GLOBAL GURU CAPITAL – MONTHLY UPDATE

May 2013

The "Ivy Plus" Investment Program gave back 2.36%. The "Global Gains" Investment Program fell 2.94%. The "Double Your Dividends" Investment Program lost 4.38%.

As painful as the current market sell-off may seem, it's actually been much worse for most investors than the headlines would lead you to believe.

After all, if you're an investor focused on U.S. stocks, you're probably feeling pretty good about yourself.

Indeed, the Dow Jones Industrial Average ended May 4.08% higher, rising for six straight months. Up 17 months out of the last 20, the Dow is on its longest winning streak since 1951.

Yet for most investors, Mr. Market's Moodswings of late have been much more painful.

Cast a glance beyond the U.S. stock market, and the returns across many asset classes and global stock markets in May were positively grim. Real estate stocks lost all of 2013′s hard-fought gains in a single month. Income investors endured one of the worst months in the past two decades.

But it's precisely after these kinds of sudden moves that "reality" diverges from Mr. Market's panic-induced perception — and which give rise to the best long-term investment opportunities.

Here's how I expect to play two prominent asset sell-offs in the coming days.

By both temperament and training, we Chartered Financial Analysts (CFAs) are a lot like accountants — reliable, ethical and well-grounded in the craft of investing.

As basically geeky folks who have been investing an average of four years to earn the designation, we eagerly and self-servingly buy into the notion that the CFA is the gold standard of investing.

But I'll let you in on a secret.

Having just returned from the CFA Society's Annual Conference in Singapore, I can reveal that these conferences struggle to match the excitement of, say, a mortgage brokers' shebang in Las Vegas.

After all, there are only so many ways to slice and dice Harry Markowitz's efficient frontier and Modern Portfolio Theory to make it interesting.

That said, the CFA society made a valiant effort by hiring 2011 economics Nobel Prize Laureate Thomas Sargent to speak to us on Bayesian probabilities.

Yet even that didn't bring the house down.

So the CFA Society recruited a crack team of professional pundits and prognosticators who regaled us with entertaining tales about themes as varied as the pace of technological development; the travails of being a corporate whistleblower in Japan; and the predictions of hedge fund manager J. Kyle Bass, a Texas-based hedge fund manager who has been expecting the imminent collapse of Japan for the past three years.

Kyle Bass' studied self-deprecating manner; his well-rehearsed one-liners; and his Southern frat boy good looks all combined to make his pitch compelling.

But here's the elephant in the room...

A city-state located at the tip of the Malay Peninsula with a population of 5.2 million, Singapore is arguably the most successful among the four "Asian Tigers" — a group that also includes Hong Kong, Taiwan and South Korea.

When this former British colony became a fully independent country in 1965, its per capita gross domestic product (GDP) was a lowly $511. Today, that figure has risen to $60,900, making Singapore wealthier per capita than the United States.

Singapore appears at the top of the annual global economic rankings with astonishing regularity, outranking the United States by almost every measure. Singapore has been ranked as the easiest place in the world to do business. It also boasts the #1 airport in the world. And by 2020, Singapore will likely surpass Switzerland as the world's largest offshore wealth management center.

Lee Kuan Yew: Singapore's George Washington

I've written about Singapore before and a Singapore-based exchange-traded fund (ETF) was also a recent recommendation in the Alpha Investor Letter.

But it wasn't until I read Lee Kuan Yew's "The Grand Master's Insights on China, the United States, and the World" this week that I realized how much Singapore owes its success to the vision and determination of a single man.

Lee Kuan Yew was prime minister from Singapore's independence in 1959 until 1990, when he allowed his hand-picked successor and now his eldest son to succeed him.

Although few Americans have heard of him, Lee Kuan Yew is the eminence grise of the global diplomatic community, and is universally admired across several political generations. Even Richard Nixon speculated that, had Lee lived in another time and another place, he might have "attained the global stature of a Churchill, a Disraeli, or a Gladstone."

At the same time, Lee Kuan Yew is a controversial figure. And his methods for lifting Singapore by its bootstraps to developed market status are both jarringly honest and relentlessly politically incorrect.

Although Lee Kuan Yew defines himself as "a liberal in the classical sense of that word," chances are you'll disagree with him whether you stand on the left or the right of the ideological spectrum.

If you are a bleeding heart liberal, you'd be appalled at Lee Kuan Yew's insensitivity to diverse points of view.