Thursday, January 26, 2023
Harmful effect of vaccine
1. Several people in chat groups shared reports and videos of young people who died suddenly a short time after they have been vaccinated. They used the event to imply that they vaccine is harmful to young people.
2. I have seen several dozens of these reports. I am sure that there are many more of these cases that I have not seen. Perhaps, the number of these cases amount to a few thousands.
3. Let us assume that there are 10,000 such cases. If 1 billion young people have been vaccinated, this represents 0.001 % of the cases. It is 1000th of 1%. It is small enough to be insignificant.
4. Even if there are no vaccination, perhaps a similar number would have died from "natural causes". They were not reported previously, because there was no major event that can be used to blame these unexpected deaths.
5. I do not rule out the small possibility that the vaccination could be the cause. But the incidence is too low for me to accept that it is the likely cause.
6. I do not trust our health authority totally, as they may be biased in favor of the vaccine. However, I trust them more than the "experts" who present an alternative theory against the vaccine.
Tan Kin Lian
Wisdom of the Crowd - New Issues
2. Which system of democracy do you prefer?
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https://tklcloud.com/Crowd2/vote.aspx
Wednesday, January 25, 2023
WOTC - Settlement of insurance claims
Wisdom of the Crowd: 89% of respondents said that customers are not satisfied with the settlement of insurance claims due to disputes over coverage, exclusions and other clauses in small print.
https://tklcloud.com/Crowd2/chart3.aspx?id=2809WOTC - Visitors fromChina
Wisdom of the Crowd: 55% of respondents said that it is not necessary to screen visitors from China because the covid virus is mild.
https://tklcloud.com/Crowd2/chart3.aspx?id=2810
Quality of customer service depends on the process
1. I experienced many instances of poor customer service from Singapore companies.
2. Quite often, the poor service is caused by their bad process. They follow SOP (standard operating procedures) that are more focused on complying with process rather than on improving outcome for customers.
4. I wanted to ask a question. In their app, they have a menu called Help. They provide an option to use WhatsApp.
5. I sent my question at night. I received a reply immediately. As the issue was quite complicated, I asked a few follow-up questions. I received prompt, clear and complete replies to each question.
6. A complicated matter was resolved to my satisfaction within half an hour. This is the time that I took trying to reach a Singapore company on a customer issue and had to give up after failing to talk to a person.
7. Plus500 has an office in Singapore. However, they do not follow the standard Singapore SOP. They followed a process that is customer friendly. I understand that this company started in Israel but has now gone international.
8. I like the following features of their customer service:
a) They make it easy for me to send a feedback.
b) They use WhatsApp, which is probably the most convenient form of communication.
c) I can send my query immediately and directly. I do not have to answer 5 to 10 pieces of data to start an inquiry.
d) They have a person to attend to my inquiry immediately.
9. I sent a detailed feedback to the staff. She replied immediately that she would forward it to the attention of the management team. I expect that they would act on my feedback.
10. I believe that the quality of service depends on how the process is handled. If Singapore companies can adopt a good process, like what Plus500 did, the quality of service would improve tremendously.
Monday, January 23, 2023
Wisdom of the Crowd - New Issues
2. Is Singapore making good progress over the past decade?
3. Do you like the CDC vouchers?
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https://tklcloud.com/Crowd2/vote.aspx
WOTC - Insurance products
Wisdom of the Crowd: 85% of the respondents said that MAS should not allow insurers to offer their products freely as it would create confusion for the public and lead to disputes over coverage and claims.
https://tklcloud.com/Crowd2/chart3.aspx?id=2808
Sunday, January 22, 2023
Bad customer service from Starhub
1. My internet connection failed due to the storm.
2. I called Starhub hotline. It was a nightmare for me. I spent 9 mins on the first call, and it was cut off. I called again and there was no answer for 15 mins. I cut off the call.3. It took me over 3 mins to clear through the nonsensical questions that do not apply to me before reaching the technical desk. After that, the call was not answered due to "large volume of calls".
4. Along the way, I was asked to state if I use a Linksys router. I checked the devices and found that I had a D-Link device and a Nucleus Connect device. I do not know if any of them are provided by Linksys.
5. I find it terrible that Starhub should ask this kind of question. I subscribe to the service of Starhub and it should not concern me about who they use to provide the router.
6. Starhub operates many business, such as mobile phone, internet, Netflix, Samsung phone, etc. They could have given a separate number for each business. Instead, they put all the business calls under one number and force the customer to waste over 3 minutes to clear through the screening.
7. Starhub customer service has been terrible for over a decade.
8. On many occasions, I wanted to move away from Starhub, but I was tied to a 2 year contract.
9. My experience with the customer service provided by many large businesses in Singapore has been poor. I find that bad customer service is probably a part of "Singapore culture".
Tan Kin Lian
https://tklcloud.com/Feedback/feedback2.aspx?id=5619
WOTC - State funded media
Wisdom of the Crowd: 81% of the respondents said that the state funded media should report independently, honestly and fairly (and not reflect Singapore's interest in the reporting).
https://tklcloud.com/Crowd2/chart3.aspx?id=2807Saturday, January 21, 2023
A new approach for SPH Media Trust
1. The government is setting aside $180 million a year over 5 years to fund SPH Media Trust. The aim is to provide Singaporeans with news from our perspective.
2. It is important that the perspective should be based on the interest of Singapore. It should not be slanted to promote the interest of the ruling party.
3. Our local news media rely on news feed from international agencies, such as Reuters, Associated Press, etc. We should not over-rely on the news feed from the western nations. We also take news feed from other Asian sources, such as Global News, CGTN, SCMP, Nikkei, Jakarta Post, New Straits Times. The aim is to have a balance of our news sources.
