Business Times Interviews - Starting Young

[Musicwhiz]

In a new series, BT interviews young people (yes, as young as early 20's!) on their investments and their motivations. Will be adding on to the interviews as the weeks pass by in a similar vein to the "Me & My Money" series.

Business Times - 25 Apr 2011

STARTING YOUNG
Trading up towards financial freedom

Kendrick Chia's advice is to learn the basics and see what you are investing in, reports MINDY TAN

ONE could describe 24-year-old Kendrick Chia as a 'man on a mission'. The Singapore Management University (SMU) undergraduate, who is pursuing a double degree in accounting and business management, manages to juggle school, his role as research director for fundamental analysis at the SMU E.y.E Investment Club, a part-time job, and volunteering at the Jurong Bird Park on a regular basis.

He was previously on track for a career in the sciences but Robert Kiyosaki's Rich Dad Poor Dad made him rethink his life goals.

His pot of gold at the end of the rainbow? Financial freedom.

Q: How and when did you start investing?

A: Against the backdrop of a booming 2007, the tipping point came when I redeemed my five-year fixed deposit and realised my interest amounted to $20. Wanting to increase my returns, I decided to try a professionally managed mutual fund in 2008.

Q: What did you learn from your first foray into investments?

A: People have the general perception that unit trusts are safe - you don't earn lot of returns, but you can't get too badly burnt either. When Lehman crashed, I lost about 20-40 per cent of my portfolio.

It got me thinking: Why can't most managed funds outperform a static index?

And I realised that you need to learn the basics. You cannot put your future in the hands of someone else. Especially with funds, you can't see what you are investing in; it's like a black box.

Q: Describe your current portfolio.

A: I typically buy blue chips, with almost no small- or mid-caps in my portfolio.

Now, with a better understanding of how to read financial statements, and a finer grasp of the financial markets and the risks that each company has, I'm moving more towards capital gains.

Q: Is there a particular industry that you favour?

A: For yields, I go for utility stocks such as transport and postal services. The stocks that I favour generally give good, stable dividend yields and have recurring business. They are not exposed to large demand fluctuations around the world.

Q: Do you have any unique quirks as an investor?

A: I tend to like to buy stocks for companies which I can literally walk to and see the business. I don't like to buy things that I can't hear, see, feel touch - for instance Hutchison Port, ports in China.

If, on the other hand, a Singapore port stock ever debuts, I wouldn't mind buying it because I can walk over and see it and get the information first-hand.

Q: Are you a spender or saver?

A: When I first entered the university, I used to scrimp and save, and could save about 25-30 per cent. But I was making myself unhappy by trying to save that much. These days, I aim for a more comfortable 10-20 per cent.

Q: How do you balance school, work and investing?

A: I gave up personal time and hobbies such as photography and cooking. The nice thing is that I don't feel it as acutely because I enjoy the things I do. Plus, we get summer breaks where we can indulge ourselves. It's a pretty good balance for now.

Q: How has investing changed your philosophy in life?

A: I used to think I would have to spend the rest of my life working, saving as much as I can, and hoping that CPF would cover me. But when Kiyosaki's Rich Dad Poor Dad mentioned the term 'financial freedom', and what it really means, and how to get there, it was an eye-opener. Who wouldn't want to cut down on the time you spend working and spend more time with your family?

It made me change my priorities in life. I decided to put down what I love to do and instead learn to love what I do.

It is also part of the reason why I applied to SMU.

Q: What tips can you share from your experience in investing?

A: Read and watch the markets first. If you're unsure, ask someone who is familiar to read and interpret the events for you. Once you have a better grasp of the market, test your philosophy on paper.

Take for instance that there is a flood in China. What are the implications? You would probably expect commodity prices to rise. You can pick a company with distributions in China, and track it for a month or so. Does the stock rise? If so, you're pretty adroit at understanding the market.

If your prediction is wrong, it is time to hit the books again.

It depends on your risk appetite. You would probably learn faster if you put money down because you can't say I will do it tomorrow. You will do it now because it hits your pocket. If you have spare change and you want to make a bet, go ahead, but be mentally prepared that you may lose all of it.

