As from April 2013 my Journey in Investing is to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

Since 2017 after retiring from full-time job as employee; I am moving towards Investing Nirvana - Freehold Investment Income for Life investing strategy where 100% of investment income from portfolio investment is cashed out to support household expenses i.e. not a single cent of re-investing!

Currently; it about 54% to destination!


Click to email CW8888 or Email ID : jacobng1@gmail.com



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This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

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Tuesday, 23 June 2020

SMOL: Trust But Verify??? (2)


Read? SMOL: Trust But Verify???

Read? Hin Leong forged documents to mislead banks, has 'no reasonable prospect of being restructured on its own': PwC


Evidence further suggests that Hin Leong may have fabricated fictitious derivatives gains and trading profits to conceal accumulated derivatives trading losses of about US$808 million over the past 10 years. “On this assumption, it follows that the cumulative overstatement of profit in the company’s financial statements in the past decade amounts to US$2.1 billion,” PWC wrote.

Hin Leong was audited by Deloitte & Touche. Deloitte said in April that it stands behind the quality of its work. Hin Leong is also under investigation by the police.

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Hin Leong's case reminded Uncle8888 of late Guru's wise words! 

Respect!

This was how late Guru would counter back and Uncle8888 learned something from him.

Trust; but You can't really verify!

Late Guru's counter argument.

We trust audited statements from the Big Four. Right?

But it doesn't mean auditors have verified there is no uncovered fakes or fraud! We have seen some audited and listed companies have been faking or fraud so well until one day they were uncovered and start failing. 

Trust is far more important than audited statements?

Have faith and trust your Gurus!

5 comments:

  1. Arthur Andersen & Enron & Worldcom

    E&Y & Wirecard & Luckin coffee

    Deloitte & Hin Leong

    KPMG & Carrilion UK

    PWC & AIG & Northern Rock UK

    What to do ... diversify & position sizing lorr.

    Or pray to tua pek kong LOL.

    ReplyDelete
    Replies
    1. Lol.... True... Or just keep money in cash... Maybe those with "weaker" balance sheet are more "honest" and conservative.

      I was told by a accountant trained friend and someone in the management that the books need not even be cooked or falsified to give an accurate picture

      Delete
    2. Same same but different for credit rating agencies?

      Delete
  2. CW,

    Well, so much for "superficial" fundamental investing...

    For eg, if someone tells me he earns more than $10K per month as a salesman selling home appliances on the selling floor in a shopping mall, I would smell something is "fishy".

    Of course can hit $10K and more, but not EVERY month. Once in a while during boom time Charlie sales periods believable. But EVERY month???

    Just like some years back a taxi driver boasted he can earn $6-7K per month easy... Straightaway kenna exposed by other fellow taxi drivers.


    Similarly, if you are working in an industry and the usual net profit margin is around 5-10%, and all of sudden this listed company says its making 30-40%...

    But if you outsider in that industry, how to do fundamental analysis if you can't read BEYOND the numbers?


    Of maybe do what Spur suggests instead?

    He must be a 4D player with his tua pek kong....

    I'm more a waterloo street Kwan Im Ma guy ;)

    LOL!

    ReplyDelete
  3. i take investing in stock market as part of life since day - naturally anything can happen.

    Once i have put my money in a stock = after that it is the same as putting my hand in the hand of the man who calm the sea.

    https://www.youtube.com/watch?v=SY-2XHqKGuw.

    Shalom.

    ReplyDelete

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