4. In reproducing the news feed, the journalist and editor of SPH should carry out this important task:
a) Remove bias or distortion from the original news feed
b) Add perspective from an alternative source to give it a balance.
c) Ensure that the final article, as rewritten, carries a perspective that supports Singapore's interest.
5. With the use of the internet, it is quite easy to access news from many sources, and to present them in a balanced way to reflect a constructive and positive perspective.
6. SPH should also make use of ex journalists from Singapore. They worked in our Singapore media in the past and have accumulated considerable experience in writing and critical analysis. They form a useful resource.
7. SPH should also make it easy for readers to give their opinion. These views can be edited for accuracy, clarity and usefulness. This can be easily managed on the online platform.
8.The above suggestion also apply to another state funded media, namely Channel NewsAsia.
Discrepancy in circulation figures of SPH
1. There was a lot of discussion in social media over the inflation of circulation figures by SPH. Many people clamored for transparency. They accused SPH of dishonesty in inflating the figures and were indignant that this episode would damage the reputation and integrity of Singapore.
2. I did not join in the accusation. I usually do not give a negative opinion when the facts are not clear. I am also not enthusiastic about defending Singapore's reputation and integrity, as I have some doubts over this matter.
3. A recent news report provided the following information.
- There was an overstatement of 49,000 average daily copies of news titles that was recorded as circulation numbers but not distributed. Most were digital copies. It amounts to 5 per cent of total daily circulation.
- There was an inflation of 5,000 average daily copies recorded after contracts had lapsed
- There was a difference of 17,000 between the reported circulation and the actual usage recorded by SPH Media's system
- There is a possible discrepancy of 19,000, which included a barter arrangement with another publisher
4. This is my perspective of the above figures.
a) 49,000 (mostly digital copies) were not distributed. Is there a need to "distribute" a digital copy? Could the subscriber access it by login to the website?
b) 5,000 copies were counted after the contracts have lapsed. Maybe they were kept alive for a few days or weeks in case the subscriber acts to renew and pay for it?
c) It is not clear whether the discrepancy of 17,000 is included in the 19,000.
5. If I were to include all the above figures, the total discrepancy amounts to slightly less than 10 percent of the reported circulation (which I estimate to be 1 million). It appears to me that the figures are not grossly inflated.
6. Let me explain what I understand about "circulation" in this environment.
a) The circulation includes print and digital copies over several newspaper titles
b) The circulation may includes paid subscriptions and free subscriptions.
c) The circulation includes copies sent to new agents who sell them at the news stands. Some may be subject to returns.
d) The subscriptions may be activated and payment has not been received, or may have lapsed and are kept for some time pending action to renew them.
The counting of the "circulation" is a matter to be decided by management policy, following industry practice.
7. There was a suggestion that the advertisers might have been misled to pay a higher advertising fee based on the inflated circulation. I do not think that this is a concern as the discrepancy is less than 10% and would probably be accepted as "industry practice".
8. It is generally unwise for a new management to challenge the decisions taken by a previous management over matters that rely on management judgment.
Tan Kin Lian
https://tklcloud.com/Feedback/feedback2.aspx?id=5616
Friday, January 20, 2023
Losses suffered by Hyflux
Some people said that Hyflux collapsed due to bad decisions taken by its management from the following:
a) Losses on overseas projects
b) Tendering a low price for the supply of water under the Tuaspring plant.
From my research, these above factors contributed to only a smaller portion of the loss by Hyflux. The main loss was due to their generation of electricity when the electricity price collapsed due to oversupply.
https://tklcloud.com/Feedback/feedback2.aspx?id=5615
WOTC - Self driving platforms
Wisdom of the Crowd: 41% of the respondents voted for Apollo (by Baidu) to be the self driving platform that will be the champion. 33% voted for FSD (by Tesla) and 18% for Waymo (by Google).
https://tklcloud.com/Crowd2/chart3.aspx?id=2805
Review of Baidu (9988.HK)
I made a review of Baidu (9988.HK).
https://fisca.sg/ArticleDisplay.aspx?ID=1298Review of Top Glove (BVA.SI)
Here is my review of Top Glove (BVA.SI).
https://fisca.sg/ArticleDisplay.aspx?ID=1297Inflation and energy prices in 2022
1. Europe and America experienced high inflation during 2022. Inflation in China was comparatively low. The data from statistica.com showed the inflation rate to be 11.1% in EU27, 8.3% in USA and 2% in China.
2. A large component of the inflation is caused by high energy prices. Why was China able to keep inflation low, when it had to import a large proportion of its energy needs? Europe had to import most of its energy, but had a high inflation rate. Even the US, which was a major producer of energy, had high inflation.3. The reason for the difference is probably due to the working of the energy market.
4. China signed long term contracts with oil producers in the Middle East countries to supply oil and gas at fixed prices. These contracts provide price stability for the producers and for China. My guess is that these oil companies that buy the energy on these contracts are given long term contracts to produce energy to the energy market in China at fixed prices.
5. I read that the pricing mechanism in Europe is different. The electricity and gas prices are based on the current market prices for energy. When the oil and gas prices increased sharply, the electricity and gas prices charged to consumers and industry increased accordingly. As the oil companies probably had long term contracts for their purchases, they enjoyed bumper profits.
6. My guess is that the energy prices in America follow the same pattern as in Europe.
7. The approach adopted in China is better. It ensured that the electricity and gas prices are kept relatively stable, based on the long term contracts. The oil companies produce the energy and supply them to the energy market at the contracted prices. The energy is then distributed to the households and industries at a small markup on the wholesale prices.
8. The energy market in Singapore probably follow the practice in America and Europe. The price of electricity and gas is probably quite volatile in Singapore.
