Chris K: September 15, 2014 at 3:53 pm (Quote) Good point but there are some important caveats to bear in mind. Being a long term investor does not mean one is not opportunistic. The repurchase of CCB stoocks in Aug 2011 2011 was exactly the case. The seller of the CCB stock was more or less a forced seller, Bank of American needed to dispose a huge block of CCB stock to address its own capital adequacy issue. In financial markets, such a huge stock disposal will be executed via a negotiated block trade and it is usually sold at a discount to the market price. As a well known large investor with the ability to buy such a block, Temasek would have been on the priority list. It woudl have been rather naive that Temasek or any other large investor would turn away such an opportunity to buy stocks below the exchange price. The sale and subsequent repurchase of the CCB stocks constituted hardly 2% of total assets under management at Temasek. Not insignificant but neither was it anything close to a major portfolio rebalancing. The timing of the repurchase was in August when Temasek would receive capital injections from the SG govt if such an injection took place in 2011. This CCB out and in trades do not prove anything. However if one wants to hit Temasek for idiocy were the investments in banks in the middle of the Global Financial Crisis. After plowing in at a price that was proven idiotic, Temasek compounded the idiocy by disposing of the stakes too early as if in a panic. That prove expensive since those stakes subsequently staged a massive recovery. These portfolio managers may be well qualified etc etc but they lack vital ingredients which cannot be learned or taught – the ability to stay calm and focus in a crisis and the ability to smell the markets.
Posted on: Mon, 15 Sep 2014 10:11:34 +0000
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