Sunday, January 7, 2024

Books Read in 2023

In my research and investing, I stress three things: people, structure, and value.  I look for companies controlled and managed by quality people, have corporate structures that align minority and majority shareholder interests, and trade at valuations that are below fair value, if not outright cheap.

One of my more popular posts was a summary of books I read the previous year. This is a similar post that provides brief summaries of books read in 2023. Many deserve longer reviews, but I like to read more than write these reviews, so these short blurbs will have to suffice.

Entangled Life - How Fungi Make Our Worlds, Change Our Minds & Shape Our Futures; Merlin Sheldrake  Put first for a reason. It is one of the few nonfiction books I could barely put down. I was skeptical when my brother recommended it, but I was wrong. Mushrooms, lichen, and a whole lot more are covered in this easy-to-read and wonderfully researched book. How they help trees communicate, break down dead organisms, maybe the origin of life on earth, and much more.  Don't miss the 50 pages of notes at the end that are equally interesting and shed even more insight into this subject. Highly recommended. 

The Muslims of Sri Lanka, One-Thousand Years of Ethnic Harmony 900-1915; Lorna Dewaraja  I became interested in this minority group after meeting several Muslim businesspeople in Colombo, and I got a lot out of this easy and insightful read on one of Sri Lanka's most important religious groups. While focusing on Muslim and Sinhalese relations, it provides insight into Sri Lankan history, society, and Buddhist ideals of tolerance and accommodation. It also reaffirms trade as being better than politics to bring people together, 'Unlike in India where Islam made its entry as a conquering proselytizing force, in Sri Lanka it appeared as the personal faith of a peaceful trading people who in the course of time earned the goodwill, confidence, and trust of the indigenous people.'   Kudos to the author and publisher for producing this fine book, '...historians have traditionally been attracted by wars and rebellions whereas the peaceful co-existence of groups of people over long periods tends to be overlooked.' 

Cairo, A Cultural and Literary History; Andrew Beattie A well-organized and very readable history of one of the world's oldest cities. Breaks Cairo's history into five eras with good details on each - Pharaonic, Christian and Jewish, Islamic, Colonial, and modern. Good reminder of the central role that the city and Egypt played in the earliest days of human civilization and Abrahamic religions (Jewish, Christian, Muslim). Highly recommended.

Banking and Business in Sri Lanka, From a Plantation to a Diversified Economy; V.S. Nadarajah  Published in 2010, I got a lot out of this short book. It’s a concise history and summary of modern Sri Lanka's economy, politics, major industries, companies, and financial institutions. Highly recommended for those investing or doing business in Sri Lanka. 

When Money Dies, The Nightmare of Deficit Spending, Devaluation and Hyperinflation in Weimar Germany; Adam Fergusson  Blow-by-blow history of early 1920's German hyperinflationary period, which helped to pave the way for the Nazis. It's a depressing yet gripping read. Recommended, especially for those investing and doing business in high-inflation countries such as Argentina, Egypt, and Turkey.

The Futures, The Rise of the Spectacular and the Origins of the World's Biggest Markets; Emily Lambert  Readable history of the Chicago Mercantile Exchange and the Chicago Board of Trade. Their competitiveness and flexibility ultimately created the world's largest commodity exchange. 

Governing the Ungovernable, Institutional Reforms for Democratic Governance; Ishrat Husain Written by the former governor of the country's central bank, the State Bank of Pakistan, this is a good summary of the key institutions in Pakistan and why their weakness is preventing the country from advancing further and faster. The author notes that the military is the one institution that's professional and well-organized, which means it will likely continue to rule Pakistan somehow. Good read on understanding the world's fifth-largest country by population. 

Fragile Cargo; Adam Brooks An exciting history of saving a large portion of China's imperial art collection during a chaotic period of rebellions, warlords, colonialism, civil war, clashing ideologies, and World War II. Its back cover blurb sums up the book well, "16 Years, 15,000 Miles, 250,000 Works of Art".  The author's first non-fiction book makes this history book very readable. Hollywood should make it into a movie.

