The likes of stockraider and fong7 are utter trash so I don't really read them seriously. I only read their assessment as an entertainment.

But I think observatory raised a good point on dual listing fees. I think it's a business failure on their part, but for a fund the most important measures to judge are the long-term investment return and choice of companies that they bought their shares. All companies will have business failures but it is rather whether you believe that they can sustain in the long term that matters. It's true that TTB has been maintaining large percentages of their portfolio in cash for years, but that in and of itself is an investment decision. It's like let's say you yourself have 10 million in cash to spend. I don't think you would take all 10 million and butcher it in the stock market. Maybe not even 7 million. So it really depends on what TTB thinks is a good margin to invest its cash. Whether you believe that is a wise decision or not is up to you.

I don't think its fair to compare TTB and Buffett. Berkshire Hathaway is not a fund and usually it buys an enormous stake in the company or even the whole company, while iCap is a closed-end fund that can only buy a defined percentage of a company in the open market.

And I think your calculation of the returns is abit wrong. Currently the NAV has an annual compound return of around 8% in about 15 years. And I think that has already been net of the 1.5% yearly fees. Plus the 1.5% fees is lower than open-ended fund's fees.

One problem that people always forget is the hindsight bias. Suppose I buy stock A 10 years ago and it turns out that I gained a lot. People will think that I am very smart, when in fact I just got lucky buying the lottery of the decade. So what I am saying is regardless of how much research you do, stock market is still a gambling den: your predictions do not always turn out right. Perhaps 10 years ago stocks A and B have equal prospect, but it just turned out unlucky for stock B down the road.

For TTB's case people will always talk about his loses from Parkson but people never point out his earnings from Padini, though Padini is not doing well this year. However people still focus on the bad and not the good. If you want to be fair, look at all his stocks and then judge yourself.

The stylised fact of iCapital's investing style is this: they overwhelmingly focus on not making loses so they have a high margin of safety. You might not think that it's a good way for you to invest because it takes too long but some people are very risk averse, even when they like to invest in the stock market which is a very risky endeavor. I'm not saying that this is the best way to invest. In fact I myself don't invest this way. But you would need to know that this is the way the company invests and like it or not if you had invested in iCapital then you had agreed to comply to his investment style. So it sucked when you don't get what you want since you don't do enough research about the company in the first place.

As I read through these comments, I thought that many of these comments turned out to be more subjective than factual or even malicious in nature. Most of these comments can be categorized into 3 types, either because (1) you hate the personality of Tan Teng Boo, or because (2) you thought that the growth of the NAV is not fast enough, or because (3) you thought that upon liquidation you'll have the opportunity to earn a measly 20-30% profit margin, or because (4) you see better performance when you invest in other securities or markets.

With regard to (1), simply said if you assign your emotions to judge the performance of a company that means you were never a shrewd investor in the first place, since it is imperative to stay rational when investing. This is the first principle taught by Buffett and Graham if you truly follow their advice. Personality has nothing to do with success, only the will to succeed. If not you cannot account for the successes of well known personalities like Bill Gates, Steve Jobs or Gordon Ramsey, who mildly speaking are demanding people.

With regard to (2), it's true that even I don't think the growth of NAV is extremely fast. However I thought that it is robust. In which case, you can clearly see the main objective of the fund, which is ensuring stability instead of chasing mindless growth. As such when 3iii said that it serves as diversifying his portfolio, which is true because iCap tends to be resilient in face of financial crises. So if you're an investor who is seeking for fast profits, then you're in the wrong crowd to begin with. If you believe in sustainable growth that potentially could be higher than FD, then you are suitable to investing in iCap.

With regard to (3), well to be honest if you're a trader who wishes to earn slight profit margins here and there, I'm not against it, though I think that's a very stressful way to live. Whatever suits you. But if you're a person who do not have the time to keep monitoring your portfolio, like most normal people (case in point me), then investing in iCap is a good start. For us, compounding interest is key, which again is what Buffett and Munger have been advocating all their lives. Sometimes you have to be patient to score the gold.