Finally, I would recommend reading Rich Dad Poor Dad. It's a very easy read, and you don't feel so intimidated. Most financial books are three-quarters filled with jargon. But he presents it in a very intuitive manner.

---

Have attached last week's interview as well, with SMU's Daniel Tan (incidentally, so far they are both from SMU)......

Business Times - 18 Apr 2011

STARTING YOUNG
Investing to derive a passive income

Finding finance more interesting than engineering, Daniel Tan switched courses in university. It's proving to be a profitable change, reports MAXIE AW YEONG

SINGAPORE Management University (SMU) business management undergraduate Daniel Tan does not fit into your stereotype of young investors, who are largely thought to come from rich families. As his father works as a driver and is the sole breadwinner, the funds for his investments mostly come from his own savings of monthly allowances and income from previous part-time jobs.

Currently financial secretary of the SMU E.y.E Investment Club, he hopes that growing his current five-figure portfolio will produce a form of passive income for him.

Q: How did you start investing?

A: I picked up a book from the bookshop about investing during NS (National Service) and started from there. I exposed myself to stocks, bonds and other instruments. I got interested, then decided to try it out.

I decided to start an account with an initial capital of $10,000 - quite a big portion of my savings. It's quite risky but you have to make your own decisions.

Q: Did your parents encourage you to invest?

A: Not really. They actually don't encourage me to invest, because they witnessed the financial crisis in 1997. So they would rather that I save the money in a bank. But I thought, since I'm interested and I have passion for it, I don't mind putting a bit of money to try it out.

Q: Are your parents still against you investing?

A: They are not that against it anymore. I tell them I'll try not to inject so much money into it, and I'll control myself and not get them into any trouble.

But they promise that if I do get into any trouble, they will try their best to help me. Again, I need to be more self-disciplined. I cannot bet with just any amount because there are risks.

Q: How do you describe your risk appetite?

A: Moderately high for equities and money. But I will adjust accordingly, depending on the situation.

For now, the market is quite unstable, so if I have some extra cash, I will hold on to the cash first until the market is more positive.

Q: What sort of financial planning have you embarked on?

A: I deal with equities and money, but I am interested to go into bonds if I have more capital. It's safer, and has an edge against equity.

I'm also currently reading up on exchange-traded funds. It's based on a basket, so you just buy into it instead of buying individual stocks. So you are diversifying the risk.

Q: Do you use credit cards?

A: No, I hold a debit card for now. I don't have a stable income, so it will be better for me. Using a credit card is like using future money, and at times it may be difficult to track. If you don't pay, it will levy an interest and you may get into bankruptcy because of it.

So I prefer debit cards for now, where I can just use my savings.

Q: What has your best investment been so far?

A: SIA Engineering. I picked it up around the beginning of the crisis. It has appreciated more than 50 per cent right now with decent dividend yield.

Q: What has your worst investment been so far?

A: A penny stock - one of the local electronics companies. It fell around 50 per cent in value due to some internal accounting issues. It is been quite inactively traded, and is 'stuck' there for quite some time. I still think that stock has potential, because the company is expanding in China. But it will take time.

I don't think I will get into any more penny stock investments for the time being, because they aren't really traded much.

Q: Did your interest in investment steer you to take up business administration for your undergraduate studies?

A: Yes, definitely. I graduated from polytechnic with a diploma in electronic and computer engineering, specialising in aerospace electronics. But I applied to SMU while I was serving NS, after I started reading up about finance. That was when I thought it would be quite interesting if I applied to SMU, which is a business-concentrated school. Fortunately, I made it through.

Q: If you were a millionaire, where would you put your money?

A: Property. At least there is something to fall back on if everything goes wrong. I'll also put my money into funds.

Q: Any tips that you want to share with fellow young investors?

A: I guess that will be to do your own research instead of relying so much on analyst reports. Some analyst reports may be conflicting, so you have to read up more and exercise your own judgment.

