Love it! I’m pretty excited Nvidia and Apple are finally growing strong together. VGT is finally catching up with VOO this year so my portfolio bumped over the next 100k mark briefly, I started about ten months ago and I’ve already built it to 223k. So far it’s nothing but blue skies! I feel like there are some good prices out there lol
Congrats! It sure has been nice to see Apple come back, my position is back in the green. Nvidia has been a beast there’s nothing else to say about it lol
Yeah the AI hype is great, but it’s also providing some opportunities elsewhere. NVDA has been my number 1 holding since the tech drop in ‘22 so this feels good
@@VanillaCherryBread How do you know where to look? where do these come from to get on your radar in the first place? Just comb through thousands of stocks until one happens to stand out??? What’s your strategy?
It's difficult to provide an exact formula, but I find success in mirroring the portfolio of a top market analyst I follow, rather than trying to anticipate market trends and acting on FOMO. Her stock picks are top notch :)
Hi Sven, thank you for this video. First Pacific seems to be very interesting. However, it should be noted that the stock is still below its IPO price ( which took place in 2000). It should also be investigated why it lost more than 70% off its peak. Either the market liked it too much, or the business took some kind of hit. Also, in light of the recent news about growth and the massive buyback announced, an update on Alibaba would be very much needed. Enjoy your weekend!
It's a solid company. I don't know enough about it yet, but I know a few things. It's portfolio in the philippines is beyond solid, it's a market leader with strong competitive advantages. Especially the utility and telco side. Management has its straight. The cofounder of First pacific heads the Philippine division today. Super hardworking, no family, and says that his main mission in life is to work.
@@mikodizon8322 TBH, I had a look of the company and IDX, a brief thought is, to long the IDX is probably better than a single company, so I just put the company on my research list. First pacific has a diversified portfolio of holdings in Southeast Asia, not only in Indonesia, and it is an HK listed company, which is more interesting, but better to check the politic background first.
@@SDM496 Just because it's down doesn't mean it was a bad buy 3 years ago. Maybe it's EVEN cheaper now. Also, you never get all your stocks right anyway. Some investments will do better than others.
Thank you Sven. 1: PE ratio is only one aspect of valuation. You need to consider the estimated growth of the company (e.g. PEG ratio, revenue growth, Discounted FCF value) 2: If you remove the "Magnificent seven" - the SP 500 (493) PE is about 15.. Most of the market is not overvalued
I completely agree with this. I don't know the future, but I think it is plausible that the Mag 7 decline (or stay static) and the other 493 companies in the S&P play "catch up". The only company I own, personally, in the MAG 7 is Amazon. Good luck.
Yes - spot on with both those. PE is a bit crude and, yes, doesn't include growth. I'd be interested to know what the current and forecast growth of the S&P Ex-Mag7 are. I'm keen to find markets poorly - or even negatively- - correlated to the S&P. Given that markets historically have gone in waves/cycles, I'd be interested in a dual-momentum index investing. I've seen a very interesting yt video showing that "EM quality" has the most pent-up value ready to be tapped and has great long-term growth. But I've yet to find a vehicle I can ride in to take advantage of that....
Sven is the kind of guy who says Microsoft is risky because it has a PE of 30 and then goes and buys Kazakhstani copper miners and Argentinian utilities 😂😂
PE doesn’t even tell the whole story and impossible to compare with company of the past who had so much lower profit margins. Cash flow is a much better way to evaluate big companies
Yes, he's a clown. And no he hasn't made lots of money, he has a 9.8% CAGR over 6 years. All those 6 years he bashed people with different investment strategies, whilst making far less than them. He's the kind of value investor who buys cheap companies that are rughtly cheap😂
Thank you Sven. Insightful as always. Thank you for Rubis, ADM and FMC (the third one you didn’t join but I did), 2 more years following you on UA-cam and I will be ready to sign for your research. 6 months ago I started to look to Indonesia, but I am still not sure about stock picking there, even understanding the market volatility. I still see opportunity in German hidden GEMS ( Schaeffler and Wacker Neusen), the first I put my foot and I will probably double down if price goes below 5,5) the second, i want to open a position asap, but for some reason seems that EU companies are cheaper in Sep-October)
Actually in the Philippines - the majority of the companies owned by first pacific are considered value stocks. Its actually quite cheap and i made like 30% last year off one of their subsidiaries delisting.
@@WolfBoehme not anymore, I bought the MPI holdco since it was a cheaper way to own meralco by like 50% (and there were aggressive buybacks) - it delisted already and i made 35% or so on that. Now you can only get MPI by buying first pacific shares
@@rexwallentan9086 Thanks for sharing. In your opinion, are there any good values in the Philippine market at the moment? If so, would you mind sharing some names? Thanks again, Wolf
Hi Sven! Are you planning to make a video about Tencent? I would like to hear your opinion about the company after the recent rally and the quarterly report.
It would be nice if you mentioned trading symbols on major exchanges and how a foriegn country taxes dividends. Its basic info you never mention in most videos.
Just looked up older GMO 7 year forecasts and found one as of July 2018, so roughly 6 years ago. They projected -4.9 % for US Large annual real return over 7 years at that time. So their assumptions and projections can be very far off. I understand that they expect a reversion to the mean in the markets which may not be the case.
0:50 Absolutely. These projections cannot be relied upon as gospel. Schwab's large cap growth fund, SWLGX, has grown 250% since 2018. I got in just under a year ago and I'm up 30%. I'll be putting in more this month. But of course, I'm not putting all my eggs into one basket. The fund is heavily invested in MSFT, AAPL, NVDA and a bunch of similar stuff, companies that dominate their markets and are looking at yet more growth potential with the emergence of AI. I don't expect any major trend changes this year. _Famous last words_
Curious about how safe that 6% dividend is when the economy turns for the worst? Also concerned about tax consequences of foreign investment in Indonesia?
Thanks for the video. However, for emerging markets I personally would prefer to have a bit more return than 6% dividend. Treasuries give 5.5%, for now.