9. The above observation is based on my research, understanding and speculation of the workings of the energy market. I am not an energy expert and may have interpreted the research wrongly.
Tan Kin Lian
https://tklcloud.com/Feedback/feedback2.aspx?id=5614
Thursday, January 19, 2023
WOTC - Surveillance to combat terrorism
Wisdom of the Crowd: 76% of the respondents said that India should introduce surveillance to combat terrorism in Kashmir.
https://tklcloud.com/Crowd2/chart3.aspx?id=2804
Wednesday, January 18, 2023
Wisdom of the Crowd - New Issues
2. Should the voter vote for a political party or the individual candidates
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https://tklcloud.com/Crowd2/vote.aspx
Election system in Switzerland
1. I recently learned that election into the national parliament and local (i.e. canton and municipal) councils in Switzerland are based on proportional votes received by participating political bodies.
2. Each political party which receives votes above a threshold gets a number of seats based on the proportion of votes received by the party. The party decides on the candidates in the party that takes the seats.
3. This system has the following advantages:
a) The number of seats received by each political party is proportional to the votes that the party receives. This is different from the "first past the post" system adopted in US, UK, Singapore and many other countries that follow the US or UK systems. For example, if a party receives 30% of the popular votes, the party will get 30% of the seats under the Swiss system. The political party will get less than 30% of the seats under the "first past the post" system. In some cases, they may not win any seats at all.
b) The political party will distribute the seats to its "candidates", based on seniority and experience of these candidates. It is likely that the most capable candidates will be selected. It will reduce the risk that a capable leader may lose an election based on "first past the post" system.
c) The cost of the election campaign spent by the political parties is likely to be much lower under the Swiss system, compared to the system in US and UK. The political party can focus on its election manifesto, rather than on the personal qualities of the individual candidates (which usually lead to large sums being spent to smear the candidates of the other parties).
4. There are some disadvantages under the Swiss system:
a) A corrupt or incompetent candidate cannot be thrown out directly by the voters.
b) The voters cannot vote directly for outstanding leaders.
5. On balance, the advantages of the Swiss system outweighs the disadvantages.
Tan Kin Lian
https://tklcloud.com/Feedback/feedback2.aspx?id=5613
WOTC - Universal suffrage
Wisdom of the Crowd: 86% of respondents said that universal suffrage (one man one vote) does not produce good leaders as the system is hijacked by rich people who have the money to influence the election.
https://tklcloud.com/Crowd2/chart3.aspx?id=2803Review of global banks
Warren Buffet recently said that banks are a good investment for 2023.
I made a study of the financials for global banks. My findings are:
a) The average PE ratio is 10.6 times and dividend yield is 3.6%.
b) Most US banks have a PE ratio of around 10.0 times. The Asia banks (HSBC, DBS, MUFG) have a higher PE ratio. ICBC (China) has a low PE ratio
The risk to global banks is the possible loss from the drop in the property markets. The banks lent a lot of money on mortgages. This could cut into their earnings.
The property markets in several countries are under stress. The mortgages are being squeezed by higher interest rates. The defaults are expected to rise.
I will avoid the banks, except for ICBC which has a very low PE ratio and a high dividend yield.
Note - This is a personal observation. It is not investment advice.
Tan Kin Lian
https://fisca.sg/ArticleDisplay.aspx?ID=1296
Tuesday, January 17, 2023
Payment in RMB to sellers in China
1. I have suggested that the China govt get their e-commerce websites in China (e.g. Alibaba) to quote their products and receive payment in RMB.
2. The buyer can use Wise platform to pay CNY to an AliPay account of the seller. See https://www.youtube.com/watch?v=Bvk4AwpiNw8
3. My DBS Bank allows me to send CNY from my bank account to an Alipay account also.
4. The seller can quote an AliPay account for the buyer to make payment.
5. I believe that the bank fee should be quite low, compared to payment by SWIFT.
6. Two years ago, I bought some product in Alibaba and had to pay by USD. I incurred a high bank charge, maybe US$20 for a small payment.
7. If all the sellers from China quote their prices in RMB, the buyers will have to pay by RMB instead of USD. This will encourage the buyers to keep their balance in RMB (either in CNY or CNH). The RMB can become an alternative reserve currency quite quickly.
8. The USD will lose a large volume of the international payments that they enjoy now.
Tan Kin Lian
https://tklcloud.com/Feedback/feedback2.aspx?id=5612
Review of China Petroleum (0386.HK)
I own 170,000 shares of China Petroleum (0386.HK) at an average cost of $3,90 HKD. The current price is $4.02 giving me a small gain.
The PE ratio is 6.28 and the dividend yield is 13.84%.
The forward PE ratio is 4.82. This suggest that the earnings will increase by 56% for the current financial year.
I have read several articles that suggest that oil companies in China will be making a large profit in 2022 as they were able to buy oil from Russia at discounted prices and sell them overseas at a large profit. This should be reflected in the earnings of the oil companies in China, which have a large stake owned by the state.
Considering the attractive financials, I bought another 70,000 shares at $4.02.
Note - This is a personal opinion. I am not giving investment advice.
