Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-09-30 08:14 | Report Abuse

If iCAP has the ability to achive return on NAV greater than the return that you require, then it makes sense for it to retain all its earnings to be reinvested at this higher rate of return on NAV.

On the other hand, should it not be able to deliver higher return on NAV than you are expecting or that you are able to do on your own , you should sell out and move your money into another stock.

It all boils down to the performance of the fund.

The difficulty facing the shareholders of iCap when they need to sell is the very steep discount to the NAV. This discount reflects the popularity or unpopularity of investing into this fund, a complex topic of many factors.

Capital Dynamic has been busy growing its assets under management. Its focus has obviously been diluted unlike when it was managing iCAP in Bursa as the sole fund. Most asset managers obtain their biggest income from growing their assets under management. Buffett is unique is his ability to GROW his single "fund" at GOOD AND HIGH rates of returns CONSISTENTLY over ALMOST EVERY YEAR.


iCAP IVF

This is a fund that distributes dividends managed by Capital Dynamic.

For those who wish to see what might happen to the NAV of iCAP if regular dividends were to be adopted, ask at the AGM for Capital Dynamic's performance of its iCAP IVF (International Value Fund). The fund started at a unit value of Australian $1 in ?2009 and it is today at unit value of Australian $0.6655. For those who have invested Australian $20,000, the value of their investment that they stay invested (minus the dividends) today in iCAP IVF is Australian $13,310.

The fund has been profitable. However, its rate of returns a bit anaemic. The investors have not lost money but has made small profits.

For those who invested into this fund since its inception, the fund has grown their initial Australian $20,000 investment to a total final value of $24,200 over 14 years. Those choosing to receive regular dividends would have received dividends totalled $24,200 - $13,310 = $10,890 [$4,200 (gain from the value of their investment) + $6,690 (from return of their own money invested).]

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-09-30 08:17 | Report Abuse

For iCAP IVF fund, can we draw the conclusion that this fund was not able to grow at a high rate of return exceeding the dividend returns sought by its initial investors. Thus, its NAV has dropped below its inception NAV.

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-09-30 08:23 | Report Abuse

Surely, in your portfolio of stocks, you have companies that gave regular dividends and its share price continues to grow, over many years.

Search them out yourself, and just stay invested.

Maybank gives dividends equivalent to a yield of 6% - 7%, with little capital gains.
PBB gives dividends (DY is lower than Maybank), with slow growth in its share price over the long term.

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-09-30 08:28 | Report Abuse

Is COL a friend or a foe or a threat to shareholders of iCAP? Definitely not a foe. So far not a threat. It is good to have knowledgeable investors in the fund too. Of course, to some, they are perceived as a threat due to its large shareholdings.

Educate the shareholders on the reason. The court is not going to solve this perceived threat, should it exists.

Posted by speakup > 2023-09-30 09:24 | Report Abuse

COL currently hold 23% of Icap, means they have to sell 3% to adhere to 20% limit

Posted by FastMoney666 > 2023-09-30 12:54 | Report Abuse

https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3389047
Based on the latest announcement, iCap is trying to clip COL wings by reviewing its rights and obligations attached to the shares based on LIFO method. They may not necessarily forced to sell the % above 20% otherwise iCap management may not necessarily go to the extend to design additional speed bumps.

Posted by FastMoney666 > 2023-09-30 12:55 | Report Abuse

Foreign ownership limit is not something new but it is usually more common if it is systemically important instituition such as banks or telecomunications.

Posted by FastMoney666 > 2023-09-30 12:56 | Report Abuse

I am not all that concern with that 3% but just that more speed bumps mean they will try to discourange it from increasing the ownership.

Posted by FastMoney666 > 2023-09-30 13:02 | Report Abuse

COL is good necessarily evil actually because either ways smallshare holders win. Liquidation of fund in sometime in the future for those still have positions will get back all the money that locked as "discounts". When COL keeps making noise, then the fund manager needs to optimize the returns. Check and balance will be there.

Posted by FastMoney666 > 2023-09-30 13:14 | Report Abuse

@Tiga i - whether payout as dividend caused pitiful return is debatable. In the first place, stripping off the dividend, holdings that they have is just simply underperforming. Don't forget that TTB is a die hard fan of China markets, if he overweight China markets don't expect it to perform. Also the currency of choice is AUD, in 2009, 1AUD = 2.5, this alone should give him some advantage in MYR term....bottomline....poor showing.

