CNA news: MM Lee explains Singapore’s long-term investment horizon
Mr Lee explained: “When we invest, we are investing for 10, 15, 20 years. You may look as if you are making a big loss today, but you have not borrowed money to invest. You will ride the storm, the company recovers, your shares go up.”
But he said that Singapore is not a master of its own economy.
He said: “Of all the economies in the world, we have the highest percentage of external trade – three and a quarter times our GDP. No other country has got that size of external trade. So when the external trade shrinks, remember it is going to hurt us.”
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I beg to disagree with our esteemed MM. Some investments go down to zero and are complete write offs. Look at WaMu and Lehman. The shareholders got completely wiped out. Singapore will never recover its losses in Citibank and Merril Lynch (now Bank of Ameria). Temasek was wrong to put 40% of its eggs in one basket (financials) and Singapore now pays the price.
Please, please stop asking the country to live in denial. If we never take responsibility for our mistakes, we will never learn and never move on.
Living in denial is the easiest way out. when good things happen, it will be their credit, when bad things happen, denial is the way to go. These cycle will continue to go on, unless changes occur.
“You will ride the storm, the company recovers, your shares go up” like what Panache has say, it can go both way and the other way is the company worsen and got wipe out.
if we keep living in denial, one day we will wake up and realize then we are in a shit hole and it is filling up extremely quickly.
“When we invest, we are investing for 10, 15, 20 years. You may look as if you are making a big loss today, but you have not borrowed money to invest. ”
What nonsense ? Then why do you need to sell national assets ? Oh… and that is done without national parliament debate ! You don’t have to borrow because you sell national asset to top up the gambling stake.
Investing for 10, 15, 20 years ? Then why did you stop throwing dumping money into citibank, ubs, and other frailings investment now ?
Simply put. No one says investing in long term is bad but to invest heavily during wrong timing and suffer fool’s loss should be not be excuse for investment in long term. So you think you are Warren Buffet given your pathetic track record ?
“we have the highest percentage of external trade – three and a quarter times our GDP. ”
Big deal ! So what’s now ? Why talk about large and astronomical revenue when there is negative profit due to courtesy of pathetic investment ? A loss is a loss , paper or not paper. So are we going to gambling big time again using your so-called secretive recipe for investment given that still “we have the highest percentage of external trade – three and a quarter times our GDP. ” ?
Just because if someone gambling using gambling chip doesn’t means it not gambling with actual money. In the same way, a paper loss is still money loss.
Never learn mistake but still repeating the same old grandfather’s story.
Well…. no one is (a master of his own economy) since Bush squandered all money to his banker and big pharmaceutical friends. Not only this, he depleted much of USA’s income tax by sending men unnecessarily to Iraq to fight. Later, media got it that Iran and Iraq has NO NUCLEAR weapons when Bush stated they had.
When USA goes down – the rest follows. When USA eats SAD (Standard American Diet), the rest follows. When obesity and heart attack rates go up in USA, the rest follows! When and if Obama makes a brand new policy, the rest will also follow!
Beware!
Mr Lee, so now you blame our current crisis on because ‘we have the highest percentage of external trade – three and a quarter times our GDP’. The crux of the matter is, who initiated the policy to have such a high percentage of external trade? I think it is the gahment. Slapping your own face?
MM Lee may as well say, “When we invest, we invest for the next 100 years.”
Wouldn’t that be the logical thing to do, if we go according to what MM Lee says? We could invest $100 billion and wait for the shares to go up, and our next generation of S’poreans would be prosperous!
Why 10, 15, 20 years? Lets go even further than that!
This sort of hare-brained excuses to cover up losses fools no one. I am surprised MM Lee thinks S’poreans can be easily misled by such infantile propaganda.
Quote:
“When we invest, we are investing for 10, 15, 20 years. You may look as if you are making a big loss today, but you have not borrowed money to invest. You will ride the storm, the company recovers, your shares go up.” Unquote.
