New Year’s Greetings by Asian Patriarchs: Implications for Value Investors (Bamboo Innovator Insight)


  • One of our recent new subscribers last month is a Singapore-based billionaire who’s a secretive low-profile super value investor with his own multi-billion family office and we have another European-based multi-billion family office signing up too.
  • The Bamboo Innovator also met up with one of our Institutional Subscribers over  Saturday at the Detecting Accounting Frauds Ahead of the Investment Curve workshop (our 6th run of the workshop series) and he commented that while he has been cautious on the macro front, he finds the investment philosophy, the thinking process and the stock ideas highlighted in the monthly reports to be carefully researched and useful for his professional and personal growth as a value investor in taking high-conviction bets of wide-moat business models with peace of mind in an uncertain macro environment.
  • We are grateful to have the support of our subscribers and readers, an unusual and exceptional group who are not traders seeking short-term momentum, get-rich-quick, syndicates-driven ideas. We are especially grateful to our initial subscribers including the astute private investors Mr K (whose investments in Malaysia’s wide-moat innovator DKSH is up nearly 200% since March 2013) and Mr W. This reminds the Bamboo Innovator of what Harvard’s Michael Porter remarked in a recent interview last month:

“The concern is that it seems like the vast majority of energy and effort in investing has become about other things. It’s about momentum. It’s about program trading to capitalize on tiny movements in share prices. It’s about locating your servers closer to the exchange so you can trade in and out a little faster. I’m all for price discovery and liquidity, but improvements here have diminishing returns for fundamental wealth creation. One investor’s gain is often another investor’s loss.. I believe that the fundamental purpose of investing is to deploy capital to productive uses in the real economy. It’s the ability of businesses to use capital well to meet needs at a profit and grow that creates all the wealth in society. Directing capital to companies that can use it productively to create economic value, and thus wealth, is ultimately the most profound benefit investors can have on society.”

With knowledge, we have a choice to invest in the hardworking Asian entrepreneurs and capital allocators who are serious in building a wide-moat business. And we are intrinsically motivated to keep the flames burning to highlight these exceptional innovators for our subscribers who are just as unique!

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,

New Year’s Greetings by Asian Patriarchs: Implications for Value Investors

“Let us boldly throw away the business models and strategies of the past five and ten years,” said the 71-year-old Lee Kun-hee in a New Year message to Samsung Group’s 420,000 employees around the world. More than 60% of the profits of Samsung come from the flagship vehicle Samsung Electronics (005930 KS, MV $180bn), and 60% of Samsung Electronics’ profits come from mobile phones. “Let us move beyond our hardware-oriented processes and corporate culture. “Our leading businesses are constantly being challenged by competitors, while time is running out for our less dynamic businesses. It is therefore time to change once again. Economic slowdowns can present opportunities too. Let us see farther from a higher vantage point and create new technologies and markets. We must push ourselves to improve our business structure so that we can lead industry trends. We must innovate technologies that can help us compete in an uncertain future. And we must invest in systems to enhance our global management capabilities. As we move forward, we must resist complacency and thoughts of being good enough, as these will prevent us from becoming better. We should not be complacent and be armed again with a sense of crisis. We need to be a management that thrives on innovation, autonomy and creativity, that accepts challenge and is not afraid of failure. We must create an environment of ingenuity, where autonomy and creativity abound. There are social expectations on us. We will take another first step toward becoming an eternal, super first-class corporation that can’t be shaken by any obstacle. Once again, we will move strongly.” Like Nokia and Blackberry, Samsung was also disrupted by Apple but it managed to accomplish something the others did not — it bounced back, stronger than ever; to bend, and not break, like the bamboo.

New Year_Samsung

Top: On June 7, 1993, at an emergency executives meeting in Frankfurt, Germany, he told his assembled managers: “Change everything except your wife and children.” Bottom left: Samsung Electronics Chairman Lee Kun-hee walks into the Hotel Shilla in Seoul, holding hands with the hotel’s CEO and his daughter Boo-jin, to attend the 2014 New Year’s greeting ceremony; Bottom right: Hyundai Motor Group Chairman Chung Mong-koo walks into a hall to attend a New Year’s greeting ceremony at the group’s headquarters in Yangje-dong, Seoul.

