memory serves me correctly, the BLS had to add about 800,000 jobs that they missed during the recovery in 2003-4. (The birth/death model misses job growth during recoveries, the opposite result of the miss in slowing periods.) They did this just last year, in a major revision of the data. We will see the same type of revisions in 2010, only this time it will be downward.
  
  And even the BLS says that the birth/death numbers have little statistical meaning. The following is from their own website (courtesy of Dennis Gartman) [emphasis obviously mine]:
  
  "Birth/death factors are a component of the not seasonally adjusted estimate and therefore are not directly comparable to the seasonally adjusted monthly changes. Instead, the birth/death factor should be assessed in the context of its effect on the not seasonally adjusted estimate... The components are not seasonally adjusted separately because they do not have particular economic meaning in and of themselves."
  

Or how about this other editorial, Yes Virginia, This Is A Recession, who address the US Economy growth of 0.6% as stated by iCapital.

As quoted by the US Statistics:

• Real GDP growth from Q1 2007 to Q1 2008 was therefore (in the neighborhood) of .57%. Or to put it another way, although “Real” GDP growth in the first quarter of 2008 was very weak, the American economy is not in a recession.

As argued by Mr. Cooke:

• People are not buying more. They are just paying more for what they buy.
• Tell that to a mother struggling to find enough money to buy food for her family and suddenly realizing she also has to buy gas with the little bit of cash that’s left in her purse.
  
  Farm prices are up. We can get an indication of the world-wide competition for available agricultural products by looking at the prices American farmers received in February 2008 versus February 2007, and Q4 2007 versus all of 2006. We can also make a projection of average annual prices in 2008 versus the actual prices farmers received in 2006. Higher consumer demand, coupled with decreased production due to crop failures and increasing production costs, have increased the competition for available food grains, sending projected prices up by more than 123%. Higher fertilizer, herbicide, insecticide and fuel costs will push up the price of commercial vegetables, and fruits and nuts. Higher feed costs mean higher prices for meat animals, dairy products, and poultry and eggs.

And how about this news posted on APress last Friday, Federal regulators close Arkansas bank ANB Financial

• BENTONVILLE, Ark. (AP) — Federal regulators says they've closed ANB Financial National Association banks after discovering "unsafe and unsound" business practices there.
  
  David Barr, a spokesman for the Federal Deposit Insurance Corp. says many customers served by the bank's nine locations had accounts under $100,000, which will be fully insured by the government. Barr says customers can continue to write checks and draw money from ATMs through the weekend.
  
  Barr says Pulaski Bank and Trust Co. agreed to assume control over ANB Financial's bank locations, which will be open Monday.
  
  As of Jan. 31, federal regulators say ANB Financial had about $2.1 billion in assets and $1.8 billion in total deposits.
  
  It was the third closure this year of an FDIC-insured bank. Douglass National Bank, a Missouri bank with $58.5 million in assets, was shut in January; another Missouri institution with assets of $18.7 million, Hume Bank, was shut down in March.
  
  Both were dwarfed in size of ANB Financial, where regulators found lax lending standards, mostly for construction and development loans for projects in Utah, Idaho and Wyoming, as well as Arkansas.
  
  Observers have been watching for signs of bank distress resulting from the mortgage crisis. Profits at federally insured U.S. banks and thrifts plunged to a 16-year low in the fourth quarter as institutions set aside a record-high amount to cover losses from sour mortgages

Is this end of this mortgage crisis? Third FDIC bank to be shut down this year. And this ANB is no smal bank. It has US$2.1 billion in asset and US$1.8 billion in total deposits.

Everything ok?

How?

Tan Teng Boo Declares Warren Buffett to be a lousy Economist!

I was given the following a screenshot of ICapital's latest commentary.

My oh my, what a huge statement!

I wonder why some people want to write things like this!

(My oh my... KLCI long term target is 2000 points? Why did ICapital dump rm50 million of shares during the last quarter then?)

Anyway, Warren Buffet was the main feature last night and he had several interesting comments.

And yes, Warren Buffett do admits that this field (economics) is not his specialty!

• "This is not a field of specialty for me, but my general feeling is that the recession will be longer and deeper than most people think," Buffett said. "This will not be short and shallow.
  
  "I think consumers are feeling gas and food prices," he added, "and not feeling they've got a lot of money for other things."
  
  He was not immediately available for further comment. Known for his frugality, the 77-year-old Buffett has lived in the same 10-room Omaha, Nebraska, house for a half-century, despite being worth an estimated $62 billion.
  
  On Wednesday, the U.S. Commerce Department is expected to say how fast the economy grew in the first quarter. Economists on average have projected that gross domestic product grew at an annualized 0.2 percent rate in the quarter.
  
  Two quarters of declining GDP is a traditional indicator of recession. That last happened in 2001. Economists expect the U.S. Federal Reserve on Wednesday to cut a key lending rate for a seventh time beginning last September.
  
  Berkshire is a $197 billion conglomerate best known for its insurance holdings, such as auto insurer Geico Corp, but it owns more than 70 businesses.
  
