Singapore Media Watch

Wednesday, November 29, 2006

Your Views: How will GIC/Temasek/CPF members' returns compare with Google shares 10 - 20 years from today, 28 Nov 2006?

Recently, Temasek claimed they achieved annualised returns of some 18% p.a over 30 years while GIC claimed returns of some 8 - 9% p.a. over 25 years. However, CPF members' funds have been getting a paltry 1 to 2% p.a.and are now earning 2.5% p.a. on the Ordinary Account.

To illustrate how bad the returns are, I shall venture into buying Google shares today (28 Nov 2006) at the price of about US$485 per share.

With S$100,000, I will get 133 Google shares.

(I would have bought another 133 Google shares (amounting to S$100,000 of my CPF funds tied up with the CPF Board) if this were allowed, but unfortunately, this is not to be even if it is my very own money!)

Nonetheless, I have used cash to purchase the shares and we'll see how it will perform over the next 10 - 20 years since my investment horizon is long term, just like our very own GIC and/or Temasek.

I shall keep track of my investment and provide yearly updates to compare this investment with the 2.5% p.a. (or whatever the CPF Board pays periodically) to see how poorly CPF members are getting in returns on their investments.

If you look at Google, there are many similarities with Singapore:

1. Both aim to attract the best brains around;

2. Both are dealing with US$ billions of shareholder/stakeholder money: Google's valuation is in hundreds of billions US$, as is S'pore's reserves.

The major similarities may end here but there are major differences too:

a. Google's revenue base is global while Singapore's is still primarily local;

b. Google's potential shareholder base is in the billions while S'pore's is only 4m;

c. Google is the future while S'pore's old school.

d. Google's staff strength is lean but value-added (many PhDs) while S'pore's full of fat

e. Google's scholars and staff are enpowered, hence a thriving innovative culture (necessary in this rapidly changing world) while Singapore's system stifles innovation and creativity, turning its scholars into good administrators but lousy innovators.

...and the list goes on.....

Now you understand why I place my bet on Google?

Let's see where we are in 10 or even 20 years' time!



  • Impressive returns indeed! But by which accounting standards was those returns figure derived, and was it audited by a reputable independent third party?

    Remember that China Aviation Oil (prior to 2006) did make similar claim on exceptional performance [before mark-to-market]!

    By Anonymous Anonymous, at 3:19 PM  

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