“The economic condition is still difficult, especially with the strengthening of the won and the dragging out of the economic recovery,” said Koo Bon-moo, chairman of LG Group, as he asked each employee to be ready for the challenge of difficult times ahead. “We are in a crisis,” he said. “A leading firm could collapse due to a careless mistake.” LG Electronics (066570 KS, MV $10bn) has since lagged far behind Samsung Electronics. Hyundai Motor (005380 KS, MV $46bn) Chairman Chung Mong-koo, 75, also called for innovative approaches to tackle challenges. “The global economy has entered the era of low growth, which has led to a fiercer competition. Uncertainty has grown, due to technological conversions,” Chung said. “It is necessary to innovate the management system of global networks to obtain efficiency to cope with challenges.” Hyundai Group Chairwoman Hyun Jeong-eun said 2014 will be a turning point for the group. “We are in a time we can’t survive with old sales strategies, business models and management measures,” she said. “We should be reborn to carry out innovative strategies.” Hyundai Group has recently decided to sell all three of its financial affiliates – Hyundai Securities, Hyundai Savings Bank and Hyundai Asset Management – for $3.1 billion in a bid to avoid a liquidity crisis and lower its high debt ratio from nearly 500% to less than 300%. It also expects to raise $320 million by selling the Banyan Tree Hotel in Seoul which it acquired for $155 million in 2012. Hyundai Group is a conglomerate with businesses ranging from shipping and logistics to finance and machinery, but it does not include Hyundai Motor or Hyundai Heavy Industries (009540 KS, MV $18bn), which were spun off following the 1997/98 Asian Financial Crisis. Creditors have piled pressure on cash-strapped industrial conglomerates to accelerate restructuring, following a string of bankruptcies including STX, Tongyang and Woongjin.

The New Year message by these successful and crisis-aware Asian patriarchs and entrepreneurs has been sober. What are the implications for value investors? The increasing pace of business disruptive changes will accelerate the restructuring efforts of many Asian business groups to spin-off, divest, merge and acquire the different business parts to stay relevant and competitive, to make decisions and execute faster on business opportunities, and to aim for the highest valuation with an improved governance structure. Take for instance Korea’s internet giant NHN which announced the spin-off of its games division (Hangame, renamed NHN Entertainment) on 8 March 2013 from its search and mobile chatapp LINE business (Naver) with the actual split date on August 29. The rationale is for the separate entities to respond to challenges and opportunities more nimbly and quickly. Naver Corp (035420 KS, MV $21.8bn) is up 57% since the split as shown in the price chart, compared to a flat Kospi index over the same corresponding period. Understanding the company’s motivations for restructuring is critical to provide clues to the future values of new and existing entities.


To read the exclusive article in full to find out more about how restructuring aimed at improving corporate governance will be a major investment theme in Korea and Asia in 2014, please visit:

New Year


For teaching us that falling only makes us stronger. For giving us the encouragement to try again. Thank you, Mom; P&G Made An Awesome Sequel To Its Tearjerker ‘Thank You, Mom’ Ad From The 2012 Olympics

P&G Made An Awesome Sequel To Its Tearjerker ‘Thank You, Mom’ Ad From The 2012 Olympics


Olympic athletes not only represent their countries — they also represent their families. Last year, consumer goods giant P&G saw the potential in this idea, and created the “Thank You, Mom” campaign for the 2012 London Olympics. The commercial “Best Job” offered a poignant look at how the mothers of Olympic athletes assisted their children every step of the way from childhood to greatness. It became a hit among consumers and critics alike. The ad agency Wieden + Kennedy produced the commercial, and has released a sequel for February’s Sochi Winter Olympics. Incredible balance is a common trait among every winter Olympian, whether their sport is skiing, snowboarding, skating, or hockey. “Pick Them Back Up” shows how the moms of athletes like gold medalists Lindsey Vonn and Evan Lysacek were always there to do just that:

As part of the campaign, P&G is sending $1,000 Visa gift cards to each of the 357 Olympic athletes’ moms, intended to help them travel to Sochi. Last year’s “Best Job” ad won the Emmy for Best Primetime Commercial, as well as two Gold Lions and three Silver Lions at Cannes.