That statement either shows us that he was very naive or he was taking Singaporeans for granted.
The objective of all investments is to maximize profits and minimize loss
(not to minimize profits and maximize loss).
In order to maximize profits, the TIMING for entering and getting-out of the investment portfolios is the KEY and MOST IMPORTANT Factor. Every other factors are secondary. It does not matter whether one is investing short term or long term; irrespective of whether it will be1 month, 1 year,10 years or 100 years.
If one gets the timing wrong, one is definitely not going to maximize profits though one may still make some money if one is able to ride the storm. That is just a consolation. That does not reflect how smart one is.
The thing about wrong timing is not only that you have lost the opportunity to maximize your profits and minimize loss, but that you have also inadvertently increased your opportunity cost. In every investment decision one makes, there is a trade-off, and that trade-off is your opportunity cost.
If one had done one’s homework thoroughly, and sharp enough, one would be able to reduce the opportunity cost, especially in the last one year or so.
The US Subprime crisis started to show signs in 2006 but very few people took notice or gave a damned. Then it surfaced clearly in 2007, when data started to churn out and made available in the Internet; projections and extrapolations of the possible spread and extent of this crisis were also made by the experts. That means if one had done one’s homework thoroughly, one would have noticed that the US Subprime crisis will only fully bloom somewhere around August-October 2009. Therefore, if one had held on a little longer, instead of being impatient and greedy and rushing in blindly, when others feared to thread, one would have at least minimize the losses.
If fact, I have already given Temasek the amble warning in 2007. But may be due to over-confidence and the halo-effect, of resting on the euphoria of the glory of past track-records, my warning bell was simply brushed away as useless and insignificant noises.
Now, after a continuous spade of heavy losses amounting to billions and billions of dollars, which Temasek had obviously not calculated when it should have, someone has still not woken up to their bad decisions but instead started to put the cart before the horse by coming out with lame excuses such as “oh, we a investing for 10, 20, 30 years …”
You employed a CEO, a Board of Directors, and also a string of Investment Officers and paid them $billions of taxpayers’ money in six to seven years and you are not going to see any gains/profits until 10, 20 or 30 years’ time?
1. Where will the operating cost come from?
2. How are you going to justify for the amount of money paid as salaries to these useless employees (or so-called talents and experts)?
3. How do you assess their qualities?
4. On what basis do you measure their performance?
5. Most important of all, how are you going to answer to your taxpayers?
By keeping everything top secret? By simply taking them for granted and demanding that they continue to trust you and respect your judgment? So simple as that?
Don’t you think that times have changed and that one cannot continue to play hide and seek with their population, especially in this Cyberspace Age? Don’t you think that it is time to take responsibility and to be courageous enough to simply apologise for the bad judgments and bad decisions?
I think a simple “Sorry, we have made some mistakes and poor judgments” would have carried the day and would definitely go a very long way to recover lost faith and trust.
@Andrew Loh (ref: Comment #6) I agree with you! It’s a little like saying “SEE? YOU DIDN’T WORK THAT’S WHY YOU HAVE NO MONEY!”
Duh! “Stating the obvious isn’t going to work!”
There are already ppl who’s been burnt by investing in the “wrong things”. So….what exactly is a master of economy?
The questions posed by “Do The Honourable Thing! ” (ref: Comment #7) are more helpful! (I am sorry no one heed your warning – but you are wise and you proved that you were right!!)
I am sad to say currently more than half of our MPs are all hand-puppets. Or motorised puppets at best —> They see what USA does – they follow! And often they do so (follow) blindly.
The dangerous food pyramid that Singapore follows (responsible for heart diseases, cancer, etc) is a result of people (VICTIMS) following the USA’s food pyramid.
Follow my updates I will tell you more —-> Twitter.com/qutequte (Yes, Obama’s on Twitter too as well as actress Demi Moore etc). lol
P.S.