Thanks for one of the few stock market channels that really offers value. I bought a first tranche of First Pacific today. I would have liked to have bought at the time of the video, when the price was even lower than it is now.
Stocks extended their year-to-date rally following the CPI report, with the S&P 500 last up 0.8% in afternoon trading. but I don't know if stocks will quickly rebound, continue to pull back or move sideways for a few weeks, or if conditions will rapidly deteriorate. I am under pressure to grow my reserve.
There are many other interesting stocks in many industries that you might follow. You don't have to act on every forecast, so I'll suggest that you work with a financial advisor who can help you choose the best times to purchase and sell the shares or ETFs you want to acquire.
Until the Fed clamps down even further I think we're going to see hysteria due to rampant inflation. If you are in cross roads or need sincere advise on the best moves to take now with financial markets will be best you seek a fin-professional with fiduciary responsibilities who knows about mortgage-backed securities for proper guidance.
There are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’ Carol Vivian Constable” for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look-her up.
The major components of First Pacific also all trade as ADR's: Indofood, Meralco ADR (Metro pacific owns 50% or so of Meralco) and PLDT ADR. So you can easily compute the valuation without using DCF, just pretty much going by market capitalization :)
The problem with First Pacific is corporate governance. Its largely controlled by one family who allocate capital according to their own interests and have a very fancy head office.
Pass on First Pacific. An investor would have to be comfortable with putting his trust not only in the respective countries (Indonesia and the Philippines) but also in the continued ability of management to successfully select the right investments. The structural complexity (especially the cross holdings) and its negative impact on overall transparency are another downside I would like to mention. There also is an inevitable currency risk associated to those countries. I expect the company to keep being traded at significant discounts for the foreseeable future.
Hi Sven, can you make a video about Seth Klarman's last purchases? He bought some questionable stocks with high debt, dilution and/or negative cash flow. How is it supposed to be value investing?
Hello Sven, thank you for the amazing videos that you do. Are you worried about the large long term debt that first Pacific carries? I see the potential as a value play, but that's the only thing that worries me. Thoughts?
The problems with investing in some non-US stocks are usually lack of enough information, more broker commissions or just no access to those stocks at all... I hope brokers, costs and accessibility get better. I think there's opportunity in Asia-but usually at a high cost. Thanks!
@@Value-Investing I know, and that's what I do... except for BABA and JD. ^^ I think diversiying a bit is good. Though the US companies usually are the best, at least most of them. I guess if the US goes bad they can emigrate and they wouldn't have much trouble... Thanks!
Hi Sven! I always like your approach regarding overall market conditions and valuations. In the past i remember you talked/invested in some companies in South America. What do you think about Adecoagro? Agricultural, boring, 4-5 PE business. Improving financials. Thanks! 👌
I am bullish on markets LATAM, Mexico, Turkey, India, but I bet this long term markets forecast looked the same 10 years ago and that would not have worked out for those who piled in Emerging Markets.
Dont know what you are on but the USD hedged India index have been performing very well for the last 10 years. Again not all emerging markets are created equal, some will fare better than others for sure.
Emerging markets seem to have some countries which deliver quite modest returns, and thus drag the index/fund down for example South America. That's why I invested on EM Asia etf... same thing but without the constant underperformers...
I think the rule for the future is like this: the money goes, where the people are (demographics matter). So ask yourself: Where are the young ppl. that want (and can) invest/consume.
In emerging market you make money until you don't :) You heavily underestimate political risks in emerging markets like it was for russia with gazprom investment. I don't say we have to avoid emerging markets, but we should be very careful with emerging markets. Also US stock market we could still find good investments, not every single stock is overevaluated.
The same goes for an overvalued market.. You make money, until you don't. Russia always carried a huge risk due to Putin. You can also hedge against certain risks.
@@maxjames00077 Russian MOEX is up 1729% over the last 25-years, vs. the S&P 500 up 274%. As long as you hold your Russian shares outside of the United States (or EU countries that also prohibit selling your Russian shares), you have done very well.
Hi Sven, Greetings from Canada. I think you're logic is spot on! High population of young people compared to the west and way less debt also, seems to be a great oppurtunity but (and maybe im just speaking for myself) for those of us who are unfamiliar with emerging markets, would it be irrational for us to buy an index tracking emerging value? or should we just buckle down and do our homework and try to pick some "winners". I ask because i can count on one hand how many companies i know from emerging markets. Thanks!
Emerging Markets do not have the same equities culture like the US. In the US almost all private persons invest into the us stock market to build up retirement nest egg. In Asia investing into the stock market is seen as gambling. Therefore prices are highly volatile despite high gdp growth
while true (and thus stock hardly ever quote at 20-30x), value eventually comes trough. If you are quoted at 5x profit that money has to go somewhere eventually (buybacks, dividends ,etc).
I have followed your channel for a while, and i take everything with a grain of salt. I am genuinely impressed by this company you found! Can you detail the process and tools that you use to find these value gems on emerging markets?
Hi Sven, glad you mentioned Indonesia, any chance you will look at Indonesian companies for the research platforms? Most of the top companies are losing market share right now, there may be values hidden here :)
Thank you, Sven, for a very interesting video. You always examine good topics. I will certainly do some more research on how to take advantage of some of this international growth potential.
Thanks for the video. You didn't mention the additional risks investing outside the US. For example poor securities regulation and corruption increases likelyhood of fraud and insider trading. In extreme cases, the local stock market may be so distorted by the players with unfair edge (ex. utilizing insider information) that it's impossible to have an edge over the market via fair means. Some might not think about this.
I d like to learn more about First Pacific. What is its stock ticker in US? Also, I did not find much data about Indonesia market on Fidelity. There are a few ETF mostly focuses on China market. Have I missed anything? Thanks, Sven.
Hi Sven, I want to invest on first pacific, but on my broker I can only invest on the one quoted on Frankfurt,the tax that I will pay would be like a German stock or Hong Kong?
