Tuesday, March 18, 2014

Olam: Retail Investors suckered again

I welcome ST willingness to have this story. Those of us more familiar with markets know that Temasek's investment in Olam was a mistake. In this article I read the suckers are the retail investors bidding the shares up. The convertible and debt buyers as expected were shrewder.

Olam has the potential to embarrass and my guess is that Temasek being bigger than the casino is fully capable of doubling down until it wins. Without the lifeline it offered earlier, Muddy Waters would have taken it straight to the cleaners.

Meanwhile I gathered that Olam's senior ranks are almost completely Indian. Well that is no good for diversity but what is truly terrible is the way they spend money. This is not difficult to find out. Just talk to some former secretaries.

I am often perplexed by Temasek's investments. Either they are geniuses or more likely they are cowboys with poor understanding of risk. They were lucky especially with the Chinese banks but we must be cognizant that over the long run you cannot escape mean reversion. If you are no good, the near term good luck only keep you for devastating bad luck down the road.

Two Ms separate GIC from Temasek. One has a method the other is just mad.


  1. for many it is insider trading, but for some it is never insider trading. That's life?

  2. More Goodyears?