When I first started investing, I relied too much on them, and got into a few wrong bets. Luckily, the loss was not very significant. After that, I decided to do my own research.

[kazukirai]

Great series MW!
Thanks for posting.

(incidentally, so far they are both from SMU)......

Not so incidental la. Both from the same Investing club. I bet the reporter did the interviews at the same time. Just publishing one after another.

[memphisb]

why going for capital gains , buy blue chips and no small and mid size capital?

[Musicwhiz]

Business Times - 02 May 2011

STARTING YOUNG
Investing like father, like son

Devneet Bajaj's businessman father gave him a financial grounding. By Hoon Yi Shyuan

DEVNEET Bajaj was first exposed to the world of finance at a young age by his father, an active investor. The young Mr Bajaj started investing when he was studying at the University of Southern California. He later worked four years in the private-equity financing sector in the US, and another three years in investment banking.

Now an MBA student at INSEAD, he has been investing for the past 12 years and is involved in an entrepreneurial venture in India's food and agriculture industry.

Q: What got you interested in investing?

A: My father is a businessman who manages his own wealth. He invested in real estate and stocks with no help from advisors, and built his own knowledge.

When I was young, he would talk to me about how the share market was doing, and of some of the investments that he was making. He definitely put this sense of understanding companies and being financially knowledgeable in me.

Q: What do you currently invest in?

A: When many were investing in US equity last year, I was not. I believed that the markets were in a bubble due to quantitative easing by the Fed, and did not invest because I wanted to protect my principal and didn't want to take 'uncalculated' risks.

From what I've seen in the equity market, insiders such as the management companies and institution buyers - what you call the smart money - have been exiting the market.

They've been doing so because the Fed has been pumping money into the market, driving up liquidity and the equity market. At the end of the day, however, that's not fundamental growth.

I believe that there's a lot of fluffiness in the market right now even though the S&P has gone up by almost 30 per cent in the last year.

I think that the market, on a fundamental basis, is still overvalued. Hence, if you look at my portfolio, a lot of my investments are in cash, inflation-protected securities, commodities and government bonds.

Q: What has been your best investment so far?

A: My best investment over the past few years has definitely been Apple. I've been following the stock and how the company innovates continuously. I've received double-digit returns from Apple over the last few years.

Other than that, over the last four years, I've been investing in the commodity markets and also innovative food and agriculture companies such as Monsanto and Syngenta.

In general, there is inherent value in scarce commodities including food.

I've also benefited from investing in booming Indian equity markets to get some alpha on my returns.

Q: Do you have a personal philosophy when it comes to investing?

A: Personally, I think that if you don't take risks, you won't get a reward. However, you have to focus on risk-adjusted returns, meaning that if you want to invest in something, you should know what the associated risks are.

Sometimes, an investment that gives you 10-20 per cent returns with less risk is better than the returns from an investment that gives you 50 per cent returns but at a higher risk. Risk-adjusted returns, to me, are very important.

Also, you need to work with the right money managers. It's important to have smart advisors who will give you the right information to make the right decisions. I don't mind paying advisors a percentage of my portfolio because they give me the right and timely advice.

Q: Do you have any tips to share from your experience in investing?

A: In private equity, I would say that having industry experience, detailed knowledge and relationships in the industry are very important.

Without having a long-term view of the industry, you cannot be successful. You have to wait for the right time, buy the right companies and really build value in them.

In the public market, it's similar. You have to have a long-term point of view. You have to be willing to tolerate little ups and downs in the market.

Having said that, I think that watching what the smart money - the institutional investors and management insiders - is doing is very important. You should not just be doing what the public market is doing.

Finally, I think what is most important is developing a knowledge of macroeconomics.

Having fundamental knowledge really helps you figure out the strengths and weaknesses of the market and to make timely investment decisions.

Q: If you were a millionaire, where would you put your money?

A: Right now, I'm working on a venture in food and agriculture. We're developing a solution to help farmers in India improve productivity, which is going to need an investment so I'll probably invest in that.