What do you think about tsmc or micron or Google? If i bought theme at a half of the current price and could cash in a 100% retur. And then reinvest in other compani but i dont know if it right to sell your best business just because they are a bit pricey. Sven what do you think?
I am not disagreeing in principle, but I do very little trust projections, whatever they are, good or bad, as I have seen too many of them not materializing at all, even in most recent years. My point is how do you factor geopolitical risks in emerging market for instance? What about climate risks in some cases? And concerning long term financial and economic stabilities? And transparency? Etc. etc. Easy to talk about low PE. The Market is not such an idiot. I conclude with a famous quote from Peter Lynch: far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, then has been lost in corrections themselves. My personal quote for the present case would be replacing the word ‘corrections’ with ‘projections’
Why do you think that heavy rate cuts are priced into stocks? At the beginning of the year, there were 6 rate cuts projected, now only 2 and stock market didn't suffer much. Are you missing the forest for the trees?
Looks like an interesting business in the sense that it is very defensive and diversified, just how I like it. However and unfortunately, here in the US, one of my brokers does not list it, another wants a $50 fee for buying and another $26. Normally I pay no fees for US or larger overseas businesses. So since I never put very much into any one position, I can't justify purchasing this.
Fidelity has FPAFY as an ADR. From what I just read from Fidelity's ADRs, there may sometimes be a pass-through fee of $0.01 to $0.03, so it would be a matter of cents.
Sven I watched many of your early videos on European frontier/emerging markets, but what are your current opinions on the Balkans, Central Asia, and The Caucasus.
Thanks for the interesting video. First Pacific, indeed, looks interesting. It is far from perfect, what company is, but I see why one might see some upside in it. It offers some upside potential and a good dividend. It does seem to play with debt. The stock seems too small to make trading it easy in the US. It might be different elsewhere, I don't know. To me, it seems like the kind of pan-Asian investment company worthy of tipping one's toes in, at least IMHO.
ok now that most companies on the jakarta exchange are tanking. Which ones do you like not just First pacific. which is based in hong kong. Indofoods, united tractor, one of the many international companies that have cheap Indonesian listings?
Sven companies with accelerated growth deserve a higher PE. Remember that growth is also part of value investments, It is not enough to just say that they are more risky or have a high risk. I think the solution in the US will be low-risk value growth stocks.
Net debt of 62b and a free cash flow of 14b, so debt to fcf at x4.5 which is not that much. The company has just a market capitalization of 16b.... so with a 14b FCF the stock is just selling at P/E of 1.1 which is insane. A P/E of 4 if one considers the debt. Debt is its only problem, although its short term debt is at 17b i.e. just around 15 months of FCF.....so still not bad and probably worth the risk considering a dividend of 5.9%, 6.6%, 9.4% and 7.4% in the last 4 years.
4:00 stock buy backs should be illegal, they just enrich Managers with stock based comp and performance targets while burning cash and shareholders' value
Problem is Sven that you said the same about the big tech stocks when they were 40% lower. Not saying you are wrong, just saying there is also risk in sitting out the rally
Sven, I've never taken you for a fan of holding companies. I can imagine following it can be a pain in the ass, because of their broad diversification, and relying on the decision-making of the management demands a fair amount of trust. Why don't you just decide for one company from their portfolio, or ETF? Seems like a more logical choice
Hey Sven, was curious if you’ve looked at any opportunities in the airline space. Personally looking at air Canada right now as they’ve done well to recover post pandemic and have been paying down that nasty debt they had to take on. They’re stating the balance sheet is healthy and are looking to pursue buybacks, during their last earnings call.
@mikkelhansen3714 Everything has its own risk/ reward. Air canada has a stronger balance sheet, more diverse business, and amazing cash flow vs. current price. I'm not interested in non opportunities.
@@HenningYT respectfully... and what? I'm just curious as to his outlook on the industry since their seems to be a divorce from value with the post pandemic recovery and outlook. Opportunity and value is this man's bread and butter
@@blazepowder66 Sven has always preferred airport stocks (and did say so in several videos). Maybe you will get a comment from him but don't be disappointed if he does not confirm your bias. Air Canada could be doing great the coming months but value investors often avoid airlines because of its high risk-reward ratio.
Is your focus on individual stocks or on ETFs? I just discovered your channel. I appreciate what you say. I feel individual stocks are too risky for me. Need to understand your approach here. Thank you.
hi Sven, you a rounding numbers. If i earn 1mln. per month and my neighbors are homeless that dosn't mean we all live good. Thats the case with sp500 and largecaps. Amzn, meta and google is close to 50% of my portfolio. I don't mind PE of 25 or so till it is justified by cash flows they generate and numbers at which they grow
Always been puzzled by share buybacks. Yes, they increase the share price and the bonuses C suite individuals earn but how do they increase the overall market cap of the company? Serious question.
"they increase the share price" + "increase the overall market cap" = the same thing. Market cap is the sum price of each individual share. If share price goes up, market cap goes up. Is there something you fundamentally misunderstand? The C suite stuff, I don't know what you are talking about. Better to leave that out.
Simple example: on the start 100 shares for 10$ the firm is worth 1000$…. Buys 50 shares back, is still 1000$ worth but now -> 50shares worth 20$… so the firm is not more worth all in all but the share price doubled 🤷🏼♂️ u call it financial engineering
@@S3RPiROYAL What? No, thats not how it works and makes no sense. The company just acts as a huge investor and buys its own share, like millions of us decided to go buy the share, obviously demand makes the price go up and the market cap increase. The key with buybacks is that the shares are removed from trading and unlikely to ever come back.
Why do you keep uaing the PE ratio as an indicator when the earnings line in an income statement is so distorted, why not heed Buffett's advice and use owners earnings which basically is the Free Cash Flow?
