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I first met Goh Tee Leng on a panel discussion that I was moderating a few years ago. At the panel, he was introduced as an individual who runs a popular investment blog – InvestingNook. However, far fewer people know that besides being an investment blogger, Tee Leng full-time job is an investment portfolio manager of a value-focused investment fund in Singapore.
One of the first things that you would realised about Tee Leng shortly after talking to him is that he has been in finance his entire life, having studied and worked in the space upon graduating from university. Finance is also part of his family’s DNA, with his grandfather being the founder of Tat Lee bank, a Singapore bank that was acquired by OCBC in 2001.
With finance very much in his blood, it should come as no surprise that Tee Leng is currently a portfolio manager at Heritage Global Capital Fund, a value investing-focused fund that is diversified across countries and industries in 20 to 30 companies at any point in time.
In this edition of #MyFirstLoss column, we spoke to Tee Leng about how he started his investment journey, why he decided to start an investment blog and advice he has for people who are looking to generate profits from the financial markets during this volatile period.
Timothy Ho (TH): We always start each article in this series with the same question. Do you still remember the first time you made a loss in your trade? #MyFirstLoss
Tee Leng (TL): Definitely!
I believe every investor would remember the first time they had to realize a loss on their investment. For me, this company in question is Singapore Post Limited, Singapore’s postal service and courier company, which I bought back in 2010 when I first started my investing journey.
Buying the company was based purely on generating passive income through dividend yield, which was 5% at that time for the stock. Since it was one of Singapore’s ‘blue-chip’ companies, I figured it couldn’t be that bad of an investment. Obviously, I was wrong.
Ultimately, I failed to consider the long-term prospects of the company, given the decline in mail business and this was back when e-commerce was not a trend either. Hence, when investing, it is crucial to always ask yourself if you believe in the company’s growth potential, or if it is in a declining industry.
TH: You came from a family that is very close to finance. How much do you think the early exposure to the financial world impacted your decision to seek out a career in the investment space?
TL: It did have an impact on my life, where I always knew I wanted to be doing something related to finance. Back in 2009, dinner conversations revolved around the topic of what stocks my parents were accumulating due to the Global Financial Crisis.
However, I felt my biggest influence was because I was studying Economics during my Junior College in 2009. What I was studying in theory, I could see the Singapore government implementing in real-time – how the government was using demand and supply-side policies to stimulate the economy or why our government has to use an exchange rate policy instead of monetary policy.
This was something that intrigued me as compared to studying Mathematics, Chemistry or Physics, where it’s much harder to see how it impacts our daily lives as compared to Economics. This led me to pursue Economics as a degree during my university years and ultimately, a career in the investment industry.
TH: Most fund managers we know don’t usually write articles on a blog, let alone start one. What were the reasons that make you decide to start an investment blog?
TL: The idea was born when I was living in Shanghai during the summer of 2014.
I wanted to keep a journal to document my learning journey and investment theses to refer back to in my later years; however, a physical journal did not appeal to me as I wanted to attach graphs and tables in my writeups. Therefore, this led to me starting an investment blog.
I initially blogged under the name ValueEdge, where I was hoping that readers would be able to gain an edge over the markets through my sharing of value investing.
TH: Many investors and traders may think that the market is smooth sailing. We know this is isn’t true. What are some major setbacks in your investment journey that you had encountered?
TL: Having started investing in 2010, many major events have colored my investment journey of 10 odd years.
I witnessed the downgrading of the US credit ratings in 2011, the Blumont saga in Singapore that wiped out S$8 billion in equity value in 3 days in 2013, the US-China Trade War in 2019 and more recently, the COVID-19 pandemic.
There has always been something to worry about every other year in the financial markets. However, a reason to be optimistic would be that as a student of history, I am assured that each crisis we witness in the financial markets is just another blip in the long history of investing.
Give it another 3 to 5 years, and when we look back at 2020, it would seem like this decline in markets was inconsequential and would probably be a great buying opportunity for investors with a long-term view.
TH: What are the important lessons which you have learnt from your setbacks?
TL: One lesson that I feel has served me well would be the lesson on stoicism.
Stoicism is not the withdrawal from the world or not feeling anything towards others. Rather, it helps us establish proper mental models and emotional attitudes towards investment decisions. This is extremely useful as markets are irrational and in such a volatile environment, we can be easily caught in a swirl of emotions.
TH: How would you describe your investment philosophy today? Would you say that you are bias towards any one particular asset class, industry or region?
TL: At the core, I am a value investor. However, I guess in recent times, many have begun challenging this term value investor and whether value investing still works.
I believe that as value investors, we should always remain open-minded and flexible in how we define value, especially when there are some real fundamental shifts in how we go about life now.
I would not want to simply say that the world is changing, so we should change our investment style according to it. However, in some ways, there are some real fundamental shifts.
Imagine yourself owning a business; how you spend on advertisement has shifted from traditional media to social media. The amount of data collected from social media from what you search for to what you enjoy viewing more would help social media companies create a profile of you; hence, assisting companies to do more targeted advertisements today on social media.
Ultimately, the teachings of value investing from psychological biases to investment principles will always remain classic and timeless. However, we should be flexible in thinking of how we define value.
TH: Given the uncertainty in the financial markets in 2020 because of COVID-19, what do you think investors should or should not be doing right now?
TL: While the outlook does seem gloomy, I remain optimistic on the future that this too shall pass. I have been adding to my positions and am still invested in the markets.
However, that said, I would like to add a word of caution. With regards to this COVID-19 pandemic, nobody would know for certain how long this would last.
Governments around the world have been spending record breaking amounts in terms of fiscal stimulus, figures that are much higher than during the Global Financial Crisis. Therefore, before going all out to invest in the markets today, do review your own personal finance needs to determine how much ‘excess’ cash you have left to invest in the markets.
TH: If you can meet your younger self before making your first trade, what advice would you give him?
TL: Honestly speaking, there is no advice I would give my younger self.
I understand why many individuals would have certain regrets and perhaps, hope that their younger selves would be able to avoid such painful mistakes.
However, I do believe that it is important to make mistakes and to learn from them. It is only by doing so do that we become better and more mature investors. While we can learn from the mistakes of other investors, there is no better way of learning than experiencing it first-hand and having a good understanding of it.
As Yogi Berra said, ‘In theory there is no difference between theory and practice. In practice there is’.
Learn & Understand About The Financial Markets Before You Start Investing & Trading
Despite coming from a family that had deep roots in finance, it was still crucial for Tee Leng to learn about the financial markets for himself, rather than to rely on what others are saying. In this aspect, Tee Leng was fortunate to have studied economics, both at the university and junior college level, which helped build up his foundation knowledge.
Even then, at an early age, Tee Leng journaled down the lessons he learned, which can be seen on his blog, both Value Edge (his old blog) and InvestingNook. He also saw his fair share of market crisis over the past 10 years and have suffered investment losses as well. These experiences helped in making him a better and more experienced investor today.
In the same way, if you are starting your investing or trading journey, it’s important that you find multiple avenues to build up your knowledge. For example, if you are looking to trade, IG Singapore has an academy where traders can develop their knowledge first with online courses, webinars and seminars. There is also an IG Community that you can be part of as you discuss and exchange knowledge with other likeminded traders.
To avoid making painful losses that may drive you away from the financial markets early, consider opening a demo account first that gives you $200,000 worth of virtual credits to practice on. A demo account is useful for you to understand how the financial markets operate and get familiar with the trading platforms you are using.
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