Everyone knows I am not a fan of iCapital.Biz. However, since it's earnings season and since iCapital.Biz announced its earnings, I decided to take a look since I was rather more interested to look at that iCapital.Biz would say in its earnings notes than anything else.
You may ask why.
The answer is rather simplistic.
The business economics of this stock is simple. It's a closed end fund is managed by Tan Teng Boo and the company acts as a Fund Manager and also Investment Adviser. ( ahem! The dual role issue questioned previously!). And since the company had declared itself to be a VALUE INVESTOR, I was hoping to read what it has to say about the market.
But I was so disappointed.
Here is the snapshot of the earnings notes.
The company said...
- 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.
Err.. surely that's rather lacking.
If I am an investor of this fund, surely the Fund Manager of this company should be more transparent in its earnings notes. To tell the reader that the company will continue to seek stocks that are attractively priced is not sufficient. It is so lacking. Surely, it owes to the shareholders of the fund, a much better market view and commentary. Just to say that the stock market is depressed is not up to standard. That's my blunt opinion.
And sad to say, why isn't the company disclosing what stocks and what investments it is currently holding? Don't the shareholders or potential shareholders have the right to know?
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4 comments:
oh..they don't need to disclose their stock holdings during their annual report?
Hi Moola, I have gone through ur blog n found u r writing quite alot of informative threads which r very useful for me to understand alot of business n investment terms. Thanks alot!
Btw, regarding the issue tat icap is reluctant to disclose its current investment holding, i think u mite miss a point tat icap
is doing investment for its shareholders, not giving investment advice to its shareholders. And it did disclose its current holding to its shareholders during AGM (in the annual report as well) but at the quarter report.
I think it is a way of doing investment management business to keep its investment intention as private & confidential as they mite still accumulating shares while reporting quarter result. Otherwise it could turn up to have too many competition to its investment target in case its intention to buy shares leak out, so its expected return could be jeopardised due to higher acquired price n subsequently compromise the return to its shareholders.
Even the Berkshire's CEO, Warren Buffet did apply exemption from the US Securities Commision not to disclose its intention of accumulating shares of companies while its shareholding exceed 5% of total shareholding up to a certain period. And the Berkshire's oso only disclosed its investment holding once a year.
Kin Wing
Kin Wing,
You said: Btw, regarding the issue tat icap is reluctant to disclose its current investment holding.
=> If it doesn't disclose, how would a potential investor knows WHAT this closed end fund is doing? Is one to invest based on blind faith? Or is one to invest based just on reputation?
Well, some might and some might not.
For me, I would want to KNOW MORE. Else, why should I invest in the fund?
You said: i think u mite miss a point tat icap
is doing investment for its shareholders, not giving investment advice to its shareholders.
=> Do remember that in iCapital's own words "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".
So what's this role as 'Investment Adviser'?
Anyway, let me rephrase. :D
I am sure that you understand that the current market is extremely tricky, yes?
Buying the wrong company at the wrong price is extremely hazardous to one's financial health.
Now say I am a potential investor of this fund.
What do you think I would like to hear or what do you think I would like to know from this fund manager before I invest in their fund?
Don't you think I would want to know what the Fund Manager's current perspective about the market? What's the Fund Manager's current market view and opions?
Don't you think I would want to know more?
To just that the market is depressed is simply insufficient.
Just not up to standard.
That is my view.
You said: And it did disclose its current holding to its shareholders during AGM (in the annual report as well) but at the quarter report.
=> Yes I am very aware it does but like I said I am extremely disappointed to see the lack of information in the quarterly earnings.
Why is this an issue for me?
Well, if you would see the following posting, http://whereiszemoola.blogspot.com/2008/08/more-on-icapital-transparent-issue.html
Quote from the posting: "The investment advisory reckons that these stocks stocks are worth a buy/hold but the fund management from this very same company reckons that are justifiable reasoning for the fund to dispose some of their stock holding! Don't you think that this is so contradictory?"
And it's because of issues like these, I would want to see more transparency!
Just my flawed views.
Kris said...
oh..they don't need to disclose their stock holdings during their annual report?
=> Missed your comments. Sorry.
Kris, I am well aware that they do disclose during their annual meeting.
However, the issue here is on the lack of disclosure in its quarterly earnings.
Well for some 'investors', they can live with the lack of information.
But some, this is an issue.
Here are couple of simple reasoning why disclosure is needed.
The world markets is highly tricky now, yes?
Many would argue that the end of the bear market is near. And yet many would simply argue that such a thought is clearly DELUSIONAL.
How?
Which camp is iCapital on?
To wait one year for the annual report is simply too long for some, given the extreme economics of the current market.
Which is why some wants to see more disclosure.
Or how about assuming that I am a potential investor of this closed fund.
How much did I gain from reading this quarterly earnings?
My blunt view is absolutely nothing.
All the company mention in their quarterly notes was.."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".
That for me is simply lacking, unprofessional and simply not up to the standard.
If I am a shareholder of this fund, I would be so disappointed. Hey, it's my money they are investing WITH and I would deem that it's only fair that they show the respect to my money by making more disclosure.
This is my blunt and flawed view.
rgds
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