People are so worried about currency devaluation in emerging markets, but in the long term it doesn't matter. Companies raise their prices accordingly. Argentina has outperformed the S&P 500 in USD terms over the last 5 years despite their 290% inflation.
i think im going to put some money into philippines... 10pe ratio, 6%gpd growth, and a firm US ally that speaks english (i learned my lesson when i lost my russian investments)
Also wanted to comment that one of the buffets strategy is investment in what you understand and know. That’s why majority of his latest investment is only in the US stock market. He sees all the other markets as something that they don’t fully understand. Thus, if you follow value investment strategy, it’s not just company value, it also overall makes that you have to understand very well. Can be wrong, but I don’t think this is the case with Indonesia. Thus it should be considered to be a bigger risk than something on the US market.
Emerging markets have been an historical bust over the years. They might show growth here and there but the overseas investors always have been hurt. I much rather play in the US and European markets long term. India might become an exception because of good demographics and stability.
A case for Meta and Alphabet is that still around 150 Billion $ of Ads are spend every year worldwide on TV ads that are basically a waste of money because nobody is watching these tv ads
Can't predict natural disasters, pandemics, political shifts etc. Wars and political tension somewhat are, which is why you shouldn't put most of your eggs in the emerging Asian markets basket. I wouldn't lean too much on exponential growth as exuberance, at least not until I have a clear picture of the growth of total money supply and where it's allocated. Markets are never normal, there's always some revolution going on. The question is not if a market is normal or not, but how to get value out of its abnormality.
The part you value guys continue to ignore is how much higher these companies margins are compared to the past. So you can’t compare companies now to companies back in the day when profit margins were like 1/3 of today’s or even less. Your whole thesis for not buying the best companies is so wrong because of that.
You can compare these. Higher margins and future growth rate means higher future free cash flows which after discounting translate into higher "Fair Value" in "value investor terms". Problem is how positive or negative are you predicting future growth and margins.
That is why it’s so hard because it’s very hard to know how much cash they will create when they are mature. All the high growth tech companies are cash machines.
All of this talk about cutting rates is stupid. When the Fed followed rates down to depression era, all of the talk was about restoring rates to historic averages. Now they seem to be saying that depression era rates should be the new standard and historic average rates are somehow devastating. We now have a real cost of capital to discourage bad investments by corporations and grow the economy on sustainable lines.
Funny thing is sp500 can be in bubble next 10 years and will beat all investors who invest risk reward wise. But Berkshire plus some gold btc and short bonds is good choice between high risk high reward and low risk low reward investments
Great advice here. Keep it simple, buy things you understand, take some risk but don’t try to shoot the lights out.
Love it! I’m pretty excited Nvidia and Apple are finally growing strong together. VGT is finally catching up with VOO this year so my portfolio bumped over the next 100k mark briefly, I started about ten months ago and I’ve already built it to 223k. So far it’s nothing but blue skies! I feel like there are some good prices out there lol
Congrats! It sure has been nice to see Apple come back, my position is back in the green. Nvidia has been a beast there’s nothing else to say about it lol
Yeah the AI hype is great, but it’s also providing some opportunities elsewhere. NVDA has been my number 1 holding since the tech drop in ‘22 so this feels good
@@VanillaCherryBread How do you know where to look? where do these come from to get on your radar in the first place? Just comb through thousands of stocks until one happens to stand out??? What’s your strategy?
It's difficult to provide an exact formula, but I find success in mirroring the portfolio of a top market analyst I follow, rather than trying to anticipate market trends and acting on FOMO. Her stock picks are top notch :)
Hi Sven, thank you for this video. First Pacific seems to be very interesting. However, it should be noted that the stock is still below its IPO price ( which took place in 2000). It should also be investigated why it lost more than 70% off its peak. Either the market liked it too much, or the business took some kind of hit. Also, in light of the recent news about growth and the massive buyback announced, an update on Alibaba would be very much needed. Enjoy your weekend!
Interesting! Thank you for sharing!
If the stock price is too low, a stock buyback is a great idea!
What about geopolitical risk of having assets in HKG?
It's a solid company. I don't know enough about it yet, but I know a few things.
It's portfolio in the philippines is beyond solid, it's a market leader with strong competitive advantages. Especially the utility and telco side. Management has its straight.
The cofounder of First pacific heads the Philippine division today. Super hardworking, no family, and says that his main mission in life is to work.
@@mikodizon8322 TBH, I had a look of the company and IDX, a brief thought is, to long the IDX is probably better than a single company, so I just put the company on my research list. First pacific has a diversified portfolio of holdings in Southeast Asia, not only in Indonesia, and it is an HK listed company, which is more interesting, but better to check the politic background first.
Sven you should revisit Baidu, You had a video 3 years ago saying its a buy, Now its half priced.
New plan: I short the stocks😂
Hence never take stock recommendations from such analysts. Business outlook for companies can easily change in 3-6 months.
@@SDM496 Just because it's down doesn't mean it was a bad buy 3 years ago. Maybe it's EVEN cheaper now. Also, you never get all your stocks right anyway. Some investments will do better than others.
If the stock is in his paid platform as a buy he won't advertise on it for free on UA-cam, so if it's a buy he might not say so.
3M, Alibaba, Baidu, Amara food, Intel, list goes on and on and on.. and fun part is he will get personal if you remind him of his previous analysis..
Thank you Sven. 1: PE ratio is only one aspect of valuation. You need to consider the estimated growth of the company (e.g. PEG ratio, revenue growth, Discounted FCF value)
2: If you remove the "Magnificent seven" - the SP 500 (493) PE is about 15.. Most of the market is not overvalued
I completely agree with this. I don't know the future, but I think it is plausible that the Mag 7 decline (or stay static) and the other 493 companies in the S&P play "catch up". The only company I own, personally, in the MAG 7 is Amazon. Good luck.