>>>>DO THE HONOURABLE THING: Don’t you think that it is time to take responsibility and to be courageous enough to simply apologise for the bad judgments and bad decisions? …..I think a simple “Sorry, we have made some mistakes and poor judgments” would have carried the day and would definitely go a very long way to recover lost faith and trust.
That’s not SPM Lee’s style it seems!
Quote
Mr Lee explained: “When we invest, we are investing for 10, 15, 20 years. You may look as if you are making a big loss today, but you have not borrowed money to invest. You will ride the storm, the company recovers, your shares go up.”
Unquote
10-20 yrs is less than a generation..so the present and the next gen’s reserves will be staring at zero growth. Every investor worth his salt knows that if his $1.00 slid 50% to $0.50 he has to make 100% and not 50% just to break even, and he has to make 200% to be up 50%. And this is not discounting inflation yet. Mr MM, yr arse is toast!
Thought they pay high salaries for ministers because ministers are talents and by right talents should perform and deliver when others could not?
Hey, few months ago, when Singapore was one of firsts to clock a recession, whose fault huh?
Imagine singapore in 10 years time.
how would the parl be?
more vibrant?
the parl debates would be more interesting ?
tick tock……
I am a Neutral member of the electorate and a concerned citizen.
I used to be Apathetic.
I understand why people are Apathetic.
I just like to voice out my Support and Admiration for our might leader’s vision.
What a Strategist!
I am extremely pleased to quote the great man of all time :
“When we invest, we are investing for 10, 15, 20 years. You may look as if you are making a big loss today, but you have not borrowed money to invest. You will ride the storm, the company recovers, your shares go up.”
Thus, I wonder should more money be invested into these long term products ?
As I trust this man, and am convinced totally, I hope they put in even more billions into the various products invested existingly. Like this, in the L O N G Run, money money leh!!!
yahoooooo!!!
the NEUTRAL ELEMENT
#13 Lau Tuck Wa is spot on!
I am gonna find out which are these investments and invest as much as is humanly possible into these wonderful products that will surely make me rich.
and then i shall retire.
my future foretold.
my moto is ” if its so good, why not get more of it!”
“Singapore not master of its own economy “………………so say the despot.
Singapore would have done a lot better if its people were masters of their political future and not serving the ambitions of a despot and familee.
Check and balance would have facilitated appointment of better talents,
ensured transparency and accountabilty in place to weed out incompetencies.
Let’s be realistic.
Somebody or some people in Temasek had blundered, whether wittingly or unwittingly.
One can of course counter that no one can foresee the future and the unexpected can always happen. True.
But if the evidence is that if you have been habitually incurring losses, then it would be obvious that you are not the person for the job.
““When we invest, we are investing for 10, 15, 20 years”
The concept of long term investment is to give time for a healthy investment to build up the total value.
What we are seeing now is “long term investment” being used as excuse for recovery of great loss due to bad investment decisions.
The paper loss is tied down for “10, 15, 20 years” and they don’t dare to mention the opportunity cost.
Remind the people, when they charge HDB flat at market-subsidy price, they are saying they could have sold the flat at such market-price and they do not do it. That opportunity cost is the “market-subsidy” we “enjoyed”.
What is the Role of REGULATORs?
why the extent of investments into Toxic products worldwide?
where is the world talent that blow the whistle that should have steered us away from the meltdown?
How much info does so-called Economists , Financial Experts, Auditors, Accountants, Business Leaders, Tycoon investors know?
The world of Intellects. What a Progress!
Lets move on, no one responsible? Its happened? Just fix the problem? No Cause just Effects?
Well done!
You people gots Balls. You dare to doubt what LKY said.. He build Singapore to what it is today, so LKY can say whatever he wants.
#19) My Idol Harry on February 9th, 2009 1.54 pm
Yes he can say whatever he wants, but with his current team of elites in charge, we definitely must take it with a large pinch of salt today. The PAP of today is no longer the same quality as it was in the early years of our nationhood. They have lost the trust of the electorate and we know they are there for the money only.
