Remember the Temasek-Berkshire comparison?
Update: WSJ is reporting on Berkshire’s released Q2 numbers here:
During the crisis, Buffett faced strong criticism for selling puts on stock indices[Link], writing an op-ed calling a buy on the market in Oct 2008[Link] and his purchase of Goldman preferreds. Critics said he lost his touch[ Has Warren Buffett Lost His Touch?]. They were all wrong. Buffett was right, right and right. Those big bets will give him the best quarter ever in at least 2 years.
‘[Buffett] has a different view. He has to give returns to his investors year by year. We don’t have to. We have to think in terms of the next 10, 20, 30 years. We are buying into something which we intend to keep for the next two, three decades and grow with them.’– MM Lee
MM Lee got it wrong. Buffett’s time horizon is actually forever – whatever he buys, he has the intention to keep them for as long as possible. What Buffett has to do is meet his shareholders ,20,000 of them face to face, every year at the Berkshire annual meeting and answer every single legitimate question they have which is something GIC does not do for its shareholders. Buffett publicly admits all his mistakes and take responsibility for them which is another thing the GIC has never done. All his investment moves are disclosed and that has never hurt his performance while GIC keeps many secrets claiming they will be disadvantaged if people knew what they have been doing. Berkshire is managed by a small group of people no more than the number for fingers you have on your hand while GIC has a staff size of 1000 and Temasek employs 300 people to give us sub-prime performance.
If you recall, not too long ago the state press compared Temasek’s performance to that of Berkshire Hathaway. Of course unlike Berkshire Temasek isn’t compelled by law to release quarterly figures. But given the recent press release by Temasek CEO Ho Ching, it doesn’t look likely that Temasek outperformed Berkshire to date.
One particularly frustrating thing about Temasek Holdings was that they don’t bother separating capital gains from state-transferred assets divestments from investment returns. This was an issue the foreign press brought up in a press conference Temasek held with the foreign media in Aug 2008:
Q (Bloomberg): What are your actual profit numbers, stripping out the divestments? Are you looking at a better year for core operations or have you been affected by the market, as you talked about the 7% returns?
Michael Dee: We do not specifically break the $18 billion down but we can say fairly clearly is that the operating performance of the portfolio companies has generally been very strong by looking at the underlying entities.
Without that breakdown it’s impossible to do a meaningful comparison or even a general assessment on the investment competence of Temasek Holdings. This is not something I forsee Temasek Holdings would disclose when Temasek Review 2009 is finally out.