Did Temasek make a mistake?
It is interesting to note that in the latest cash call by Barclays, Temasek only contributed a measly 200 million pounds. I think This has more to do with a diluation issue than having a real interest in buying the share at a 9% discount to the stock price as of Tuesday.
So, if we apply Buffet's definition of a good stock (of buying more when the price drops), then indeed Temasek's action may have the following implications:
a. That they may have paid too much last summer
b. That there may be more write-downs for Barclays and a further cash call
Ouch!
9 comments:
None of my finance friends agreed the timing was correct for investing in any of those by GIC or Temasek. It just smacks of a decision maker who does not know the markets enough to have jumped in.
This new injection is purely defensive.
Which fund manager won't be taken to task if their investments lost half their value within the same 12months of their investment?
I would expect Parliament to raise these questions. How long is long term? Where is the stop loss?
Uniquely Singapore.
Perhaps unitentionally, Singaporeans are now in efect Subsidising the foreign governements to bail out their banks!
yeah - and we have our CPF life to help subsidise these foreign government.
PS - I really want all my CPF at age 55 - how??
" How long is long term? Where is the stop loss?"
LKY says it all. 30 years. Amazing answer.
Our MM, the chairman of GIC, had said yesterday that opposition will ruin Singapore in 5 years. How abt the GIC with our reserves? How many years will GIC take to ruin our reserves away?
Already made so many mistakes yet still don't want to to admit them at all.
Damn shameless these Li-family members! Still dare to hang on to their positions as if nothing happened.
Hello anons, clearly, if the returns of the investments were measured in absolute terms, it is definitely dismal. However, if measured against another benchmark (say the S&P 500 financials index), the returns do not look that 'bad'.
Again, in my post, I have used Warren Buffet's yardstick so judging any investment is not totally straight-forward.
There may be other non-quantitative factors at play here - namely political goodwill which can explain the premium paid. Temasek's agenda as the nation's investment vehicle is definitely not identical to a day trader, so we should refrain from using absolute returns as the yardstick in the short term.
Unless we have privy to the internal yardstick used by Temasek for this investment, it still remains to be seen what returns the investment brings.
Got a friend who worked in GIC. Actually from our conversation, he's as clueless as any other. In fact, the credit crunch almost wiped out GIC's gains for the past few years.
Really, I would love to see GIC's balance sheets now.
Hi CK,
Hmm ... I believe every Singaporean who pays taxes would love to have a look at GIC's returns since June last year. Guess that is why MM Lee had to come out and say that their results will be published every 5 years.
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