He led the team that built up Singapore, but it was not of his effort alone. Sadly, his current team has undone so much of what the pioneers had painstakingly built up. To me, he failed to build up robust civic institutions during our relatively peaceful years in the 80s and 90s to allow more political openess and placed too much emphasis on elitism. I believe that is one of the key reasons why we see the failures of our elites today as they continue to happily live in their own wonderland withour realising that the fire underneath their feet is burning ever stronger day by day.
But I believe that our country is greater than PAP and for the good of our nation and the future of our children, we have to overcome their might bit by bit.
Yes, we can and yes, we shall.
that the intention of these investments was to gain the commanding heights (banks in this case) in this globalised economy. To let Singapore have an influence in the decisions that are made to shape the world economy as well as to protect ourselves against any political/financial ‘enemies’.
i think the intention was good, but the execution was unfortunately untimely and ill-judged.
Without doubt, we could have mitigated a significant amount of the losses and stretched our dollar even further in these investments.
What a world of difference it could have been!
When the economy was booming (due to global boom, not necessarily because of the capability of our leaders) I recall he was attributing it all to his team being first class team. That was the reason for the high salaries given to the ministers etc. Credit goes to him and his team…….BUT
Now the economy is doing so badly…the decline in GDP is worse than our third world neighbouring countries.. he says that Singapore is not master of its own destiny. Blame, blame, blame… it is due to external factors. Granted that the global economy is bad, Singapore if it had been well run with proper economic planning should not suffer as badly as it is now. We as citizens are still waiting for justice to be seen in a BIG CUT in ministers salaries. The cut in their salaries will lower cost of running the country and hopefully our utilities bill and transport cost without digging into reserves. At a time when so many people are jobless, the economic disparity is too great between the minister+top civil servants and the ordinary citizens.
I am an ordinary citizen not interested to be involved in politics. I just want to get a job. I am just very sad that though I am well educated but I am unemployed, not that I did not try hard.
What is happening to me now is exactly the same as what happened to my father (much less educated as I am) (he is now dead) 40 years ago, when our whole family suffered the plight of his unemployment (at the time our country just gained independence and British withdrawal). Every day then was a misery…no food, no money to pay school fees. I ask myself, after all these years of hard work will I soon be going through the same fate as my father in his 50s.
WHERE IS THE PROMISE OF MORE GOOD YEARS OR GOLDEN ERA.
Quote: We have the highest percentage of external trade – three and a quarter times our GDP.
I’m sure MM Lee and his team would have known it. But did they prepare a backup plan/ policy when this crisis happens? I’m not highly educated, but I know that one must have a backup plan to fall back to when sh*t happens. Did they have one?
PS: I suggest adding this quote to the long list of quotes that’s somewhere in TOC to be taken out again during the next elections.
22) powerless on February 9th, 2009 5.04 pm “We as citizens are still waiting for justice to be seen in a BIG CUT in ministers salaries. The cut in their salaries will lower cost of running the country and hopefully our utilities bill and transport cost without digging into reserves. At a time when so many people are jobless, the economic disparity is too great between the minister+top civil servants and the ordinary citizens.”
I share you views on Ministers+Top Civil Servants salary. I sincerely hope that during these desperate times that we are digging into our taxpayers’ reserves that the Government freeze all their bonuses. Using our taxpayers’ reserves and running huge deficits to pay out bonuses while many are jobless or are becoming jobless just seem wrong.
23) Sick&Tired
“I’m sure MM Lee and his team would have known it. But did they prepare a backup plan/ policy when this crisis happens?”
Mmm…as far as we can tell, when we are falling down into the shit hole, LHL was still saying that it is ok etc etc. and when the shit got worse, a hastily thought-out plan is been developed. So does that look like they have prepare a backup plan/ policy? Arh, i think i know partly why, that’s because they still believe that we have golden years ahead during the fall, and it wasn’t until they reach a point beyond return, then they realize that we are in a shit hole and something needs to be done.