Posted by FastMoney666 > 2023-09-30 13:19 | Report Abuse

In any event, if, I am saying, hypothetically I am having about 3-5% ownership in iCap, will I vote to close the fund, the answer is not at NAV of 3.53 with 25% discount NAV to Share Price. But sometime in the future, 20 years from now, NAV 11.32, share price 8.49, 25% discount NAV to share price, will I vote to close it down. The answer is probably yes, TTB will be 90 years old.....it's about time we harvest it. 😂😂

Posted by FastMoney666 > 2023-09-30 13:31 | Report Abuse

I believe COL will buy my idea too, it's too early to shut it down and divide the estate. What they are trying to do is to establish a clear majority right from the beginning so that they can call the shot when the time is ripe for harvesting.

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-09-30 16:06 | Report Abuse

iCAP

FYE --- NAV --- Dividends --- Annual Return on NAV)
2005 --- 0.99 --- 0 --- -
2006 --- 1.37 --- 0 --- 38.4%
2007 --- 2.23 --- 0 --- 62.8%
2008 --- 1.56 --- 0 --- -30.0%
2009 --- 1.99 --- 0 --- 27.6%
2010 --- 2.55 --- 0 --- 28.1%
2011 --- 2.73 --- 0 --- 7.1%
2012 --- 2.93 --- 0 --- 7.3%
2013 --- 3.00 --- 0.095 --- 5.6%
2014 --- 2.91 --- 0 --- -3.0%
2015 --- 3.01 --- 0 --- 3.4%
2016 --- 3.12 --- 0 --- 3.7%
2017 --- 3.56 --- 0 --- 14.1%
2018 --- 3.18 --- 0 --- -10.7%
2019 --- 3.12 --- 0 --- -1.9%
2020 --- 3.10 --- 0 --- -0.6%
2021 --- 3.46 --- 0 --- 11.6%
2022 --- 3.27 --- 0.20 --- 0.3%
29/9/2023 --- 3.57 --- 0 --- 9.2%

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-09-30 16:17 | Report Abuse

For 9 yeas from 2005 to 2013, iCAP's returns on NAV were impressive, growing its NAV from RM 0.99 in 2005 to RM 3.095 in 2013.

For the next 9 years, from 2013 to 2022, it grew its NAV from RM 3.00 in 2013 to RM 3.57 + 0.20 dividends (in 2022) in Sept 2023. During this lack-lustre return period, its share prices were traded at a steep discount, at times approaching 40% to its NAV.

Posted by FastMoney666 > 2023-09-30 17:23 | Report Abuse

@ Tiga i. The same table that you share, you put 1 more column on % cash on hand....there are periods our fund manager hold high level of cash.....but it was prercisely when the discount was growing that I started to buy regularly. :)

Posted by FastMoney666 > 2023-09-30 17:26 | Report Abuse

Usually when NAV is shooting up, meaning also could be due to rising sentiments. Fund manager has option to take profit and covert to cash so that when market decline, it will suffer less. Actually TTB is hiding behind cash that is why when there are periods of rapid decline in the KLSE, he looks good relatively and it's not because of his share selections bullet proof.

Posted by FastMoney666 > 2023-09-30 17:28 | Report Abuse

Because of the high cash he hold, he managed to pick up some bargains during Covid 19 period. One of his biggest winner is SEM.....now he is betting on Hibiscus and CapitalA. Let's see how it turn out to be.

Posted by FastMoney666 > 2023-09-30 17:35 | Report Abuse

Anyone who wants to buy now is only betting on rising NAV not to pray for discounts to narrow. Also pray our fund manager to book the profits to preserve NAV. :)

Posted by FastMoney666 > 2023-09-30 17:40 | Report Abuse

This is where I differ with the rest that we should not be harping on cash he has converted from profits taking. There are times that it's okay to hold high cash, there are times that should reduce cash.....don't interfere with the fund manager strategy. Don't get jealous because of management fees and we should not be double standards. Have ever asked your mutual fund managers to reduce the fees when the funds that you buy losing money? If someone didn't really losing a lot of your money you ask for fees reduction and etc....It's a bit unfair. I understand the logic of share buy back but for control purpose, iCap will never do it.

Posted by dumbMoney > 2023-10-01 12:44 | Report Abuse

Here is a very simple explanation for the share price discount. One common measure in valuation of a firm is the economic or enterprise value EV, which is given by the formula
EV = Market Capitalization (Equity Value) + Total Debt + Minority Interests + Preferred Stock - Cash and Cash Equivalents.
In iCap’s case, the EV is the NAV, which are essentially the share portfolio + cash, as the other asset items are not significant. On the other side of the equation, there is no debt and minority interest, so just left with market cap - cash.
The equation can then be simplified as portfolio + cash = market cap – cash.
Removing cash from both sides of the equation (e.g. setting it to 0), we are left with portfolio = market cap. So the cash is discounted from the valuation, like magic, so does the price discount, haha.

Posted by dumbMoney > 2023-10-01 14:45 | Report Abuse

Another common share valuation formula is the Capital Asset Pricing Model (CAPM) taught in Finance 101, where Cost of Equity (Ke) = Risk-Free Rate (Rf) + Beta (β) × (Market Risk Premium).
Here, risk free rate and market risk premium are beyond the control of the investor, leaving only β, the sensitivity of the price of the portfolio to overall market movement, or the systemic risk of the portfolio. A high beta means higher risk and corresponding higher returns in an up market, but also higher downside in a down market. This can be tweaked in two ways, one is by selecting high beta individual stocks to outperform the market, which is well and good in a rising market, but will be the reverse in a down market. Given that in the long run, markets generally go up, a manager with a high beta portfolio can usually outperforms the market index. Another way is to gear the portfolio with borrowings, with lower cost than the cost of equity. With 2x gearing, the portfolio can outperform the index by two times before borrowing cost. In the case of iCap, the cash holding becomes negative gearing, lowering the beta, and the risk/reward ratio, resulting in a lower share price.
A more complete evaluation of a fund manager’s performance, like Morningstar, can include the historical alpha and Sharpe ratio metrics to give a peer to peer comparison, rather than the one size fits all composite index. In the Fama/Fisher 3 Factor and 5-Factor Models, value and small cap stocks can outperform the market, so iCap, being a value portfolio, has a built-in advantage against the KLCI already, before adding in the handicap of dividend yield not included in the latter.
All the above ramblings are for the benefit of the mom and pop investors who are not professionally trained investors. For the latter, not trying to teach grandmothers to suck eggs here, lol. And sorry for the free plug on Fama/Fisher and Morningstar here, they are my fellow alumni.

Posted by dumbMoney > 2023-10-01 15:25 | Report Abuse

@i3lurker Haha, when TTB vehemently refused to do just a 10% share buyback because it will cut his fees by 10%, you think he will take a 50% haircut? That's more than the 40% that shareholders took when they sold their shares at 40% discount earlier. Shareholders will need to do it at gunpoint.

Posted by speakup > 2023-10-01 17:11 | Report Abuse

Agree. And should be performance based.

Posted by dumbMoney > 2023-10-01 17:42 | Report Abuse

Or just KISS, convert it to a passive index fund, then no arguments over manager's fees and performance. Low cost no frills investing.

Posted by Dehcomic01 > 2023-10-01 17:49 | Report Abuse

The returns from the funds have been below 1% since 2017. It did very well prior to that. Has the market changed so that the fund is now not able to repeat its past success ie was the past due to luck?

Posted by dumbMoney > 2023-10-01 18:12 | Report Abuse

@Dehcomic01 A more polite way to put it is statistically, a reversion to the mean. That's why almost all funds will add the disclaimer that past performance is no guarantee for future success. At iCap's launch, they were boasting of historical returns of 20-22% p.a. https://www.icapital.my/files/images/plaunch-media/2.jpg Maybe iCap should also adopt such a disclaimer.

Posted by FastMoney666 > 2023-10-01 20:11 | Report Abuse

TTB charged about 3.5 millions on fund management fees + another 3.5 million on investment advisory fees in 2022 - about 1.5%. Sorry guys can't agree this the cause of discounts to NAV.

Posted by FastMoney666 > 2023-10-01 20:13 | Report Abuse

But stagnant of NAV as pointed out by Tiga i got people keep selling but it's all depend which side of trade you are now, those bought at 1.7 to 2 will be smiling.

Posted by FastMoney666 > 2023-10-01 20:17 | Report Abuse

Discounts is a welcome thing is you want to buy I wish it's 80% discounts. dumb money brought up a good reminder reversion to mean someday when the sentiments turn, we don't need a parity just lesser discounts ady make money.

Posted by FastMoney666 > 2023-10-01 20:30 | Report Abuse

There are just really smart people wanna hand you a 1 Ringgit note by accepting 60 sen. I am gladly shaking hands with those smart people, making deals...the more the merrier.

