Posted by JohnD0ugh > 2022-09-11 13:58 | Report Abuse

Barring unforeseen circumstances, the odds favour the NAV of icapital.biz Bhd exceeding RM1 bln or RM7.14 per share.

icapital.biz Bhd is easily the most undervalued company on Bursa Malaysia and remains a misunderstood company; such a combination smells of a unique investment opportunity.

This is without taking into account the future strong increase in NAV.

In a world filled with uncertainty, icapital.biz Bhd represents a solid long-term investment.

If a subscriber starts with only RM500, and makes a monthly regular investment of RM500 and icapital.biz Bhd generates a return of only 8% per annum, the subscriber would have a total of RM251,278 in 224 months (18 years and 8 months).

If the return rises to 15% per annum, well, the end result will be much higher.


i Capital Newsletter Volume 33 Issue 7

Posted by dumbMoney > 2022-09-12 22:15 | Report Abuse

The standard disclaimer of most fund managers is that past performance is no indication or guarantee of future performance. Why stop at only 15% per annum, why not 20%? What is the CAGR since listing? Anywhere near 15%?

Posted by dumbMoney > 2022-09-12 22:54 | Report Abuse

BTW, the company was listed on 19 Oct 2005, didn't quite make it 18 years and 8 months yet. Want to give it a longer and more impressive track record? The same performance stretched over a longer period will reduce the CAGR.

Posted by dumbMoney > 2022-09-13 11:08 | Report Abuse

Until the share price discount to NAV is normalised, shareholder returns based on NAV is academic. What you see is not what you get. There are plenty of other companies on Bursa selling at deep discount to NAV, how do their shareholders calculate their returns on investment?

Posted by dumbMoney > 2022-09-13 11:17 | Report Abuse

The elephant in the room is not NAV performance, but share price discount. Blaming it on shareholders is management passing the buck. There were 4 listed closed end funds in Singapore in the past, but all ended up in members voluntary liquidation because of persistent share price discount, which management was unable or unwilling to address.

Posted by dumbMoney > 2022-09-13 16:20 | Report Abuse

The only other Malaysian listed closed end fund also suffered the same fate some years back because of the price discount. This is an existential threat to a CEF if not addressed by management.

Posted by JohnD0ugh > 2022-09-19 04:26 | Report Abuse

Many investors and investment analysts have failed to understand that icapital.biz Berhad is ideal for investors looking for a low-risk, high-return Malaysia focused fund.

icapital.biz Berhad's strong performance is not a fluke shot and its consistency is but the logical result of its fund manager's Bamboo value investing philosophy.

Developed by Tan Teng Boo, this eclectic investing style has proven itself time and again throughout a variety of financial market and economic conditions, including the 2020 pandemic recession and our current bear market.

i Capital Newsletter Volume 33 Issue 36

Posted by dumbMoney > 2022-09-20 17:45 | Report Abuse

So the share price discount is all investors and investment analysts' fault then, go fix it yourself, TTB has done his part admirably well and earned his fees. Good for him.

Posted by bryantfc > 2022-09-23 09:50 | Report Abuse

Discounted price will self correct, if dividend payout is consistently declare at rm0.20 per annum. This especially for retirees looking for annual income for yearly expenditure without affecting initial capital.

Posted by dumbMoney > 2022-09-23 23:44 | Report Abuse

That's 28 million a year in dividend and $420K a year reduction in management fees income.

Posted by Noni > 2022-09-24 00:24 | Report Abuse

Closed end funds, is always below NAV. Is a natural setup issue. This is not ETF.

Posted by bryantfc > 2022-09-24 06:33 | Report Abuse

A test to the sincerity of the ICAP management.

Posted by firehawk > 2022-09-24 07:10 | Report Abuse

Don;t dream about 20sen per annum, this is against his interest

Posted by Noni > 2022-09-25 07:42 | Report Abuse

You think is so easy to move it up 0.20? Market will sell and you going to end up holding more of the same thing.
Why should TTB take such risk to reward shareholders?

Posted by bryantfc > 2022-09-25 08:09 | Report Abuse

Yes agreed that it is a left and right pocket issues. Dividend payout has no real impact on wealth. In this situation it is different, demand for ICAP shares is very low despite NTA is growing rapidly. Why? Aren't you dissatisfied high cash holding ICAP which cause high management fees? What does longterm investor looking for? Perpectual grow in the investment value? Ultimately is what is the payout, a mature investment should have a continuous sustainanble payout.