With regard to (4), I will start by saying that I don't think that iCap is the best possible fund that you can find in Malaysia. I think that it is possible that some funds might have better performance in terms of stability and growth (though I have not seen a plausible alternative so far for a Malaysia fund). But the main point is that you have to beware of the comparison that you make. It is fine to compare iCap with an open-end fund, like unit-trust. However if you simply just said that the CAGR is much higher than iCap's, then you leave out very important cost considerations, such as annual and entry charges. You have to take those cost considerations into account first to make a sound comparison. However, I don't think it is appropriate to compare the performance of iCap with a China fund or even Berkshire's. First of all, China and US have been growing at an impressive pace over the years, being the largest economies in the world. So technically on average, investing in stocks in those economies would naturally yield higher returns than investing in Malaysia. iCap's stocks are all local stocks and it's a different argument if it invests elsewhere.

However, one important thing to note is that I think most people here who sides with iCap do not think that iCap is the only stock in their portfolio. Most of the time is just to clarify the misunderstandings of others who are present here, or pointing out that there are some good points to iCap instead of just sticking to the negative points. The point is to understand all arguments before you decide.

I too agree with 3iii with regard to the nature of closed-end funds. As I have reiterated last time, it is pointless to compare a closed-end fund and other companies on the stock market, as the latter is considered quite a unique entity. It is also especially daunting that closed-end funds have always been trading at a wide discount, so it is not surprising if iCap is traded that way. One can just google "closed-end fund puzzle" and you'll find that there is a lot of research done with respect to this.

I'll take some quotes from a well-known paper which discusses the closed-end fund puzzle. You can check it here: https://www.jstor.org/stable/2328690?seq=1#page_scan_tab_contents

"Few problems in finance are as perplexing as the closed-end fund puzzle.....Although funds sometimes sell at premia to their net asset values, in recent years discounts of 10 to 20 percent have been the norm."

So with regard to the discount, iCap is not the only fund that faces this problem. It has always been the norm to trade at a discount, regardless of market. You should especially worry if it is not traded at a discount.

My bad that the numbers are reversed. Kenanga's cumulative return is 237.66% while KAF's return is 94.30%. But KAF tactical fund has not paid dividend in the past 6 years. And you say open end fund got so much bottlenecks and handicaps. How do you know and why should I believe you? Are you just saying things you don't know? So in a way you're also lying.

Posted by stockraider > Oct 19, 2019 3:50 PM | Report Abuse

Raider no bluff u mah jayden, the info is obtain from this sohai ipilot50 a staunch supporter of ttb mah....!!

Posted by jeydan89 > Oct 19, 2019 3:24 PM | Report Abuse

Stockraider : I M QUITE SURPRISE WITH THE FINDINGS THAT ICAP CANNOT EVEN BEAT KAF TACTICAL FUNDS PERFORMANCE OVER A VERY LONG PERIOD OF 15 YEARS LOH:

Where u get your fact? From the websites, cumulative perf of KTF since launch in Sep 2004 - 17 Oct 2019 is 114.17% , as at 30 Sep 2019, ICAP NAV cumulative perf is double of KTF, even share price beats KTF. Are u seeing the right KTF??

Don't simply bash TB lah and please STOP confusing others....there are genuine novice investors here who want to listen to OBJECTIVE and UNBIASED views!!!

Posted by iPilot50 > Oct 17, 2019 4:33 PM | Report Abuse

Let me educate you about some other major funds in Malaysia. Let me give you 2 examples: KAF Tactical Fund and Kenanga Balanced Fund. To be honest it might not be completely fair to compare since the KAF and Kenanga's funds are open-end while iCapital is closed-end (Do your own result to know the difference. Lazy to explain), but they follow the same principles in rewarding their investors. I also chose these 2 funds because both were established close to the year 2005(KAF was 2004 and Kenanga was 2001) and they have similar investing philosophy, which is medium to long term. Current iCapital cumulative return is 231.15% since inception, while KAF's and Kenanga's cumulative return is 237.66% and 94.30% respectively as of August 2019(Find the information yourself). Now KAF's fund beat iCapital, but only a small margin. To note, this is not to say I'm discouraging people to buy KAF's and Kenanga's funds. In fact I think it is admirable that they make millions for their investors considering the nature of their funds. But you can clearly see the performance. If you can find another fund that has a similar inception date and investment philosophy that beats iCapital, then I'll salute you. But I still won't change my mind that iCapital's performance is good.

this site i mean

It stands for Ooi Teik Bee. You can look him up in this forum by searching that name

The only issue I see is that it's that people here obviously have different investment philosophies. And thus you cling on your own ideas. I don't think that it's wrong to stick to your ideas, but if you want to stick with them, then others can too. So it's actually kinda pointless to keep arguing, because you either believe in iCapital's investment strategies or you don't. End of story.

