Consolidated Annual Report 2008: Fill & Download for Free

The answer to this is a bit long. I have tried to give all the details so bear with me.Market is rising despite Covid-19 cases rising and shutdowns.On the news front there has been a lot of negativity with Corona cases rising from a few hundred in late March to more than 60,000, while international cases have increased more than 10x. There has been a lockdown which has shut the economic activity leaving states and center with very limited revenue. Still, equity markets have rallied since then which is baffling to most investors. Some of it was a short covering rally, but there is more to it. Before that let’s see how equity markets have fared in previous economic crisis.Source: Ambit ResearchIn the dot-com bubble and post 9/11 crisis, markets had a W-shaped recovery. While in the 2008 financial crisis (which was more severe than the dot-com bubble crisis as globally financial institutions had collapsed and there were massive layoffs), market made a sort of U-shaped recovery. Ideally it should have been the opposite, but as we can see that was not the case. Let’s observe the 2008-10 financial crisis: The first phase was the capitulation phase where all the bad news starting with Lehman default came, and global markets were in a free fall (Indian benchmark indices declined more than 60%). The second phase was the consolidation phase where various central banks and governments came out with monetary and fiscal stimulus. In the US, to stimulate the economy, in early 2009, Congress passed the $787 billion American Recovery and Reinvestment Act, a temporary stimulus that included $288 billion in tax cuts and benefits and more than $150 billion for sectors such as education, energy, and transportation. The third phase was the re-inflation phase where markets picked up ahead of pick up ahead of any pick-up in economic numbers (sounds like Deja-Vu, doesn’t it?)One thing to realize is that globally markets are moving in tandem. Indian markets are replicating what US markets are doing (and more so because the US is deploying so much liquidity - see below) which is bringing liquidity to the Indian markets as well. Now, let’s see what happened in the last few weeks and what has led to the rise in the market.1. Fiscal and Monetary Stimulus: Over the last several weeks, global central banks (like US Federal Reserve, RBI, ECB, Bank of England) have shown that they will go to unprecedented lengths to stimulate the economy and prevent further market disruption. Those signals have, in turn, stabilized stocks and allowed them to retrace a significant chunk of their post-coronavirus loss. Put simply, the Fed has been indirectly backstopping the stock market by reducing investor worries around how much the coronavirus lockdown will hurt corporate profits and strain outstanding debt. These measures are much bigger than what was there in 2008. In 2008 it was a limited response, but here it is unlimited. In 2008, they only bought investment grade bonds but now they are buying junk bonds and even ETF (this level of monetary support is unprecedented). ECB, Bank of England, Japan and China have introduced similar measures. Hence a part of the reason why are stocks soaring as the economy is on a shaky ground? Thank the Fed.2. A wave of relief rushed through as Italy and Spain, the highly affected countries, reported slowing of new infections and also reported lesser number of deaths per day. However, there are pockets of concerns such as the US and India.3. Crude decline: The crude oil prices have fallen to $ 21 per/barrel. Every drop in prices by one dollar gives us an advantage of $1.5 billion. We are looking at a gain of $ 40-45 billion to the economy due to this. However, this is also a slight negative as global trade declines when crude prices go down. And India’s exports are thrice the amount of crude we import.4. Monetary stimulus by RBI although there has not been much to see on fiscal response.5. Globally economies have started to open up although in a slow manner, which is the case with the west and India.6. Foreign Investments: The current crisis puts China is a very bad spot. Things were anyways gloomy for them in terms of manufacturers considering a move outside of China. This crisis has accentuated the will of manufacturers moving outside of China in order to de-risk their business model. If you read the annual reports, a lot of Fortune 500 companies have mentioned in these reports that they plan to move outside of China to India, Vietnam, Mexico, Thailand, Indonesia etc. The countries other than India are not big in size to absorb if there is a sizable movement from China. Besides, as you would have read in a lot of newspaper articles, that Government of India is taking this opportunity very seriously. One report mentioned India is considering allotting land size double that of Luxembourg for companies moving outside of China. Japan is giving stimulus to companies to move outside of China. If we are able to get the FDI investments, our growth will be sorted for the next couple of decades. Let’s take an example of Samsung: they have $10bn investment in India. The same Samsung has a $64bn investment in a small country like Vietnam and contributes ~24% to Vietnam’s GDP. Similar FDI investments have made Vietnam a miracle economy.What are asset managers thinking?The market is working with a thesis of decline in the number of cases gradually, although with post-corona world to be slightly different than the ones previously. Smart money is working with the thesis that operating earnings of 2020 will be zero. They are looking at stock and asset prices based on 2021 and 2022 financials when the recovery happens and hence they are buying stocks. Secondly, fund managers are buying as the steps of the central governments (incl. RBI) have been reassuring. Anyways, who would have the b**ls to go against US Fed and other central banks. However, within that thesis there are winners and losers. There are businesses at ground zero like Oil & Gas, Real Estate, Airlines, Small Banks, Theatre companies, NBFCs, Travel, etc. where the fall have been higher than average. These are businesses where the recovery will be delayed, pains will be higher or a part of the business thesis has been punctured. Also, to add to the list is companies which have a great deal of debt on their balance sheet. The ones to do better are clearly Pharma, Telecom and I.T (to a small extent). These businesses are possibly the next leaders. And everything else is in the middle.What is in store for us going ahead? We believe these are the three possible scenarios:1. U-shaped recover: We assign a probability of 60% to this. Similar, to the 2008 crisis, the market could see a U-shaped recovery. However we believe the consolidation phase would possibly be a bit longer than 2008. The possible reasons for the same could be fed support, fiscal support by the Indian government and economies coming back in a slow and steady manner. 2. V-Shaped recovery. We assign a 20% probability to this scenario. In this case, the market could move let’s say 20% from here. The possible reasons for this would be a vaccine for treating the virus, better than expected news on the economic front, etc.3. Nifty could slide down below 7500 (recent low which the Nifty hit in mid-March). We assign a 20% probability to this event. For markets to again go back to the recent bottom of 7500 would require a significant amount of bad data. The reason for a low probability to this is policies introduced by the central bankers have act as a floor to the market, and have taken away initial round of volatility and fear psychosis. The above probabilities could change in the absence of fiscal support by the Indian government and worse than expected data.If you would like to get your mutual fund portfolio managed professionally so that you make better risk adjusted returns and are well informed about the markets and your investments, get in touch. The contact details are provided on my profile page.RegardsSonali Jain