Tan Kin Lian
https://fisca.sg/ArticleDisplay.aspx?ID=1295
Wisdom of the Crowd - New Issues
2. Does high salaries attract honest and capable leaders?
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https://tklcloud.com/Crowd2/vote.aspx
WOTC - Capable and honest system
Wisdom of the Crowd: 79% of the respondents said that the China system produces capable and honest leaders. This is followed by the UK system (7%) and the US system (4%).
https://tklcloud.com/Crowd2/chart3.aspx?id=2802Monday, January 16, 2023
WOTC - Workers from low cost countries
Wisdom of the Crowd: 74% of respondents said that it is a bad policy to bring in workers from low cost countries as it depressed wages for local jobs and is bad for local workers.
https://tklcloud.com/Crowd2/chart3.aspx?id=2801Sunday, January 15, 2023
Payment in CNH
I suggest that the China authority ask the e-commerce platforms to quote their prices in CNH (the international RMB) and operate a payment platform to handle the payments.
http://tklcloud.com/Feedback/feedback2.aspx?id=5609WOTC - Globalization
Wisdom of the Crowd: 66% of respondents said that globalization is good for business but is generally bad for workers.
https://tklcloud.com/Crowd2/chart3.aspx?id=2800
Saturday, January 14, 2023
WOTC - Tariffs to protect jobs
Wisdom of the Crowd: 85% of the respondents said that each country should decide on its tariffs to protect local production and jobs.
https://tklcloud.com/Crowd2/chart3.aspx?id=2799TKL said.
I found that the World Trade Organization allows this measure, although WTO prefers that tariff barriers be reduce.
Friday, January 13, 2023
Wisdom of the Crowd - New Issues
2. Was the US govt correct in charging Keppel for bribing the Brazilian officials?
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WOTC - Donald Trump's tax returns
Wisdom of the Crowd: 54% of the respondents said that the tax returns of Donald Trump is a private and confidential matter and should not be discussed in the media.
https://tklcloud.com/Crowd2/chart3.aspx?id=2798Thursday, January 12, 2023
WOTC - Donald Trump's tax return
Wisdom of the Crowd: 58% of the respondents said that the US House should keep the tax returns of Donald Trump private as it was released to the House to carry out its duty.
https://tklcloud.com/Crowd2/chart3.aspx?id=2797Wednesday, January 11, 2023
Review of ministers' salaries
1. The government is carrying out a review of ministers' salaries in 2023. The last review was carried out in 2017. The actual review is for the top political office bearers, but the public generally refers to them as "ministers".
2. An earlier review in 2012 made a major adjustment. It reduced the salary of the prime minister and president. If I remembered correctly, the revised salaries were still pegged to the top salaries in the private sector. However, the revised salaries were still high by international standards.
3. At the salary review in 2023, it would be more acceptable to peg the salary of the prime minister to a certain multiple of the median income.
4. The median monthly income from work in Singapore was $4,680 in 2021, or $56,000 annually. These figures are inclusive of CPF contributions from employers.
5. I suggest that the salary of the prime minister be pegged at 15 times of the median income. This would work out of $840,000. The salary of the other ministers and of the president should be pegged at 80% or 90% of the prime minister's salary, depending on responsibility.
6. My suggested formula will produce a lower salary for the ministers compared to what they earn now. However, they will still be the highest in the world.
7. The use of a formula that is pegged to median income will be simpler (compared to the top salaries). It would also more acceptable to the people.
8. Some people suggested that the salary should be pegged to the lower quartile but a higher multiple could be used. They said that it would focus the minister's attention to raising the salaries of the lower income. I think that this would be somewhat complicated, as the lower quarter would include part time and casual workers. It is better to deal with the inequality separately.
9. Over the past 10 years, the median income has actually risen 44%, or 3.7% per annum, from $3,249 in 2011. This benchmark is likely to reflect the general increase in wages, and will be more stable compared to a benchmark that is based on top salaries.
Tan Kin Lian
http://tklcloud.com/Feedback/feedback2.aspx?id=5603
Review of China stocks
I invested HK$12.8 million (S$2.1 million) in China stocks listed in Hong Kong.
The average PE ratio is 5.78 and the dividend yield is 10.87%.The prices in Hong Kong are about 30% lower than the same stocks quoted in Shanghai.
At the current prices, these stocks should a loss of S$128,000. I expect to see the prices recover in the near future, with the re-opening of the economy of China.
https://fisca.sg/ArticleDisplay.aspx?ID=1294
Tuesday, January 10, 2023
Paxlovid vs VV116
Pavlovid is a therapy approved for the treatment of covid. It is owned and manufactured by Pfizer.
The US government bought 10 million courses of the therapy for $5.3 billion. Each course is taken over 5 days.
The cost paid by the US government is $450 per course. This is for bulk purchase. For smaller quantities, it is probable that the price is higher.
A Chinese company has created another covid therapy called VV116. The clinical trial showed that VV116 is more effective and safer than Paxlovid. It has been submitted for approval.
More details can be found here.
https://fisca.sg/ArticleDisplay.aspx?ID=1293
Review of Shanghai Junshi (1877.HK)
I bought 5,000 shares of Shanghai Junshi (1877.HK) at $41.65 HKD on 9 Jan. The price jumped by 7.7% to $45.00 within one day.
I bought this stock because it produced the VV116 theraphy for covid that is more effective than Paxlovid. They have applied for approval of this drug, and are waiting for the decision.
The company is still operating at a loss. The future profit depends on the approval of VV116 and its sales.
In November 2021, the US government paid $5.3 billion for 10 million courses of Paxlovid. This works out to US $530 for a 5 day course. It implies a large profit margin to the manufacturer Pfizer.
Shanghai Junshi should be able to sell VV116 at a lower price, gain a large market share and show a huge profit.
I read from other reports that Shanghai Junshi had also developed therapies for the treatment of cancer and have entered into marketing arrangements to sell the therapies.
I will study them in more detail.
Note - this is my finding on the stock. I am not giving investment advice.
Tan Kin Lian
https://fisca.sg/ArticleDisplay.aspx?ID=1293
WOTC - Long term contract for energy
Wisdom of the Crowd: 84% of respondents said that a country should enter into a long term contract for the supply of energy to create a steady source of supply at steady prices.
https://tklcloud.com/Crowd2/chart3.aspx?id=2796
Monday, January 09, 2023
Review of Hongkong Land (H78.SI)
I have 15,000 shares of Hong Kong Land (HKL), bought at an average cost of $4.89. It is listed in USD in Singapore Exchange.