Posted by dumbMoney > 2022-09-25 16:16 | Report Abuse

@bryantfc TTB's argument against dividends is that his counterpart (since he is supposed to be the Malaysian equivalent) WB's Berkshire also doesn't pay a dividend. iCapital's two previous dividends were one off, the first one is to use up the dividend franking credit, and the second one of 20 sen is a pacifier to shareholders before the AGM, a special Covid handout, like the Government's financial relief. @Noni, you said it, not me, haha. If TTB is not going to do it, shareholders can DIY with a liquidation. Your choice!

Posted by dumbMoney > 2022-09-25 16:20 | Report Abuse

This is reposting of my earlier comment, because of typing errors: @bryantfc Dividend payouts will not have much impact on shareholders' wealth because the share price will theoretically adjust for it ex-dividend, so it is just left pocket and right pocket. However, just raising the share price by 20 sen by reducing the price discount to NAV is real money you can take to the bank, and it is a win/win thingy for TTB also as there is no reduction in management fees payable, unlike a dividend payout.

Posted by dumbMoney > 2022-09-25 16:42 | Report Abuse

@bryantfc According to the Nobel Economic Prize winning M&M Theorem on corporate capital structure, dividend policy has no bearing on a company's market value. https://www.investopedia.com/terms/m/modigliani-millertheorem.asp#:~:text=The%20Modigliani%2DMiller%20theorem%20states,was%20introduced%20in%20the%201950s. For dividend paying companies, the role of dividends is as a signaling tool, an increase in payout is a signal that the company is optimistic on future earnings growth and vice versa. If a company can reinvest earnings at a higher returns than the cost of capital of its investors, like Berkshire, then not paying a dividend is optimal. And vice versa. Similarly, if the company's ROE is higher than what the market is rating it at, then a share buyback is suggested. For example, if the dividend yield is 5% and the company can borrow at 2.5% or lower, like during QE2, US companies were rushing to buy back their shares with cheap borrowings and boost their EPS and achieve higher share prices.

Posted by JohnD0ugh > 2022-09-25 22:46 | Report Abuse

The intellectual approach towards investing in the stock market differs greatly between those who time the market or stocks and those who practise value investing.

For the former, the market index or stock price is just a number to predict, making it in essence similar to gambling or speculating; for the latter, the market index is meaningless and irrelevant while the stock prices are to be used only in comparisons with the intrinsic value of a stock or business.


i Capital Newsletter Volume 31 Issue 36

Posted by JohnD0ugh > 2022-10-02 20:30 | Report Abuse

An investor needs to match his or her own investment objective with the investment product before investing.

As Tan Teng Boo explained, to understand icapital.biz Berhad better and see if it is suitable for your investment needs, think of two types of properties: Property A as an empty land and Property B as a shop house.

Question: which type of property is suitable for your investment needs? If you are looking at an investment that can provide you with regular income, obviously buying a shop house with rental would be the most suitable.

If you are looking for an investment that offers high long-term capital appreciation, buying a piece of land would be far superior. In Malaysia, just think of the property tycoons that bought empty pieces of land 40 or 50 years ago in places like Bangsar, Bandar Utama, Subang Jaya, etc. and sat on them and let the land appreciate in value.

Investing in icapital.biz Berhad is like buying such a piece of empty land. icapital.biz Berhad calls its investors "share owners" instead of "shareholders".

icapital.biz Berhad is certainly meant for the serious long-term investors,
people who want to be able to sleep soundly at night and then wake up later to see their asset value has appreciated substantially.


i Capital Newsletter Volume 30 Issue 1

Posted by Nepo > 2022-10-03 10:00 | Report Abuse

ANALYSIS OF SHAREHOLDINGS as at 24 August 2022
Cartaban Nominees (Asing) Sdn Bhd
SSBT Fund WB7A For Bill And Melinda Gates Foundation Trust 3,556,917 shares 2.541%
====..===========..===
Quite impressive, even Bill And Melinda Fates Foundation also holds Icap Share.
Source: Annual Report 2022-Analysis of Shareholding.