As a point of clarification to your question, insurance companies do not insure against bankruptcy. They insure accounts receivable. Vendors pay a premium which buys a policy that basically says "If Sears doesn't pay you, then we will."Things are not looking for good for Sears right now. Sales are declining and losses are widening. However, that doesn't necessarily mean they're on their deathbed.Some of the insurers perceive a risk, one they'd prefer not to take. On the surface of things, it doesn't seem like this risk is justified. Sears has a $3.5 billion revolving line of credit and $16 billion in total assets, a lot of which could be liquidated if push came to shove. As such, the article is a little puzzling, but perhaps there is something I'm not seeing.I don't perceive any short-term insolvency issues but here is what I do see.If you take a look at the Liquidity section of their most recently-filed 10-Q, they say:We consider ourselves to be an asset-rich enterprise with substantial liquidity and financial flexibility.We believe that we benefit from multiple potential funding resources, including our $3.275 billion domestic revolving credit facility through April 2016, and a $300 million Canadian revolving credit facility through May 2019, which is subject to potential reserves. In addition, as discussed in Note 2 of the Notes to Consolidated Financial Statements, the Company completed a $1.0 billion senior secured term loan facility under the Company's existing Second Amended and Restated Credit Agreement in the third quarter of 2013. Further, our $1.24 billion of senior secured notes are due in 2018 and there is approximately $327 million of remaining Sears debt from the Merger. These funding resources and obligations are described in more detail below. In addition, at August 2, 2014, we had cash balances of $839 million and $3.9 billion of inventory, net of payables. The domestic revolving credit facility and senior secured notes are supported by an asset base which includes $5.8 billion of domestic inventory.When a public company files an annual report, the company's auditors are required to express an opinion that basically says that the accompanying financial statements are fairly presented. In addition to this, they are also required to state if they believe there is any "substantial doubt" that the company will be able to operate during the next 12 months. Probably, one of the more high profile going concern opinions was General Electric's 2008 Annual Report. Here is how the disclosure reads, as issued by Deloitte and Touche, the company's auditors.(click to enlarge)The company will acknowledge this auditor opinion in the Liquidity and Capital Resources, as well as Risk Factors section of the 10-K. It'll say something to the effect of "our auditors have expressed substantial doubt about the company's ability to operate as a going concern."If you're ever think a publicly traded company is in danger of being illiquid during the next 12 months, read their 10-K. They must warn shareholders about potential risks. Search for the terms "going-concern" and "substantial doubt." The only times the latter is said is in the context of a deeply troubled company on a downward spiral.To not do so would be negligent. Negligence leads to shareholder lawsuits. Nobody wants that. Public companies, particularly the larger ones like Sears, typically employ the use of high-powered SEC attorneys and auditors have SEC partners whose job is to keep them out of legal hot water. Rest assured, if the company is in trouble, they will disclose it.

I don't think buying land that's physically in another country is viable for 'national' use. Firstly what happens when the other country's government changes? What if it's invaded? What if it declares war on another country and its enemy bombs that parcel of land? What if the land is flooded? What if the land is contaminated by chemical leak from a plant nearby? Secondly how do you use it in a 'national' way by your population before a teleportation device is invented? If your population does not use it in a physical way, it amounts to little more than an investment.It's interesting to look at what has been done, planned and being considered in Singapore's land use and constraints.What's been done (and will continue to be done):Land reclamation.1 - The creation of Jurong Island, an amalgamation of 7 smaller islands."Jurong Island locator map". Licensed under CC BY-SA 2.5 via Wikimedia Commons - File:Jurong Island locator map.png2 - Around Tuas Industrial area (the empty area enveloping where the 7 ships in the picture below is being reclaimed):Picture source: wildshores.blogspot.sgBuilding industrial parks to consolidate the supply and demand of services.Encourage public transportation instead of ownership of cars.Going underground:1 - Underground Ammunition Facility, the world's first large-scale underground containerised facility was unveiled in 2008.Picture source: SAF unveils underground ammunition facility2 - Deep Tunnel Sewerage System (DTSS), a tunnel for used water management opened in 2010.Picture source: pub.gov.sgPicture source: PUB Singapore - Annual Report 2012/20133 - Jurong Rock Caverns, the first underground oil storage in Southeast Asia, opened in Sep 2014.Picture source: Page on asiaone.comPicture source: skyline : nov - dec '12 : Going undergroundWhat's been planned and confirmed:Relocation of ports to free up land for better economical use.It will even relocate Paya Lebar Air Base a centrally located military airbase that's preventing buildings taller than 12 to 15 HDB storeys from being built.www.portfinanceinternational.com/- Singapore confirms transshipment move to Tuashttp://www.reuters.com/- Singapore unveils master plan for port, airport, waterfrontWhat's being looked into:Building underground massively, meaning to the level of small public areas for multi-use, vs. the current one off use for ammunition depot or oil storage. It's at the planning & public consultation stage with many issues to iron out from legal framework for dealing with ownership and use of underground space (vs. what's directly aboveground and how they interact) to safety, costs etc.Govt mulling large-scale underground developments