Apprentice star set up investment firm at 18

At 13, he noticed poor fathers watched TV after work, while rich ones read The Wall Street Journal.

Thu, Feb 18, 2010
The Straits Times

By Lorna Tan

In 1995, when he was 18 and still in school, Mr James Sun set up his first investment firm Sun & Associates and invested US$5,000 (S$7,000 at today's rate) of his savings in popular auction portal eBay.

Six months later, he was looking at a profit of US$150,000.

He then diversified into four technology stocks including AOL, Google and Yahoo, besides eBay.

By the time he was 23, the Korean-American was looking at a portfolio worth US$2.2 million.

'It was boom time and I rode a good market. I chose some good technology stocks and got really lucky,' said the entrepreneur and TV host.

He was shrewd too. 'I took my money off the table before the tech bust in 2001 because the tech stock market was over inflated then.'

It was hard work though. Besides pursuing his full-time degree in computer science and business at the University of Washington, he was putting in 60 hours a week researching his stocks so that he would know them intimately.

'I treated it like a job. There was no partying. In 1997, people started giving me money to manage. From 1998 to 2000, I was managing US$10 million.'

Mr Sun, 32, graduated in 1999 and joined Deloitte Consulting as a strategy consultant from 2000 to 2002. With a sum of US$2 million, he then set up wireless software firm 3P Networks, which he sold for a profit three years later.

He took a break for 18 months during which time he backpacked around the world, before starting a location search engine GeoPage in 2007 with US$1.5 million. Next on his cards is a hedge fund which will be launched here soon.

Mr Sun, who was the first Asian finalist and runner-up in the hit reality show The Apprentice in 2007, currently appears as a host who provides makeovers to businesses in a BBC TV programme Sun Tzu - War On Business, which Channel News Asia airs every Tuesday at 9.30 pm. He signed up as an artiste with home-grown firm Fly Entertainment last June.

He shuttles between South Korea and the United States. He is married to a Korean-American, 32, who is a community volunteer, and they have two daughters aged five and three.

Q: Are you a spender or saver?

I'm both a spender and a saver. I don't like to buy big-ticket items that depreciate quickly, like cars. Obviously, it's a necessity but I don't like to trade cars every year. However, I am definitely a spender when it comes to experience and lifestyle. I enjoy travelling, eating out and experiencing a great time with friends. I usually re-invest 80 per cent of what I earn into my stock portfolio or start companies.

Q: How much do you charge to your credit cards every month?

I charge about US$20,000 every month. I always pay off the bills in full. I don't withdraw much cash. I go to the ATM weekly and I carry at least a few hundred dollars at any one time.

Q: What financial planning have you done for yourself?

I'm very diversified. I own companies, invest in stocks and have multiple real estate holdings. Broadly, I'm 80 per cent in stocks and 20 per cent in real estate. I own US stocks like Apple, Intel and WatchGuard (an online enterprise security firm) and Korean stock LG. I like stocks with good value, year-on-year growth and healthy gross margins. I hold them for at least a year.

I own four companies. After Sun & Associates, I set up New York- and Seattle-based investment bank Sun & Rosencrantz, with a partner, in 2006. The initial investment for this firm, which deals with mergers and acquisitions, was US$100,000. We are looking at a pipeline of US$50 million in deals with a profit of US$5 million this year.

In 2007, I set up online city guide Geo-Page with US$1.5 million. The fourth is an online education firm Living Learning which was set up six months ago in Korea. I set it up with a venture capital firm which invested US$9 million.

I'm the chairman of these firms.

I'm now putting the legal structure in place for a hedge fund here and I plan to raise US$500 million in six months. I'm setting it up with a partner and the set-up cost is US$500,000. When it is set up, I will channel my stock holdings into the fund. My target annual return for the fund is 35 per cent.

Q: Moneywise, what were your growing-up years like?

My family did not have much money when I was growing up. When I was three, my parents, older sister and I emigrated to Texas, US. My father had only US$35. He was an accountant in Korea but he could not speak English. So he worked in various jobs including as a car mechanic before starting a few businesses dealing with auto repairs and homemade pizzas, as well as a beauty salon which my mother managed. We really lived the American Dream through hard work and determination. We lived in a single-storey, three-bedroom house. We didn't have much money and were thrifty.

Q: How did you get interested in investing?

When I was 13, I noticed a big difference between rich fathers and poor fathers. The poor ones watched a lot of TV after work and the rich fathers read the Wall Street Journal. So, I started reading the Wall Street Journal and tracked stocks. I would watch the stock prices and see the correlation to the news. This was where I truly learnt both the macro and micro effects of events on stock prices.

When I was 18, I started my first investment fund and traded using my own money. The portfolio started with US$5,000 and grew into US$2.2 million by the time I reached 23. In five years, I had built a sizeable amount for a young person.

Q: What property do you own?

Sun & Associates is my real estate holding firm for five properties. They are landed houses in Los Angeles and Seattle - bought in 2005 - and an apartment in Korea which was bought a year later. I live in them. The firm also owns two mixed-use commercial and residential buildings in Seoul and Seattle. They were bought in 2000 and 2005, respectively. I would like to keep the purchase prices and rental yields confidential.

Q: What's the most extravagant thing you have bought?

I pay for experience. When I'm on vacation, I stay at the nicest place because I'm enjoying it with my family. Last July, I took my parents, an aunt, my sister's family and mine on a 10-day trip to Hawaii. There were 10 of us. I spent US$50,000.

Q: What's your retirement plan?

I don't ever plan on retiring. I told myself that I will always be working. Having said that, working to me means being 100 per cent independent. Even today, I don't really need to work, but I completely enjoy working. When the kids are independent, my wife and I will need US$20,000 to US$30,000 a month.

I will continue to give back to society. I am already giving 10 per cent of my earnings to charity every year. I'm a board member of three non-profit organisations and I'm actively involved in two more. I plan to give 70 per cent of my wealth to charity and the balance to my kids when I grow old.

Q: My home is...

I have homes in Seoul, Los Angeles and Seattle. We move around.

Q: I drive...

A silver Mercedes C32.

Q: What has been your worst investment to date?

I had US$2 million in biotech stocks from 2000 and my holdings were down 30 per cent a year later when I got out of the sector. I liquidated my tech stocks in 2000, but not my biotech holdings. The main reason for holding on to the biotech sector was that I bought the stocks later.

Q: And your best investment?

It would be investing US$5,000 in tech stocks such as eBay and Intel in 1995 and making US$2.2 million five years later. My best move was to get out of tech stocks in 2000.