  Many of those businesses are tied to the housing market, including Acme Brick Co, insulation maker Johns Manville, and the real estate brokerage HomeServices of America Inc.
  
  Others depend on consumers to spend more on discretionary items, such as Ben Bridge Jeweler and Borsheims Fine Jewelry.
  
  "In the retail businesses ... if anything, they've gotten a little worse," Buffett said. "Of course, things connected with housing, whether it's in brick or whether it's in carpet, those businesses have shown no uptick at all. Jewelry had a bad Christmas ... and it stayed that way."
  
  Buffett sees no respite from the housing slump.
  
  "I think this is going to be fairly long and fairly deep, but who knows," he said. ( source of article: here )

How now my dearest MooMooCow?

More Rumblings On Tan Teng Boo's ICapital's Disposal Of Shares

Blogged previously, What Do You Think of ICap's Recent Disposal Of Shares Held?

The main issue in the posting was that in the quarterly earnings report ended Feb 29th 2008, ICapital had disposed some 50 million worth of shares.

Some find it truly amazing because it was just in Jan 2008, ICapital's Mr.Tan Teng Boo had been quoted on the daily news paper that he had been bullish on the Malaysian equities.

See Jan 5th 2008 article Corridors of catalysts and Jan 19th 2008 article Analysts and fund managers weigh in on scope of Dow’s impact and as mentioned by Mr.Tan.

• The KLCI is resilient as it is not over-valued with sectors such as palm oil, which is doing well. The KLCI would continue to perform despite a slowdown in the US.

And my point was rather simple. I have nothing against his selling or whatever.

My point is why he is telling everyone he is BULLISH on the market when deep underneath it all, he is a huge seller?

Now, I had received some interesting feedbacks that I thought deserves to be highlighted. One reader, madcap had said that I had simply been insinuating someone to be deceitful with flimsy assumptions is wrong.

Here are his comments:

• Moolah, you have always pride yourself in looking beyond the obvious. In the quarter ending Feb 2008, when do you think ICap sold? Don't you think it is naive to assume that ICap was a consistent net seller in a month from the fact that it was a net seller in a quarter? The first article says he is a net buyer at that time. Was that an outright lie? Fact is, you assumed from the fact that ICap sold in that quarter, that he must be a net seller in January. Could he have sold in February? Honestly, I don't know that.
  
  Was TTB advising on long term trend or was he giving advice on short term market timing? Look at his reasoning and tell me if he is implying that markets will go up in the next month. If TTB is bullish long term, does this mean that he should not trade in the short term? Is he implying that people who listen to his advice should not trade?
  
  The insinuation here is that the man is deceitful, not that he gave bad advice - that he was selling when he gave bullish comments - and I think that it is unsubstantiated.
  
  Finally, you quoted March 8. Take a look at KLCI from March 8. If I took his advice, I would probably be making money. So, do you think he continued to sell in March?
  
  His long term call has yet to be proven right. You can challenge him on that. But to insinuate someone to be deceitful with flimsy assumptions is wrong.

Madcap, many thanks for your feedback. I am not here to degrade Mr.Tan's ICapital capabilities and performance and neither do I want to challenge his long term calls. And let me repeat again, I have absolutely nothing against his selling of shares. What amazes me is what has happened while he was selling the shares!

So, in this reported quarter ending Feb 29th, he could have sold in December, January or February.

Looks like the issue is now focused on when exactly he sold.

If he had sold in December or January, then how would one interpret his two massive comments on January stating that the KLCI is not over-valued and that the KLCI would continue to perform? Now, that wouldn't have been nice and it would NOT make sense, would it? Well sell when he thinks the market is not over-valued?

Yes, he could have changed his mind and decided to sell in February.

Possible. However, to suddenly sell 50 million worth of shares alone in one month, in February would have been incredible.

I am wondering, did something happen in February to spook him?

Can it be the US economy or the US market? Well it can't be because in early March, March 8th, the day of our elections, Mr.Tan had another lengthy interview in the Star Biz, stating that he was still bullish in the US Market, Dare to be contrarian .

And in our local market, the one and notable market event was Gamuda's market led selldown.

And mind you, he did make a commentary on this issue in February 2008!

Feb 23rd 2008, published on BizWeek, Market expected to recover with bargain-hunting.

• While most people are gripped by fear over US taking a one-way street to Recessionville, i Capital.biz managing director Tan Teng Boo maintains an extremely bullish view on the US economy while he holds on to the view that the world economy has decoupled from the US economy.
  
  Tan says that without the strong US export growth in 2007, especially in the China market, the US economy would have been in a recession 6 to 9 months ago. The export-oriented Asian economies have all seen their currencies appreciate.
  
  Tan welcomes the present panic-selling as it allows many equity markets to undergo meaningful corrections. He sees the current fall as a panic attack, based partly on an eagerly waited, long anticipated correction. He expects market volatility to eventually subside.

Still bullish and he publicly said he welcomed the panic selling in February 2008.