Yes - spot on with both those. PE is a bit crude and, yes, doesn't include growth. I'd be interested to know what the current and forecast growth of the S&P Ex-Mag7 are. I'm keen to find markets poorly - or even negatively- - correlated to the S&P. Given that markets historically have gone in waves/cycles, I'd be interested in a dual-momentum index investing. I've seen a very interesting yt video showing that "EM quality" has the most pent-up value ready to be tapped and has great long-term growth. But I've yet to find a vehicle I can ride in to take advantage of that....
Sven is the kind of guy who says Microsoft is risky because it has a PE of 30 and then goes and buys Kazakhstani copper miners and Argentinian utilities 😂😂
Sven said he actually dumped all his Russian stocks when they started gathering forces on the Ukrainian border.
@@stiffmaster491 Yeah so? he made a lot of money and got out at the right time?
PE doesn’t even tell the whole story and impossible to compare with company of the past who had so much lower profit margins. Cash flow is a much better way to evaluate big companies
Yes, he's a clown. And no he hasn't made lots of money, he has a 9.8% CAGR over 6 years. All those 6 years he bashed people with different investment strategies, whilst making far less than them.
He's the kind of value investor who buys cheap companies that are rughtly cheap😂
I would say Microsoft is risky, because it has shitty products. 😂
Thank you Sven. Insightful as always. Thank you for Rubis, ADM and FMC (the third one you didn’t join but I did), 2 more years following you on UA-cam and I will be ready to sign for your research. 6 months ago I started to look to Indonesia, but I am still not sure about stock picking there, even understanding the market volatility. I still see opportunity in German hidden GEMS ( Schaeffler and Wacker Neusen), the first I put my foot and I will probably double down if price goes below 5,5) the second, i want to open a position asap, but for some reason seems that EU companies are cheaper in Sep-October)
Actually in the Philippines - the majority of the companies owned by first pacific are considered value stocks.
Its actually quite cheap and i made like 30% last year off one of their subsidiaries delisting.
do you prefer to own First Pacific itself or the component companies? If you prefer the component companies, do you have a favorite? Thanks
@@WolfBoehme not anymore, I bought the MPI holdco since it was a cheaper way to own meralco by like 50% (and there were aggressive buybacks) - it delisted already and i made 35% or so on that.
Now you can only get MPI by buying first pacific shares
@@WolfBoehmeif you do buy Philippine shares, we have a good FB group going where many ppl are outperforming market by 10 to 15% ytd
@@rexwallentan9086 Thanks for sharing. In your opinion, are there any good values in the Philippine market at the moment? If so, would you mind sharing some names? Thanks again, Wolf
Hi Sven! Are you planning to make a video about Tencent? I would like to hear your opinion about the company after the recent rally and the quarterly report.
It would be nice if you mentioned trading symbols on major exchanges and how a foriegn country taxes dividends. Its basic info you never mention in most videos.
Just looked up older GMO 7 year forecasts and found one as of July 2018, so roughly 6 years ago. They projected -4.9 % for US Large annual real return over 7 years at that time. So their assumptions and projections can be very far off. I understand that they expect a reversion to the mean in the markets which may not be the case.
0:50 Absolutely. These projections cannot be relied upon as gospel. Schwab's large cap growth fund, SWLGX, has grown 250% since 2018. I got in just under a year ago and I'm up 30%. I'll be putting in more this month. But of course, I'm not putting all my eggs into one basket. The fund is heavily invested in MSFT, AAPL, NVDA and a bunch of similar stuff, companies that dominate their markets and are looking at yet more growth potential with the emergence of AI. I don't expect any major trend changes this year.
_Famous last words_
Curious about how safe that 6% dividend is when the economy turns for the worst? Also concerned about tax consequences of foreign investment in Indonesia?
Tax is good in Indonesia
Quoted in hong kong. No dividend tax, no capital gains tax. So should be good ?
@@snoomtreb should be a 20% capital tax?
Thanks for the video. However, for emerging markets I personally would prefer to have a bit more return than 6% dividend. Treasuries give 5.5%, for now.
Thanks for sharing!
yes, in HK market, 6% is not that spectacular compared with many Chinese state-owned enterprises.
Thanks for one of the few stock market channels that really offers value. I bought a first tranche of First Pacific today. I would have liked to have bought at the time of the video, when the price was even lower than it is now.
Stocks extended their year-to-date rally following the CPI report, with the S&P 500 last up 0.8% in afternoon trading. but I don't know if stocks will quickly rebound, continue to pull back or move sideways for a few weeks, or if conditions will rapidly deteriorate. I am under pressure to grow my reserve.
There are many other interesting stocks in many industries that you might follow. You don't have to act on every forecast, so I'll suggest that you work with a financial advisor who can help you choose the best times to purchase and sell the shares or ETFs you want to acquire.
Until the Fed clamps down even further I think we're going to see hysteria due to rampant inflation. If you are in cross roads or need sincere advise on the best moves to take now with financial markets will be best you seek a fin-professional with fiduciary responsibilities who knows about mortgage-backed securities for proper guidance.
this sounds considerable! think you know any advisors i can get on the phone with? i'm in dire need of proper portfolio allocation
There are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’ Carol Vivian Constable” for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look-her up.
She appears to be well-educated and well-read. I ran a Google search on her name and came across her website; thank you for sharing.
The major components of First Pacific also all trade as ADR's: Indofood, Meralco ADR (Metro pacific owns 50% or so of Meralco) and PLDT ADR. So you can easily compute the valuation without using DCF, just pretty much going by market capitalization :)
The problem with First Pacific is corporate governance. Its largely controlled by one family who allocate capital according to their own interests and have a very fancy head office.
that is a fair point!
Pass on First Pacific. An investor would have to be comfortable with putting his trust not only in the respective countries (Indonesia and the Philippines) but also in the continued ability of management to successfully select the right investments. The structural complexity (especially the cross holdings) and its negative impact on overall transparency are another downside I would like to mention. There also is an inevitable currency risk associated to those countries. I expect the company to keep being traded at significant discounts for the foreseeable future.
Good points! Thanks for sharing!
* his, her, or their trust
An investor may be better off having his assets in currencies outside of USD and EUR.
