Replies to post #2870 on Global Value Investing

[fat baboon]

Hello!

emailed you the interview - it's a fun read and i think there is a reference to the "create and expand a public company" desire which you mention that some of these business men have. the founder comes across as very hardworking, energetic, rational and family oriented although I also get a bit the impression of a man in a hurry willing to play a bit fast.

Sorry I wasn't so clear about my leverage question. I wasn't referring to what one sees - like the currency hedge, I was referring to what one doesn't see! My experience (limited) is that these cash heavy controlled companies often have liabilities at the founder holdco entity level, in this case probably Goodland. There is even mention of margining shares a number of times in the interview. Looked at from Goodland's bankers point of view Keck Seng is essentially a majority owned subsidiary. The NAV of Keck Seng is therefore margin-able at the Goodland holdco level.

So what you might say! After all if you're margined on your shares it isn't a liability I have to worry about, so we don't have to worry if the Keck Seng family have liabilities at the Goodland level. I'm not as worried in this case as I have been in the case with some others but I would be happier if Goodland wasn't directly shareholding in some of Keck Seng subs. Also it is something that I have learnt to look at as a bit of a red warning light.