While I started value investing in 2006, it was the Lehman Brothers crisis in 2008 that really shaped our business vision. As people kept reaching out to my business partner and me for investment advice, I realised that the crisis also showed the sheer number of companies out there that were grossly undervalued.
This crystallised our mission to inspire a hundred million lives by empowering people to achieve sustainable wealth in the long term. We believe that value investing—looking for stocks that may be trading for less than they may actually be worth—is a sound strategy to achieve this. And we started doing this via financial education because we believe that people can lower their risk if they learn to invest properly. In that spirit, here are a few key lessons I've learned from years of value investing.
Learn Your Audience (And Prepare To Be Surprised)
Over time, we realised that artificial intelligence (AI) and data analytics can greatly enhance learning, which is why we launched VI app, an investing tool, in 2014. We focus mainly on markets in developed countries where GDP per capita is about US$20,000 to US$30,000—markets were people had disposable income and were preoccupied with growing their money efficiently through financial planning and investment.
Having said that, it surprised us to learn that, while Singapore is such a developed market, a large part of the population is financially illiterate. I believe this is because the local school system is built on an “worker-focused” model and so while many people get a good education, it doesn’t actually teach them how to achieve financial freedom. Misconceptions abound—for example, I’ve had clients tell me that high-risk investments guarantee high returns, which is simply not true.