This morning I added shares in COSCO Pacifc (HK:1199) to the portfolio. COSCO Pacifc is essentially a PRC port operator which also carries on a number of related businesses. The company is selling on a trailing PE and dividend yield of 8.9x and 4.5%. The company's history of paying dividends (annual and interim) is quite consistent and the balance sheet carries a reasonable level of indebtedness. Available information in container volumes for the year to August are encouraging.
I paid an average of HK$9.82 per share.
Wednesday, October 12, 2011
Monday, October 10, 2011
NWS Holdings purchased
This morning I added some shares in NWS Holdings Limited (HK:659) to the portfolio. NWS Holdings is a diversified conglomerate with its main businesses being toll roads/transport, water, waste management and miscellaneous services. The company is selling at a trailing PE of 7.6x and a trailing yield of 6.6%. The yield represents a pay out ratio of 50%, leaving plenty of profit being reinvested. The balance sheet is solid, with HK$4.5 billion in cash and net gearing of only 7% giving the company the flexibility to continuing expanding its businesses and to withstand adverse economic conditions.
I paid an average of HK$10.62 per share.
I paid an average of HK$10.62 per share.
Sunday, October 09, 2011
Book Review: The Upside of Irrationality
I purchased this book as in flight reading material for a recent business trip on the strength of a single question on the back cover:
"Why can paying high bonuses lead to lower productivity?"
I was also generally interested in the first part of Dan Ariely's book which deals with the unexpected ways in which we defy logic at work.
I found The Upside of Irrationality to be an engaging book that explained a number apparently irrational responses to various situations. The (simplified) answer to the issue of why large bonuses don't always produce better performance, and sometimes produce worse performance, is that the higher the stakes the more likely that the recipient of the bonus will succumb to pressure. Also, when as the stakes get higher, people (understandably) start spending more time thinking about their bonus than focusing on the task at hand. As an aside, I wouldn't have minded more space being devoted to what incentive schemes do tend to produce higher performance. The author does address the point but not in as much detail as he devotes to unsuccessful incentive structures.
While he book reads as a discrete list of issues where irrational human behavior is examined and explained rather than a single cohesive look at the subject, it remained an engaging and thought provoking read.
Recommended (although possibly not for people who's compensation includes a large bonus element).
"Why can paying high bonuses lead to lower productivity?"
I was also generally interested in the first part of Dan Ariely's book which deals with the unexpected ways in which we defy logic at work.
I found The Upside of Irrationality to be an engaging book that explained a number apparently irrational responses to various situations. The (simplified) answer to the issue of why large bonuses don't always produce better performance, and sometimes produce worse performance, is that the higher the stakes the more likely that the recipient of the bonus will succumb to pressure. Also, when as the stakes get higher, people (understandably) start spending more time thinking about their bonus than focusing on the task at hand. As an aside, I wouldn't have minded more space being devoted to what incentive schemes do tend to produce higher performance. The author does address the point but not in as much detail as he devotes to unsuccessful incentive structures.
While he book reads as a discrete list of issues where irrational human behavior is examined and explained rather than a single cohesive look at the subject, it remained an engaging and thought provoking read.
Recommended (although possibly not for people who's compensation includes a large bonus element).
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