One Up on Wall Street; Peter Lynch I finally got around to reading this investment classic. It is good and highly readable, with insights for professional and non-professional investors. I like the author’s focus on companies rather than the market, his preference for long-term fundamentals over short-term trading, and his contrarian mindset. Full of great quotes and wisdom. "The trick is not to learn to trust your gut feelings, but rather discipline yourself to ignore them'. 'Pick the right stocks, and the market will take care of itself,' 'Several of my favorite ten baggers made their biggest moves during bad markets.' 

The Struggle for Egypt; From Nasser To Tahrir Square; Steven A. CookThe first 2/3rds provide a decent enough history of modern Egypt. It reconfirmed my impression of the country after a trip to Alexandria...not much has changed since the end of the British Era. "It was a system founded in the ideological and power politics of the early 1950s when the Free Officers discovered they could dispose of their opponents through non-democratic laws, rules, regulations, and decrees." 

When McKinsey Comes to Town; Walt Bogdanich and Michael Forsythe   Easy to read book on helping the rich and powerful to make even more by gaming people and the system. If there’s a global elite, McKinsey is their champion. The chapter on how they helped pump up opioid sales in the US is particularly alarming and depressing. McKinsey management says they'll do better, but ultimately, they shill for money. Cronyism Western style

Midnight in Cairo, The Female Stars of Egypt's Roaring '20s; Raphael Cormack  Interesting summary of female stage actors and personalities when Cairo and Alexandria were more international than today and the center of the Arab-speaking world. It is a good reminder that Egypt is more than just pyramids and ancient Pharaonic artifacts. It's a bit of a narrow topic for me, though. 

The Story of Ceylon Teamaker; Merrill J. Fernando Ok autobiography of one of Sri Lanka's wealthiest people.  Mr. Fernando created and built the country's best-known brand, Dilmah Tea. Unlike blended lower-quality bulk products, Dilmah produces and sells high-quality single-origin Sri Lankan tea. He was obsessed with keeping the value-adding processes like blending, packaging, and marketing within Sri Lanka. Mr. Fernando passed soon after the book's publication in May 2023 at age 97.  





Thursday, August 24, 2023

Greek Week Updated. An 11-Year Review

In my research and investing I stress three things: people, structure, and value.  I look for companies that are controlled and managed by quality people, have corporate structures that align minority and majority shareholder interests and trade at valuations that are below fair value if not outright cheap. Some eleven years and change ago I travelled to Greece, invested in a handful of Greek stocks and posted about the experience (see here).  This post is a follow-up to the trip.

At the time Greece’s financial and economic meltdown was headline news. Images of riots in Athens filled TV screens while news flow centered on its overextended banks, economic decline and possible EU succession. It seemed like a vicious cycle of bad news reports pushing the market down, which caused further panic, which pushed the market down, etc.

By the time I went in late June 2012 Greece’s headline index, the Greek ATHEX Composite, had fallen by nearly 89% in USD from its November 2007 high; and was down about 53% in the previous 12-months.  In other words, it was a very ugly environment.

Been here before I started to look at Greek equities because it reminded me of the 1997/98 Asian financial crisis. In particular Indonesia, where I first started looking at equities in 1989. The crisis in Asia turned into what was possibly the best time ever to buy Indonesian stocks. Like Greece in 2012, stock valuations were very inexpensive, there was very little market activity, and news flow was dreadful with each article seemingly painting a bleaker and bleaker picture as time went on.  

Over the next few decades, Indonesian equities, particularly those of quality companies, had a stunning run. From its 1998 bottom, the headline JSX index increased by over 14x over the next ten years. Quality companies did better. Some 8% of Indonesia’s listed companies went on to become USD 100-baggers. The blue chip ‘big’ cap stock Astra International was up over 200x (see here).

Greek portfolio My July 2012 trip to Greece was time and money well spent. It would have been easier and far less costly to just invest in the US listed Greek ETF (GREK) or the two USD listed ADRs, than to spend 10-days in Athens visiting companies and talking to anybody and everybody who could tell me about the background and reputation of Greek companies and business families.

The methodology for selecting stocks is the same I use currently. I buy stocks based on the three key criteria stated in the first paragraph of this and most of my other posts. Good people, alignment of interests between minority and controlling shareholders, and generational low valuations. At the time I went, Greece was the world’s least expensive market trading at 3.6x its last ten-years inflation adjusted PE ratio. At these levels, and with all the negative news, just about everything was value so I could concentrate on quality (people and structure).

