To be honest, if I'm a dividend investor seeker, there are many competitive stocks out there...so iCap can only be attractive by driving capital gains either via NAV growth a lot faster or narrowing the discounts.

When sentiment is negative and grip with extreme fear, dividend alone cannot help. Let me give you an example, ICBC(1398.HK) listed in HKSE, it's one of the largest banks in the world & well managed, ROE consistently above 10% but it has a bad label with it.....no need for me to elaborate more la.

Year *** Dividend (HKD) ***
2019 ** 0.2953
2020 ** 0.2874
2021 ** 0.3199
2022 ** 0.3432
2023 ** 0.3292

Nice growing dividend trend, right? If you translate that into yield will be almost 9-10%

Price in 2019 was about HKD 6. Last traded was HKD 3.60. Total return was -14%

Price/Book 0.35

If would have bought an ETF that mimics Hang Seng Index 2800.HK, it's a physical ETF with regular dividend payments.

Year ** Dividend HKD
2019 ** 0.93
2020 ** 0.75
2021 ** 0.67
2022** 0.64
2023 ** Not yet declare full dividend...Ist interim 0.10 but let's assume it's same like 2022 0.64

Price in 2019 was roughly HKD 27, last traded HKD 17.84.....Total return = -20%

ICBC may still outperformed the index but the point is dividend alone is insufficient to drive higher price/book value of which is very common measure in evaluating banking stock.

In such a conservative culture embracing shareholder activism is unprecedented. 😂😂

"It was a dramatic change for a company that used to be totally unresponsive to shareholder demands," said Oki Matsumoto, CEO of Monex Group, a leading online broker. Cross-shareholdings are widely seen by activists as contributing to low capital efficiency.

The move sent DNP shares to a 17-year high and up about 50% so far this year. The plan challenges the company to lift its stock price, which has stayed below its book value for the past 10 years.

https://asia.nikkei.com/Spotlight/Market-Spotlight/Japanese-companies-embrace-shareholder-activism-as-never-before

Last comment: we should show restraint in making comments.

For example "While it is the fund manager's responsibility to manage its net asset value(NAV), it is important to note that the share price of a fund is determine by investors, and not a responsibility of the fund manager."

It's not helping. We can spin these sentences and start a war. 😂😂 But we all peace loving people....

Regardless of whatever tools we use, it cannot solve all the problems. Ultimately it's still the stocks that have been picked and will be picked must perform. This is the bottomline.

My second comment is on his quote on Warren Buffett letter to shareholders demographics, that was written in 1985 -- about 38 years ago....a lot things have changed.

Quote " ......This unusual result has been achieved by a shareholder group with unusual demographics: virtually all of our shareholders are individuals, not institutions" Unquote

That was 38 years ago, today if we Google it.....

% of shares held by all insiders : 38.7%
% of Shares Held by Institutions : 19.24%
% of Float Held by Institutions : 31.27%
Number of Institutions Holding Shares : 1,234

Let's have an open mind.....understand the fear of institutional gang up to do bad things.....the fund manager also can use their other funds to increase the stakes until it becomes a major controlling shareholders. The rest of us can sleep soundly at night....

Or the fund manager can attract the likeminded institutions that focus on Value....

We can learn too from Berkshire for example has Tweedy Browne Global Value Fund.

They broke down iCap into 2 distinct phases and kinda acknowledge cash holding was one of issues.

2005 - 2013 NAV compounded at 14.85% and share price 11.67% (Putting a lot of cash to work)
2014 - 2019 NAV compounded at 0.7% and essentially zero return from share price(Average cash level 63.4%)
2020 - Sept 2023 NAV compounded at 5.06% and share price 6.73%(cash has fallen to 26.4%)

Now will have see his stock picking skills already. If 74.6% of the stocks he has picked start to perform, we then can talk about performance and giving a much better catalyst for iCapital share price to run.

I think iCap people is reading quietly our comments judging from what they posted in the newsletter....they wrote an update on iCapital company analysis. I think we should de-escalate and reduce tension as all have a common interest, we are talking about RM 140 million market cap locked as discounts that big or small shareholders should joint hands to unlocked this.