From what i have read, the summary can be given ” when the economy is good, the MIW are the master of our economy, able to control it and boosting the growth and expecting high pay. however in such a bad situation, somehow the control have disappear from their hand, and they are not to be blame for this.”
#19 Yeah, MM Lee can say whatever he wants (even remarks or comments that do little to nothing to help) and yes, since he built Singapore to be what it is today. What he said are just “fillers” to kill time until the economy improves. And yes he is entitled to say his “fillers”.
But he did not build this country alone. His wife and the ppl who support him.
If I own “my kids” it doesn’t mean I can say or treat them anyway I want either.
#24 Agree with you! But there must be a balance. The govt cannot help you every month! Once ppl get comfortable with social welfare, they will refuse to find “a way out” from poverty and more.
You people are a bunch of ungrateful lot, What he build and made he can lose.
But some of the MP and our french holiday civil servant do not deserve their worth.
Too many Army General, Navy Rear Adm and Air Force Cdm that are not up to standard are paid sky high salary and all holding key posts in public office
They really have no clue as to what to do next esp during this global depession.
“we are investing for 10, 15, 20 years.:
Aiyoh, if our growth figure for 2009 alone has already been revised at least twice and it is only one year, why tell me about 10, 15, 20 years ????.
Now, corporate life cycle is no longer like last time lah. If we are no master of our own economy which is so local / near to us, what makes us think that we can be a better master of our investment destiny (paper ????) with such long-term horizon in some faraway countries & which we do not have good control at all.
There no doubt that MM made Singapore what is it today but the point is with all the continual mistakes his men made today by losing those huge $billions losses and at the rate they are going, our nation reserve could be emptied in no time. Who is going to suffer????? MM and his coffers? Of course they will not admit their wrongs, since when in singapore history have anyone of the papees ministers ever publicly admit their mistake??? We, the taxpapers of course will be the ones who will be made to suffer for their mistakes.
I think the crux of the frustrations here among readers is the poor economic conditions in Singapore after more than 40 years of PAP rule. Readers are beginning to see that many of the strategic decisions made turn out to be against Singapore’s interest even though there is vehement denial on the part of the government.
The acid test is that our men were working as chauffeurs to the British before independence and our women as amahs to the British households. Over forty years later, we are beginning to see that many of our retrenched managers and professionals are turning to taxi driving and many of our ladies to cleaning jobs, this time, driving a diverse crowd of foreign talents from India, China etc.
This to us Singaporeans is simply not acceptable. After forty over years of trusting one party and all its policies, shouldn’t we expect better? I have seen many with high education in lowly paid jobs.
When we are in our twenties, we were told we have low pay because we do not have the experience. When we are in our thirties, we were told we need to upgrade our qualifications if we want higher pay. When we have upgraded our qualifications and garnered our experience and in our forties, we were told that they could get a fresh grad or foreign talent for a fraction of our pay. In our late forties, they don’t even want to interview us anymore. All these happened during the PAP rein. Is this the more good years you are talking about?
In the past we were told to stop at two because Singapore cannot hold too many people. We were told not to apply to become doctors because Singapore does not need so many doctors. Now we are importing so many foreigners because Singapore needs them to run the economy and our hospitals. Yet, rich foreigners get to see our doctors almost immediately while we wait for months to see the specialists because they are too busy attending to these foreigners.
There is this divide that we perceive between the ruling elite and ordinary Singaporeans. While you give yourselves humongous increments, our lives are getting harder by the day. I cannot believe that you, the government, would be so uncaring as to ignore our plights so I think you have been misinformed, by those you surround yourself with.
You have been told we are fussy, and the statistics your aides showed you reflected that. But do you know that people can be made to resign on paper? In short, I urge the govt of Singapore to not just look at the statistics that is shown to you but to look beyond for the real things that are happening on the ground, because your future and Singapore’s future depend on it.
