What lessons can we learn from Yeo Seng Chong of Yeoman Capital Management?

Thank you Rachel Boon and Sunday Times (20150726) for profiling Yeo Seng Chong (born ~1954), who founded Yeoman Capital Management in 1999. The word Yeoman reminds me on Tower of London that I visited in 2005. From another perspective, Yeoman can be interpreted as Yeo Man – a man of Yeo.

Beating inflation and other competitors / hedge funds, the Yeoman 3-Rights Value Asia Fund has compounded at 13% per year in Singapore dollars, net of fees, from 1997 through the end of 2012. To illustrate, $100,000 invested at the end of October 1997 is $953,000 at the end of June 2015.

Work hard. There is no substitute for hard work. Track your portfolio performance meticulously. Stock tips from others are not necessarily reliable and acting on them cannot be counted as hard work. Start with a beginner fund of ~ 10 stocks of $100,000 to $1 million. Regularly (monthly, quarterly, annually) measure your growth only in terms of net of fees. This means that you must account for buys, sells, dividend receipts, transaction charges, custody charges.

Focus and discipline. To invest successfully, focus and discipline are essential. Lifelong learning, a working knowledge of accounting and hard work are also prerequisites. Learn the macro economy for local, regional and world economy. Learn the micro economy for each sector and enterprise. He usually avoids banking sector as it is too complex, and focus on manufacturing, technical services, distribution and retails.

Read voraciously. He reads across diverse topics including military history, the Middle East and archaeology. Why? The aim is to understand the patterns / “ebb and flow of human geography and history” for acquiring long-term view.

Define you rules. He focuses stocks with on low P/E ratio, low price-to-book, high dividends and with a listing history of at least 5 years.

Courage to face the worst. He shared that there have been stocks in the fund portfolio that went to zero. Proper risk controls can minimize the impact.

You can have a colourful career path. It’s okay if you have not figured out what you want to do for the rest of your life, from your first or second jobs. After completing an undergraduate in civil engineering at McGill University (1972-1975), he served as an engineer (5 years), as a senior officer in the Trade Development Board, in managerial roles in the followings: Centrepoint Properties Ltd, Metro Holdings Ltd and Singapore Technologies Industrial Corp Ltd. He has worked in Singapore, Dubai, Beijing.

Marry a supportive spouse. Both he and his wife Lim Mee Hwa co-founded Yeoman Capital Management. I’m highly concerned with increasing divorce rates and my friends who divorced (today is the birthday of one of them, I can only pray that she finds the love of her life). My parents are probably right on highlighting 家和万事兴 (a harmonious family can lead to the success of everything). Another thing is, never underestimate today housewives and househusbands, who prefer to be low-profile (perhaps believing that humility is power). They are well-educated and have side hustles.

Move step by step, in a measured way but decisively each time.” ~ Yeo Seng Chong, a value investor

Advertisements

2 comments

  1. […] We are living in an increasingly dynamic age. It is okay if you cannot stay in a single career of your choice, you can have a portfolio of career. […]

    Like

  2. […] We are living in an increasingly dynamic age. It is okay if you cannot stay in a single career of your choice, you can have a portfolio of career. […]

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: