***

This post has been edited by Boon3: Aug 21 2012, 11:06 AM

I did not read what you had posted...

Excuse me but do you think icapital is a success?

Using your definition of success, a 15% cagr over 10 years and with ichap only in the 7th year, icap, by your definition, should be considered only as a 'almost a success' la.

prophetjul: Impressive! Well done with your investments.

prophetjul, does have a point you know, so do you.
Yes, to calculate the CAGR for the NAV is important. It tells how well the fund is performing.
However, as prophetjul has pointed out, you cannot sell at the NAV price, you can only sell at the market price. Hence, for the fund investor, knowing the CAGR for the stock price is just as important.

This post has been edited by Boon3: Aug 24 2012, 02:53 PM

Unreal flaming!
Guys, this is just the stock market and everyone have different views. Don't hate someone just because they don't share same views.
I can understand the extreme optimism over icap given its current performance but for all you fanci, you have to understand that in this inperfect world, there's always two sides to a coin, hence there will always be some criticism and since icap is a CEF, you cannot expect propsective investors of the fund not to question the character of Teng Boo and you would expect some question on the fees he charges.
This is an open forum and you guys should be open to all such questions and even negative comments. This is not a cheerleading forum where one post a subject and everyone just agrees.
I find also the issue of CAGR amusing because what's there to argue about?
To know the performance of the fund itself, knowing the CAGR of its NAV is important. It tells how terribly good or bad Teng Boo's stocks have performed since he bought the stocks for the CEF.
However, just as important for the prospective investor, knowing the CAGR of the stock price is just as important. In the future, the value of the stock could be worth much more or less but in terms of present value, the CEF is only worth how much it is selling in the market. You cannot sell based on NAV because the market price is much lower than the NAV price. Therefor, KNOWING the CAGR of the stock price is just as relevant.
Chill la. No need die die argue. There is no prize awards.
Peace.

Three new members to LY just to post on this thread.



This post has been edited by Boon3: Nov 5 2012, 08:24 AM

I find it very interesting.
This topic was first started by Vv.SoViEt.vV.
The messsage was very good even on hindsight now.

It was a simple and good warning message. A closed end fund should not be trading more than its worth.
Some comments made.

A bit exaggerated?

Topic starter, Vv.SoViEt.vV reply

Quote: You will never find well managed stocks like ICAP trading at a discount to their NAV because demand for the stock generally will outstrip supply and thus the price will be higher.



ICAP today trades at 2.38 and it traded as low as 1.90+ in 2011. I wonder if klsestockreview would like to reconsider his statement made in Jan 2008 that 'avoiding this counter at all cost is very funny advise'. The TS had made a good warning on ICAP back in Jan 2008.

Interesting to read back the past comments.
AhYap's posting on ICAP is good. Very rational and non egoistic.

A good value posting.
Sad to say is disappointing that we cannot have a good discussion without ego getting in the way.

prophetjul, I have small issue with the numbers you have posted.
ICAP was listed on 17/10/2005.
Its NAV on 20/10/2005 was 0.99.
Its 2012 Annual report was dated 12/9/2012.
NAV on 13/9/2012 was 2.93.
That's a CAGR of 16.77% since listed.

Not sure how you got the CAGR of 18%.
Also in maths, when one compounds for many years, the slightest variance in the growth rate would see a drastic different result.

Here's an assumption that ICAP can grow at CAGR of 16.77% till 2020.

year NAV
2005 0.99 === icap NAV when it was listed
1 2006 1.156023
2 2007 1.349888057
3 2008 1.576264284
4 2009 1.840603805
5 2010 2.149273063
6 2011 2.509706155
7 2012 2.930583878 === where we are now.
8 2013 3.422042794
9 2014 3.995919371
10 2015 4.666035049
11 2016 5.448529127
12 2017 6.362247461
13 2018 7.429196361
14 2019 8.67507259
15 2020 10.12988226 === NAV of ICAP by 2020.

A NAV of 10.13 by 2020?
Possible? We will get to that later.

This is a CAGR of 18%.

year NAV
2005 0.99
1 2006 1.1682
2 2007 1.378476
3 2008 1.62660168
4 2009 1.919389982
5 2010 2.264880179
6 2011 2.672558611
7 2012 3.153619162 === if ICAP compounded at 18% since inception, its NAV would have been 3.15!
8 2013 3.721270611
9 2014 4.391099321
10 2015 5.181497198
11 2016 6.114166694
12 2017 7.214716699
13 2018 8.513365705
14 2019 10.04577153
15 2020 11.85401041 === NAV of ICAP by 2020!!

A NAV of 11.85 if ICAP compounded at 18% since inception!!!

Where is ICAP NAV headed?
CAN ICAP grow at the SAME CAGR for the next 8 years?
ICAP 2012 annual report had some interesting points.

From page 4.
1. "There are no purchases made since 31 May 2011.. "
2. "For the financial year ended 31 May 2012, your Fund sold 4,400 shares of Boustead Holdings
Berhad, 383,000 shares of Fraser & Neave Holdings Berhad, 350,000 shares of Integrax Berhad
and 300,000 shares of Petronas Dagangan Berhad. These sales generated realised gains of
RM8.329 million with a cost of RM3.647 million."
3. In the year ending 31 May 2012, your Fund received 113,800 shares of Pharmaniaga Berhad from
Boustead Holdings Berhad on the basis of one Pharmaniaga share for every 57.5 ordinary shares of
RM0.50 held in Boustead.

My interpretation (this is mine, what's yours? )
Teng Boo is a proclaimed value investor who believes that one should let the power of compounding works for the investor.
But for the fiscal year, Teng Boo, sold or take profit a portion of the fund's stake in several stocks and bought nothing.
My interpretation is that he sees no value in the current market since he bought nothing.
And that he took profit by selling a small portion of the fund's holding on F&N and Petronas Dagangan suggests to me he thinks the stock value is rich and is a good time to take profit.
Which means I thinks he wants to build a war chest to buy stocks once they fall lower.

In the fund's current portfolio at 12/9/12, the following stocks carries the most value.
Petronas Dagangan - 51 million
Padini - 46.5 million
Parkson - 41.8 million
F&N - 41 million
Boustead - 36.3 million

This 5 stocks carries a value of 216.6 million.
ICAP total stock value at 12/9/12 is 269 million. (all this info from page 37)
Cash is 133 million. (page 26)

To say ICAP compound at 18% since listing until 2020, says that ICAP should be around 11.85.
ICAP NAV value now is 2.93.
How many percent increase from 2.93 to 11.85?
With the current stocks ICAP have and its cash position, can Teng Boo do it?

Ahh Tan....



I try write shorter.

Teng Boo's 18% CAGR target.
NAV now is 2.93.
Compounded at 18% for the next 8 years, the NAV would be 11.01.
NAV would have increased by 8.08 or by 375.7%!!!

Can achieve?
One, at least, should know what stocks the fund holds, what the fund is doing (is it selling or buying more?) the past year, the cash level.
Right now, last fiscal year, he sold (or took profit) of some stocks.

The fund stock portfolio at 12/9/12 is valued at 269 million.
The fund hold five main stocks.
Petronas Dagangan - 51 million
Padini - 46.5 million
Parkson - 41.8 million
F&N - 41 million
Boustead - 36.3 million
This 5 stocks carries a value of 216.6 million.
Cash is 133 million.

If Teng Boo hold firms to value investing and use the power of compounding to work for the fund, he's expecting this portfolio to increase by 375% in 8 years time.
Can?

Some scenarios I am thinking... (if wrong say la... cos you know I no investor. )

If he hold...
Petronas Daganan - love the growth story. Solid.
Padini? Errr.....
Parkson? Errrrrrr...
F&N? Now no COKE? How? Properties?
Boustead? I think got potential but can it double or triple its value in 3 years time?

If he waits for market to fall and then buy cheap stuff...
Good idea but if market falls enough for Teng Boo to bargain hunt, this 5 stocks would see some lost in value too.

Sell and buy cheap stocks?
Possible but he hasn't been selling much.....

18% target?
I think I think ... I also agree with you.. hard target.




This post has been edited by Boon3: Nov 17 2012, 05:57 PM

Brilliant!

The NAV of the fund depends on the stocks the fund holds and I find it so amusing that there is not much talk focused on the stocks iCap hold.
One could look at the EPS of the stocks iCap is holding.
Is the EPS generally increasing, decreasing or lackluster?

What is iCap's 5 biggest stock holdings as per last annual report?
PetDag, Parkson, Padini, F&N and Boustead.
Are these companies earnings increasing or decreasing?

If the earnings are generally decreasing, how will their stock price rise?
If these stock price don't rise, how will iCap's NAV increase at such a huge compounding rate?

TBH, if I buy iCap now, I would be over the moon if the NAV touches 3.50 lah.

This is a good issue to give it some thinking.

I feel that it all boils down to what prophetjul was saying.

ICAP had been sitting on too big of a cash pile for a fund.

We can argue/disagree with the importance of cash in a fund.
Some view it as war chest which will be of great importance in a crash. (I accept this argument)
Some view it as a no-no because the cash is being wasted as it is doing nothing. As a fund, it has a duty to generate return for its cash and if the fund manager is sitting on his 'rearend and still reaping off its investors withs his 'mega' manager's FEES...' then there will be some disgrunted shareholders. (But when market is soaring and the fund is not doing anything, then the fund got it all wrong. )

To qualify what prophetjul statement best we check ourselves.
Screenshot of balance sheet the past 5 years. Data provided by klse tracker.



Latest balance sheet shows cash balances has increased to 200 million.

As we can see the issue some have is ICapital is having too much un-invested cash.

As a fund, we have to gauge the fund manager and his investing decisions and in this instance, we need to gauge the fund's decision to sit on cash.
IE is the fund manager correct to sit on cash??

No matter what the fund manager view points, by not utilizing these cash, the fund managers is TELLING his shareholders that there's nothing better to invest in and Teng Boo had been sitting on a lot of cash since 2010.
In 2010, the CI started at 1272. This year the index reached a high of 1810.

Chart below:



And iCap is sitting on excess cash during this period.

I know it's easy to critic and I feel like I am an armchair investor criticizing Teng Boo and his iCap fund but if I am going to be an investor of the fund, this type of critic/evaluation of him and his fund is needed.

How would I evaluate his fund decision to have excess cash and not putting the excess cash to use?

My evaluation would be I would grade it as fairly poor.

To check on the fees issue, I had to look at the annual report.



Two type of fees charged upon the fund.
Fund management fee and investment advisory fee. (why two? )
They have both increased in 2012 compared to previous year. ( Should I check how much fees were charged in 2008? )

From this perspective, I have to agree with prophetjul that Teng Boo is sitting on his 'rearend and still reaping off its investors withs his 'mega' manager's FEES...'

The closed end fund is sitting on excess cash for far too long and clearly it was the wrong decision with the market hitting new highs constantly during this period. The fund got it all wrong.

Did any shareholders even ask why the fund is sitting on excess cash when the market keeps on rising in the agm? Or are the shareholders simply fans of Teng Boo who believe he can't do no wrong?

By giving out dividends is not solving things exactly.
The NAV would be readjusted and then last but not least .... what then about Teng Boo's mega annual compounding projection for the fund?
That was his promise to his shareholders.
Would that promise be attainable now?

Questions indeed.

Not wind to talk so talk Teng Boo wind lor.

Agree very much with the very last statement you made.

That was an old posting already.

KLSE today 1818.39 and what Teng Boo said just the other day ... was incredible !


Source: http://www.thestar.com.my/Business/Busines...overvalued.aspx



High cash position for last nine to 10 months?

Just the last 9 to 10 months?

Or is it more accurate to say the fund had been carrying more than 100 million cash since 2010 !!??

Only in Malaysia, a fund manager can sit and do nothing and collect more and more fees each year.

Sit on excess cash since 2010.
And market has been rising and rising.

I didn't consider his fess based from that perspective.

I agree with your last posting.
The fees should based on performance.

I hope many will understand your message.

Teng Boo very lucky cos he got many loyal fans.

No wonder he so easily shake his legs and just say M'sian stocks overvalued.

Kow tim.
Done for the year.
Collect increased fees again next year!

Ah Tan, you no jeles hor.

yhtan





Geng!
Well done aaa!

Hehe!

Can I add oil.

2009 Bursa opening price - 876.75
2010 Bursa opening price - 1272.78
Yesterday Bursa closed at 1815.65

Bursa index CAGR since 2009 - 15.76% <----> iCap NAV CAGR for this period is 13.37% <====> Bursa index wins!
Bursa index CaGR since 2010 - 9.29% <----> iCap NAV CAGR for this period is 10.25% <====> iCap win

Now this one is the best.

From 2009 annual report, his fund management fee is 1,747,606, investment advisory fee is also 1,747,606
From 2010 annual report, his fund management fee is 2,018,550, investment advisory fee is also 2,018,550
From 2012 annual report, his fund management fee is 2,894,863, investment advisory fee is also 2,894,863
Latest annual report, his fund management fee is 3,089,891 investment advisory fee is also 3,089,891 <====> WOW !!!!! increase lagi!

Total fees for 2009 is 3,495,212
Total fees for 2010 is 4,037,100
Total fees for 2012 is 5,789,726
Total fees for 2013 is 6,179,782 !!!!!!!!!!

OMG!!! Every year.... fees naik !!!!

gark who said greed is good ah?

Total fees CAGR since 2009 is ...... 12.07%% !!!!
Total fees CAGR since 2010 is ...... 11.23% !!!!

Is this picture even clearer?

Remember in 2012 report (and mentioned earlier in this thread), iCap said the following:

1. "There are no purchases made since 31 May 2011.. "

In new 2013 report, iCap said it bought one stock, Wellcall.

Which means Since 31 May 2011, iCap only buy one stock.

31 May 2011, Bursa open at 1,542.84
Today, Bursa opening is 1815.65

Which means Bursa index increased 272.81 points or 17.7%.

All iCap have to say to that is "Shares on Bursa Malaysia are not cheap… many stocks are overvalued at present,” - source http://www.thestar.com.my/Business/Busines...overvalued.aspx

Meanwhile, again to remind, his fees has increased to 6,179,782

By the way...
fund management fees - he charge, this one I can brain (except the every year fee naik like crazy! )
But investment advisory fee? I cannot brain. How to brain? He the fund manager mah. When he manage the fund, isn't his duty also to provide all the advisory to the fund itself?

This post has been edited by Boon3: Oct 30 2013, 08:47 AM

Actually I don't agree.
Any fund manager can under perform one time or another.
The biggest issue is clearly the fees issue.

Teng Boo's fees is really lei sai po.