Investing in the Covid Era

Nirgunan Tiruchelvam

Description

Covid-19 is the most devastating event for the world economy since the WWII. Many investors are grappling with its implications. This book provides an overview of the investment themes in the wake of the pandemic. It is written in clear terms for the lay investor in Singapore and beyond. Some of the topics addressed include: What lessons can we learn from the 1918 Flu Pandemic in 2020 Why Investors should hunger for food delivery companies Is Alibaba going to wipe out physical retail shops What commodities will boom after Covid How fridges will be hot commodities with the vaccines How can investors avoid frauds like Luckin Coffee The book also looks at larger themes for local investors: Are Iran, Myanmar and Saudi Arabia going to be the next emerging market winners How Singapore can actually benefit from the F1 How poor people can reap rich rewards by investing How to the play the Trump card while investing

Sujets

• Personal finance

Informations

• Publié par: Marshall Cavendish International
• Date de parution: 10 mars 2021
• Nombre de lectures: 0
• EAN13: 9789814974196
• Langue: English

Extrait

Articles were previously published in The Edge Singapore
2021 Nirgunan Tiruchelvam
Published in 2021 by Marshall Cavendish Business
An imprint of Marshall Cavendish International

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National Library Board, Singapore Cataloguing in Publication Data
Names: Tiruchelvam, Nirgunan.
Title: Investing in the Covid era : how to spot opportunities and pitfalls / Nirgunan Tiruchelvam.
Description: Singapore : Marshall Cavendish Business, 2021.
Identifiers: OCN 1232454737 | ISBN 978-981-4974-19-6
Subjects: LCSH: Investments-Singapore. | COVID-19 (Disease-Economic aspects--Singapore.
Classification: DDC 332.6095957,dc23