The current price is $4.82 giving me a small lost of 1.5%.
The PE ratio (TTM) is 13.39 and the forward PE ratio is 9.55. This implies that the earnings will increase by 40% for the next financial year which ended on 31 Dec 2022 (the results are not known yet).
The dividend yield is 4.78%.
The book value is $14.78 p share, which is 3.0 times of the current stock price.
The fundamentals are very attractive. I expect the stock price to increase strongly when the financial results later this year.
I just bought another 10,000 shares at $4.82.
Note - I am sharing my views. I am not giving investment advice.
Tan Kin Lian
https://fisca.sg/ArticleDisplay.aspx?ID=1291
WOTC - Screen visitors from China
Wisdom of the Crowd: 59% of the respondents said that countries should screen visitors from China before allowing them to enter the country.
https://tklcloud.com/Crowd2/chart3.aspx?id=2795
Wisdom of the Crowd - New Issues
2. How should our state media respond to the rivalry between America and China?
3. How should the SG government respond to the rivalry between America and China?
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https://tklcloud.com/Crowd2/vote.aspx
Compulsory insurance for visitors
It is reasonable for a country to require visitors to buy insurance to cover medical expenses that may be incurred during the visit to the country.
The country should arrange the insurance with a local insurance provider for the mandatory coverage.
This type of insurance is necessary as the visitor may need hospital treatment for covid infection, which is now quite common, and may affect more than 1% of visitors.
The visitor can pay for the insurance and treat it as part of the cost of travel to that country. After all, they have to pay visa fee (in some cases) and the airline and hotel bills.
Tan Kin Lian
https://fisca.sg/ArticleDisplay.aspx?ID=1290
Sunday, January 08, 2023
Is insurance good for the community?
Insurance is good for the community if it is run properly. It performs a useful role in protecting economic losses and generates employment.
It can also be bad for the community if it is run badly. It can imposes a high cost to the community and create unproductive jobs to resolve disputes that can be avoided.
Let me compare the role of insurance with the road of private cars in the economy.
Private cars are good for the community if it leads to the following outcome:
a) The drivers observe traffic rules to ensure road safety
b) There is effective control to avoid congestion on the roads
Private cars are bad for the community if it leads to the following outcome:
a) The roads are not safe, due to lack or disregard for traffic rules
b) The roads are overcrowded and travel time is long
To ensure that the private cars are useful, the authority needs to set and enforce the rules on traffic safety and prevent congestion.
The same principle applies to insurance. The authority needs to set and enforce the rules on the safe operation of insurance contracts. It cannot be unregulated and left to the free market.
Tan Kin Lian
https://fisca.sg/ArticleDisplay.aspx?ID=1289
Wisdom of the Crowd - New Issues
2. Are customers generally satisfied with settlement of insurance claims?
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https://tklcloud.com/Crowd2/vote.aspx
Economic role of insurance
1. Insurance is not gambling, as there is an economic loss that needs to be compensated.
For insurance to work properly and fairly, the following pre-requisites have to be observed:
b) the past statistics of losses have to be available
c) the premium should be computed fairly with a margin to cover expenses and profit.
A well designed insurance scheme is beneficial to the community. It helps to protect economic losses and imposes a fair charge. It also creates employment.
2. Insurance can be badly designed under the following circumstances
a) The coverage is vague and leads to disputes over what is covered or not
b) There are no past statistics of losses, leading to speculation by the insurer
c) The premiums are excessive high to make big profit for the insurer.
d) The insurer employs agents who misrepresent the coverage in their eagerness to earn a commission on the sale.
A badly designed insurance scheme imposes a high cost to the community and creates jobs for people who carry out unproductive work, i.e. sell insurance that are not valuable or handles disputes that should have been avoided.
3. To ensure that the insurance schemes are useful, the government authority has to perform a important role:
a) They have to agree with the insurance companies on a few standard insurance policies that are offered to the public.
b) The coverage of these standard policies are clearly defined to avoid disputes due to ambiguity.
c) The insurers have to offer some or all of these standard policies to the public
d) The loss statistics have to be available to determine the expected losses.
e) The premium should not exceed 50% of the expected losses.
f) If the insurer wishes to customize their own policy, it has to go through a rigorous scrutiny by the authority and the policy has to be labeled as "non-standard"
WOTC - Covid outbreak in China
Wisdom of the Crowd: 87% of respondents expect the covid outbreak to be overcome within a few weeks in China.
Saturday, January 07, 2023
Review of Cosco Shipping (1919.HK)
This stock pay a dividend of $2.21 HKD in Dec 2022. My cost has reduced to $9.52. The current price is $7.84 giving me a loss of 18% ($37,000 SGD).
I cannot understand why the stock price is so low. At the current price, the PE ratio is 0.97 times and the dividend yield is 42%.
The quarterly financial figures showed that the earnings for 2022 is likely to be 20% higher than 2021.
I expect that this stock will give another bumper dividend after the close of the 2022 results. Maybe, the dividend will be another $2.21 per share.
The debt is 39% of equity, which is quite low.
The forward PE ratio for this stock is 4.2 times, based on the analysts estimate. This suggest that the profit is likely to drop by 4 times. This is probably likely to occur for 2023, assuming that the capacity oversupply brings down the earnings.
I have read forecasts that the earnings are likely to drop by 60% annually over the next few years. I find this forecast to be speculative. I did not see any report to substantiate it.
The stock trades in Hong Kong at a discount of 33% from the price in Shanghai. Overall, I find the fundamentals to be excellent. I will hold on to the stock until the release of the 2022 financial results and review my decision at that time.