Extract from Wiki:-
"The Bill & Melinda Gates Foundation (BMGF), a merging of the William H. Gates Foundation and the Gates Learning Foundation,[5] is an American private foundation founded by Bill Gates and Melinda French Gates. Based in Seattle, Washington, it was launched in 2000 and is reported as of 2020 to be the second largest charitable foundation in the world,[6][7] holding $49.8 billion in assets.[4] On his 43rd birthday, Bill Gates gave the foundation $1 billion.[8] The primary stated goals of the foundation are to enhance healthcare and reduce extreme poverty across the world, and to expand educational opportunities and access to information technology in the U.S. Key individuals of the foundation include Bill Gates, Melinda French Gates, Warren Buffett, chief executive officer Mark Suzman,[9] and Michael Larson.[10]"

Posted by dumbMoney > 2022-10-07 01:09 | Report Abuse

@Noni, you asked "You think is so easy to move it up 0.20? Market will sell and you going to end up holding more of the same thing". If the company announces a share buy back or a capital repayment, will the market buy or sell?

Posted by observatory > 2022-10-08 16:10 | Report Abuse

Extracted from Security Analysis, the classic written by Benjamin Graham in 1934.

In Chapter 29, The Dividend Factor in Common-Stock Analysis, Graham wrote that
"... if stockholders’ opinions were properly informed, it would insist upon curtailing the despotic powers given the directorate over the dividend policy. Experience shows that these unrestricted powers are likely to be abused for various reasons. Boards of directors usually consist largely of executive officers and their friends. The officers are naturally desirous of retaining as much cash as possible in the treasury, in order to simplify their financial problems; they are also inclined to expand the business persistently for the sake of personal aggrandizement and to secure higher salaries."

Does it sound familiar?

Posted by dumbMoney > 2022-10-09 06:56 | Report Abuse

For the latest financial year, total dividend and interest income came to $7,099,433 and management and advisory fees came to $7,124,484, so there is no surplus income left to shareholders. Are management's interest aligned with that of the shareowners? From the list of 30 largest shareowners, quite a large number of them have been loyal shareowners holding the shares for more than 10 years. At the end of September 2012, 10 years ago, the share price was $2.25. On the same date this year, the share price is $1.97. Add back dividends received of 9 and 20 sen, the adjusted share price is $2.26. So for 10 years, do shareowners feel any richer? If they decide to walk away now, they have nothing to show for holding the shares, unless the price/NAV discount improves. What can, or what should they do? If they had invested the dividends into bank deposits, at least they can earn some interest on them. But if they had reinvested the funds into iCap shares, the way total returns on shares are usually calculated, won't have made any difference because the share price didn't move. Just remember, management fees are based on NAV, shareholders returns are based on share price and dividends, two different things entirely. How to be on the same page?

Posted by dumbMoney > 2022-10-09 07:33 | Report Abuse

The last time the share traded at a premium to its NAV as in 2008, so for the greater part of its existence, the share trades at a discount. Is this going to be permanent, only time will tell, but for the Big 4 Singapore bank managed closed end fund and the only other CEF fund listed here, shareholders and management decided that enough is enough and went into voluntary liquidation, so that everyone, including the banks themselves, as major shareholders, can exit at NAV. While not a CEF, AHP2, a listed property trust managed by PNB, the largest fund manager in the country besides EPF, also self liquidated because of the persistent discount. For these funds, the market have spoken and management decided not to fight it.

Posted by JohnD0ugh > 2022-10-09 19:41 | Report Abuse

Last year’s AGM was held on 20th November 2021. In the question and answer session, I spent quite a fair bit of time explaining why share buyback does not and will not work for icapital.biz Berhad.

Let me update our share owners on this unproductive matter.


I used the example of Top Glove’s loss-making share buyback in last year’s AGM. On 19 November 2021, its closing price was RM2.31. On 30 November 2021, it closed at RM2.92. On 15 September 2022, Top Glove’s share price closed at RM0.765.

In short, since then, Top Glove’s share price has collapsed a further 67% and 74% respectively.

A share buyback of RM1.0 billion by Top Glove, for example, would have seen a further massive loss of RM670 million or RM740 million. In April 2022, Starbucks, the world’s leading coffee chain, suspended its share buyback program as Howard Schultz takes command again.

Schultz explained that the share buyback programme is suspended so that Starbucks can “invest more profit into our people and our stores.” Starbucks like Amazon.com and Apple Inc has seen a rising worker rights campaign that has seen many of their store workers voting to unionize.