Hi Sven, can you make a video about Seth Klarman's last purchases? He bought some questionable stocks with high debt, dilution and/or negative cash flow. How is it supposed to be value investing?
I shorted SOUN via way otm short calls, even though Klarman went long. The call premiums were ridiculous.
Hello Sven, thank you for the amazing videos that you do. Are you worried about the large long term debt that first Pacific carries? I see the potential as a value play, but that's the only thing that worries me. Thoughts?
The problems with investing in some non-US stocks are usually lack of enough information, more broker commissions or just no access to those stocks at all... I hope brokers, costs and accessibility get better. I think there's opportunity in Asia-but usually at a high cost. Thanks!
you don't have to invest outside the US, you can also wait for value there, there is...
@@Value-Investing I know, and that's what I do... except for BABA and JD. ^^ I think diversiying a bit is good. Though the US companies usually are the best, at least most of them. I guess if the US goes bad they can emigrate and they wouldn't have much trouble... Thanks!
Hi Sven! I always like your approach regarding overall market conditions and valuations.
In the past i remember you talked/invested in some companies in South America.
What do you think about Adecoagro? Agricultural, boring, 4-5 PE business. Improving financials.
Thanks! 👌
I am bullish on markets LATAM, Mexico, Turkey, India, but I bet this long term markets forecast looked the same 10 years ago and that would not have worked out for those who piled in Emerging Markets.
Dont know what you are on but the USD hedged India index have been performing very well for the last 10 years. Again not all emerging markets are created equal, some will fare better than others for sure.
Emerging markets seem to have some countries which deliver quite modest returns, and thus drag the index/fund down for example South America. That's why I invested on EM Asia etf... same thing but without the constant underperformers...
I think the rule for the future is like this: the money goes, where the people are (demographics matter). So ask yourself: Where are the young ppl. that want (and can) invest/consume.
@@stefankalisch424 not necessarily, China had fast growth for 30 years now, but the return from the capital market has a big question mark.
In emerging market you make money until you don't :)
You heavily underestimate political risks in emerging markets like it was for russia with gazprom investment. I don't say we have to avoid emerging markets, but we should be very careful with emerging markets. Also US stock market we could still find good investments, not every single stock is overevaluated.
The same goes for an overvalued market.. You make money, until you don't.
Russia always carried a huge risk due to Putin. You can also hedge against certain risks.
@@maxjames00077 Russian MOEX is up 1729% over the last 25-years, vs. the S&P 500 up 274%. As long as you hold your Russian shares outside of the United States (or EU countries that also prohibit selling your Russian shares), you have done very well.
What kind of money are you making in emerging markets exactly? They barely outperformed inflation in the past 20 years. Clueless 😔
@@ZelenoJabko Russia MOEX index up over 1700% last 25 years. SPX up about 300%.
@@ZelenoJabko because he didn't say they USED to be undervalued he said they are now.
Hi Sven, Greetings from Canada. I think you're logic is spot on! High population of young people compared to the west and way less debt also, seems to be a great oppurtunity but (and maybe im just speaking for myself) for those of us who are unfamiliar with emerging markets, would it be irrational for us to buy an index tracking emerging value? or should we just buckle down and do our homework and try to pick some "winners". I ask because i can count on one hand how many companies i know from emerging markets. Thanks!
I haven't analyzed the ETFs so I don't know.
Sven why do all Superinvestors buy Charter Communications? Is it a value investment atm?
Emerging Markets do not have the same equities culture like the US. In the US almost all private persons invest into the us stock market to build up retirement nest egg. In Asia investing into the stock market is seen as gambling. Therefore prices are highly volatile despite high gdp growth
Volatility is good!!
while true (and thus stock hardly ever quote at 20-30x), value eventually comes trough. If you are quoted at 5x profit that money has to go somewhere eventually (buybacks, dividends ,etc).
I have followed your channel for a while, and i take everything with a grain of salt.
I am genuinely impressed by this company you found!
Can you detail the process and tools that you use to find these value gems on emerging markets?
Hi Sven, glad you mentioned Indonesia, any chance you will look at Indonesian companies for the research platforms? Most of the top companies are losing market share right now, there may be values hidden here :)
we will see :-)
Thank you, Sven, for a very interesting video. You always examine good topics. I will certainly do some more research on how to take advantage of some of this international growth potential.
Thanks for the video. You didn't mention the additional risks investing outside the US. For example poor securities regulation and corruption increases likelyhood of fraud and insider trading. In extreme cases, the local stock market may be so distorted by the players with unfair edge (ex. utilizing insider information) that it's impossible to have an edge over the market via fair means. Some might not think about this.
yes, but there are also risks in the US - what was it - FTX
Good day Sven! What's your opinion on Leggett&Platt? Also, is India an interesting country for investment?
no opinion, and I can't invest in India!
What do you think about First Pacific debt levels ?
in growing economies you have to do it that way, the cash flows later repay it - but debt is always a risk!
I d like to learn more about First Pacific. What is its stock ticker in US? Also, I did not find much data about Indonesia market on Fidelity. There are a few ETF mostly focuses on China market. Have I missed anything? Thanks, Sven.
there is an ADR on the US market
@@Value-Investinghi Sven should we buy the ADR with the discrepantie or take the risk on the currency?
Would you recommend shorting the market?
you never know with that
Hi Sven, I want to invest on first pacific, but on my broker I can only invest on the one quoted on Frankfurt,the tax that I will pay would be like a German stock or Hong Kong?
Very enlightening and helpful lesson! Terima Kasih (thank you) for highlighting Indonesia and First Pacific! Southeast Asia is awesome!
What do you think about tsmc or micron or Google? If i bought theme at a half of the current price and could cash in a 100% retur. And then reinvest in other compani but i dont know if it right to sell your best business just because they are a bit pricey. Sven what do you think?
I don't know whether it will get you a 100% return!