I invested in six stocks after my trip. They were Jumbo (stock symbol BELA), Public Power Corporation (PPC), OPAP–Greek Organisation of Football Prognostics (OPAP), Motor Oil Hellas (MOH), Hellenic Exchanges (EXAE), and Folli Follie (FFGRP). I dabbled in others, but this was my core long-term portfolio. They were initiated at equal weights.

    Jumbo is a retail chain of toy stores that also sells other household items. It’s family founded and still run and managed by its biggest shareholder and founder, Apostolos Vakakis (

   Public Power Corporation, now known as the PPC Group, is Greece’s leading electricity producer and supplier. The government has been divesting since 2016, but retains a 34.1% stake (

    OPAP is the largest gaming/betting company in Greece. In 2013 the Greek government sold its remaining stake to a private equity fund (

    Motor Oil Hellas is one of Greece’s largest oil refining and petrol retailers. It’s controlled by the Vardinogiannis family (

    Hellenic Exchanges, better known as the Athens Exchange Group, operates Greece’s stock exchange (

    Folli Follie is a retail chain of affordable luxury items such as jewelry, watches, handbags and other accessories. In 2018 it was revealed that the group’s management inflated sales and profits via fake documents with the founding and major shareholders, the Koutsolioutsos family, reaping the benefits (

Readers should note that while I initially bought the stocks above, I did not hold this portfolio over the last eleven years. Most of the money I earned from “Greek Week” was invested in a fund I started in 2017. It uses virtually the same methodology and process I used to select stocks in Greece and elsewhere. Buy quality companies (good controlling shareholders and aligned structures) during a crisis (value).

I do however want to know how my stock picks did over time and I thought readers could benefit from a long-term perspective. In other words, the stock picks are real but the returns are - unfortunately for me - hypothetical.

Decent returns despite a big mistake  As seen in the adjacent charts and graphs my six-stock Greek portfolio did pretty well. Based on just share prices alone, its 11-year CAGR was 14.9%, or a total increase of 360.3%. Not bad and better than the S&P500 over the same period of time, which had a CAGR of 11.5%. 

Note that this includes 130bp per annum of transactions and custody fees. This is what I paid in the most recent quarter on my last remaining holding at my Greek broker. The high percentage is due to the small amount remaining in the account and the fixed/minimum payment for custody, VAT, and transaction fees such as receiving and reinvesting dividends.  Without these charges the six-stock portfolio's CAGR increases to 15.7%. 

Please note that the remainder of this post will disregard custody and other fees.

Including dividends received, and factoring in Greece’s 15% dividend withholding tax, the hypothetical return increases to 491.3%, with a CAGR of 17.5%. Another way to put this is that sticking with the core six stock portfolio over the last eleven years, and just sitting back and collecting dividends, the initial USD10,000 invested turned into USD59,100.

Reinvesting after-tax dividends further boosted returns. About 140 basis points per annum could have been added to the returns by simply collecting after-tax dividends and buying stock in the same company after the dividends were received. While 140bp doesn’t seem like a lot, over 11-years this amounts to USD8,043 or 80% of our original investment. The CAGR from this simple after-tax dividend reinvestment strategy would have been 18.9%, or USD67,100. 

Note that these calculated returns include a 100% loss in one of the six stocks I selected. Folli Follie turned out to be cooking the books and its price crashed to virtually zero when the fraud was exposed in 2018. The CAGR return of a five-stock portfolio, without Folli Follie, would have been 20.9%, for a hypothetical total of USD80,600.

Note that in all scenarios, the core portfolio return was much better than US listed Greek ETF, GREK, which is not too far from where it was eleven years ago. Its lethargic performance is mostly due to the abysmal showing of Greek banks, which were a big proportion of the ETF and still are at about 30%.

In retrospect, the best decision I made was not investing in Greek banks. Banks are inherently leveraged and when things go bad at banks, they really go bad. This happened in Greece with the banks going through several recapitalizations. Stock prices of the big four Greek banks fell by over 99% between then and now.