In short, share buyback is destroying Starbucks in the long-term.


i Capital.biz Berhad 2022 Annual Report

Posted by observatory > 2022-10-10 00:09 | Report Abuse

Benjamin Graham also wrote,
" Given two companies in the same general position and with the same earning power, the one paying the larger dividend will always sell at the higher price"

"Assuming that the reported earnings were actually available for distribution, then stockholders in general would certainly fare better in dollars and cents if they drew out practically all of these earnings in dividends."

"Although we have concluded that the payment of a liberal portion of the earnings in dividends adds definitely to the attractiveness of a common stock, it must be recognized that this conclusion involves a curious paradox. Value is increased by taking away value. The more the stockholder subtracts in dividends from the capital and surplus fund the larger value he places upon what is left."

In other words, Graham observed almost a century ago that the market prefers companies which return idle cash to shareholders. The more idle cash is returned to shareholders, either via dividends, or share buyback (if the stock is undervalued), the more valuable the company becomes. The shareholders will enjoy the double benefits of returned cash and a higher share price assigned by the market.

Graham's wisdom then has become common sense nowadays. The only problem is the self proclaimed Graham's disciple doesn't walk the talk.

Posted by dumbMoney > 2022-10-10 02:27 | Report Abuse

@observatory You forgot to mention that WB's Berkshire also buys back shares below a certain threshold, and that is supposed to destroy shareholders value? A higher share price means a lower cost of equity capital. For the same required ROI margin, a company with a lower cost of equity capital can consider investments with a lower absolute ROI, which also usually means lower risks, for the benefit of shareholders.

Posted by JohnD0ugh > 2022-10-16 14:37 | Report Abuse

Once again, despite a very tough and rough environment, icapital.biz Berhad has achieved a superior NAV and share price returns of 19.60% and 7.71% respectively for the two years ended 30 September 2022.

Both have strongly outperformed the 12.77% plunge in the bellwether MSCI Malaysia index. Remember, icapital.biz Berhad is ideal for investors looking for a low-risk, high-return fund.

With over RM150 million still in cash reserves and Capital Dynamics’ time-proven value investing philosophy, it is an excellent time to invest more in icapital.biz Berhad.

This year, the highly popular and productive Investor Day will be back. It will be held on Saturday, 26th and Sunday, 27th November at the KL Convention Centre. Learn for yourself why icapital.biz Berhad works.

Finally, let me repeat what I think is a very important point to my fellow Malaysian shareowners - do not let any investor who refuses to think and act like a share owner destroy a precious gem like your Fund.

Do participate in its coming Annual General Meeting and make your ownership counts. It can help narrow the NAV discount.

i Capital.biz Berhad 1Q2023 Report

Posted by observatory > 2022-10-17 11:28 | Report Abuse

"Do participate in its coming Annual General Meeting and make your ownership counts. It can help narrow the NAV discount."

How does participation in AGM help narrowing the NAV discount? By indoctrinating and firing up shareholders so that they will buy the shares up?

It sounds like religion. When has value investing turned into a faith based investing?

Posted by dumbMoney > 2022-10-17 22:28 | Report Abuse

The biggest shareowner's persistent buying has been stopped by the company from buying more shares and here, TTB is asking people to buy more shares. More like election campaigning.

Posted by dumbMoney > 2022-10-18 16:40 | Report Abuse

If the company's performance has been as good as claimed, it begs the question of why the persistent discount, when it should be trading at a premium instead? What gives? Shareowners don't know what's good for them or there is a trust deficit?

Posted by drken91 > 2022-10-21 18:14 | Report Abuse

sorry to interrupt your highly intellectual Buffet-esque discussion,
may I know if anyone knows what other stocks are still in iCapital's portfolio? if got link, pls share..
much appreciated, tq

Posted by dumbMoney > 2022-10-21 23:49 | Report Abuse

@drken91 https://disclosure.bursamalaysia.com/FileAccess/apbursaweb/download?id=220608&name=EA_FR_ATTACHMENTS

Posted by JohnD0ugh > 2022-10-23 15:15 | Report Abuse

In last year’s annual report, I wrote about Scottish Mortgage (SMT), an investment trust or a closed-end fund listed on the London Stock Exchange and a constituent of the FTSE 100 Index.

For some investors who kept asking about the NAV discount of icapital.biz Berhad and whether your Fund has an expiry date, SMT offers plenty of lessons to learn from.