Now I am confused, if Mr.Tan welcomes this panic selling in February, did he also sell some 50 million shares during this period too?

Well, madcap, like you, I honestly do not know if ICapital shares were sold during this February time frame but if it did happen during this period, I find it incredible, really.

And more so, early March 2008, Mr.Tan was quoted to say the following,

• If there is a contrarian view currently playing out in Malaysia in relation to the prognosis of the US economy, it’ll have to come from and not surprisingly, the frank and candid Tan Teng Boo – a man with a wealth of experience on equities who currently heads Capital Dynamics Asset Management Sdn Bhd.
  
  And it is for that reason that while many market pundits have written off Asian equities for the time being, he remains unabashedly bullish.
  
  His take is largely premised on the fact that the US is not faced with a doomsday scenario but a slow-paced softening in economic conditions that is easier to stomach for the rest of the world.
  
  “Firstly, the subprime problem remains just that – subprime. Secondly, while many large financial institutions have been badly hit, the central banks have successfully averted a credit or liquidity crunch scenario. Thirdly, the US economy is certainly slowing down but a recession is only a possibility, and not certain.” (do read rest of the lengthy article here )

Anyway, blogger Seng, from Fusioninvestor, had this to say.

• I would like to add my 2 sen worth here, since this topic was discussed at length in my chatbox.
  
  madcap, as john mentions here, "(TTB) has always been bullish". There are many times where he publicly declares that he is bullish. Usually made in a very confident, sometimes, arrogant manner, almost always with no qualification that he has always been bullish.
  
  Now, we must remember that TTB has a wide following. He is looked at as a leader in the local investing world. His words carry significant influence. Many people will take that with confidence and act on it.
  
  At the same time as he is making bullish pronoucements in an almost arrogant fashion, he silently sells. $50 million. This selling is only reported a few days ago from the QE Feb 2008 Quarterly Report.
  
  The amount of selling is not small. Nearly 20%. It is his largest selling yet.
  
  Of course you can try to confuse the issue by saying he is a trader and we don't know exactly the exact timing, he has the right to silently change his minds, etc.. But that's not the impression he gives to the world when managing ICAP. The impression is that he is a Buy and Hold Value Investor. Most people would assume that.
  
  So, it is this inconsistency - almost lack of integrity - that when he maintains his bullishness repeatedly, he sells behind the scene. That is what Moo is trying to point out here. Not other things.
  
  Now, why can't he tell the world that he is "generally" bullish, but will consider/not hesitate to take profits when he feels it's over-priced? Or tone down the arrogance to allow for exceptional cases when some pockets might be overpriced (and thus justify selling)? Wouldn't this be a better and more accurate approach to make? I for one would prefer to see him tell it realistically, rather than maintaining his almost arrogant bullish stance but selling significantly and silently.
  
  Don't get me wrong - one behaviour doesn't make the man. I still have high respects for Uncle Tan especially his investing skills. But my concern is if this gets repeated, that behaviour might become habitual, and one day, you could see a man with a totally different character than the old TTB we thought we knew before.
  
  And of course, if you are the owner of ICAP, then, you would be pleased that he practices sound and prudent money management. But this is NOT the issue here. The issue is the discrepancy between Talk and Action. Some people calls it lack of integrity.

In which madcap replied,

• I must say I am quite disappointed to read your response, Seng. If you tell people that you believe Parkson to be fundamentally sound and you are bullish on Parkson's prospects ("TTB has always been bullish"), but you continue to trade Parkson based on your read of market trends and charts (TTB net seller in last quarter, buying back in this quarter), are you being deceitful?
  
  You have claimed "fusion" investment strategies. And TTB cannot do the same?
  
  TTB gives the impression that ICap will be buy and hold? People assume so? Now they see that he also sells. And he is deceitful? Note your words - "gives the impression", "assume". I remember reading somewhere someone being surprised at the amount of buy and sell he found in TTB's portfolios in the past. As you have pointed out, ICap investors will probably be happier to discover that he applies trading techniques to enhance their fund (like Seng discovering the power of trading).
  
  If TTB says in January that he believes KL markets is still sound. Sells in February. Buys back in March. He is deceitful? I don't know if this is what he actually did. But neither do you know that he sold in January and February. Right? So don't say I am trying to confuse the matter if I say so.
  
  I think TTB is arrogant. I also think that he has a hard time acknowledging his bad calls. Perhaps that is the quality of an adviser of trends and analysis. (I am not even interested in defending him. I am just pointing out bad analysis and judgement here.) You may even say that you think he is a bad advisor. But arrogance is not deceit.
  
  But I don't see evidence of deceit. And I think it is wrong to pressure BB (in your chatbox) to come to this conclusion when the evidence is flawed by a time frame mismatch.

How? What say you?

I do invite more feedbacks on this topic.

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Updated: 29th April 2008.

The Wanderer, posted a screenshot of what ICapital said in its January 25th write up!




Quote: .. ICapital and its CEO have been singing a very different BULLISH song....