Note - I am giving an observation. I am not giving financial advice.
Tan Kin Lian
https://fisca.sg/ArticleDisplay.aspx?ID=1284
Integrated health plan does not cover congenital birth defect
My friend have a strong trust in the integrated health plan. He likes to buy the top plan to cover private hospital and is willing to pay the high premium. He also read the coverage and policy conditions carefully and talk to the insurance agent to clarify any doubts.
Recently, he came across an unexpected problem.He had some problems with irregular heartbeat recently. He carried out a thorough medical checkup. The doctor discovered that he had a congenital hole in the heart and a faulty valve.
He thought - how fortunate that he had a complete integrated plan coverage. That would take care of his financial problem.
He got a shock. Congenital defects are excluded from the coverage.
My friend has been insured under this plan more than ten years. He is now approaching 60 years. All along, he was not aware of this medical defect.
He recalled that the medishield plan (on which the integrated plan was built on) was extended to cover congenital defects many years ago.
The insurance company said that this coverage applied to integrated plans taken after the change of government policy. It does not apply to insurances taken earlier.
I find this reason to be ridiculous. My common sense indicates that the inclusion of congenital defects should be applied to all coverages, and not those taken after the change of government policy.
I was not sure if he had since resolved this issue with the insurance company.
Over the years, many people have consulted me on claims settlement matters. The problem arises with the interpretation of the policy conditions, and the obvious effort by the claims officers to reduce the claim payment as much as possible, to the detriment of the customers.
This is a big disadvantage of an insurance system that is run by private insurers to make the most profit.
Tan Kin Lian
https://fisca.sg/ArticleDisplay.aspx?ID=1287
Travel insurance
Someone asked me if he should buy travel insurance.
I told him that the premium is a few dollars. He can decide whether or not to spend this money. He does not need to ask me.If he wants to spend $100 on a dinner, he can go ahead. He does not need to ask me also.
He can ask the insurance agent or marketing staff about the travel insurance coverage. I have no idea what is being covered and what is the premium charged.
Anyway, I never buy travel insurance over the past decades. I found it to be unnecessary.
But my family members, being typical Sinkies, want to buy travel insurance all the time. I do not argue with them It is their money.
I think that they never made any travel insurance claim. So, they are giving a lot of profit to the insurance company.
Tan Kin Lian
https://fisca.sg/ArticleDisplay.aspx?ID=1286
Review of Alibaba (9988.HK)
I hold 15,000 shares of Alibaba (9988.HK) at an average cost of $101.65 HKD. My total investment is $260,000 SGD.
At the worse point, I saw a drop of 40% on my holding, giving a loss of $102,000 SGD.
The stock price has just recovered to my cost. The analysts are positive about this stock as it will benefit from the reopening of the China economy (after the covid lockdown) and the listing of Ant Financial.
However, I am worried about the fundamentals. It has a TTM PE ratio of 135 times and a forward PE ratio of 10.81 times. This implies that the profit will increase by 12 times in the coming year.
I looked at the financials for the first three quarters of the current financial year. The earnings are still weak. The analysts are projecting strong growth for the financial year started 1 April 2023.
I sold 5,000 shares last Friday. I will sell the remaining 10,000 shares on Monday. After that, I will have 0 shares in Alibaba.
Note - I am sharing my personal view. I am not giving financial advice.
Tan Kin Lian
https://fisca.sg/ArticleDisplay.aspx?ID=1285
WOTC - Fair wage for each job
Wisdom of the Crowd: 70% of respondents suggested to use data analytics to recommend the fair wage for each job based on supply and demand
https://tklcloud.com/Crowd2/chart3.aspx?id=2793
Wisdom of the Crowd - New Issues
1. How should Singapore's state media handle its international news?
2. Should the state media safeguard Singapore's interest in its news reporting?
Vote in
https://tklcloud.com/Crowd2/vote.aspx
Friday, January 06, 2023
Review of Cosco Shipping (1919.HK)
I hold 130,000 shares of Cosco Shipping Holdings at an average cost of $11.73 HKD. The current price is $7.84 giving me a loss of 33% ($87,000 SGD).
I cannot understand why the stock price is so low. At the current price, the PE ratio is 0.97 times and the dividend yield is 42%.
The forward PE ratio is 4.2 times. This suggest that the profit is likely to drop by 4 times. However, the financial figures showed that the earnings for 2022 is likely to be higher than 2021. This does not support the higher PE ratio.
The debt is 39% of equity, which is quite low.
The stock trades in Hong Kong at a discount of 33% from the price in Shanghai.
Overall, I find the fundamentals to be excellent. I cannot understand why the stock price dropped by 33% from my cost.
Note - I am giving an observation. I am not giving financial advice.
Tan Kin Lian
https://fisca.sg/ArticleDisplay.aspx?ID=1284
WOTC - Economic prospects for 2023
Wisdom of the Crowd: 52% of respondents said that the economic prospects for Singapore is bleak in 2023.
https://tklcloud.com/Crowd2/chart3.aspx?id=2792
Thursday, January 05, 2023
Tesla's production and delivery figures for 2022.
The growth rate for NIO is 34% for 2022. The growth rate for BYD is 184% but the total EV sold is still smaller than Tesla.
There is a fear that Tesla will lose out in its competition with BYD. However, most analysts expect the EV market to grow rapidly over the next 5 years. Tesla will be able to sell all the EVs that it produces in this expanding market.
Why did Tesla miss its growth target of 50%? The actual growth of 40% indicate a shortfall of 100,000 vehicles.
At the end of 2022, Tesla had 70,000 vehicles that were produced, but were not delivered. The bearish analysts said that it is due to a drop in demand for Tesla.
