Ken Chee
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Ken Chee, co-founder and CEO of 8VI Holdings Limited, shares the lessons he's learned over the years

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.

Listen to the Voice of Reason

One of the greatest myths about investing is that anyone can do it. I would argue that, in addition to intelligence, emotional stability is key so that you don’t fall prey to irrational fear or greed, both of which can lead to bad investment decisions.

For example, you might have done your research and picked a good company to invest in but might start to doubt yourself if its share prices keep falling due to market flux. Now, from my experience, a company’s valuation can rise and fall quite significantly depending on what’s the “flavour of the month”, such as the e-commerce boom in 2014 or the current trend for fast-growth tech companies. Value investing necessitates a long-term investment horizon because research shows that a company that grows well over the long term has share prices that reflect that value. For investors whose outlook spans just one to six months, we recommend other forms of investment such as Exchange Traded Funds, which have a shorter turnaround.

 

Find a Problem to Solve

There’s a lot of data and information out there. Technology should help us make sense of investments, which can only be done by capturing the right data points and using the proper financial modelling and key linguistic structures.

We designed the VI app (which currently has about 130,000 users) to analyse companies and present findings in a very simple format, so that users can understand and evaluate their investment potential within three clicks. Simple traffic-light-style colour codes of green, red, and amber show a company’s financial health and companies are classified according to animal type. A gorilla, for example, means the company is very aggressive and is dominant in the industry. A sloth might indicate a slow grower and a cow would denote a cash cow.

Accurate valuation is important as you want to buy strong companies at a fair or low value—you want to buy a Ferrari for the price of a Proton, in other words. Continual innovation is key in staying ahead of the curve, and as a form of giveback to our long-term clients, we will soon introduce a useful predictive feature that would prompt users if, for example, a gorilla might change into a sloth.

Always Think About What Could Kill Your Business

Our business launched as a traditional brick-and-mortar operation. In 2013 I read that we had entered the mobile era—as smartphone sales had just outstripped that of laptops and desktops for the first time—I realised we had no presence in the mobile landscape, which meant we could become irrelevant. We invested heavily in mobile-first data analytics, and this strategy was proven to be prescient when Covid hit in 2020—and our business actually jumped threefold.

Despite this success, I started thinking again about what could make our business obsolete. I reasoned that if my prospective customers would be in their 20s a decade from now, they’re currently 10 to 15 years old, so I set out to see what this demographic was like. My daughters (who belonged to this age group) are already in the metaverse, building characters and interacting with others in Roblox, a popular online game. One of them even asked me if I could turn her artwork into a non-fungible token, or NFT! This made me realise the importance of embracing the metaverse and digital decentralisation.

In response, we made it so that our customers can potentially “learn to earn” in Web3. If they complete a module, they’ll get a token. If they contribute a comment, solve a case study or get good ratings from helping a fellow student, they could potentially get a token.

Understand What “Value” Is

Web3 reminds me of the early ‘90s when we had the dot-com bubble: there were so many companies out there and it was hard to predict which ones would be successful. I’d advise allocating 3 to 5 per cent of your investment portfolio to the more prominent developers, such as Ethereum and Solana. Many decentralised applications use these two blockchain protocols to develop their services and when more people use it, the demand is there, which creates value.

The “value” in NFTs comes from the communities you are buying into. Therefore you need to be able to assess the company that’s creating this community and whether they have the track record to support NFT holders to create long-term value. Who are the founders and their partners? What is their track record?

Another thing to consider is whether the NFT offers any real utility – does it give the user access to life-enhancing products and services? Such an NFT might be one that gets you whitelisted for future concerts by your favourite artist. Or it could get you access to merchandise, backstage access or even private time with the artist if your NFT is very rare.


Ken Chee is the co-founder and CEO of  8VI Holdings Limited, an investment holding company specialising in financial education technology and financial asset management.

This piece is part of a collaboration between Tatler Asia and Young Presidents’ Organisation (YPO), a global leadership community of chief executives, which counts more than 30,000 members from 142 countries among its members.