Investor's humble roots and big ambitions

Me & My Money Series (Sunday Times) Big Toe san, it's so popular an adage to work in our area of interest, but not easy to get there and survive. I was interested to know if you parlayed your working technical skills to start off, as that would be easier. Sounds like you did not and have achieved well enough in your own independent area. Ok, will not wheel out a guess about the biz in this forum. Still, good luck! Nice area, could be interesting/challenging to grow and become a bigger player (if my guess is right). But then, you may decide not wont be enjoyable either . It can be intrinsically rewarding covering different roles to understand how the different parts are needed to successfully run a biz. But i believe that this will usually only be more useful if one intends to run own, or somebody else's smaller business. Most who go to MNCs do not have that in mind when they start.

RE: Me & My Money Series (Sunday Times) Jan 30, 2011 me & my money Investor's humble roots and big ambitions Entrepreneur and trainer Ken Chee looks for the '3Rs' when investing in stocks By Lorna Tan, Senior Correspondent For entrepreneur and stock investor Ken Chee, value investing is an approach that has worked well. Value investing generally involves buying shares that are trading at discounts to what they are really worth. As it is difficult to accurately determine the value of a firm, a value investor buys at a big enough discount to allow some room for error. For Mr Chee, 35, his margin of safety is 50 per cent. This means that if he values a firm at $1, he will buy the stock only if the share price is at 50 cents or below. In Mr Chee's '3Rs' approach to stock investing, he ensures that the counter bears the 'right price', that the firm has the 'right business model in the right industry', and that it has the 'right management team'. This is something that he teaches to the participants in his three-day 'Millionaire Investor Programme'. 'I discovered that few people in Singapore know how to invest intelligently,' he said. Mr Chee's current portfolio comprises mainly local stocks and properties. This year, he is looking to diversify further into China stocks listed in Hong Kong as he is bullish on the China story. He holds a diploma in banking and financial service from Singapore Polytechnic, where he graduated in 1995. Four years later, he graduated from the University of Queensland with a degree in business management. He was retrenched from his first job at a software firm after six months. He then worked at Interactive Data System before joining Swiss financial information firm Telekurs Finance (now called SIX Telekurs) from 2001 till 2004. He started branding consultancy firm JM Asia in 2003. In 2008, he set up training and investment firm 8 Investment, which conducts investment programmes. He is married to Cynthia Seen, 34, who is the creative director at JM Asia. He expects to launch two books - Brand Mastery and Value Investing For Employees - this year. Q Are you a spender or saver? I am a saver. Since 2001, I've practised the approach of 'paying myself first'. Whenever income comes in, I will set aside a large portion of that into an asset account first before deciding what I can spend with the balance. I consider my lifestyle very frugal and simple. I realise that the many things in life that make me happy are usually free or cost little, such as great health, loving relationships and compassion. Before my marriage in 2009, I used to save 70 per cent of my income. Now, 60 per cent is saved and invested with the balance spent on household expenses, wife allowance and donations. Q How much do you charge to your credit cards every month? I use one main card to collect reward points so that I can receive rebates for petrol or groceries. I spend $4,000 to $5,000 a month on average if I'm not travelling. I draw $500 cash every fortnight. Q What financial planning have you done for yourself? I have a life insurance cover of $1 million from two term policies. I also own a personal accident plan, a hospitalisation policy and a critical illness cover of $600,000. My portfolio comprises my two businesses, a $2 million stock portfolio and properties. In the area of my businesses, I now receive passive income through programme licensing, books and dividend payments. Most of my business' free cash flow is channelled into two main investment classes - equities and properties - to generate more passive cash flow. I've been enjoying 18 to 20 per cent average compound returns yearly since 2003. When selecting stocks, I look for good growth firms that are undervalued and have stable businesses with a long track record, and firms which are undervalued and provide annual dividend yields of 6 to 8 per cent. I've been holding SPH since 2006 and bought into it at an average price of $3.50. My other stocks include Sats, Vicom and Hourglass. Q Moneywise, what were your growing-up years like? I come from a very humble family and I have a twin brother. My mum left when I was seven and my loving grandma took care of me till she died in 1996, when I was in national service. She was a porridge seller at