Tesla could have suffered from this drop in demand. However, there are two other reasons for the lower deliveries:
a) Many customers in America wanted to delay the completion of the purchase to 2023 to enjoy the tax incentive that will come into force.
Tesla introduced a discount of $7,500 to encourage these customers to complete the purchase in 2022, but it came too late to make any impact. Whatever sales lost in 2022 will probably be recovered in 2023.
b) Tesla found it difficult to arrange the logistics to export the vehicles from China to other countries. This was caused by the covid outbreak in China towards the end of the year, which caused a shortage of workers as many reported sick. This problem should probably be resolved in the 2023.
There is one negative point for Tesla. BYD appeared to be able to sell their vehicles in China (as can be seen from their record sales in December). NIO also reported record sales in that month.
So, it is likely that the lower demand is felt by Tesla in China, in spite of the problems in logistics.
To offset this challenge, Tesla had reduced the prices of its vehicles. This should make Tesla more competitive against the other manufacturers.
Tesla enjoys a large profit margin. Even if the prices are reduced, Tesla will still be able to sell their vehicles at a profit.
NIO operates at a loss in 2022. It is expected to make a loss in 2023 as well. NIO has a large debt of 82% of equity. The high interest rate will put pressure on NIO.
BYD is profitable, but has a PE ratio of 52 times. It is imported to improve its profits in 2023 and reduce its PE ration to 33 times. It debt is 23% of equity (which is low).
Tesla has a PE ratio of 39.6 times. The PE ratio is expected to fall to 24.3 in 2023. Its debt is 14% of equity. It has a cash hoard 0f $21.2 billion compared to debt of $5.9 billion.
At the current stock price, both Tesla and BYD are attractive for investment. I prefer Tesla because the stock price can increase by 50% from current level to put the fundamentals at a similar level to BYD.
Tan Kin Lian
https://fisca.sg/ArticleDisplay.aspx?ID=1283
Wisdom of the Crowd - New Issues
2. Which self driving platform is likely to be the champion?
Vote in
https://tklcloud.com/Crowd2/vote.aspx
WOTC - China economic growth in 2023
Wisdom of the Crowd: 52% of respondents expect China to achieve strong economic growth (5% or higher) in 2023.
https://tklcloud.com/Crowd2/chart3.aspx?id=2791
Review of China Railway (0390.HK)
I hold 400,000 shares of China Railway at an average cost of $3.67 HKD. The current price is $4.28, giving me a gain of $60,000 HKD.
The PE ratio is 3.15 times and the dividend yield is 5.57%. These indicators are attractive.
The forward PE ratio is 2.64 times. This suggest that the earnings for the current financial year will grow by 19%.
The stock trades in Hong Kong show a discount of 34% compared to the price in Shanghai.
Another positive factor, which will give a big boost to the stock is that the recent relaxation of covid restrictions in China will give a big boost to domestic travel within China. This will bring a big revenue boost to this stock.
All these factors are positive. I will buy an additional 200,000 shares.
Note - This is a personal opinion. I am not giving investment advice.
Tan Kin Lian
https://fisca.sg/ArticleDisplay.aspx?ID=1282
Why is Tesla highly profitable?
Many customers like Tesla for the following reasons:
a) It has leading battery technologyb) It has great software (to manage the operations) that can be updated "over the air"
c) It has an excellent design for the battery operated drive train
Many customer are willing to pay a premium price to own a Tesla.
There are many EV models from competitors that may have better specs than Tesla. Will Tesla maintain a lead over these competitors?
Many analysts overlook a key feature of Tesla - its manufacturing operation. It comprise of:
a) Tesla is able to produce a large volume of vehicles. For example, Tesla sold 1.3 million vehicles, compared to 122,000 for Nio, 112,000 for BYD and 95,000 for Volkswagon.
b) Tesla shows a healthy profit on its operations. Nio is still operating at a loss. The profit margin for BYD is quite low.
c) Tesla pays special attention to produce large volumes of vehicles at low unit cost. It offers a small number of models, but allows customers to select from a few options of each model. This allows them to achieve big economy of scale in production. The other manufacturers do not operate in this way.
While analysts and investors look at the specs of the models offered by the different manufacturers, few pay attention to the manufacturing method.
In my view, Tesla will continue to expand its sales significantly by offering competitive prices for its models and still maintain a high profit margin.
Tan Kin Lian
https://fisca.sg/ArticleDisplay.aspx?ID=1281
Wednesday, January 04, 2023
Price and quality of durian
There is a Chinese saying - the price that you pay reflects the quality of the goods.
This may be generally true, but it is not always the case. You may get the same quality, but you pay a higher price because the vendor knows that you are not familiar with the market.
I quote this example.
I inspected the price of the top grade durian (musang king, black thorn) sold in Ang Mo Kio town center. A stall sells 3 boxes for $50. Another sells 2 boxes for $50. The quality and quantity appears to be the same. The customer can pick the boxes.
At a shop near my home (quite far away the town center), the price is $40 for each box.
Of course, the price changes according to the season and the supply and demand in the market.
In the above example, I am quoting three prices for similar quality of durian being sold on the same day.
I do not believe in paying more for the same product, in the blind belief that a higher price is for better quality.
I apply the same principle when I buy other products.
Tan Kin Lian
https://tklcloud.com/Feedback/feedback2.aspx?id=5599
WOTC - China relax covid restrictions
Wisdom of the Crowd: 62% of the participants expect that after China relaxed its covid restrictions, only a few people will die and the population will achieve immunity.
https://tklcloud.com/Crowd2/chart3.aspx?id=2790Tuesday, January 03, 2023
Alternative to the US dollar
I am still studying which of the following is a better alternative to the US dollar:
a) Global currencyb) International RMB (or e-CNY) which is different from domestic RMB.
