Impatient Optimists Vs Value Investors in the New Year 2014: The Billion Dollar Stories of Bill-Melinda and Lupin (Bamboo Innovator Insight)
December 31, 2013 Leave a comment
The following article is extracted from the Bamboo Innovator Insight weekly column blog related to the context and thought leadership behind the stock idea generation process of Asian wide-moat businesses that are featured in the monthly entitled The Moat Report Asia. Fellow value investors get to go behind the scene to learn thought-provoking timely insights on key macro and industry trends in Asia, as well as benefit from the occasional discussion of potential red flags, misgovernance or fraud-detection trails ahead of time to enhance the critical-thinking skill about the myriad pitfalls of investing in Asia at the microstructure- and firm-level.
Dear Friends and All,
Nearly ten years ago, the Bamboo Innovator had met with the founder of a Chinese drugmaker who was seeking to list his firm in Singapore. As this Chinese entrepreneur hails from the northeastern Shandong province and Shandong men are generally stocky like rugby players, this particular entrepreneur stood out for being unusually small-build. So the Bamboo Innovator asked him and found out that he had been afflicted with polio when he was young and he managed to recover from the disease. The gritty entrepreneur remarked that I am the only fund manager who observed this condition and made an effort to ask; he is usually bombarded by questions about profit margins and guidance on sales figures. The Bamboo Innovator is positive on people who have overcome personal adversities in life as they tend to be resilient in creating value for others. We invested in the shares of this Chinese pharmaceutical company and not only did the market value climbed four-fold from around $75 million to $300 million, but importantly it was also possibly the only Chinese S-Chip firm whose accounting was clean and did not suffer when the wave of accounting fraud revelation swept across the statistically-cheap Singapore-listed Chinese firms during the 2007/09 Global Financial Crisis.
As we step forward into the New Year 2014, the Bamboo Innovator was captivated by a WSJ article “What I Learned in the Fight Against Polio” written by Bill Gates on Nov 10. It talks about how the Bill and Melinda Gates Foundation has helped India stayed polio-free for more than two years and the lessons for solving other human welfare issues worldwide. Impatient Optimists is the name of the blog (www.impatientoptimists.org) of the influential Bill & Melinda Gates Foundation featuring the work and stories of the people working every day to help alleviate suffering, poverty, diseases, promote health, and to help students realize his or her full potential. These are all urgent problems requiring innovative solutions that have long-term investment implications which we will discuss shortly with the story of the Indian compounder Lupin (NSE: Lupin, MV $6.5 billion) and how its focus in the neglected niche of anti-TB drugs transformed the firm into India’s third-most valuable listed pharmaceutical firm, compounding shareholders’ wealth by over 138-fold. Bill Gates wrote in a blog post on Dec 23 about a summary of “Good News You Might Have Missed in 2013” that include how we got smarter and faster at fighting polio and that funding commitment to the Global Fund to fight TB and malaria was renewed. Gates also shared a tweet expressing his excitement on what he is looking forward to seeing in 2014: a new vaccine called pentavalent that can prevent five diseases.
Lupin (NSE: LUPIN) – Stock Price Performance, 1995-2013
To read the exclusive article to find out more about the story of Lupin, of Australia’s CSL which is up 85-fold to $29 billion and how value investors can potentially gaze at the next Lupin/CSL, please visit:
- Impatient Optimists Vs Value Investors in the New Year 2014: The Billion Dollar Stories of Bill-Melinda and Lupin, Dec 27, 2013 (Moat Report Asia, BeyondProxy)