Would Temasek Holdings and GIC do a Warren Buffett?
March 1st, 2009
It’s a rhetorical question.
In his highly anticipated annual letter to shareholders of Berkshire Hathaway, the legendary investor Warren Buffett said the following, clearly accepting blame for the lacklustre performance of his investment firm:
“During 2008 I did some dumb things in investments,… I made some errors of omission, sucking my thumb when new facts came in that should have caused me to re-examine my thinking and promptly take action.”
The book value of his firm – i.e. assets minus liabilities – fell to US$109.27 billion at end 2008 from a high of US$120.73 billion at the end of 2007. This is a decline of US$11.5 billion, or a 9.5% decline.
Compare Berkshire’s losses with those of Singapore’s sovereign wealth funds. Temasek Holdings lost S$58 billion or 31%, while GIC reportedly lost S$50 billion.
Yes – total losses amounting to more than S$100 billion.
Ho Ching has stepped down as Temasek’s CEO, but said she has “no regrets”.
In fact, I don’t remember anyone taking blame for the huge investment losses of our national reserves.
Just a week ago, PM Lee said:
“Some years it will go down, some years it will go up more. But on average it’s not bad. And we have to take a long-term view because this is not money for now, this is money for many years ahead. If you look at a long-term basis, on the overall, on the way the government has managed the money, we haven’t done badly.”
Maybe I shouldn’t ask if Temasek Holdings and GIC would do a Warren Buffett. Instead, I think Mr Buffett should not be too quick in accepting blame.
Mr Buffett, it’s only paper losses. Some years it will go down, some years it will go up more. It’s not your fault.
. reasons are obvious if you scroll down this forum –...
Battern Says:
March 1st, 2009 at 8:37 pm
Admin, I love your sacarsm
Its smart and at the same time ironical to the failures displayed in some reckless hands.
US Overrated Says:
March 1st, 2009 at 9:23 pm
Excellent wit!
SGDividends Says:
March 1st, 2009 at 10:34 pm
First rule of politicians and their related entities is never ever admit a mistake and never commit to an answer.
adiemuso Says:
March 2nd, 2009 at 9:16 am
spending some $$ (def less than 100Bil) positioning SG a Clean n Green Industry leader might looks a bit better!
insider Says:
March 2nd, 2009 at 4:21 pm
There is no need to be sarcastic. The only being that knew about the crisis before it blew up was God. Even the mini deity of finance, Buffett was a casualty. So no need to get on a high horse just because you have the benefit of the hindsight and throw potshots at our SWFs or Ho. Afterall, you are crapping about it on and on, AFTER it happened. That is what we call, speaking from hindsight. If you can talk talk talk before it happens, then maybe you earn a chance to say you are better than those you diss.
Otherwise, you are really no better or different from the jobless losers who run anti-government blogs. All a bunch of losers and lowlives. Hahaha!
insider Says:
March 2nd, 2009 at 4:35 pm
My parting-shot comments are referring to the jobless bloggers, not the admin.
lwo cost-low tech Says:
March 2nd, 2009 at 8:56 pm
jim rogers & others already said at the time sg was making a mistake doing those investments.
adiemuso Says:
March 3rd, 2009 at 9:55 am
insider,
pls do not stir.
me Says:
March 3rd, 2009 at 10:48 pm
Human make mistakes, that’s the truth of life, but must admit and be hold accountable.
What makes most people unhappy about the leaders is that they never admit when they did wrong and the lack of transparency to acknowledge the action plan to mitigate and rectify the issue.