信。约 – 唐山到南洋 The Journey: A Voyage; 人生再多波折 逆风而上 只要有希望 就挺起胸膛 那是因为有爱 一直在身旁

信。约 – 唐山到南洋 The Journey: A Voyage

主题曲:《家乡》作词:乐声 主唱:沈志豪

惜别了家乡 远渡过海洋
沿途风雨险阻 往心里放
看日月交换 欣喜和惆怅
眼睛就算迷惘 汗水会擦亮

收拾起行囊 把思念带上
人生再多波折 逆风而上
看笑泪交织 聚散多无常
只要有希望 就挺起胸膛

这天地茫茫 何处是我家乡
要让命运看我 从来不投降
荆棘满身缠 挡不住渴望
一旦认定了 决不回头望

这天地茫茫 何处是我家乡
相信总有一天 会云开雾散
不朽的故事 岁月会流传
那是因为有爱 一直在身旁

这里有希望 这就是家乡

‘Identity-Based Goals’ Are The Only Way To Make Good Habits Last

‘Identity-Based Goals’ Are The Only Way To Make Good Habits Last

JAN. 5, 2014, 1:43 PM 7,465 1


If you want to get in shape, you have to believe you’re the type of person who never misses a workout. Change is hard. You’ve probably noticed that. We all want to become better people — stronger and healthier, more creative and more skilled, a better friend or family member. But even if we get really inspired and start doing things better, it’s tough to actually stick to new behaviors. It’s more likely that this time next year you’ll be doing the same thing than performing a new habit with ease. Why is that? And is there anything you can do to make change easier? Read more of this post

The Dark Side of Emotional Intelligence; In some jobs, being in touch with emotions is essential. In others, it seems to be a detriment. And like any skill, being able to read people can be used for good or evil

The Dark Side of Emotional Intelligence

In some jobs, being in touch with emotions is essential. In others, it seems to be a detriment. And like any skill, being able to read people can be used for good or evil.

By Adam Grant

Some of the greatest moments in human history were fueled by emotional intelligence. When Martin Luther King, Jr. presented his dream, he chose language that would stir the hearts of his audience. “Instead of honoring this sacred obligation” to liberty, King thundered, “American has given the Negro people a bad check.” He promised that a land “sweltering with the heat of oppression” could be “transformed into an oasis of freedom and justice,” and envisioned a future in which “on the red hills of Georgia sons of former slaves and the sons of former slave-owners will be able to sit down together at the table of brotherhood.” Read more of this post

24 Charts Of Leadership Styles Around The World

24 Charts Of Leadership Styles Around The World


JAN. 6, 2014, 9:45 AM 2,972 2

leadership charts layout_02

Different cultures can have radically different leadership styles, and international organizations would do well to understand them. British linguist Richard D. Lewis charted these differences in his book “When Cultures Collide,” first published in 1996 and now in its third edition, and he teaches these insights in seminars with major corporate clients. Read more of this post

Can Upward Mobility Cost You Your Health? Some respond by doubling down on character strengths that have served them well, cultivating an even more determined persistence to succeed. This strategy, however, can backfire when it comes to health.

JANUARY 4, 2014, 2:30 PM

Can Upward Mobility Cost You Your Health?


Americans love a good rags-to-riches story. Even in an age of soaring inequality, we like to think that people can still make it big here if they work hard and stay out of trouble. The socioeconomic reality of most of the last four decades — stagnant wages, soaring income and wealth inequality, and reduced equality of opportunity — have dented, but not destroyed, the appeal of the American dream. Read more of this post

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