The global currency will need to be supervised by a few participating countries, e.g. BRICS.
The e-CNY will be managed by China, but it has to be done fairly and transparently to gain the confidence of other countries. It will be different from the domestic RMB because China wants to keep interest rate low to protect the China economy.
Each option has its advantages and disadvantages. There is no perfect solution.
A global currency will get the support of a few sponsoring countries and will be better trusted by other countries. But it may be difficult to get a few countries to agree on future policy and direction.
The e-CNY can be managed easily, as it depends only on China. While some countries do not like to rely on China, they will probably find China to be more trustworthy than America.
I have not decided which option is likely to work better. I shall think more about the choice.
I am confident that most countries want an alternative to the US dollar, to get away from the abuse of the US over its currency. Furthermore, the US dollar is likely to collapse due to the huge national debt.
Tan Kin Lian
Wisdom of the Crowd - New Issues
2. Does universal suffrage (one man one vote) produce good leaders?
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https://tklcloud.com/Crowd2/vote.aspx
WOTC - Vaccine from America
Wisdom of the Crowd: 57% of respondents said that China should not use vaccine from America as America cannot be trusted.
https://tklcloud.com/Crowd2/chart3.aspx?id=2789
Monday, January 02, 2023
Wisdom of the Crowd - New Issues
2. Is globalization good for all countries?
3. Is it a good policy to bring in workers from low cost countries?
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https://tklcloud.com/Crowd2/vote.aspx
Free and fair trade
Here are the five principles of the World Trade Organization that seek to promote free and fair trade.
https://tklcloud.com/Feedback/feedback2.aspx?id=5594WOTC - Estate duty
Wisdom of the Crowd: 91% of respondents said that abolishing of estate duty does not help the poor. It helped the rich to avoid paying tax on inheritance.
https://tklcloud.com/Crowd2/chart3.aspx?id=2788Sunday, January 01, 2023
Donald Trump's tax returns
The US House of Representative obtained a court order for Donald Trump to turn over his personal tax returns.
After received the tax returns, the House released the tax returns to the media. Journalists discussed the tax returns extensively in reports published in the media.
a) Donald Trump's tax returns are supposed to be private and confidential.
b) The House may have some legitimate reason to get the tax returns (e.g. to investigate if Donald Trump had abused his power as President while he was in office), but that power should not extend to release the confidential information to the media and the public.
c) Donald Trump should be tried by the court and not by journalist in the media.
d) If the House can act in this manner to Donald Trump, it will set a precedent for any future office bearer.
e) This tool can be used by a political party to attack office bearers from the opposing party for political motivation.
I find this practice to be immoral and vindictive. The situation is getting worse in America as the time goes by.
I do not like Donald Trump personally, but I think he should be fairly treated.
Digital dollar (e-USD)
Some people are alarmed that America is introducing its CBDC, i.e. a digital dollar.
Why should they be alarmed?
They say that the digital dollar, i.e. e-USD, will have a different value from the current USD. The government will force everybody to convert their USD to e-USD at a lower conversion rate, say 10 USD to 1 e-USD. This is how the US government can reduce its large debt.
The e-USD will become a different currency from the USD.
I believe that this happened previously in countries that went through hyperinflation. The government printed a new currency and forced everyone to convert from the old currency to the new currency at a lower exchange rate.
I believe that the e-USD will be issued to promote digital payment. The fear that it will be used to devalue the current USD is overblown and alarmist.
Anyway, the USD is likely to devalue anyway due to the high national debt in America.
Tan Kin Lian
https://tklcloud.com/Feedback/feedback2.aspx?id=5589
Singapore policy changes - 2023
These policy changes will take effect from 2023.
1. GST rate up by one percentage point2. GST extended to imported low-value goods
3. Increased property tax rates
4. Lower childcare fees at government-supported pre-schools
5. Increased CPF contribution rates for those aged 55 to 70
6. Greater flexibility in transferring CPF savings
7. Mandatory rest days for migrant domestic workers
8. Quota for S Pass holders to be cut for certain sectors
https://www.straitstimes.com/singapore/higher-gst-lower-pre-school-fees-and-cpf-tweaks-8-policy-changes-from-jan-1
Wisdom of the Crowd - New Issues
1. Should the US House of Representatives released the tax return of Donald Trump?
2. Should the media discuss the tax returns of Donald Trump?
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https://tklcloud.com/Crowd2/vote.aspx
WOTC - Acting prime minister
Wisdom of the Crowd: 75% of the respondents said that one of the deputy PMs should be given the chance to be acting PM when the PM goes on leave, rather than rely on an experienced senior minister.
https://tklcloud.com/Crowd2/chart3.aspx?id=2786
Saturday, December 31, 2022
Wisdom of the Crowd - New Issues
2. Should a country enter into a long term contract for its energy needs?
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https://tklcloud.com/Crowd2/vote.aspx
My positive view of the China government
Many people observed that I have a positive view about the government of China.
This is largely true.
But, I do not think that the government in China is perfect. There are negative aspects as well, but this probably applies to all governments.
I generally do not like to play up the negative aspect of any situation, unless it is systemic and cannot be changed.
I believe that the China government is working hard to improve the living standard and well being of the ordinary people, and they are doing it in an honest way.
They may have to adopt some harsh measures at times, but this is necessary to combat some forces that are intent on creating social disorder or to disrupt their progress.
On some occasions, they may have adopted the harsh measures wrongly. It may occur at the lower levels, due to the lack of experience of the officers. Mistakes are made. But they can be corrected.
I have less faith in other systems of governments which seek to enrich the elites and the super rich at the expense of the general population. They may claim to be "democratic" but I find them to be hypocritical and dishonest.
Tan Kin Lian
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