SMT was launched in 1909, about 113 years ago and is still going strong with total assets of US$11.36 billion (icapital.biz Berhad is only 16 years young). It once traded at a persistent discount to its NAV.

After around twenty years, its NAV discount disappeared in 2013, endowing
its share price with a premium to NAV before trading around parity.

After I wrote about SMT in the said annual report, some uninformed investors, especially those from overseas, say that icapital.biz Berhd should follow SMT by buying back its own shares.

Was the discount narrowing of SMT due to its share buyback and/or dividend payment ? The simple answer is no.

The move from discount to premium was primarily driven by increased demand from retail investors and an evolving ownership.

For decades, a significant portion of SMT was owned by institutional investors, mainly UK pension schemes. By the end of the last century, these investors had become disengaged with the investment trust structure as new open-ended pooled vehicles allowed greater operational efficiencies.

They were persistent sellers which drove the share price to a persistent discount to NAV. From 2010, SMT was more proactively marketed to retail investors, who in the UK had begun taking greater control over their own finances, via savings platforms.

Consequently, the SMT shares owned by institutions declined substantially, from 54% in 1994 to only 17% in 2021. At the same time, share ownership by individuals jumped.

It was the massive increase in ownership by individual investors that essentially removed the NAV discount of SMT.

Shareholders, existing and future ones, ultimately bear the responsibility of determining the market price of a listed company. So, the type and quality of shareholders matter.


i Capital.biz Berhad 2022 Annual Report

Posted by observatory > 2022-10-23 23:59 | Report Abuse

The Forbes article below explains why closed-end funds often trade at a discount to their NAVs.
https://www.forbes.com/sites/simonmoore/2020/04/12/wider-closed-end-fund-discounts-have-historically-been-a-good-sign-should-you-bite/?sh=1eb964e050a7

Check out this closed-end fund screener mentioned in the article.
https://www.cefconnect.com/closed-end-funds-screener

It lists a few hundred closed end funds. Sort these funds by the Discount/ Premium column. It shows that about 90% of the closed end funds suffer from NAV discounts!

What is even more interesting is out of the few hundred funds, only one fund called DMA (Destra Capital Advisors LLC) suffers from a greater NAV discount than iCAP!

At the time I sorted the list, DMA’s discount was 41%. Based on latest Bursa announcement, ICAP discount was 1 – 1.96/3.23 = 39%.

In other words, if ICAP were to be included in the list, it would be the second worse performer in premium/ discount out of the few hundreds!

Just before anyone concludes that ICAP offers the opportunity where NAV discount may narrow over time, read the last paragraph which says,
“So if you see a closed-end fund trading at an unusually high discount there may be an opportunity. Discounts and premiums do appear to be mean reverting. Unfortunately these opportunity often comes at times of high market panic, such that other opportunities may be large too. Plus these trades do involve some risk and cannot be fully arbitraged in a riskless way. Also, a final note of caution is that closed-end funds can move systematically over time. For example, in the early 1970s closed-end fund discounts in the US and UK exceeded 30% on average for several years. So these discounts don’t necessarily always close as rapidly as an investor might hope.”

Posted by dumbMoney > 2022-10-24 12:28 | Report Abuse

Haha, shareowners, here you heard it, the deep share price discount is all your fault. It is like you get the government you voted for, no one else to blame but yourself.

Posted by RealValueInvestor > 2022-10-24 22:44 | Report Abuse

Thanks observatory... DMA is a similar market cap to ICAP but its holdings are less liquid that ICAP's being real estate and unquoted funds, so it SHOULD trade on a wider discount than ICAP!

ICAP's discount rather than being the fault of shareholders is the fault of the board for delegating the management of the discount to the manager, who likes to blame shareholders and continues to pursue a method to close that discount that hasn't worked for all the years he has tried it.

Posted by dumbMoney > 2022-10-24 23:04 | Report Abuse

@observatory No need to look so far. Historically, there were 4 CEFs (later became 3 through the merger of UOB and OUB) managed by the Big 4 local banks in Singapore, and the Amanah Millenia Fund here, managed by MIDF Amanah Asset Management Bhd, plus a property trust AHP2, managed by PNB, the largest unit trust management in the country. All were trading at a persistent discount and amid shareholders discontent, management decided to proactively let the shareholders decide on the fate of their investment by calling for a vote on the voluntary dissolution of their funds. All were liquidated this way and no more hassle and distraction for the managers, who all got bigger other businesses to run. Here at iCapital, COL is the only group who collectively have enough votes to move such a resolution and that is why they are taken to court to stop them buying more shares. Let's see how COL is going to vote this coming AGM. If they can defeat any of the resolutions, the writing is on the wall.