Share buy back did help to do damage control while a major shareholder was exiting a big position as they perceived YTL is gone already especially from its hospitality business. But the ultimate catalyst for the share price recovery was due to strong financial turnaround. If it can go to demonstrate another 3-4 quarters with billions of profits, the share price has more legs to run.

YTL Corp is having a very strong balance sheet, as at 30/6/2023, they have more than 11 billions in Fixed deposits and another 3 billion cash and bank balances. For them to spend about 60 million plus in the past few years were just chicken feet.

Prior to Covid 19 that started around Q4 '2019, profits from the operations were quite stable around 500 mln +/- before it started to rocket in the last 2 quarters 2023 with billions of Ringgit. Profits for the periods were quite volatiles but it was a bit more convincing in the last 2 quarters 2023 due to strong performance mainly from its utilities business.

Not all share buyback created equals. The catalyst for good share recovery ultimately is rooted on financial performance.

Going back to YTL

RM million**Profit from operations**Profits for the period
2019/3** 596** 12
2019/6** 563**87
2019/9** 583**100
2019/12**556**96
2020/3**549**129
2020/6**336**-321
2020/9**437** 49
2020/12**497**86
2021/3** 463**93
2021/6** 400**-555
2021/9** 587**178
2021/12**421**63
2022/3** 1231**828
2022/6** 499**103
2022/9** 597**123
2022/12**727**196
2023/3**1337**659
2023/6** 1935**1071

....................

Will DRP achieve the same effect? I think there are some minor differences - it's done 1 time per year so whether shareholder gets the best price will depend on luck. In share buy back, given the active investing management skill of a fund manager, surely they can time better than a corporate finance manager. 😂😂 You can't provide liquidity when it is needed the most. When you have odd lots, it is quite difficult to sell. 1,000 shares x 0.10 =
$ 100 dividend / 2.54 = 39 shares. but could be same also with share dividend e.g. 1 share : 30 share ordinary share. may get 33 shares.

In the case of distributing it as share dividend and not retiring the treasury shares, I think the concern of losing controlling interest is addressed. But of course if a major shareholder wants to buy more shares, they can always do so after selling the dividend shares, receiving cash dividend or forking out own money.....worries will never end. 😂😂

We don't have to choose share buy back or cash dividend but it can be share buy back AND cash dividend. Don't fall into the trap of choosing OR

P.S YTL also buy back a lot of shares prior to 2019 at the market price....I have not summarized those but if company is disciplined enough - they should not buy back when it is "expensive" during this period, they can actually pay cash dividend.

I want to share a very micro case study on YTL Corp. The company is quite flexible when comes to cash dividend and share dividend. When the company is seeing its share price is under pressure, they will do share buy back...The advantages,

1. Provide liquidity on days there are big sell orders....without them absorbing the sell orders, price can drop a lot faster. I have mentioned before EPF was selling like nobody business from year 2020 till April 2023, they sold something like 100 million shares, if without the company share buy back, the company share price will be way below 0.50.

2. They buy back when the price is low when sentiment was low. I give you this example during period of covid 19 from year 2020 to year 2022 and they stopped buy back after that. They think the sentiment has improved and do not need to do intervention because it can stand on its own and let the market forces govern the demand and supply. During this period they accumulated 74 million shares. average buy back price is about RM 0.82. They put this back into treasury shares and distribute back to shareholders sometime in the future.

3. Like cash dividend, if they distribute as share dividend, share price also will be adjusted downward of equivalent amount. But if the company is buying at rock bottom price and distribute it, when sentiment is turning the corner, the rate of return is fantastic. Point #4 to follow.

4. For argument sake, when they distributed this share at 0.82/share in early 2023 and you can sell it in the market for RM 1.41 as of last Friday, this is a tidy profit of 72%.....the return will be far higher than ROE.

Conclusion: if managed it right, this is one of ways to enhanced shareholders' value.

You may see some of the data that I extracted from Bursa Malaysia website. Some day share buy back can be as low as 1,000 shares when trading volume is very thin but there are small guys want to sell and exaggerated price drop downwards.

