By Lorna Tan, Senior Correspondent
When fear gripped the market late last year and investors began selling off their stock holdings, veteran stock investor Gabriel Yap did the opposite. He began pumping nearly US$1 million (S$1.4 million) into United States stocks such as AIG, Citigroup and General Electric till early this year.
His investments have since more than doubled.
For Mr Yap, who is in his early 40s, crisis periods offer great opportunities to profit from. It is a strategy that the senior dealing director at DMG Securities & Partners has put into action many times to his benefit.
He made his first million from investing in stocks when he was 27.
An accountancy graduate from Nanyang Technological University, he started out in the stockbroking industry as an analyst and later moved on to become an institutional dealer at Summit Securities. This was followed by a three-year stint in New York when he ran the US broking arm of local broking house Tsang & Ong, before joining stockbroker Ong & Co in 1998. The firm was taken over by Kim Eng subsequently.
He became a Chartered Financial Analyst in 1996. Prior to joining DMG in 2006, he was with Phillip Securities as a senior dealing director for three years.
Q: Are you a spender or a saver?
I am very much a saver. My parents brought me up with the virtues of honesty, integrity, hard work and thrift. Thus, I save 60 per cent, spend 30 per cent and give away 10 per cent to charities, my church and needy causes.
Q: How much do you charge to your credit cards every month?
I have nine credit cards, although I use three of them only. If I go on a major adventure trip or take my parents overseas, which is like once every quarter, I can chalk up as much as $20,000. Otherwise, I charge only about $2,000 every month. I draw $500 a week from the ATM.
Q: What financial planning have you done for yourself?
My asset allocation is: equities, 40 per cent; real estate, 30 per cent; real estate investment trusts (Reits)/preference shares/bonds, 25 per cent; and resources/currencies, 5 per cent.
I am listed as a top 20 shareholder in companies like Midas Holdings, Frasers Centrepoint Trust and Raffles Education since their listings. These companies are steady growers and thus steady dividend payers. I expect them to continue to pay me quarterly dividends on a steady, upward basis.
I also invest in listed Reits like CapitaMall Trust, Ascendas Reit, Capitacomm Trust, Suntec Reit, Ascott Reit and Mapletree Logistics for steady quarterly dividend payments. These quarterly payments allow me to re-invest in other asset classes like resources and commodities-backed currencies like the Australian, Canadian and New Zealand dollars. I am also a long-term accumulator of the Chinese renminbi.
Q: Moneywise, what were your growing-up years like?
I have two younger sisters. Dad was an executive at Fitzpatricks supermarket and later became a senior manager at Orchard Hotel. Mum was a housewife. We lived in a three-room flat at MacPherson and later in a four-room flat at Yishun.
From the time I turned 14, I took on many part-time and holiday jobs ranging from catering to tuition, factory worker, warehouse worker, supermarket assistant at Yaohan, Fitzpatricks and Robinsons. I understood from a very young age the value of hard-earned money and an honest day's pay for an honest day's work.
Q: How did you get interested in investing?
I started investing rather early during my days at Catholic Junior College. While my classmates were chasing girls, I was chasing stocks. I was working on weekends and used my savings to buy stocks. I also became totally absorbed in economics and was rather good at it, winning the top economics prize in college.
I subscribe firmly to the investment principles of Peter Lynch and Warren Buffett, who believe in investing selectively in stocks that can offer exponential returns, rather than diversification. If my initial investments turn out to be right, I increase my bets along the way, rather than taking my profits early.
Q: What properties do you own?
I own four properties in Singapore. One is a two-bedroom condo unit at Toa Payoh, which was bought in 1996 and is rented out at an annual yield of 5.8 per cent.
In 2003, I bought a 4,000 sq ft, six-bedroom, four-storey terrace house in the East Coast where I live now. Another three-bedroom condo unit at Clementi was bought in early 2007 and should be completed next year. Recently, I bought a two-bedroom condo at The Interlace at Alexandra Road, and it will be completed in 2013.
I also own a 36th-storey penthouse apartment in Melbourne's central business district (CBD). I am finalising a purchase of an eight-acre ranch land in the Dandenong Ranges in Victoria, a 40-minute ride away from Melbourne's CBD. If this materialises, I would be keeping some horses on the ranch.
Q: What's the most extravagant thing you have bought?
It was a two-week trip with my family to Europe in 2006. We visited Switzerland, Germany and Italy. It cost $35,000 for the four of us - my parents, younger sister and I.
Q: What's your retirement plan?
I am blessed that my golden years are sufficiently provided for, and my plan is to start a foundation with at least $1 million for the needy. I will need about $20,000 a month in my golden years.
Q: Home is now...
My 4,000 sq ft terrace house in the East Coast.
Q: I drive...
Two cars - a maroon BMW 5 series and a grey Subaru Impreza WRX.
Q: My worst investment to date...
It was my $50,000 to $60,000 worth of investments in Malaysian Clob shares like Magnum and Kamunting, before capital controls were introduced by the Malaysian government during the Asian financial crisis in 1997. I had to wait six years before I was able to exit these stocks at a slight profit, the longest I have had to wait to break even on a stock position.
Q: My best investment to date...
It was my investments in global financial stocks and China financial stocks, following the meltdown of Lehman Brothers last year.
I invested close to US$1 million (S$1.4 million) in global financial institutions like Citigroup, AIG, General Electric (GE) and UBS at a fraction (ranging from 20 per cent to 30 per cent) of what most state-owned investment funds or sovereign wealth funds paid.
It was very rare to see such famous names valued at way below liquidation prices. We have to go back to the Depression of 1929 to see any similarities.
Citigroup has more than doubled in share price, AIG is up 70 per cent, and both GE and UBS are up 60 per cent compared with the average prices from October last year to March this year. I plan to hold on to some of these shares as the recovery continues its upward momentum.
This article was first published in The Straits Times