[Musicwhiz]

My advice to Mr. Park - mock trading platforms do NOT work. This is because they feature emotionless trading, whereas in the real world, you need to deal with behavioural cues and tendencies!

Business Times - 09 May 2011

STARTING YOUNG
His dream: to start his own fund

MINDY TAN asks former engineer Park Kwan Hoon what sparked off the pursuit of his dream

PARK Kwan Hoon's amiable and laid-back manner belies the grand ambition that he harbours. It is his dream to run a fund with his wife, who is an investment banker.

Ironically, 31-year-old Mr Park's interest in investments did not take hold till later in life. Previously an engineer, he moved to Hong Kong and delved into investment banking in 2008. After the financial crisis hit, he returned to South Korea where he joined a private equity firm. He is currently an MBA student at the National University of Singapore.

Q: What got you interested in investing?

A: After I graduated and started working, I was putting aside 60 to 70 per cent of my income because I wanted to build my capital. But even as I was saving all this money, I realised how low the bank interest rate was. And it was dropping further as time passed!

I was an engineer, and I didn't know much about investments in general; I didn't even know how to read financial statements properly. I learned that the equity market was booming back in South Korea and that's what got me interested. I realised it'd be a better way for me to make profits out of my savings.

Q: How did you get started investing?

A: I started out with mutual funds before creating my own trading account. Picking stocks takes time, and mutual funds are a passive means of investment. I don't have to keep an eye on it all the time, so that was easy.

In the beginning when I started picking my own stocks, I didn't really know how to read financial statements. Basically, when somebody said an equity was a good stock, or when I read something in the news, I'd pick up on their advice or news I read without any kind of detailed analysis of my own.

I'd invest a minimal sum of money just to see how it went, and keep track of the stock performance.

When the stock's price fell and I lost money, I found myself pulling out from the market right away. Back then, I really did not have any sort of strategy.

Mutual funds were okay, but any sort of investment I made - big or small amounts, they were not that successful because I wasn't confident of what I was doing.

I was heavily reliant on industry trends. It was more of macroeconomic analysis than financial analysis. For example, one of the biggest gains I got from equities was from a Korean company called Infraware that developed mobile browsers. I invested in that company at a time when the iPhone was out in the market because I could see the demand for smart phones going up. Understanding the industry flow or trend informed most of my investment decisions.

Previously, I tended to concentrate on capital gains. Now, after learning more about the basis of finance, I've learnt how to do more fundamental analysis of a company and understand the intrinsic value of a stock. I'll try to look more into dividends as well.

Q: What do you currently invest in?

A: Right now, my main investments are mutual funds back in South Korea. Before I came to Singapore (to undertake the MBA programme), I realised I wasn't going to be able to pay much attention to my stocks so I basically cleared out everything except for a few mutual funds. Most of my mutual funds are focused on blue chip Korean equities like Samsung, Hyundai etc. I've been investing in these mutual funds since 2005.

The most significant investment I have right now is in real estate (a condominium in District 11). My wife and I were spending so much money on rent in Singapore, so back in late 2009/early 2010, we decided it was a good time to invest.

Our financial planning currently revolves around the condominium. Other than that, we do our regular savings, and we have our insurance. About 30 to 40 per cent of my income goes into servicing the mortgage and another 30 to 40 per cent goes to savings and investments.

Q: Do you have any tips to share from your experience in investing?

A: Confidence and patience are key. You need to have a good understanding of what you're investing in in the first place, and then be confident of your choice. There were two stocks that I invested in before the financial crisis - Kia Motors and Infraware. I was pretty confident about these companies' fundamentals and was sure these companies would pick up when the financial crisis was over. I only cashed out at the end of 2009 when it was back up and running again. If you're confident of your investment, you can be patient even if the market is volatile. Eventually, there's a better chance to gain the returns you were expecting when you initially made the investment. Without the confidence, I'm pretty sure I would have tried to cash out and sustained a loss.