YTL
Date *******Average buying price***Qty**** Amount paid
27/6/2022***** 0.61*****1000****** 605
26-Nov-21**** 0.60***** 1000****** 595
1-Jun-21******* 0.68*****1000***** 675
11/1/2021-18/1/2021**** 0.71**** 16,500,000***** 11,701,877
30~31/12/2021***** 0.77*****4,000,000****** 3,087,245
21~23/12/2020***** 0.78*****8,000,000****** 6,233,483
18/12/2020***** 0.80****6,000,000****** 4,793,488
22/12/2020**** 0.77*****3,000,000****** 2,298,808
21/12/2020**** 0.79*****3,000,000****** 2,382,038
18/12/2020**** 0.80*****6,000,000****** 4,793,488
9-11/12/2020******* 0.72*****5,698,100***** 4,110,713
27-Nov-20***** 0.69****1,000****** 694
22-Jun-20***** 0.86***** 1,000***** 859
29-Jan-20***** 0.94***** 100,000******** 94,267
20-23/1/2020******* 0.99*****1,943,200****** 1,922,151
17-Jan-20***** 0.98***** 500,000******** 491,905
16-Jan-20***** 0.98***** 500,000***** 489,397
14-Jan-20***** 0.99***** 500,000**** 496,923
6-10/1/2020**** 0.96****2,000,000****1,924,393
13-Jan-20***** 1.00***** 500,000*** 501,940
30/12/2019~3/1/2020**** 0.96****16,008,100***** 15,435,563

Average buying price*** 0.82*** 74,254,400**** 60,761,104

@dumbMoney - Impressive school - University of Chicago Booth School of business. 😂😂

Chicago is a damn cold place....how many years were you there?

Yup - probably the findings that these experts have considered should be communicated to shareholders. 101 Stakeholders engagement. If they have presented the alternatives considered such as cash dividend, share dividend, share buy back, etc... Better informed shareholders will have better buy in and hold on to their investment not quit silently.... Beside selection bias, confirmation bias also should be eliminated.

The fund manager is probably feel if it is coming from his mouth, it's not partial or not-independent.....trying to get an expert to say it. The crux of the issue I feel is his credibility is chipping away....and he should return to his root as a stock picker. He has been setting up too many funds for his business expansion. And not to mention wasted all the time chasing a ghost that doesn't exist, discussing lawsuits.

@dumbMoney - I was not trying to mock Morgan Stanley or Goldman Sachs....but the point was they are expensive....why go through all the troubles to do MRI scanning, full blood test, ECG test running around the town trying to get the best doctor, when the symptom is only a small flu....take 2 Panadols and have a good sleep.

This is my personal experience about how my expectations translate into what I am willing to pay when there are discounts or premiums....I have been there for both periods.😂😂

I emerged buy some small quantities when I see the discounts is getting ridiculous at 40% but dare not swing as big as in the past as my confidence is not that great....it's okay to play small small la

The lost decade for iCapital

At hindsight, I feel it was pure luck that I didn't continue to hang on to it for the past many years.

His NAV at highlight continued to climb impressively but share price was bad....and discounts are getting worst

I finally sold my investments in year 2011...during PIIGS time frame....also that was the time the rate of NAV growth has slowed down and I started to feel it's time to move on to other investments

Then shits hit the fan.....we had financial Pearl Habour...I didn't bailed out...but stopped buying till mid 2008....and double down and keep buying till 2010

I made my first investment on 3/3/2006 around $ 1.17 and keep topping up regularly till year 2007.

I was willing to pay for premiums...you know, at time, many of self taught investors like me baptized with Buffett investment philosophy....it's okay to pay for a premium for a good company or fund manager

Based on his track records of low risk high return of which I truly believed at that time...

Like many other small investors......I was thrilled that he finally made his fund to the rest of us....

At least he survived Asian Financial Crisis and Dot.Com bubble

At that time, I saw the fund manager is someone can walked on water.....when comes to investment.....I can't exactly but his investment return of CDAM fund performance was really fantastics...
Year ** YoY returns
1998 + 20%
1999 57%
2000 1%
2001 8.7%
2002 12.7%
2003 39.7%
2004 16.2%

Prior to iCap launched, the fund manager is managing fund for private investor and it's not available to small retail investors. I will probably take many back right to Asian Financial Crisis.....