I am not disagreeing in principle, but I do very little trust projections, whatever they are, good or bad, as I have seen too many of them not materializing at all, even in most recent years. My point is how do you factor geopolitical risks in emerging market for instance? What about climate risks in some cases? And concerning long term financial and economic stabilities? And transparency? Etc. etc. Easy to talk about low PE. The Market is not such an idiot. I conclude with a famous quote from Peter Lynch: far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, then has been lost in corrections themselves. My personal quote for the present case would be replacing the word ‘corrections’ with ‘projections’
Why do you think that heavy rate cuts are priced into stocks?
At the beginning of the year, there were 6 rate cuts projected, now only 2 and stock market didn't suffer much.
Are you missing the forest for the trees?
He's missing the trees aswell
Looks like an interesting business in the sense that it is very defensive and diversified, just how I like it. However and unfortunately, here in the US, one of my brokers does not list it, another wants a $50 fee for buying and another $26. Normally I pay no fees for US or larger overseas businesses. So since I never put very much into any one position, I can't justify purchasing this.
There are others :/))
Fidelity has FPAFY as an ADR. From what I just read from Fidelity's ADRs, there may sometimes be a pass-through fee of $0.01 to $0.03, so it would be a matter of cents.
@@pongop you pay adr fees every year. That's quite an expense ratio, especially if the stock price drops further
@@ZelenoJabko Thanks for the info!
Sven I watched many of your early videos on European frontier/emerging markets, but what are your current opinions on the Balkans, Central Asia, and The Caucasus.
Hi Sven, great video as always. I have „only 40% in US. Would love to hear your opinion on South America. Also very cheap. Thanks
It is "cheap" because there is always a political risk and currency devaluation risk out there.
Thanks for the interesting video. First Pacific, indeed, looks interesting. It is far from perfect, what company is, but I see why one might see some upside in it. It offers some upside potential and a good dividend. It does seem to play with debt. The stock seems too small to make trading it easy in the US. It might be different elsewhere, I don't know. To me, it seems like the kind of pan-Asian investment company worthy of tipping one's toes in, at least IMHO.
HI Sven really interesting video, it was good to see the different kinds of figures you take into account when thinking about investing. Thanks.
ok now that most companies on the jakarta exchange are tanking. Which ones do you like not just First pacific. which is based in hong kong. Indofoods, united tractor, one of the many international companies that have cheap Indonesian listings?
Sven companies with accelerated growth deserve a higher PE. Remember that growth is also part of value investments,
It is not enough to just say that they are more risky or have a high risk. I think the solution in the US will be low-risk value growth stocks.
Hi Sven, what are your thoughts on UK smaller companies?
I looked once at them all, I follow a few.
Where do you First Pacific from? I can’t on Trading212
Net debt of 62b and a free cash flow of 14b, so debt to fcf at x4.5 which is not that much. The company has just a market capitalization of 16b.... so with a 14b FCF the stock is just selling at P/E of 1.1 which is insane. A P/E of 4 if one considers the debt. Debt is its only problem, although its short term debt is at 17b i.e. just around 15 months of FCF.....so still not bad and probably worth the risk considering a dividend of 5.9%, 6.6%, 9.4% and 7.4% in the last 4 years.
4:00 stock buy backs should be illegal, they just enrich Managers with stock based comp and performance targets while burning cash and shareholders' value
good point, thanks for sharing!
they were until Reagan
My issue with Apple is that it is Buffets biggest position. When they start to rebalance, that's a lot of supply!
that is one year of buybacks for Apple, he is selling as they are buying, no worries! But yes, stock won't go up for a while!
@@Value-Investing well it did something 🙂 Took a small position in the first pacific adr
solid! thx Sven. solid advice.
Happy to help!
As an investor I can't easily invest in Indonesian companies. So the best I can do is invest in vxus. I really don't get why I'd do otherwise?
Problem is Sven that you said the same about the big tech stocks when they were 40% lower. Not saying you are wrong, just saying there is also risk in sitting out the rally
Yes, but you sit out of the risk too!!!
remember also the fall happens very quickly and in few weeks you might see all this glorious climb evaporate
....swing you bum 😂
The voice of reason.
Nah he's a dogmatic cult leader now, he doesn't talk like a rational investor
Sven, I've never taken you for a fan of holding companies. I can imagine following it can be a pain in the ass, because of their broad diversification, and relying on the decision-making of the management demands a fair amount of trust. Why don't you just decide for one company from their portfolio, or ETF? Seems like a more logical choice
Ah, ETFs have more of the expensive and less of the cheap :-)))
Like the Video Sven, I like the unorthodox perspective
Glad to hear!
Hey Sven, was curious if you’ve looked at any opportunities in the airline space. Personally looking at air Canada right now as they’ve done well to recover post pandemic and have been paying down that nasty debt they had to take on. They’re stating the balance sheet is healthy and are looking to pursue buybacks, during their last earnings call.
I highly doubt that Sven likes airline stocks
Airlines are risky. If anything you should look at airports. But the times for that was in 2020
@mikkelhansen3714 Everything has its own risk/ reward. Air canada has a stronger balance sheet, more diverse business, and amazing cash flow vs. current price. I'm not interested in non opportunities.
@@HenningYT respectfully... and what? I'm just curious as to his outlook on the industry since their seems to be a divorce from value with the post pandemic recovery and outlook. Opportunity and value is this man's bread and butter
@@blazepowder66 Sven has always preferred airport stocks (and did say so in several videos). Maybe you will get a comment from him but don't be disappointed if he does not confirm your bias. Air Canada could be doing great the coming months but value investors often avoid airlines because of its high risk-reward ratio.
So invest in SE?
Is your focus on individual stocks or on ETFs? I just discovered your channel. I appreciate what you say. I feel individual stocks are too risky for me. Need to understand your approach here. Thank you.
hi Sven, you a rounding numbers. If i earn 1mln. per month and my neighbors are homeless that dosn't mean we all live good. Thats the case with sp500 and largecaps. Amzn, meta and google is close to 50% of my portfolio. I don't mind PE of 25 or so till it is justified by cash flows they generate and numbers at which they grow
are there any good emerging value ETFs?