Coulda, shoulda done better While the return of my core portfolio was not bad, it could have been better. The best performing holding, Jumbo, was just the 15th best performing Greek stock over the last eleven years. The best, and one that I was a aware of at the time, was Epsilon Net, a software company whose share price is up nearly 200x in the last eleven years. Another IT company, Quest Holdings, is the second best performing stock in Greece having risen by 45x in the last eleven years. Other tech companies dominate the list of the ten best performing stocks over the last ten years. The growth in technology over the last eleven years did not pass Greece by. Nor did it pass over more savvy investors than myself. 

Contrast to Turkey. As noted in the original blog post the neighboring Turkish market was hitting all time highs when I was in Greece in 2012. I didn’t go there, but suspect the mood in Istanbul was much better than the depressed mood in Athens at the time. I don’t remember anybody recommending Turkish stocks, but I distinctly remember that almost nobody was recommending Greek stocks. However, things go in cycles and this certainly happened in both countries. Over the next eleven years the Turkish market, as measured by their headline BIST100 index fell 28.9%.


  • People, Structure, Value. A key takeaway from the trip and this review is that my core investment strategy works.  While this is just one example, I’ve used the same strategy elsewhere and it appears to be effective, with my handpicked portfolios outperforming most comparable headline indexes and ETFs.
  • Choose a good time frame. One reason the portfolio looks good is that Greek stocks have had a good run recently.  The Athens index has been one of the world’s best, rising by 44% so far this year and 58% in the last 12-months alone. If we had done the same exercise one year ago, the portfolio’s dividend reinvested CAGR would have been just 12.9% instead of 18.9%. Holding tight in just the last year added USD33,570 to our hypothetical returns.
  • Hold long and strong.  Psychologically, it would have been hard to hold Greek stocks over the last eleven years. During this time there were numerous protests, government changes, and a tremendous number of articles and news shows about how poor and hopeless the situation in Greece had become. In 2013 a big index provider relegated Greece downward from a developed to an emerging market. Investors had to put up with four years of capital controls which made it near impossible to get money out of Greece (June 2015 to Aug 2019). As can be seen in the charts, after a very nice two-year run, the next seven years were humbling with most stock prices below their recent high water mark.
  • Dividends matter, especially if they’re reinvested. As noted in the text above, dividends reinvested increased the returns. Shares bought with dividends this year, will earn even more dividends next year, and so on, and so on. In the last eleven years after-tax dividends received from Jumbo and OPAP were 171% and 193% of each stock’s respective purchase price.
  • Don’t be a dividend hog. The best return of the six stock portfolio, PPC, did not pay any dividends. This is ironic as typically utilities - such as PPC - are bought for their steady yield. This is what I call a ‘double negative’.  An out of favor sector/stock in and out-of-favor country.  Who would ever want to buy a government owned, non-dividend paying utility in a seemingly bankrupt country going through a financial crisis?? It was amazingly cheap on a 10-year average PE and DY; and was also very inexpensive on a market cap to power supply capacity. Double-negatives don’t always work – they can and do go bankrupt or get delisted – but when they do it can be very sweet.
  • Be cognizant of global trends. Of the top ten performing stocks in Greece in the last eleven years, half were IT or technology related. Globally this has been one of the best performing sectors and so it was in Greece.
  • Don’t buy frauds. Not much to add here. I made decent money on Folli Follie as I sold a year or so before the fraud was exposed. It’s good to be lucky, but this was making money for the wrong reason. I sold for two reasons. First, was the lack of people in their stores. Second, the great John Hempton (see here) thankfully noted that Folli Follie was a fraud as their numbers didn’t add up.
  • Avoid banks. As noted above the stock prices of Greek banks were abysmal over the last 11-years. Please see this Financial Times article which does a much better job than I in explaining why banks are very risky investments (link is here).