Let me share my own experience on my personal investment in iCAP.....way back to 19 years ago....Oops probably you will know I am not young anymore....

I have my own theory of premium/discount from psychology point of view, EXPECTATIONS, the expectations of growth prospect of a company and cost of capital.....but let's put aside the cost of capital as aside today....such as CAPM, risk free, etc. ...In English, an investor is willing pay for high Price Earning Multiple for example is due the company has demonstrated high growth in the past and investor will project high growth in the future indefinitely...when the growth is fall short, darlings turn into fallen angels, we will see PE multiples will collapse rapidly. Say 50 times PE ratio will collapse quickly to mid or even single digit.

They are trying to borrow some credibility by using UTS of which top 90 in QS World University Rankings 2024, is it necessarily? Thank God it's only university not Morgan Stanley or Goldman Sachs..🤡

If I’m COL, I want to proof a point. Since the fund manager said they have done the wonderful promotions with all kinds of roadshows, there should be shareowners stepping in now, with 30% discount to NAV.

Ever since they announced the innovative dividend policy and reminding COL not to buy, the share price keeps dropping, like a falling hot knife cutting through a butter. Oh perhaps, they will say correction is normal since it’s overbought…. well, we shall wait and see what will happen when it’s oversold(soon).

Or perhaps, easiest explanation later, damn COL is causing troubles again…. COL will be the sacrificial lamb lagi!

Thanks. Understood. Learn so much......I am pretty sure to many, are still weighing the probabilities, the chance of COL become a white knight is dead or alive. Some thought COL is checkmated with the 20% foreign ownership.
Now it also becomes clearer to me why the fund manager is getting paranoid. They possibly think, in the unlikely event of MGO, the minority of shareholders will receive the short end of the stick. This can be also a political capital to talk about.

I will leave that to other to imagine......not sexy, if there is nothing left for imagination. TGIF🍻

@dumbMoney. The 33% parties in concert rule will be triggered if COL as a fund manager with multiple funds, hypothetically, exceeded the 33% ownership? Falls under a number of shareholders acting in concert? Kam siah😁😁

To all - - apologise for all the typos and sometimes missing words, hard for me to do proof readings in a small tiny comment window. Cheers

@dumbMoney. Yesterday conversation on 20% foreign owneship limit is a non event to me... from law point of view. Next is 33% concert parties.. Care to elaborate? What is rule and it's implications?

@dumbMoney. Yes.. Re enlarged ownership only 2.3% with 10% buyback that's why I softened my view. It's doesn't affect me at all but for the benefits of other readers that may not understand this impact, the clarification will help them a lot.

I see....no wonder the irresistible force met with big batu.....they will automatically feel defensive as they perceived as a threat as if they get questioned why they got paid full NAV while not fixing the discounts...

Fixing discounts is not easy....it's involved technical and emotional aspects. Sharebuy back is one way, as I put forth the other issue of COL ownership will be enlarged....but somewhere you made a comment that we may not need to do full blown buy back just some small % like 10% may be enough to fix the discounts. The other part of discounts is old friends fear and greed in play.

I understand better now, COL model is to find big discounts in closed end funds, fix the discounts and move on next projects. Unfortunately it was misunderstood . COL was projected as a villain or corporate raider. Or may be lack of scientific explanation - pure birth dates bo ngam😂😂

I have opened up my kimono now...usually left with not much imagination is not so sexy anymore

There is also something about his concentration strategy, good point of this strategy, when he gets 1 home run, it will pay for his dogs in the portfolio. Only people that really know what they are doing this can deliver long term results. I saw people rant about his Boustead pick....one of his dogs but he has Petronas Dagangan, F & N, Padini, SEM etc....enough to offset those dogs.

For me, TTB is not bad or at least he understands it is so much easier to lose money than make money. From money management point of view is quite conservative. He is someone who dares to make a big swing when something is selling at ridiculous price. A few of his winners are also nicely picked on growth story. He held on to winners as long as he can but his strength also become his weakness, he held on to losses(from price point of view) way too long such Parkson. He wins more than his losses.

buying something cheap may remains cheap....value trap. There is something deeper than than I believe....