Posted by observatory > 2022-10-25 15:04 | Report Abuse

I analysed past AGM votes on resolution of directors’ appointment. Over the years the number of shareholder votes supporting directors’ appointment has declined while the Against votes has kept increasing (presumably most are from COL)

Year No. of Shares For No. of Shares Against
2021 43,623,877 (58%) 31,099,317 (42%)
2020 42,332,043 (58%) 30,267,507 (42%)
2019 43,829,446 (61%) 27,963,500 (39%)
2018 46,261,889 (62%) 28,389,753 (38%)
2017 44,554,250 (64%) 24,832,500 (36%)
2016 57,089,178 (71%) 23,646,300 (29%)
2015 60,198,263 (75%) 20,281,250 (25%)
2014 47,978,106 (73%) 17,777,592 (27%)

Hence the urgency to stop COL.

With 140 million shares outstanding, a full 47% have not bothered to vote. If shareholders don’t care to defend their own interests, the current sorry state could continue for many more years.

Posted by RealValueInvestor > 2022-10-25 21:16 | Report Abuse

Berkshire Hathaway Annual - Page K-31

Common Stock Repurchase Program
Berkshire’s common stock repurchase program permits Berkshire to repurchase its Class A and Class B shares at any time that Warren Buffett, Berkshire’s Chairman of the Board and Chief Executive Officer, and Charles Munger, Vice Chairman of the Board, believe that the repurchase price is below Berkshire’s intrinsic value, conservatively determined. Repurchases may be in the open market or through privately negotiated transactions.

In the last 3 months of 2021 alone they repurchased own shares at a cost of over $6.7billion or circa 1% of shares in issue!

Now that is responsible stewardship!

Posted by dumbMoney > 2022-10-26 13:38 | Report Abuse

@observatory I give you a real case study of shareholders' apathy. When minority shareholders of AHP2, a then listed property trust managed by PNB, called for an EGM to vote on the voluntary liquidation of the trust, PNB affiliated funds were prohibited from voting because of the related party clause in the trust deed. There was a minimum quorum clause in the trust deed which was 25%, and excluding PNB related shareholders, there was not enough members present or in proxies to make up the quorum and the resolution would not be passed. So PNB, even though the trust can escape liquidation because of this lack of quorum, signed in as attendee and made up the required numbers, and even though they cannot vote, they decided not to stand in the way of the outside shareholders and let them decide. So the resolution was carried. Why PNB did that, to allow their fund to be liquidated? Because it is the biggest shareholder and the liquidation allowed them to get out of a perennial discount and realised full value for their investors, and the trust was of no importance to them in their greater scheme of things, and instead of a loss of face, they gained brownie points from investors for corporate governance, acting in the best interest of their investors. How I knew all this? Because I was there.

Posted by dumbMoney > 2022-10-26 15:17 | Report Abuse

Prior to the AHP2 announcement, the share price was hovering around 50 sen. The final realised returns to shareholders was around $1, so happy ending all round. Years later, AHP, the sister company of AHP2, was also trading at a persistent discount of more than 30%, but this time, PNB wised up, instead of waiting for shareholders to try another liquidation proposal, they proactively took the company private at the issue price and close to NAV. Unlike other major shareholders of discounted listed companies who try to 'steal' the company from minorities with unfair and unreasonable low ball offers, PNB did the right thing with a fair and reasonable offer. So no more disgruntled minorities, and PNB no longer need to mark to mark its unlisted investment to market.

Posted by dumbMoney > 2022-10-26 15:20 | Report Abuse

And who says management and shareholders cannot do anything about deep price discount?

Posted by JohnD0ugh > 2022-10-30 18:49 | Report Abuse

The strategy of attracting more individual investors has been copied by Pershing Square Holdings (PSH), the 2nd largest closed-end fund in the world.

Despite massive share buyback and regular dividend payments, Pershing Square Holdings encountered the same NAV discount issue.

