Rough patches a time for managements to shine

I agree that investors should carefully evaluate and understand the information presented by listed companies ("Faltering S-chips need watchful eyes"; Nov 23).

However, I am concerned with how this investment habit is cultivated.

We must not let the past performance of S-chips hinder our judgment and bring natural justice into question.

There is often opportunity in adversity.

The key to understanding adversity is to be able to distinguish between operating decisions that add value and selective misrepresentation for personal gain.

If we remember that the share price is the present value of future cash flows, we would be looking at opportunity differently, with less bias.

It is unfortunate that economic slowdowns may be hard to predict. However, it is also an opportunity to observe management expertise.

One concern in the decision to participate in a particular capital market or not is whether the right measures have been applied in response to economic phenomena or in cultivating an economic future.

Thankfully, in Singapore, the fiscal regime has been responsive in keeping us resilient in tough times.

Elsewhere, the marketplace may require management to demonstrate their ability to make good operational decisions along with appropriate accounting policy choices that add value for investors in the longer term.

Alvin Tan Chiang Pern

A version of this article appeared in the print edition of The Straits Times on November 26, 2015, with the headline 'Rough patches a time for managements to shine'. Print Edition | Subscribe