I also think it's important to set a certain amount of expected returns in the beginning when you make the investment. Let's say you set it at 30 per cent. When you hit 30 per cent, you must pull out no matter what the momentum is. That takes a lot of self-control.

Finally, even though I don't actively invest in the equity market right now, I do invest on mock trading platforms. I think it's a good way to have that indirect experience so that I can at least read how the market is going,

Q: What are your long-term investment goals?

A: My wife and I hope to start a portfolio after I graduate. As we build our track record, we might start recruiting family members. The end goal is to hopefully, one day, bring in more investors.

I'm still a novice, still learning how to do all of this. It's just one of the dreams I have going forward.

[Musicwhiz]

I don't really agree with this guy - investment is best done alone, without so much "noise" from others. You have to be comfortable with your own style. Then again, I guess he is still very young at 22!

(Also noted that so far, most of the interviewees have been SMU students!).

Business Times - 16 May 2011

STARTING YOUNG
Friends are the best investment

Toh Yi Fan tells REBECCA LIU the road to acquiring wealth is easier to travel with a supportive peer group

TOH Yi Fan seems to have adopted for himself the mantra, 'I get by with a little help from my friends', as sung by John Lennon.

The 22-year-old second-year business studies undergraduate at Singapore Management University (SMU) credits the school for providing both the environment and the people on his investment journey - one he embarked on alone despite his parents being involved in the finance sector.

A member of the SMU E.y.E Investment Club, he treats investing as a hobby but also sees it as a great complement to his studies.

Q: What got you interested in investing?

A: In National Service, we had quite some free time - at least six free hours a day. So, like many of my peers, I started reading up on investing. I was previously more into science and engineering, but after reading up I became more interested and decided to change my course to study in SMU. I never really looked back after that.

Also, I forecast my expenses until the age of 60: if I die then, how much do I need now? It came up to at least $1 million in cash. House prices are rising, everything is rising. When I understood these rising costs, and compared it with what I wanted in the future, I realised that I couldn't get what I wanted with my current lifestyle. That was the first step in taking a more proactive approach in the management of my own finances.

Q: Do you use credit cards?

A: I have a debit card, on which I spend about $200 a month.

My credit card, which is used only for special purposes, is provided for by my parents. Thus, I pay the bills in full every month.

Q: How did your upbringing influence your attitude towards investing?

A: I come from a pretty well-to-do family. My parents also work in the financial services sector, and are quite well-versed in the market. However, they got rich through well-placed property investments.

Thus, they instilled in me the importance of prudent financial management and good financial habits - such as to save often, to plan my budget well, and set aside some money at the end of each year, to invest and to take calculated risks.

I received a monthly allowance, and typically saved about half of it. I still do so today.

Q: What do you currently invest in?

A: I have tried every financial instrument possible - from insurance, to unit trusts, stocks, forex and commodities. But the last two are inherently riskier, so I've cut them out for now.

I currently invest in unit trusts and equities with a more active strategy. I do a lot of equity research, as it comprises 60-70 per cent of my portfolio, and focus mostly on the oil-and-gas sector.

Twenty per cent is invested in unit trusts, placed in more strategic locations such as South Korea and Thailand, which I see as more promising.

The remaining 8-10 per cent of my current portfolio is in extremely high-risk stocks that are traded on Catalist, such as Chew's Egg Farm Group. Right now, I'm just waiting to see what happens as it is not very liquid.

Q: Your best and worst investment so far?

A: My best investment happened during the Japan earthquake. At the time, people were panicking, exiting the market and buying quite quickly. I bought Golden Agri, a palm oil stock, after the earthquake hit and prices plummeted. In just a week, there was quite substantial growth of about 5 per cent.

However, Golden Agri was also the source of my worst investment - I tried to make a quick buck and over-leveraged myself. When the stock declined, I lost about 1-2 per cent of my capital as I had to sell it at a loss.

This both happened in the last six months. But I have set a floating band; when the stock price is within the band, I will buy it.

Q: Any tips to share from your experience in investing?

A: Do your homework. I derived my band through a lot of research - analysts' reports, learning valuations.