*Sorry RM330 million

I can't believe that this discussion is still going on. The oppositions keep using the same arguments again and again. What I mean is if you already made your point, I'm not sure what's the benefit of staying here to comment more when you could have gone elsewhere to debate.

Nonetheless since I'm free, I might as well do some research and comment for the people here.

First to clarify is that from my experience attending iCapital's AGMs, I can guarantee you that there's NO way they'll vote for a dissolution, because people still believe TTB's expertise and ideals.

Second is that there is a particular person here keeps dragging OTB's name. Now to clarify, I do believe that OTB has the skill and experience in investing over the years, and I respect his investment philosophies. But why do you need to keep dragging his name here? Come on, the poor guy already has to respond to his detractors in forums where he invests his stocks and you drag him here in this debate for no reason. Moreover, people don't seem to understand that there's a difference between investment advisory and fund management. As the name suggests, the former advises investors while the latter actually manages investors' money. There are overlaps in what they do but they are clearly different. One obvious difference is that advisers are less burdened by their stockholders and stakeholders. Sure if their predictions are wrong no one is gonna trust them. But it is not necessarily for you to listen to OTB or any other advisers' advice to make an investment decision. But for fund managers the investment decisions that they make directly affects their shareholders and stakeholders. They have to be more accurate. They have to abide by the strict rules that the prospectus has laid out. The stakes are obviously higher, and therefore they have to be more careful. They also have to get a license to manage the funds. If you think the license is easy to get, then you're a genius and congratulations to you.

I'm glad someone asked the following, because it implies that you're comparing between different funds:
"Msia is also doing very good coz we are better than Zimbakwe?

The same mentality here..but at least u can be happy in yr life....very simple guy with little expectation...

Do u expect TTB , an established FM to only produce this result?
"
Let me educate you about some other major funds in Malaysia. Let me give you 2 examples: KAF Tactical Fund and Kenanga Balanced Fund. To be honest it might not be completely fair to compare since the KAF and Kenanga's funds are open-end while iCapital is closed-end (Do your own result to know the difference. Lazy to explain), but they follow the same principles in rewarding their investors. I also chose these 2 funds because both were established close to the year 2005(KAF was 2004 and Kenanga was 2001) and they have similar investing philosophy, which is medium to long term. Current iCapital cumulative return is 231.15% since inception, while KAF's and Kenanga's cumulative return is 237.66% and 94.30% respectively as of August 2019(Find the information yourself). Now KAF's fund beat iCapital, but only a small margin. To note, this is not to say I'm discouraging people to buy KAF's and Kenanga's funds. In fact I think it is admirable that they make millions for their investors considering the nature of their funds. But you can clearly see the performance. If you can find another fund that has a similar inception date and investment philosophy that beats iCapital, then I'll salute you. But I still won't change my mind that iCapital's performance is good.

The other comparison that people make is on the relative amount of returns instead of the absolute amount of the returns. Say for example, I invests 1 million and I get 21 million in 5 years. Suppose another person invests 140 million and get 160 million in 5 years. Both persons gained 20 million in 5 years, but you would say that the latter has a worse performance (which is still true, I'm not denying this). However, you have to acknowledge that the returns are still huge for both. Since inception, iCapital's NAV grown from RM140 million to RM 471.8 million since 2005. You don't appreciate the fact that in absolute terms, they have grown RM310 million in assets, which is not an easy feet since it has gone through the 2008 financial crisis, and the subsequent European Sovereign crisis that destroyed wealth and bankrupted so many people.

So I'm still confused. Why the hate again?

Posted by stockraider > Oct 12, 2019 7:53 PM | Report Abuse

DO NOT BE CONFUSE TTB IS VERY SELFISH WHEN HE MANAGE ICAP WITHOUT LOOKING AT THE INVESTOR PLIGHT LOH...!!

Posted by iPilot50 > Oct 12, 2019 6:56 PM | Report Abuse
(Lazy to copy and paste everything)

I see this comment and your other comments I'm very scared...for your mental health. Every comment either has CAPS or has the word "sohai." Do you meet up with your psychologist or psychiatrist everyday? Don't miss your meetings and eat your medicine on time. You're in a dire situation.

Posted by stockraider > Oct 12, 2019 7:36 PM | Report Abuse

U HAVE BEEN MISLEAD & BRAINWASH BY TTB LOH...!!