LKY once said recently, in 5 years, Singapore will be good, and in 10 years, even better.
What kind of progress is he talking about, when we see HDB building more 2 and 3 room flats, so that Singaporeans can afford them? Or is he talking about progress only for his leegime, but regress for the people?
aiyoyo
per say “Singapore not master of its own economy”
so what’s the ELITEs actions? since they take hi salary!
also why not invest in own country? in times of need like now.
not sure the logic behind???
aiyoyo
30) Singaporean on February 10th, 2009 1.30 am
The later part of this papees govt are just a bunch of greedy businessmen using their influence to monopolise the market and making fast money at the expense of the people. Because of greed, they can just do anything, yes just about anything from lies to all kinds of unscrupoulous ways just to get what they want. So, the question is, do we singaporeans still want to have them around?
I just heard Lee Sr’s speech. It makes absolutely no sense to me all.
Yes, give the $300/-, as every penny counts. People who need financial help should be given assistance. Don’t worry what they buy.
Singapore is in for a long haul. We in America is facing a financial meltdown, Obama’s economic stimulus is not going to work. Job loss for Jan of ’09 for Americans was a staggering 580,000. For Feb’09, add in another 40-50,000 job losses, as that is the trend that it is going.
Lee Kuan Yew’s own daughter-linlaw, Ho Ching, has lost BILLIONS for Temasek, and now, Temasek has , maybe…a ‘fake Charles GoodyearIV’ to head it. Is the Charles Goodyear IV of Temasek an impostor?
http://www.johnharding.com (please click to read)
In dire financial times, like what we are facing, like the Great Depression of 1933, there has to be wiggle room to help the poor, the jobless, and the old.
Lee Sr’s policy should be flexible enough to change. He has messed up his own investments, thru’ Temasek. What does that mean for Singaporeans? Is there any accountability?
Americans are NOT buying. Americans are losing theirjobs, Americans are losing their homes. America is in a Great Depression.
When PAP govt takes credit for everything that has gone right,it is justifiable to blame them when things go wrong.
If we have a civil society with the strength of US, there will be less blame as the decision was made by all of us.
The key component that droves the dynamics of growth for the past three decades was the People’s Support.
That was a Uniquely Singapore phenomenon that was unfound anywhere else, and the envy of every other governments in the world; and you guys blew it.
Talents can be bought as and when it’s needed, but not trust and faith.
Mr Lee, get your men to do some serious reflective thinkings before you do us all in.
I had this belief long long ago, and I said many it many many times – when the nation’s economy is doing well, the fkg garmen will never fail to say, singapore got good garmen, able leaders with no corruption, and why quibble over paying for talent and welcoming talent.
But when the 100 % opposite happens – when the nation’s economy fell – the fkg garmen never fail to blame on external environment which is beyond their control (I challenge the MSM to dig their archives, bring them out and rewrite it in their chosen media), blame the SARs, blame the Iran-Iraq war, blame 911.
Never never for once, accept credit for failures on their part – failed 2-child policy, failed graduate mum priority scheme for P1, failed to restructure the economy when they have plenty of time on their stupid hands and resources which they put it to better use to clamp opposition, dissent, catch thin air left behind by mas selamat etc.
When National Semiconductor left what did they do? When Fairchild left, what did they do? When Micropolis failed what did they do? When the dozens of garment factories closed in the 80′s what did they do ? When the dozens of plywood factories in Pandan, Kadut closed, what did they do ??
When national stadium closed, foolish Singaporeans celebrated. Now please, these same 1000′s of Singaporeans, go and reflect what you were tricked into doing what you did??
So where’s the much taunted progress that fkg powers keep on trumpeting about ?
Just asked a sample of those who migrated.
no use crying over spilled milk. its back to working hard, more savings , less spending. its time now for belt tightniing not only for singaporeans but also for the people of the world. greed is the root of all these financial mess.