15 December 2015
3 Keys To Value Investing Success & Financial Freedom
During our interview, multi-millionaire value investor, author, award-winning entrepreneur and founder of the 8I Group Ken Chee said that he was “not smart”. But this is the same person who transformed 8 Investment from a private investment business with $0 start-up capital into a public-listed company with a market capitalisation in excess of S$350,000,000 within 7 years. Apart from years of experience and practice, he also attributed his success to three important mindsets, which he is happy to share.
1) Being Humble and Eager to Learn
“I tell myself that the more I know, the more I don’t know,” said Ken. “In other words, the more knowledge I acquire, the more I realise that there are other areas that I’ll need to understand regarding that topic.” That also explains why he is a hungry learner who likes to associate himself with the experts of the field, constantly asks questions and always keeps an open mind.
Though he jokingly calls himself a “lazy” person who just wants to “sleep and let his money grow”, Ken still makes the effort to read actively outside work and be sufficiently updated on the latest happenings such as new economic policies and reforms, etc. He also mentioned that it was through daily observation that he spots the companies to invest in, so even for value investors who prefer to look at long-term performances, there is still quite some research to be done on a regular basis. In fact, his advice for young aspiring investors who have limited experience and resources is to “always invest in one’s own knowledge first”.
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2) Being Patient and Looking at Long Term
We live in a digitised age, where we are used to instant-gratification, so we tend to expect results instantaneously. Investing on the other hand, does not happen that way, says Ken.
Quoting from Warren Buffet: ““No matter how great the talent or efforts, some things just take time. You can’t produce a baby in one month by getting nine women pregnant.” In another interview with FFN, Ken also suggested that when it comes to value investing, one should look at yearly results instead of watching quarter-to-quarter results too closely.
When it comes to deciding whether a company is worth investing in, he highlighted two questions that investors need to ask themselves, which are: “Will this company still be around 10 years down the road?” and “Will it be more valuable 10 years down the road?” “I think if you cannot answer these two questions, looking at quarter-to-quarter results is not going to help,” he said.
3) Being Frugal
This advice may be especially applicable to youths who are looking to embark on their investment journey, but have limited money. “Develop a habit of saving, and don’t ever get yourself into debt,” advised Ken, who recalled living thriftily for many years. Back in his earlier years, he rode a second-hand bicycle to work and packed his own lunch in order to save money for investment. Even when he could afford a condominium as he became more well-to-do later on, he purchased a HDB flat instead.
“I think it’s important to use very minimal resources to invest in a good company and compound the earnings overtime,” said Ken. Connect with Ken in his coming Value Growth Workshop to know more about the right investing mentality and habits
Labels: Value Investing