Posted by FastMoney666 > 2023-10-01 20:31 | Report Abuse

Then resell 1 Ringgit for 75 sen.....make my day ... buy more moon cakes....cheer guys.

Posted by FastMoney666 > 2023-10-01 21:03 | Report Abuse

@dumb money...assuming Rf is 3 mnths malaysia treasury bill of 3.15%, beta of 1(I just assume but didn't run the correlation) expected market return ....hmm a bit of problem with KLSE it's pretty bad actully but for argument sake...it's 10%...so max cost of equity is about 10% max. But in reality is lower...lazy to go back to my Portfolio class. I was never a smart student. 😴

Posted by dumbMoney > 2023-10-01 21:04 | Report Abuse

@FastMoney666 You really live up to your nick as FastMoney. COL has been around for more than 10 years and yet they are being treated as public enemy No. 1. In comparison, you should be shot on sight then, haha..

Posted by FastMoney666 > 2023-10-01 21:04 | Report Abuse

So TTB is f×××××g better do better than 10% on the cash he sits on it while waiting to buy low sell high.

Posted by FastMoney666 > 2023-10-01 21:14 | Report Abuse

I am a capitalist....my religion is making money....go to the street and fight....take no sides😂😂

Posted by dumbMoney > 2023-10-01 21:18 | Report Abuse

@FastMoney If you take the risk free rate at around 3.15%, the average dividend yield of the index from Jul 2009 to Aug 2023 is 3.08%. So any price gains on the index itself will be your market risk premium. Now you see why it is so easy for any fund to just beat the price index without accounting for the dividend yield. https://www.ceicdata.com/en/malaysia/bursa-malaysia-dividend-yield/bursa-malaysia-dividend-yield-ftse-composite-index

Posted by FastMoney666 > 2023-10-01 21:31 | Report Abuse

@dumbMoney. Thanks....time to take the outperformance was an issue....for example, for consistency sake, when Tiga i said from 2013 till 2023, iCap lau si performance, at that point KLSE was at around 1,800 and today is 1400, a drop of 22% and assume that Div Yied of 4%(approximately lah since it's sunday), cummulative of 40% - 22, 18%.. so average about 2%(not CAGR ya...lazy to take out my financial calculator la)...that is why know it was lower but usually I always take 10% either as a discounting factor either do DCF or other things....I am a street fighter ma...not a professional wall street guy

Posted by FastMoney666 > 2023-10-01 21:33 | Report Abuse

Usually I don't like to use benchmark to see out performance because i find that everyone will say their good points....where got people sell flower don't praise their flower fragrance one.

Posted by FastMoney666 > 2023-10-01 21:34 | Report Abuse

What matters to me is investors sentiments.....this subject of behavioral finance is important...😂😂 I got a bit of interest

Posted by FastMoney666 > 2023-10-01 21:35 | Report Abuse

I was glad that a few other posts start to talk about NAV, performance and etc....this is important thing for price discovery...we are doing TTB a favor actually educating the public....but with a small fees.....no free lunch in this world ma.😂😂

Posted by FastMoney666 > 2023-10-01 21:38 | Report Abuse

To be honest to all, I was happy when all are f***g TTB on innovative dividend policy...cause it will create discounts again....enough discounts....that is the time I will be dancing....making deals...evil me😉

Posted by JohnD0ugh > 2023-10-01 22:26 | Report Abuse

Since 2012, City of London has been using all kinds of tactics, including unethical ones and working together with Laxey Partners, another London activist, to pressurise Tan Teng Boo to do all kinds of things for short-term benefits and to benefit its own interests.

City of London has been forcing Tan Teng Boo to change his time proven, well thought-out value investing style, even using a prominent local media and the social media to conduct a campaign to kick Tan Teng Boo out as the fund manager in last year's AGM.

In a classic David versus Goliath battle, since 2012, Tan Teng Boo has been fighting City of London, based on his deep belief in integrity and value investing. The successful listing of icapital.biz Bhd in Oct 2005 was due to investors who shared his value investing approach and who trusted him.