Printed in Singapore
For Shehara, Antak and Vegav.
CONTENTS
INTRODUCTION
COVID-19
Sea in troubled waters
How to profit from a looming debt crisis
Beware the viral virus stocks
Beware of the retail zombies
The big shorts in the COVID-19 crisis
Is the coronavirus a bull market signal?
BUSINESS PRACTICES
Why the VIX might do the trick
Donald Trump is a godsend for US banks
President Trump could boost prospects for corporates like Apple, Cemex and Geo Group
Lessons from Bernie Ebbers acquisitions spree
Are roll-ups brewing in beer and coffee?
Luckin Coffee: Why did investors ignore the red flags?
What are the lessons from the Hyflux haircut?
COMMODITIES
Are diamonds an investor s best friend?
Is there a silver lining to COVID-19?
Lithium may rise like a meteor
Rubber could bounce from the glove boom
Altman casts dark shadow over Singapore s oil and gas sector
Why did Hin Leong collapse?
How to play nickel s turnaround
What Brexit teaches about commodity investing
El Ni o may create a rice price spike
Palm oil slavery
The myths of investing in commodity traders like Noble, Olam and Wilmar
ExxonMobil s lesson on riding the cycle
EMERGING MARKETS
What stocks to buy post-Castro s Cuba?
As Thailand grieves, three winning stocks ensure Teflon economy continues
Are emerging markets about to turn around?
Why Bangladesh still beckons despite its troubles
The exotic appeal of frontier bonds
Financial trouble at India s UB Group turns spotlight on looming NPL crisis
China is powering Pakistan s turnaround
How cheap oil is a boon for India
Three lessons for ASEAN from the life of former Singapore DPM S. Rajaratnam
Will ASEAN s dalliance with debt spark another financial crisis?
Why Jim Rogers is wrong to ditch India
Investing in Iran s isolation
Learning about the risks and rewards of frontier markets from Burmese Beer
Is the ASEAN conglomerate model losing its shine?
Poor consumers are a big opportunity
Let us raise a glass to the ThaiBev listing
INVENTIONS
The cheap washing machine may power the wheels of growth in ASEAN
Why food delivery stocks are steaming hot
Why barbershops are defying death
Will the iris herald the biometric revolution?
Will a mattress IPO raise Asian e-commerce from its slumber?
Will Alibaba s Hong Kong listing end in tears?
Space may be the final investment frontier
What the Chettiar era tells us about fintech
Moleskine proves the enduring value of writing in style
Will dual-class shares bring SGX an F1 listing?
Suppressing short-sellers is like shooting the messenger
Lessons from the Rumble in the Jungle
Cheap air-conditioners could deliver big returns in India
How Western Union and MoneyGram are making big money from small transfers
Event planning is a business set to thrive
European defence stocks may blossom
Long March of chicken in Asia
Fridges may heat up consumer stocks
Can we escape the ghosts of 1997?
ACKNOWLEDGEMENTS
ABOUT THE AUTHOR
INDEX
Introduction
Equity analysts play the same role as movie critics. We recommend stocks for fund managers, just as critics guide cinema goers. Our views help direct investment. We are accredited gatekeepers.
The work involves sifting through thousands of pages of financial statements. It also requires computer modelling to create financial forecasts. Ultimately, the equity analyst needs to generate a report full of facts, figures and charts.
In my early days as an analyst, I used to travel the world to meet investors. This was before the COVID era when airports were functioning. I used to meet investors in financial centres like London, New York and Tokyo.
Once in Albuquerque, New Mexico, I was pitching the virtues of investing in rubber producers in Asia. The arid plains of New Mexico were a contrast from the greenery of tropical Asia. My enthusiasm for the investment theme and the boredom of the investors was an even sharper contrast.
I rattled off statistics on rubber demand and supply, but the investors dozed off. They were glancing at their Blackberries out of boredom. The minutiae of the figures made no impression. The end of my presentation came as a relief.
It was time to shift gear. I realized that it is better to pitch to the heart than the head.
The story of rubber became my pitch. Despite rubber being an old commodity, it is at the heart of industry. Without rubber, cars cannot operate. Rubber is vital for planes to land. It is the only way for rubber gloves and condoms to be manufactured.
Rubber was a wild crop in Brazil until the 1870s. It was domesticated by an English thief who took it to Malaya. Rubber can take up to 10 years to reach peak production. Hence, investors should pounce on the drop in rubber prices to buy rubber plantation stocks.
The investors were ecstatic. They promptly asked to meet the rubber companies. Before long, they were buying the stocks.
A successful pitch needs a narrative. The thoroughness of the analysis is irrelevant. People need to connect with your pitch with emotion.
This book seeks to popularize investing through stories. COVID-19 has devastated lives and companies. Investors need to come to grips with the catastrophe.
The immediacy of data in the digital age can mislead us. In October 1987, I was at an international boarding school in a remote hill station in South India. It was 14 hours from the nearest large city - Madras (now known as Chennai).
Bangalore, which is now the tech capital of Asia, was nine hours away. But in those days, Bangalore was more provincial than metropolitan. Its airport terminal was roughly the size of a large HDB.
The school followed the American curriculum and had students from over 35 countries. The library had glossy magazines like Time, Newsweek and Sports Illustrated that were then rare in India. India was an austere, isolated country that was following Soviet-style planning.
I used to follow the stock market closely. India s stock market was closed to foreigners, but I was transfixed by the gyrations on Wall Street. I had read a book called The Confessions of a Stock Operator by Edwin Lefevre. The book s protagonist is stock trader Jesse Livermore in the 1890s. He prospers by picking up the debris of a stock market collapse.
On 19 October 1987, the Dow Jones fell 23%. This catastrophe, named Black Monday, was a gilded opportunity to accumulate stocks. Within a week, the market had rallied 10%. But, Newsweek, Time and The Wall Street Journal arrived in my library two weeks after the collapse. The bird had flown.
News used to spread slowly in those days. India had only 30 minutes of English language programming a day. The state-owned TV station had a show called The World this Week . The buying opportunity passed by unnoticed.
Today, stock prices are instantly available. You can follow the markets on the Iphone in real-time. Trading is free.
But, investment research is not free of jargon. Terms like EBITDA, greenshoe, CBO, and CDO misguide more than inform. These terms can be simplified for both professionals and lay investors.
This book seeks to introduce investing in an accessible way. I use stories to convey complex concepts.
As Steve Lynch said, If you re prepared to invest in a company, then you ought to be able to explain why, in simple language that a fifth grader could understand, and quickly enough so the fifth grader won t get bored.

Sea in troubled waters
Published on October 09, 2020
In 1883, there was a circus pony called Dicky in Chicago. Dicky won the affection of the audience. He was skilful in jumping over a stack of books. The circus goers marvelled at his flexibility. Children laughed and clapped.
Dicky performed the same trick in the same circus for many years. The audience began to tire of this old trick. They soon realised that the pony could only perform one trick. The poor beast was eventually put to death.
In