December 3, 2017
December 3, 2017


Do you have any strong feelings on the euro, yen, dollar or any major currency beside the tugrik? One of the things I am trying to understand is what currency levels are in the best interest of each of the major issuers (or in the case of the euro, countries). Do you believe the Japanese really want a lower yen, given its aging population and need to import raw materials? Do you believe the piigs want a lower euro, given their inability to compete within Europe? Lastly, what do you believe China wants in terms of these currency levels, and do you think ultimately they will come to the rescue of Europe as a cost of doing business to keep the world economy afloat?

Sorry, there are just too many parts to this question. I think most of these currencies are just awful. The Mongolian Tugrik is the least bad out of the many options I have seen–at the very least, they pay you well to own it–which is more than you can say for most other currencies. EUR is probably going to be better than most as they will eventually kick out the bad players. EUR also isn’t the USD which is probably the most toxic of the many currencies you have mentioned. What will China do? I just don’t know. I would look to RUB as another viable currency to consider. Remember, most currencies (think AUD) are priced for perfection, RUB still isn’t. How about gold? That is still my favorite currency.

What is the name of the Mongolian company paying 18%

Tavan Tolgoi. The ticker is TTL in Mongolia. Please do your own due diligence however. There are no audited financials so I cannot really mention much about it other than that the dividend continues to grow and I generally find dividends more accurate than earnings anyway. Because of the lack of information, this is an unusually small position for me. I have also heard rumors that the reserve life is less than 10 years. Then again, without published data, that is also just speculation as well. What I wanted to point out was how cheap companies are in Mongolia, not really one specific one. This is the largest publicly traded company in the country–imagine the valuations of the smaller and less liquid ones.

hi Kuppy, can u kindly update your view on fx? why u picked nzd in your bkt of favorite currencies before and any target level? do u think aud is expensive (market may worry more about china hard landing? ) and any view on SGD pls ? thx in advance.

I should probably mention that I am no expert on FX. I’ve had some decent success at FX over the past few years and most of it is based on two principles–is it cheap to buy dinner and drinks? Is the government doing the right things long term? When these line up, I’m a buyer. I buy for the long term and try not to time the small moves. Generally, travelling around gives me more of a feel than any government data. With that out of the way, I like NZD. When the world was near collapse in 2008, New Zealand was the only country that I know of which lowered the top income tax rate. The economy is based on protein (which i’m very bullish on) and I felt that it was pretty cheap when I was there last year at roughly the same price level. It sure is better than AUD which I think has some more serious issues–especially from current prices. From my knowlege, SGD is just a collection of other currencies. I would rather choose the good/bad ones myself. Of course, Singapore is one of the best run countries–if not THE BEST.

Buffet never pays a dividend; he prefers reinvesting in his own good ideas to creating a tax liability for shareholders (and protecting his snowball from melting). Do you agree with his approach?

There is no perfect capital structure. What works for Buffet does not work for other companies.

I was wondering if you had come up with any other ideas in the last few months related to growing consumer demand in China (aside from toilet paper). Thanks.


I’m not a mining expert; far from it in fact.
Can you provide a rough indication of the consequences of AAG not getting its community agreements signed by Q2 ’11?
In these situations, can mining companies continue to negotiate (i.e. is the process delayed)? Or does a no really mean no? If AAG is unsuccessful, what other options are available to management?
Are there any example companies you are aware of which have fallen at this stage?

The company will keep pushing on the agreements until they either have them or give up trying. I still am optimistic that they get them. I don’t think the company has gotten a “no.”
They just havne’t gotten a “yes.” Mgmt has no other options. Plenty of companies have failed to get their community agreements in order. It’s why mining is all risk and the reason why AAG trades at a tiny fraction of the deposit’s NPV. There are lots of risks here. As the company eliminates risks, the value should accrete to NPV.

Hi Kuppy,
Looks like the japanese market is very cheap at the moment, it is also been in 20 years bear market.
What is your view for japan?

For my entire career, capital has gone to Japan to die. I don’t see anything that would make me second guess that concept….. You pay up for good businesses and cheap assets tend to get even cheaper.

If you were to invest for your childs future (assuming you have a child), and you could buy 500 to 1000 shares, what two or three stocks would you put away with the hope and expectation of substantial appreciation? Knowing that any investment could turn out not as expected. Thanks.

I really cannot answer that question. People who claim that you can invest for the next decade without making changes are mistaken. Things change. I have a lot of confidence that if you buy an ounce of gold, it will still be an ounce of gold. Outside of that, I really don’t know what the future brings…