Posted by iPilot50 > Oct 12, 2019 6:55 PM | Report Abuse
(Lazy to copy and paste everything)

You really see the character of someone who uses CAPITAL LETTERS and insults people by using "sohai" or "pondan" words to prove their point, and use value judgment on TTB without talking to him or his staff in person or attend the AGM.

When savages cannot convince you they regress their brain into the Stone Age in order to show dominance. Hello this is the 21st century okay. "Uh uh uh ah ah ah" is not how you convince others (That's your monkey call btw). Wake up from your dream. You're not the king of monkeys now. We live in a society that has consequences in things we do. You don't just assume things you don't know.

(Just to be sure, the references I made have nothing to do with Ong Teik Bee, I'm just saying in general.)

Another problem that some people pointed was that the past comments were so negative, so I must listen to these people's advice and go against iCapital. Following this argument, if the majority consensus thinks that eating feces is nutritious, then you would follow their advice and eat feces as breakfast tomorrow, like animals do when they lack nutrition (see here https://www.smithsonianmag.com/science-nature/everyone-poops-some-animals-eat-it-why-180961020/). This is the problem of populism and group identify, in which you follow other people's advice without first thinking on your own what's good and bad. A more concrete example is the Vietnam war. During the Cold War, the Americans fought a war against the Vietnam communist because they thought that communism would spread in the South East Asia (SEA) region if left alone. But if you think about it properly, why would the Vietnam or even SEA threaten the survival of the Americans when they obviously have inferior weaponry and a high cost of travelling to the US? The Americans lost so much in a war that even they felt was stupid to fight in. In short, the Americans were fighting an unjust war against the Vietnamese who is fighting for a just cause. The same thing can be seen in this forum. In fact, there are many more examples of this problem littered in history. I just don't have time and you also don't want a history lecture. But the point is that if you only hear what other people without doing your own research, then you are just a puppet who only follows what other people says. (You might think I'm a historian or a political scientist by occupation. No, I'm not. I'm just not ignorant.)

Lastly, people are talking about winding up and liquidating the funds come next year. Now, if you really believe that the fund is not earning as much as you thought, you are free to think that way. But you do not have to be so insulting or caustic about it. If the fund is liquidated, that means a lot of people are going to lose their jobs and livelihood. So what I'm saying is you have your own opinions but you don't have to denigrate the efforts of the people who are trying to make a living. You might say the world is a cruel place, and such injustice happens all this time. Yes it is and it does happen, but a little kindness and emphathy goes a long way.

As a long time investor of iCapital, I feel like I have a need to correct some misunderstandings as well as defuse the incorrect value judgments made.

The first problem I see is that people don't seem to understand what a closed-end fund(CEF) actually is, as compared to open-end fund like unit trust(UT) or other entities such as fixed deposit (FD). Like a UT, CEF is managed by professionals who have experience in the the stock market, and they try to increase their net assets over time. But unlike a UT, or even FD, CEF is traded on the stock market. So an easy example to think about this is that unlike conventional companies traded on the stock market, where investors would buy their shares based on the company's profits and investments made, such as real estate, commodities or technology, investors would buy CEF shares because of the investments in other companies and the growth of these companies contributed to the asset earned as a result. Therefore, the first misconception that I need to rectify is that when you buy CEF shares you are not charged with an fund entry fee, unlike UTs. You are only charged with the fees associated from buying shares on the stock market. And no, you're not charged the management fees, unlike UT. So I'm not sure what's the contention about management fees. So if normal companies charge a markup on their products to earn a living you don't complain, but if a CEF charges management fees to earn a living you said that it goes to TTB's pocket.

Second problem I see continues from the previous point, which is about management fees. First of all just to clear the confusion, the fees amount to 1.5% of the net asset value (NAV), 0.75% will go to Capital Dynamics Sdn Bhd (CDSB), and 0.75% will go to Capital Dynamics Asset Management (CDAM). Before you complain why is it like? Is it corruption? No. It has been stated very clearly in prospectus and annual reports. So it does not matter how high or low the absolute fees, like 6 or 8 million per year. What it matters is the NAV. The higher the NAV, the higher the fee and vice versa. Another point is that contrary to comments here, TTB does not just absorb all the management fees. It's an annual fee and he has to pay for other expenses as well such as rent and wages. Because ultimately he's not a remisier, he's a business owner. He is responsible for the livelihood of the people working for him.