15 July 2012 - 15July 2023
NameTotal ReturnCAGRAsset Value 15 July 2023 ($10,000 start)
Portfolio With Fees (Without Dividends)360.3%14.9%46,031
Portfolio (Without Dividends)396.2%15.7%49,619
Portfolio (With Dividends)491.3%17.5%59,132
Portfolio (With Dividends Reinvested)571.8%18.9%67,175
Portfolio Excluding Folli Follie (With Dividends Reinvested)706.1%20.9%80,610
S&P 500232.0%11.5%33,200
BIST100 (Turkish Headline Index)-28.9%-3.1%7,110
Greece Hellenic Petroleum
(Now Hellenic Energy Corp.)
Lamda Development371.2%19.4%47,120
Alpha Services & Holdings-95.2%-28.0%477
National Bank of Greece-99.5%-39.3%47
Eurobank Ergasias Services & Holdings-99.8%-45.5%23
Piraeus Financial Holdings-100.0%-60.4%1
CAGRCAGR with dividends reinvestedTotal Dividends Received/ Initial Investment
Public Power Corporation23.4%23.7%3.7%
Motor Oil Hellas14.4%18.1%126.3%
Hellenic Exchange7.3%10.7%70.0%
Folli Follie-100.0%-100.0%12.9%

Many thanks to Smith Lee ChengChung (李正中) for crunching the numbers, preparing the visuals and help with additional research. Smith will be a year four student at National Taiwan Normal University this Fall where he’s an English major.

Disclosure: The above is written for entertainment purposes only and should not be relied upon for anything at all, especially financial and investment advice. One should assume the authors have financial interest in one or all of the companies mentioned in this post.

Thursday, March 23, 2023

Books Read in 2022

In my research and investing I stress three things: people, structure, and value.  I look for companies that are controlled and managed by quality people, have corporate structures that align minority and majority shareholder interests and trade at valuations that are below fair value if not outright cheap.

One thing I like about my "job" is that I can read a lot and claim its "work". I put "job" and "work" in quotes as looking at new countries, industries and companies is very interesting. It certainly doesn't seem like "work" most of the time.

Originally posted on Twitter, below are the books I read in 2022. I was hoping to write more detailed reviews on several of these, but did not have time to do them justice, so smaller comments will have to suffice. Original Twitter post is here.

Black Fortunes: The Story of the First Six African Americans Who Survived Slavery and Became Millionaires; Shomari Wills  A great reminder that from adversity comes greatness. Very well written. Put first on this list for a reason. Highly recommended.

Lost Enlightenment: Central Asia's Golden Age From the Arab Conquest to Tamerlane; S. Frederick Starr   Eye-opening and crazy good book about Central Asia and the key role it played in preserving, inventing, improvising and improving just about everything. Government, Mathematics, Philosophy, Religion, Engineering, etc. Highly recommended.

The Model, 37 years investing in Asian equities; Richard H. Lawrence, Jr. with Contributions by James Squire, Leonie Foong and Wiliam Leung  I'm a big fan of Overlook, the investment firm that Mr. Lawrence founded. Great insight from him and his team. Must read for investors.

Nationalism in Sri Lanka; Srikantha Nadarajah I got a lot out of this small, easy to read book. Good post-independence history and insight into Sri Lankan politics and its underlying economic, linguistic and ethnic situation. Highly recommended for those interested in this small, yet important country.

The World for Sale; Javier Blas & Jack Farchy Very readable book about commodity traders. Recommended.

Flash Boys; Michael Lewis  Easy read from a great author. Makes you hate Wall Street and Corporate Greed. Who doesn't?  I suspect that nothing's changed since its publication. Institutionalized frontrunning. Rent-seeking American style.

Sir Robert Ho Tung, Public Figure, Private Man; May Holdsworth  Rushed out to buy this one. Ok biography of his later life. Some insight into his business dealings.  I'm still looking for a good book on his early life and wealth accumulation. 

The Evolution of Technical Analysis, Financial Prediction from Babylon Tablets to Bloomberg Terminals; Andrew W. Lo and Jasmina Hasanhodzic  Andrew Lo is one of the few academics that I know of doing serious work on technical analysis. I'm a big fan of his. Not his strongest work, but there are moments of enlightening insight.

Hit Refresh, The Quest to Rediscover Microsoft's Soul and Imagine a Better Future for Everyone; Satya Nadella Last for a reason. There could be some great insight here, but it reads more like a marketing piece for the author and Microsoft.