Good morning

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The headlines:

  1. The price of Roast Pork.

    Link: let’s take this slowly.

    Kay Lee Roast Meat Joint is a Singapore restaurant with an owner that wants to retire and spend more time with her son in Australia.

    Their restaurant property was assessed at a value of S$1.25 million. They decided to go with an asking price of S$3.5 million. And now: this news item is scaling its way through the news sites as “US$1.8 million for a Roast Pork recipe!”

    And there are all kinds of experts declaring that this is madness and that usually, restaurants don’t come with a price-tag for recipes, unless you’re Coca-Cola.

    I am on Betty Kong’s side. I think that this is a classic case of framing-the-issue-badly, with a great number of off-the-street comments by old ladies such as fellow Cantonese food-vendor Leong Yuet Meng: “Two million dollars for a recipe? Too much!”

    If we go back to the facts: the queue for her restaurant at lunchtimes is out the door. She makes a profit margin of 60% on annual sales of S$620,000. And her roast pork? The recipe is so popular that she is able to charge $5 a plate where other vendors can only charge $3.50 or less. That’s almost a 33% premium!

    So the property is worth S$1.25 million. And the business itself? Annual profits of S$372,000; and let’s say that you wanted that to represent a return of 15% a year on your investment. That’s a rough value of S$2,480,000 ($372k ÷ 15%). What’s the premium being charged? S$2,250,000.

    Actually – it’s almost a bargain. Especially when you have those off-the-street folk telling you that they would come back if the recipe remained the same because it’s that good.

    Go Betty. You’re Singapore’s Coca-Cola.

  2. I’ve found a new quote.

    Link: the real Greek issue.

    A former someone-important from the IMF:

    “I am always pained by the characterisation of the issue as one of growth versus austerity, as if that were the issue of immediate consequence. The issue is underlying structural reform. If economies like Greece, Portugal, and ultimately Spain and Italy, cannot recapture lost ground in terms of competitiveness in the Eurozone, it’s hard to see how they are going to achieve economic and financial success”.

    For two really awesome podcasts/lectures on this topic, I recommend: the Eurozone’s awkward threesome and Can Greece Get Out of the Crisis? Both are public lecture events from the LSE, and are well worth the time. Especially that first one.

  3. First JPM, now Barclays.

    Link: the banking gravy train?

    Barclays is now under investigation for its power-trading on America’s west coast. The Federal Energy Regulatory Commission has been chasing JPM for some time. They’ve now turned their attention to Barclays.

    And in the manner of all regulators, they’ve issued Barclays with a $435 million civil penalty, and asked it to explain why they shouldn’t have to pay it.

That’s all for now.

Before we go, a quick look at Apple’s share price (just because):

That’s over $100 down in a month. Sherbet.

Have a good day.