Also, they like to give motherhood statement e.g. one day economy will recover, recovery can be in V, U or W shape doesn’t add value at all. Better keep quiet and don’t say anything.
adiemuso Says:
March 4th, 2009 at 9:38 am
im disappointed with both parties, ruling n opposition. however, at least the ruling is doing something coming up with plans to try alleviate the situation. the latter critises but has no concrete or feasible constructive counter proposals.
look at the current episodes, sgd100bio jux like that! assuming we have 5 mio citizens, thats 20,000 each. assuming we support the 10,000 lowest income families with sgd1,000 cash a month, its sgd10mio a month, sgd120mio a year. sgd1.2bio can support 10,000 lowest income family with 1,000 a month for 10years! thats giving a lot of ppl some hope and chance to survive n not down the slippery path of negative spiral.
however, other than some petty political sniping, have our opposition mentioned that in parliament? if the opposition is in for the sake of being one, its a bit pointless in my humble opinion.
having said that, the ruling party has to admit its shortcomings and try to finetune some of its “elitist” policies. not every scholar are borne with a trading/investment midas touch and are highly suitable to be one. so do give other capable singaporean non scholars a chance in managing and investing the country’s wealth. sometimes its the “non scholars” who happens to be the best business, public, private leaders n entrepreneurs.
Pinabonds Says:
March 4th, 2009 at 2:37 pm
Adiemuso, an investment loss of 100bn is not the same thing as spending 100bn on Spore’s 5mil citizens. The former can rebound to its former glory or lose even more money in the future; the latter is spent and gone. So discussing the magnitude of investment losses in our reserves as though we are actually “missing” the funds is probably not the most accurate way to look at matters.
For me at least, I am totally distinterested whether anyone in GIC or Temasek apologizes, steps down or “feels bad” for what they did – to the extent that it makes pple feel better that Ho Ching stepped down – great, but who cares? GIC and Temasek aren’t accountable to me, the average Sporean voter. However, the Govt is accountable to the voters, and it is them we should hold responsible if we’re not happy about how our reserves are being managed – and a potential looming GE may be a good chance to do so. If you keep voting in the same govt everytime however, please dont complain so much. People everywhere always get the government they deserve.
deacon Says:
March 4th, 2009 at 2:48 pm
whaha.. funny. I like.
thanks for the article.
adiemuso Says:
March 4th, 2009 at 4:53 pm
Pinabonds,
“the latter is spent and gone”
I do not agree. Human capital is what SG has. If 1,000 a month can keep a family of 4 going, the kids to continue their education, 1,000 is a mere investment for further gains.
We can only vote for whoever is running for office. If you are going to vote against the ruling party based on some “anger” or “unhappiness” per se, i think the outcome is worse. Not being supportive of anyone here, but it is true that gettin a “show me the money” guy doesn’t seems to be the best or wisest choice!
farmer Says:
March 4th, 2009 at 6:35 pm
A lot of towkays, some of whom multi-millionaires, are “chinese helicopters” (chinese-educated) who were not given employment opportunities by the english-speaking elites in the 70s-80s, so they were forced to become entrepreneurs. it’s a blessing in disguise for many of them. the english elites who found jobs are still working for others, and none could own the things they’ve done or create – no matter how much they contributed, they’re just salaried employees, helping the big bosses make money, and if they lose their jobs, they can only jump to another ship owned by someone else, maybe a chinese helicopter.
Pinabonds Says:
March 5th, 2009 at 10:40 am
Adiemuso, I understand you feel strongly about supporting families in need – though I may differ in your view about whether providing money to needy families constitutes human capital investment.
However, arguing that the investment losses could have been better “spent” on needy families is odd – an investment loss is not an expenditure choice. It’s like arguing that after buying a house for 1 mil and watching it decline to 800k due to a wider property market slump – you then lament not spending the 200k on something else. The 200k was never yours to spend no?
Your statement that “we can only vote for whoever is running for office” is quite telling by the way. Ever thought that perhaps you could make a difference? It’s better to avoid a victim mindset – don’t be disappointed with the PAP and the opposition – either vote for them, against them, or stand up and be counted. Complaining changes nothing.
adiemuso Says:
March 5th, 2009 at 4:40 pm
Hi Pinabonds,
you sound like an elitist.
to correct you, “The 200k was never yours to spend no? ”
perhaps you do not know about money, there is no such thing as paper loss. 200k has its opportunity cost as well. in this case, you could be better off buying a 800k house, send ur kids to lovely England get an higher education in Economics for 200k. Now thats 200k was always yours to spend.
