NTU Prof shares his thoughts on Temasek investments

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An honorable member of the Coffee Shop Has Just Posted the Following:

Temasek is claiming not that they did a little better than every major stock market, and the Singaporean index, since 1974 but that they simple obliterated it. According to Temasek they beat indexes every year by a factor of about 2 to 1, which over 40 years adds up to Temasek beating global stock by a factor of nearly 20. This is truly astounding performance and Temasek should just start giving investment lessons to Warren Buffet and every other investor in the world.

The second major problem is the large public surpluses and investment capital from CPF that has flowed through the Singaporean public purse. Since 1974 Singapore in adding up operational government surpluses and investment capital from CPF, received more than $700 billion SGD in total yearly inflows. Temasek and GIC claim they have earned 16% in SGD terms and 7% in USD terms over the long run. Astoundingly, the Singapore balance sheet as of March 31, 2012 listed only $765 billion in assets.

The discrepancy between the financial assets Singapore has and should have based on the inflows it received, is enormous. If GIC and Temasek are earning what they are claiming, even after subtracting out currency losses and interest on CPF capital to savers, Singapore should have approximately double the financial assets it lists on its balance sheet. This is not unique financial theory but simply the laws of mathematics and the public data provided by the Singapore government. Surpluses do not disappear and investment capital from CPF has to go somewhere.

I am sure that Temasek senior management thinks I am a quack. However, this merely pushes me on because I know that they could prove me wrong and embarrass me easily by proving me wrong with minimal data releases. They have chosen not to because, as I strongly suspect, they know that the evidence supports my version of events, even if imperfectly, much more than their version. I have offered time and time again to publish a full retraction and apology to the Singaporean government, Temasek, and the Singaporean people if Temasek can provide data that proves I am wrong. They have not.

- http://www.baldingsworld.com/2014/03...rk-on-temasek/


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