I set myself investment criteria. I look at the income and general health of the company, but those only tell you that the company is a good investment; they don't tell you when to invest. To know when to enter or exit the market, I do a lot of technical analysis.

You don't need a lot of tools to actually make money. You just have to be very disciplined, and be able to spot your mistakes before they get worse.

Q: Do you have a personal philosophy when it comes to investing?

A: Find friends of the same interests as you. Find a club, join an investment club. If you have good friends like mine who trade everyday, you will realise that they talk about investing in stocks, forex and the valuation of companies. To them, it's their bread and butter, and when you get to know them really well, you get influenced by that.

Like they say, your friends will probably influence you much more than your parents ever will. So although my parents taught me to be prudent in my investments, I mostly learnt the ropes from my friends.

The first step to real investment is in your friends. Once you have a very supportive peer group, you will get influenced because you want to be like them: a little bit wealthier, a little bit more financially independent.

[karlmarx]

i think some peer support is good such that it facilitates investment discussions and you can bounce ideas off one another. just like the ben graham partnership, or the buffett-munger team. of coz, your peers have to be smart or they just be giving you bad ideas. i believe this is also one of the reasons for the VB forum's attractiveness.

investment requires some amount of capital to be allocated to risk assets. i believe smu students are disproportionately represented -- if they did try to get other uni students -- because they operate in a relatively secure environment (well heeled family) where any loss of capital is not life changing. add to this the fact that he trades (short-term) rather than invest (long-term).

[Musicwhiz]

It's a little confusing - he says he is a value investor yet is into technical analysis, and also has his portfolio split 60%:40% between equities and forex. Forex, to me, is speculation and does not constitute investing at all. Also, he seems to believe in diversification as he reads about forex, warrants and options, but value investing should encompass focused investing as you need intense knowledge about something in order to focus your energies.

Or perhaps my views are out of line with current realities?

Business Times - 23 May 2011

STARTING YOUNG
Embarking on a fascinating journey

Kenneth Nah tells REBECCA LIU why he has diversified his investments and become a little more risk-averse

MANY young boys wish to be pilots, astronauts or firemen when they grow up. Not so for Kenneth Nah Yu Siang when he was at an impressionable age. 'My aspiration was to wear a suit and a tie and stand at Raffles Place,' says the now 22-year-old second-year finance student from Singapore Management University (SMU).

The former gymnast and dancer's varied interests include breakdancing, wakeboarding and being a member of the SMU E.y.E. Investment Club. He believes strongly in pursuing a well-rounded education.

Q: What got you interested in investing?

A: I had a dream of working in Raffles Place and wanted to pursue it. Also, after completing National Service, I had quite a bit of savings and wanted to do something with that amount of money. I didn't want it to be in a bank where it would only earn 0.1 to 0.4 per cent of interest a year. So I decided to do something about it.

My parents are also typical Singaporeans, conservative in handling money. Their riskiest asset class is property, and I did not want to follow that path. I wanted to do something different from them.

Q: How did you begin your investment journey?

A: Last summer, I took a portion of my savings out and used it to fund a course on financial knowledge, recommended to me by a friend. It's called 'Trading for a Living', and it taught me about different financial instruments such as options and warrants, how to do technical analysis, and a little bit of fundamentals about trading. I also upgraded my knowledge by reading books and hung out with friends who could answer my questions and help me along the way.

Q: Describe your current portfolio.

A: It's split 60:40 between equities and forex. I was trading in equities for about a year until I started my internship at Oanda, a company that provides forex trading services. I mainly buy Singapore equities - SGX stocks such as Yangzijiang and Golden Agri. I don't favour any particular industry, but when I think that the value is low, I will buy into it. I practice value investing.

I'm still quite new to forex trading, but I mostly trade in major currencies such as the euro, sterling pound, the US dollar and occasionally, the Australian dollar.

I'm also interested in options, which Singapore does not currently offer. I did extensive research in options out of my own interest, and in future I want to look into trading options in the US market. However, I feel that I need more experience before I go into that.