“victimised mindset” i guess i do not know u well enough, neither do u know me as well to pass such a judgement? but u certainly reeked of sarcasm n elitism. correct me if im wrong.
and by the way, if voting against, voting for or standing up for elections means being counted, im for sure being counted. but please understand that many people think they are counted, but most of the time they are just passing through the motion.
it depends on a person’s perception, in other words it is subjective whether my observations are complaints, procrastination or objective critisms.
Pinabonds Says:
March 5th, 2009 at 6:49 pm
Poor adiemuso, it really is like talking to a wall. From your last posting, I can only hope for your sake that you don’t make a professional living out of either investments or writing in English.
Yeah Says:
March 5th, 2009 at 8:18 pm
Hahaha, exactly pinabonds
and then Says:
March 6th, 2009 at 4:46 am
when the 800k house drops to 600k? send another kid to college?
adiemuso Says:
March 6th, 2009 at 8:47 am
Pinabonds,
this is jux a forum, a casual thingie, nothing that requires several rounds of proof reading,editing. for sure, i dun really do that. perhaps it shows how impt it is for you up here in this forum. you can have it all if u want. btw, im an investor and im happy with my living. not too sure if you are though.
adiemuso Says:
March 6th, 2009 at 8:50 am
and then,
yup, it just shows that the money could have been spent otherwise. 1,000,000 to 600,000 is not just figures. it is real money. pity that most dun see it.
the fact that we are seeing huge losses being racked up globally is due to so called paper losses from CDS, MBS, blah blah blah…nothing concrete just valuations, accounting rules..its not as “virtual” as most ppl think.
Pinabonds Says:
March 6th, 2009 at 9:53 am
Adiemuso’s desire to defend himself robustly despite his halting command of the written word is commendable. And good for him that he’s an “investor” who’s happy with his living, we can’t ask for more in life can we? Although for his sake, I hope his house price keeps rising indefinitely so that he can send even more of his children to the UK to study economics – goodness knows he could use the help.
adiemuso Says:
March 6th, 2009 at 9:59 am
Pina,
i hope u are doing as well too.
Neo Says:
March 15th, 2009 at 2:56 am
I like your sarcarsm! haha! However, Singapore is just not as forgiving in US. Singaporean are just not forgiving to anybody who made the mistakes sometime, to a certain extent, family members.
Imagine Ho Ching admitted to the public on the loss of GIC investment. The CEO of Singapore will be very unhappy.
Jimmy Lim Says:
March 26th, 2009 at 9:40 pm
Admitting to mistakes helps a lot in whatever you do, like Warren Buffet recognizes his own fooliness in buying oil related companies stocks during the highs of oil prices.
The next time if he intend to buy stocks of oil related companies for long term investment, it will not be during some middle east conflicts or simply high oil prices.
It will be be a tragedy and dire consequences if elite scholars because of getting straight As all the way, did not “make mistakes”, does not admit their own mistakes.
Life is not like exams where all there is to do is reproduce what is deemed as “correct” for that subject exams during exams.
A lot of times, there is no correct or optimal answers clear cut in real world situations.
Like if they can simply learn the fact that there is 1 major financial crisis every 10 years. Simply postponing purchases of stocks when approaching that once in a 10 years helps reduces loss and gain significantly.
Hindsight Says:
June 19th, 2009 at 6:42 pm
Temasek exited some of their investments, and possibly realising up to SGD10bn. SGD10bn i am sure education would yield better gains
Would Temasek Holdings and GIC do a Warren Buffett? - Page 3 - Salary.sg Forums Says:
June 19th, 2009 at 10:23 pm
[...] Temasek exited some of their investments, and possibly realising up to SGD10bn. SGD10bn i am sure education would yield better gains http://www.salary.sg/2009/would-tema…/#comment-5050 [...]
Ran Says:
July 1st, 2009 at 11:46 am
Thank you for this
This related post by this blogger might prove useful to you:
“What is WORRYING about GIC & Temasek Losses!”
http://singaporemind.blogspot.com/2008/11/what-is-worrying-about-gic-temasek.html