Old Airport Road. My father used to be a bus driver. We lived in a three-room Housing Board flat in West Coast Road. He gambled, speculated in shares and got burned badly in 1985 during the Pan-Electric crisis. Life was hard and I started working part-time from age 13 in bookstores and as a waiter to help my father repay his debts. I'm blessed to have a well-to-do aunt who supported me and my brother financially. My only regret is that my grandmother is no longer around. Q How did you get interested in investing? I studied banking and finance in Singapore Polytechnic. Representing the poly, I was the first runner-up in Singapore's first ever Singapore International Monetary Exchange (Simex) Challenge in 1994. The career path as a future trader seemed set until I met rouge trader Nick Leeson and many other traders during my internship at Simex that year. I decided that trading and technical analysis was not the way for me because I never seemed to find a trader who could generate consistent results. I was introduced to the concept of value investing and I have never looked back. Q What's your outlook on the China economy? On a horizon of 10 to 15 years, I'm very bullish on China. In the short term, I believe the greatest challenge facing the Chinese government is not to have the country's growth derailed by factors such as hyperinflation. I expect the China economy to grow at 8 to 10 per cent per annum. It can easily be the next powerhouse in the next 10 to 15 years. There is much room for development as the resources and growth spread from the coastal areas like Shanghai, Beijing and Guangzhou to inland China. When selecting China stocks, I will focus on a sector like infrastructure, which includes railways and waterworks. Other sectors that I like include education, energy and defence, and health care. Q What property do you own? I prefer commercial properties for investment because the yield is much better. At the same time, I am careful with debt leveraging because it is a double-edged sword. I believe the Singapore residential market is in a 'happy and insane' mood, hence I shall stay away for now. I have six properties. One is a four-room, 950 sq ft Housing Board flat at Cantonment Road, bought in April 2009 for $475,000. It is currently worth $610,000. I also have a 2,400 sq ft commercial shop unit in Kuala Lumpur bought in 2008 for $230,000. It is tenanted at 7 per cent annual yield. I do not know the current value. In 2009, I bought two student accommodation units - each 220 sq ft - in Makati, the Philippines, for $117,000. They will be completed this year and the rental yield is projected to be 10 per cent. Last year, I bought a 550 sq ft Soho unit in Makati, the Philippines, for $175,000. The unit will be ready next year and the rental yield is estimated to be 10 per cent. I also bought a 1,450 sq ft Northpoint light industrial unit at Yishun at $320,000 in September last year. Three months later, the development next to it was selling at $300 to $350 per sq ft. It will be completed next year. Q What's the most extravagant thing you have bought? I bought a rose gold diamond Rolex watch for my wife last year, for her birthday. It cost $9,000. I also bought a membership in the Marriott Vacation Club for $24,000 last year. Q What's your retirement plan? I'm already retired at 35 doing what I love most, which is running my businesses, investing and empowering lives. Currently, without children, we need $15,000 a month to live a very comfortable life. I believe that might change after we have kids. My ultimate lifelong goal is to set up a foundation with a minimum sum of $100 million to create massive sustainable value for humanity. Q Home is now.... My four-room Housing Board flat at Cantonment. Q I drive.... A two-litre black Mitsubishi Lancer, sports version, which I bought for $61,000 in April 2009. [e-mail] -------------------------------------------------------------------------------- WORST AND BEST BETS Q What's your worst investment to date? In 2007, I bought into PineAgritech - a China firm listed here - when it announced it had secured an exclusive distributor contract with $500 million net profit for the next three years. It did not materialise by the second year. I invested about $30,000 at 80 cents per share and sold them at 45 cents each when I discovered there were management integrity issues. I lost $13,200. Fortunately, I had invested a small amount with the intention of assessing the management performance before committing more. -------------------------------------------------------------------------------- Q And your best investment to date? My wife... My other good investments are my businesses. We started with little or no money and we are now generating millions. To me, the returns are infinite. For instance, JM Asia was started with just $9 and it generated $1.4 million in less than 18 months. 8 Investment was started in August 2008 at a minimal cost and has generated about $2 million in training alone since. Our business vision is to become the Berkshire Hathaway of Asia. We want to sit on the boards of the firms we have shares in to protect the interests of minority shareholders.