Q: What are some rules you set for yourself when investing?

A: I do extensive research. I read reports from different brokerage houses, look up the fundamentals of the company, and look at how the company is doing. With that, I use technical analysis to time my entry into the market. If I feel like a stock is undervalued and I want to buy it, I will use technical analysis to make sure I enter at the right time.

For forex, it's important to have a fixed system, where you can ensure minimal losses. You must be disciplined enough to cut your losses and protect your capital. If you keep making small losses and big gains, you'll definitely be up.

Q: How would you describe your risk appetite?

A: I used to have a high-risk appetite, but I've taken a step back. I used some products which are Contracts for Difference (CFDs) - these were highly leveraged. But as time went by, I figured that it's not my style.

I also previously set aside about 30 per cent for speculation, but now I've cut it down to 5 per cent - minimal speculation. As I learn more theories about the fundamentals in school, I realise it makes more sense to diversify your investments and to be a little more risk-averse.

When I first started, it was all about the glam factor. I soon realised that of the 10 people that take on big risks, you only hear about the one person who succeeds and not the nine that fail. So as glamourous as it seems, the reality of it is there. If you take on high risks, there is a chance that you might not get that high return. In that way, it's good to not have such a big risk appetite.

Now I have a lower risk appetite. I moved into forex trading because I believe in diversifying my investments into more than one asset class and to hedge away my risks.

Q: What is your best and worst investment so far?

A: My best investment would be the course I signed up for at the very beginning, to improve my knowledge. I also set aside a sum of money to kickstart my investment journey. In total, this was about 25 per cent of my savings.

Although the course was expensive, I see an endless amount of returns in terms of financial knowledge and being able to understand financial concepts. It has allowed me to get to where I am today.

My worst investment is my first trade. I didn't know what I was doing, and decided to short Genting when it was on an obvious uptrend. I got out quickly, but it wasn't a well-informed decision. I lost about 10 per cent of my investment portfolio.

Q: Why do you find investing rewarding and fascinating?

A: I like knowing that my money can work for me even as I work for it. As we try to earn our keep, we cannot let our money sit in the bank and eventually be eroded by inflation. It eats up your savings with every second. I believe you have to put your money somewhere with higher returns than what you get in your savings account - it may be in fixed deposits or bonds. If you are risk-averse, find something like Singapore Government bonds or US Treasury bills which have guaranteed returns.

Watching the market allows you to be up-to-date with whatever is happening. The stock market is like a cluster of human emotions; when you see the market going down you know that people are very negative. It's a good measure of the world's emotions. In that way, you can see how the news affects the stock market, and it's very interesting.

For example, during the recent Japan earthquake, I could see the Nikkei 225 crashing. People were panicking - you can see fear and panic in times of crisis. Sometimes, you can see greed as well. It's fascinating.

Q: How big a part of your life will investing be?

A: I hope to work in the finance sector in future, doing equities research and working in asset management companies. I have an interest in researching the fundamentals of different companies. This best fits my current risk appetite - where I don't have to be on my toes all the time, watching the markets, but rather contributing in the form of quality research on different industries in the stock market.

It all boils down the dream I once had when I was young. It's really something I want to do, and this is my way of working towards it.

[kazukirai]

A: Last summer, I took a portion of my savings out and used it to fund a course on financial knowledge, recommended to me by a friend. It's called 'Trading for a Living', and it taught me about different financial instruments such as options and warrants, how to do technical analysis, and a little bit of fundamentals about trading.

I guess he defines Value Investing a little differently. Also interesting to note that he started off by taking a trading course rather than an investing one and I think that makes all the difference. Most new people start with one system and make their tweaks from there. After all, if it works for him, it's easier to tweak the parts than overhaul the whole system I think.

I started off in investing after hearing about Warren Buffett's story- Robert P Miles came to give a talk at my school a few years back (and of course, sell his book too) and that was where I was sold on the Value Investing way (i.e. focus on the margin of safety and capital preservation rather than price movement) and so far it's been working for me.