The Board of PSH “believes that the best way to close the discount is for PSH to attract long-term investors by continuing to deliver strong investment performance over time. We can also do more to increase awareness of our performance and our strategy among investors. In recent years the Board has actively taken steps to broaden our investor base by securing a listing on the London Stock Exchange. Our subsequent elevation to the FTSE 100 index has increased the visibility of PSH to investors. In 2021, we increased our marketing efforts in the U.K., specifically to retail investors and the “platforms” they use, and remain focused on reaching a broader array of potential investors” (2021 Annual Report of PSH).

In March 2021, Pershing engaged Frostrow to cultivate demand across UK-based wealth managers, retail/adviser platforms, targeting individual investors.

i Capital.biz Berhad 2022 Annual Report

Posted by RealValueInvestor > 2022-11-02 01:09 | Report Abuse

JohnDough thinks he invented "the strategy of attracting more individual investors" as well as value investing!

Posted by RealValueInvestor > 2022-11-02 05:42 | Report Abuse

https://pershingsquareholdings.com/performance/net-asset-value-and-returns/

And the strategy is working nearly as poorly for PSH as it is for ICAP. End October Discount £35% and that's with ongoing buybacks!

Posted by RealValueInvestor > 2022-11-02 05:52 | Report Abuse

Scottish Mortgage Trust Annual 2022, page 7 -

"The Board recognises that it is in the long term interests of shareholders to manage discount/premium volatility. Whilst the Board believes that the primary driver of discounts over the longer term is performance, the relationship between the Company’s NAV and share price can be impacted in the shorter term by an imbalance of buyers and sellers in the market.

The Board does not have formal discount or premium targets at which shares will be bought back or sold respectively, as it believes that the announcement of specific targets is likely to hinder rather than help the successful execution of a buyback/issuance policy. However, it will undertake to aid the efficient functioning of the market in its shares in normal market conditions, by acting when such a significant imbalance in supply and demand for the Company’s shares exists.

In furtherance of this policy, during the year the Company bought back a total of 12,437,319 shares into treasury. Between 1 April and 16 May 2022, 81,088 shares were bought back. During the
year the Company issued from treasury 34,950,000 ordinary shares at a premium to the net asset value. Between 1 April and 16 May 2022, no further ordinary shares were issued."

Why does TTB chose to ignore this?

https://stpukswebsharedmedia.blob.core.windows.net/mws/5f0cmds2/638012677305061178baillie-20gifford-20scottish-20mortgage-20investment-20trust-20factsheet-200922.pdf

3.6% discount.

Feel free to draw your own conclusion.

Posted by dumbMoney > 2022-11-02 21:28 | Report Abuse

@RealValueInvestor We call this selective memory and taken out of context, something we are very familiar with here. The so-called management's efforts to narrow the discount, to this day, they have not given a proper explanation on how the aborted multi-million dual listed fund effort was supposed to work, and why is it in the shreholders' best interest to take COL to court over their continued purchase of shares?

Posted by JohnD0ugh > 2022-11-06 15:48 | Report Abuse

The long-term investment success of Warren Buffett is world famous.

What is often neglected in the long-term success of Berkshire Hathaway is the role played by its shareholders or more specifically, by the type and quality of its shareholders.

Let me quote Warren Buffett on this fundamentally important factor in determining the success of a company’s share price performance.

“Over the long term, there has been a more consistent relationship between Berkshire’s market value and business value than has existed for any other publicly-traded equity with which I am familiar.

This is a tribute to you. Because you have been rational, interested, and investment-oriented, the market price for Berkshire stock has almost always been sensible.

This unusual result has been achieved by a shareholder group with unusual demographics: virtually all of our shareholders are individuals, not institutions. No other public company our size can claim the same.

You might think that institutions, with their large staffs of highly-paid and experienced investment professionals, would be a force for stability and reason in financial markets.

They are not: stocks heavily owned and constantly monitored by institutions have often been among the most inappropriately valued.”

The messages from Warren Buffett are very simple and very clear.

He is not keen at all to attract institutional investors for very good reasons and that he and Charlie Munger have a special kinship for the million-plus individual investors of Berkshire Hathaway.

As he explained in 1985 and many times after that, “stocks heavily owned and constantly monitored by institutions have often been among the most inappropriately valued.”

As a long-term value investor myself, I cannot agree with Buffett more.


i Capital.biz Berhad 2022 Annual Report