Ishares EM Asia etf (CEBL here in Europe) was the best I found... leaves out all these laggard countries in South America etc.
Always been puzzled by share buybacks. Yes, they increase the share price and the bonuses C suite individuals earn but how do they increase the overall market cap of the company? Serious question.
It does not in theory. It increases the percentage of the previous holders.
"they increase the share price" + "increase the overall market cap" = the same thing. Market cap is the sum price of each individual share. If share price goes up, market cap goes up. Is there something you fundamentally misunderstand? The C suite stuff, I don't know what you are talking about. Better to leave that out.
Simple example: on the start 100 shares for 10$ the firm is worth 1000$…. Buys 50 shares back, is still 1000$ worth but now -> 50shares worth 20$… so the firm is not more worth all in all but the share price doubled 🤷🏼♂️ u call it financial engineering
@@S3RPiROYAL What? No, thats not how it works and makes no sense. The company just acts as a huge investor and buys its own share, like millions of us decided to go buy the share, obviously demand makes the price go up and the market cap increase.
The key with buybacks is that the shares are removed from trading and unlikely to ever come back.
@@TheBooban it depends. In apples case, if there is a sellout, buybacks would barely stable the price. Nothing comes out of nothing.
Why do you keep uaing the PE ratio as an indicator when the earnings line in an income statement is so distorted, why not heed Buffett's advice and use owners earnings which basically is the Free Cash Flow?
depends on the company you are using them on
What everyone knows is not worth knowing.
First Pacific was a good buy around 2
People are so worried about currency devaluation in emerging markets, but in the long term it doesn't matter. Companies raise their prices accordingly. Argentina has outperformed the S&P 500 in USD terms over the last 5 years despite their 290% inflation.
:-)))
i think im going to put some money into philippines... 10pe ratio, 6%gpd growth, and a firm US ally that speaks english (i learned my lesson when i lost my russian investments)
:-)))
First Pacific has debt of hell
Also wanted to comment that one of the buffets strategy is investment in what you understand and know. That’s why majority of his latest investment is only in the US stock market. He sees all the other markets as something that they don’t fully understand. Thus, if you follow value investment strategy, it’s not just company value, it also overall makes that you have to understand very well. Can be wrong, but I don’t think this is the case with Indonesia. Thus it should be considered to be a bigger risk than something on the US market.
Good point!
Emerging markets have been an historical bust over the years. They might show growth here and there but the overseas investors always have been hurt. I much rather play in the US and European markets long term. India might become an exception because of good demographics and stability.
Depends at what price you buy!!!
Have you researched the Indonesian market in your RP?
The solution
Gold.
Thanks for sharing
I´ve out of the US for a While now, buying in Latam and China at the time.
thank you Sven!
My pleasure!
people boosting price on low volume while homeexchange closed, ignoring taxes and transactioncosts are really something.
thanks for sharing
How would you buy HKG 0142 from the UK?
Interactive Brokers for instance.
There are a number of brokers who allow you to trade the Hong Kong market from the UK. Personally, I use Interactive Investor.
A case for Meta and Alphabet is that still around 150 Billion $ of Ads are spend every year worldwide on TV ads that are basically a waste of money because nobody is watching these tv ads
Good video, thanks.
:-)
So are you looking at indonesian stocks?
Can't predict natural disasters, pandemics, political shifts etc. Wars and political tension somewhat are, which is why you shouldn't put most of your eggs in the emerging Asian markets basket.
I wouldn't lean too much on exponential growth as exuberance, at least not until I have a clear picture of the growth of total money supply and where it's allocated. Markets are never normal, there's always some revolution going on. The question is not if a market is normal or not, but how to get value out of its abnormality.
thanks for sharing!
Thanks...
The part you value guys continue to ignore is how much higher these companies margins are compared to the past. So you can’t compare companies now to companies back in the day when profit margins were like 1/3 of today’s or even less. Your whole thesis for not buying the best companies is so wrong because of that.
You can compare these. Higher margins and future growth rate means higher future free cash flows which after discounting translate into higher "Fair Value" in "value investor terms". Problem is how positive or negative are you predicting future growth and margins.
That is why it’s so hard because it’s very hard to know how much cash they will create when they are mature. All the high growth tech companies are cash machines.
buffet would never buy emerging value, just stick to quality.
Thanks for sharing!
🗽 Negative return for 7 years.... in the MAG7, due to sky high valuations.
That sounds not so good for me!
.
real, meaning minus inflation
Unfortunately, Is not tradable with my brocker... So I do not start to study It
With all due respect, there’s a better chance of some crappy Indonesian company losing 40% than Apple or Microsoft.
thanks for sharing!
All of this talk about cutting rates is stupid. When the Fed followed rates down to depression era, all of the talk was about restoring rates to historic averages. Now they seem to be saying that depression era rates should be the new standard and historic average rates are somehow devastating. We now have a real cost of capital to discourage bad investments by corporations and grow the economy on sustainable lines.
5% GDP growth is not high for a developing country
Emerging Value has been "promising" to outperform since the last century. Emerging Value investors are still waiting for Godot.
:-)))
EM investing motto is "next year will be better" 😁
Alphabet very cheap.
Undervalued. $300.
Nobody knows nothing.
- John C. Bogle
That's a double negative that actually means that everybody knows something.
everybody knows something. But no one knows The future. It just speculation.
Funny thing is sp500 can be in bubble next 10 years and will beat all investors who invest risk reward wise. But Berkshire plus some gold btc and short bonds is good choice between high risk high reward and low risk low reward investments
NVDA is more valuable than German economy, lol
:-)
❤
"Never bet against America." Warren Buffett
I would never bet against, there is betting on, and betting against. With almost $200 billion in cash, Buffett isn't betting much ON America :-))