So, I guess, I've been lucky to a) have found Value Investing and b) find out that it works for me. Otherwise, given how risk-averse I am, I might still be into Fixed Deposits.

[Musicwhiz]

OK, what is an "IT" bag? And it's interesting to read about the philosophy of "Buy Low, Sell High". So easy to quote, so hard to practice!

Business Times - 30 May 2011

STARTING YOUNG
Taking ownership of her investments

Ooi Tong Si tells HOON YI SHYUAN how she got interested and used her savings to invest in equities

A major in finance and law at Singapore Management University (SMU), Ooi Tong Si was introduced to investing when her friend dragged her to an SMU E.y.E Investment Club Basic Research Meeting (BRM).

She has since been actively investing in equities and believes that investing is a good way of learning how to manage one's money. A firm believer in taking ownership of one's investments, she rejected her father's offer to fund her investments and chose instead to fund her investments with her own hard-earned savings.

Q: Growing up, how did you handle money?

A: My parents had a very huge influence on me. They've always told me that every single cent counts, so I've been saving quite a lot. At the same time, my dad has always reminded me that it's important to have a balance. I save, but I also reward myself and spend once in a while.

Q: Do you spend more or save more?

A: I think I save more. Of course, there's always the big ticket spending on the 'It' bag.

Q: What got you interested in investing?

A: Initially, I wasn't interested in investing and finance but my friend, who was in the investment club, dragged me to a meeting one day. From there, I realised that investing and finance were quite interesting. Females tend to get intimidated by the words 'finance' and 'investing' but everyone in the club was quite willing to help me overcome the fear. The club was male-dominated but I could just ask questions. It was more of a discussion rather than a teaching session. Even though I entered with no knowledge and experience, they were very willing to help me. They helped me start my account and taught me to do technical analysis.

Q: Why the interest in investing?

A: The ultimate goal for me is to be financially independent. Many girls dream of marrying a rich guy and being a 'tai-tai' but I thought, 'Why depend on a guy when you can do it yourself?' I think investing is a good tool for females to learn how to manage their own money.

Q: What do you currently invest in?

A: Only equities. Most of my portfolio is in properties and some commodities like Golden Agriculture, CapitaLand and Yanlord.

My portfolio is quite small because I use my own savings and don't have a lot of capital.

When I first started investing, my dad wanted to give me a sum of money to manage myself. I didn't think that was good for me because it's not my own money and I might spend it quite carelessly.

When you use your own money, money you've spent your whole life saving, you'll tend to do more research and generally put more effort into ensuring that it does not disappear.

Q: How would you describe your risk appetite?

A: I think relatively moderate to low. Unlike the other investment club members, I do not like to use leverage, I don't do CFDs (contracts for difference) and I don't tap on margins. I believe in spending what you have, so I don't short sell.

Q: What has your best investment been so far?

A: That would be Q&M Dental. I bought it at a time when it started expanding into China. I got in at 50 cents, which at that time was relatively high already. Everyone was telling me that I was stupid to buy but my father told me not to go with the flow. Right now, it's 90 cents.

Also, I bought Keppel Land quite long ago at $3.30 and sold it at about $3.70, right before it shot up.

Q: What about your worst investment?

A: It's also Keppel Land because after I sold it, I bought it back at $3.90. This was before the Chinese government implemented the cooling measures. Right now, it's not doing so well but I'm still holding on to it because I think the company has a first-mover advantage into the second and third tier cities in China. Hopefully it'll improve in the near future.

Q: Do you have a personal philosophy when it comes to investing?

A: My father has always told me that it's important to buy low and sell high. That's the most basic strategy.

Q: What are your long-term investment goals?

A: It's to ultimately gain financial freedom and be able to invest in properties. From what my father has taught me, equities is a good investment but ultimately, the money should go to investing in physical things like properties or maybe commodities.

Q: If you were a millionaire, where would you put your money?

A: I think it's best to set up your own business. When investing in equities, you need a large capital outlay to be able to get the returns that you want. With business, if it continues running, you can always get capital returns. It helps value-add your assets.