Even at the risk of him being kicked out, Tan Teng Boo would not depart from what he has promised the thousands of shareowners. This is integrity, an old fashion value that an activist investment firm like City of London probably can never understand.


i Capital Newsletter Volume 27 Issue 22

Posted by FastMoney666 > 2023-10-02 08:42 | Report Abuse

John....give me a hug. Make love, not war. His loyal investors jumped ship ady lo. Else why would they give me RM 1 by accepting 60 sen coins.....Peace forever....👻👻

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-10-02 09:32 | Report Abuse

Berk shire’s Performance vs. the S&P 500
Annual Percentage Change
Year...in Per-Share Market Value of Berk shire ...in S&P 500 with Dividends Included

2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .0.8 ...4.9
2006 ......................................................................... 24.1 ... 15.8
2007 ......................................................................... 28.7 ... 5.5
2008 ......................................................................... (31.8) ... (37.0)
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7... 26.5
2010 ......................................................................... 21.4 ... 15.1
2011 ......................................................................... (4.7) ... 2.1
2012 ......................................................................... 16.8 ... 16.0
2013 ......................................................................... 32.7 ... 32.4
2014 ......................................................................... 27.0 ... 13.7
2015 ......................................................................... (12.5) ... 1.4
2016 ......................................................................... 23.4 ... 12.0
2017 ......................................................................... 21.9 ... 21.8
2018 . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8... (4.4)
2019 ......................................................................... 11.0 ...31.5
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.4 ....18.4
2021 ......................................................................... 29.6 ... 28.7
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.0 ... (18.1)

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-10-02 09:36 | Report Abuse

Berkshire Hathaway A share
2005 Highest price 87,000
2023 Today's price 531,477

531/87 = 6.1x

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-10-02 09:42 | Report Abuse

S&P 500
2005 1,200
2023 Today 4,288

4,288/1,200 = 3.6x

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-10-02 09:49 | Report Abuse

KLSE index
2005 900
2023 1426

1426/900 = 1.6x (excluding dividends)

iCAP NAV
2005 0.99
2023 (27.9.2023) 3.57 .. excluding dividends

3.57 / 0.99 = 3.6x

Market Price of iCAP
2023 Today's price 2.65

2.65 / 0.99 = 2.7x

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-10-02 10:27 | Report Abuse

iCAP

FYE --- NAV --- Dividends --- Annual Return on NAV)
2005 --- 0.99 --- 0 --- -
2006 --- 1.37 --- 0 --- 38.4%
2007 --- 2.23 --- 0 --- 62.8%
2008 --- 1.56 --- 0 --- -30.0%
2009 --- 1.99 --- 0 --- 27.6%
2010 --- 2.55 --- 0 --- 28.1%
2011 --- 2.73 --- 0 --- 7.1%
2012 --- 2.93 --- 0 --- 7.3%
2013 --- 3.00 --- 0.095 --- 5.6%
2014 --- 2.91 --- 0 --- -3.0%
2015 --- 3.01 --- 0 --- 3.4%
2016 --- 3.12 --- 0 --- 3.7%
2017 --- 3.56 --- 0 --- 14.1%
2018 --- 3.18 --- 0 --- -10.7%
2019 --- 3.12 --- 0 --- -1.9%
2020 --- 3.10 --- 0 --- -0.6%
2021 --- 3.46 --- 0 --- 11.6%
2022 --- 3.27 --- 0.20 --- 0.3%
29/9/2023 --- 3.57 --- 0 --- 9.2%

>>>>

KLSE index
2005 900
2017 1750
2018 (Jan) 1868 (Peaked)
2023 1426

From 2005 to 2017
KLSE index increased 1750 / 900 = 1.9x
iCAP NAV increased 3.56 / 0.99 = 3.6x

From 2017 to 2023
KLSE index decreased by -(1750 -1426) / 1750 = -324 / 1750 = - 0.185 ( or - 18.5%)
iCAP NAV increased 3.57 / 3.56 = 1.0028 ( or 0.28%)

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-10-02 10:44 | Report Abuse

>>>
From 2017 to 2023
KLSE index decreased by -(1750 -1426) / 1750 = -324 / 1750 = - 0.185 ( or - 18.5%)
iCAP NAV increased 3.57 / 3.56 = 1.0028 ( or 0.28%)
>>>

From 2017 to 2023 (about 6 years), the returns for those who kept their money in FD were better than the returns from the KLSE or iCAP. The FDs had returned 3% to 4% yearly for the last 6 years.

Of course, this is asset allocation hindsight bias (vision 2020).

Posted by goldmanbull > 2023-10-02 10:45 | Report Abuse

Dear all, I am thinking to invest in TTB's ASEAN fund but sadly on I Capital portal, I couldn't find any info on the fund's current investment. Can someone share the ASEAN's fund holding please? Thank you.