Another concern is about market timing, that TTB is only waiting for the market to crash and then buy when its low, or that TTB missed some bullish windows to buy some stocks and thus lost the opportunity to gain. Like I said in my last post, the investment philosophy of iCapital is long term capital appreciation, which has nothing to do with what happens in the short and medium terms. iCapital invests when they think that the fundamental is strong and sell otherwise. Whether you think that's a good thing is up to your judgment. And someone pointed out that it's common sense that you could earn if you buy the stocks during the recessionary period and sell to earn the gain once the market starts going bullish. The problem in this argument is that you could convince yourself the logic of your perceived action but not everyone can pull it off. When fear floods the market, most people are unable to keep calm and they abandon sound investment framework. So you definitely need skill to earn from a recessionary period. If everyone can do that then we really don't need a fund manager or even listen to the so-called experts in this forum. We could just shake leg and wait for the recession to come and then earn huge gains.

I feel offended that my efforts to give some justice to iCap led me to being framed as staff member of iCap. CharlesT, the global economic downturn caused you to be irrational or you hit your head when you fell down the hole like Alice in Wonderland? What makes you think that iCap people would waste time in this forum, where people like you give nonsensical commentaries on companies that you don't know or understand? The hard working people that I met in iCap would never waste their time with nincompoops who have no idea how to actualize plans and make money for others. You waste your time here making speculations when iCap people spend their time thinking of how to serve others. I thought I could be the person who injects rationality into this forum, but it turns out that it still became a joke.

I have been holding iCapital stock for years and I also attended a few of TTB's AGM.

I was drawn by the recent news about iCapital to take a look at i3investor. I decided to give my 2 cents since iCapital has drawn numerous criticisms.

To note, I am not a full time investor(I actually have a job outside investing), but I think it is unfair to iCapital to keep making comparisons between TTB and Buffett. Now, it is true that TTB drew his inspirations as well as his investing philosophy from Buffett and more notably Benjamin Graham, the founder of Value Investing, TTB has said that developing market has certain nuances that makes it impossible to fully apply the value investing methods. Therefore, it makes sense to diverge somewhat from those teachings but still incorporate key ideas into your investing philosophy to suit the market that you invest. And regardless, Buffett and Munger are both wise beyond their years and you'll be out of your mind if you do not heed their advice and/or teachings.

Another thing is some people's arguments revolve around the logic of Buffett is the god of investing, TTB is following his advice and thus TTB must make money since he abides Buffett's teachings. Now, Buffett might seem like a genius investor but even he had lost BILLIONS of dollars before. He's not immune to market movements and sentiments. He might lack doing market research and due diligence, or he just made a lapse in judgement. Even TTB hasn't lost billions of dollars before. iCapital is not growing like 200% percent a year does not mean that TTB is not making money for investors.

Moreover, a popular argument is that he does not used up the cash to make investments and just put money to waste. Everyone has their own investment style so I cannot judge too much. But if you think carefully, what's the alternative to not investing in stocks? What most funds would do is that they will invest in safe assets like bonds. But the problem in investing in bonds is twofold. One is that the bond market in Malaysia is still considered nascent and weak. Two is that if you decide to invest in bonds, it will be harder to pull out your money to make other stock investments which you think plausible in a moment's notice, since bonds are slightly more illiquid compared to cash.

Another point is that iCapital stands by its long-term capital appreciation investment strategy, which means that it does not withdraw investments if it thinks that losses are temporary and it still believe in the fundamentals of the company. Therefore, they would hold the company stocks for months to years. It is not the same with short or medium term trading strategies where you buy the company when the market is supporting the company and then drop it when you think it's not supporting it. Whether the strategy works or not it really depends on luck but they did their due diligence amidst the data that they have, and that in itself is laudable.

Lastly, people seem to not understand that iCapital is handling millions of ringgit, which is a huge burden. I work in an industry where I never had the chance to hold millions in my hands but even in my case handling a few thousands a month can already be considered taxing when I need to support my family. If I give you a million ringgit to invest and ask you to not lose money in the long run, would you have confidence to say that you are able to beat the market?

So sometimes I think if you want to give your opinion, you look more deeply into the company, compare it with other companies first before you make your judgement whether iCapital is really just toying investors or they are actually doing their best with the money that they are handling. Besides it doesn't hurt that TTB often gives his outlook on the economy, which is sensible most times and that he truly resonates with the plight of Malaysians.