WITH nearly two decades of stock investing and employment in the finance arena behind him, it is no wonder that Mr Lavin Mok, 39, has developed a healthy respect for markets and the risks that can befall the uninitiated.
Mr Mok, managing director of United States-based hedge fund Tremont Capital Management (Asia), considers himself a conservative investor. A Hong Kong citizen, he flies to Singapore regularly for business.
'If you have been in the market for so long, you learn to respect it and understand yourself more. You know what you want and what you are comfortable with,' he said.
His interest in stocks was sparked at the unlikely age of 17, when he landed a summer holiday job in a relation's brokerage.
He recalled that like most young people, he thought making money when markets went up and down would be very easy.
'I had that feeling, too, and I thought I was smart in investing. As I work in this industry longer, get more experience and know more people, I learn that making money in the stock market is not that easy.'
Buy low, sell high
'If the market keeps going up, I will keep selling down to reduce my exposure...When there is a big correction and people don't buy, I'm prepared to take some risks.'
MR MOK, on his contrarian investment strategy
His first investment of HK$100,000 (S$19,570) was in four shares in the early 1990s. The market, however, was undergoing a correction at the time. He panicked and sold his shares a few weeks later because their prices kept falling.
He eventually lost 10 per cent to 20 per cent of his investment.
That experience taught Mr Mok to understand market cycles and to combine micro and macro views in his analyses.
Some of his investment guidelines now include not chasing markets when they are high and buying in when there is a correction.
It is difficult to time the market, so his strategy is not to invest all his money in one go or into one investment but to be prepared to buy more if the index comes down further.
Before joining Tremont last November, Mr Mok was managing director of OppenheimerFunds (Asia). Prior to that, he was head of retail sales at Invesco.
His wife Penny, 35, is a flight attendant and they have a 10-year-old daughter, Alison.
Q What are your investment guidelines?
A I'm a little contrarian. I don't want to chase markets when they are high. When markets are selling down, such as in middle of last year, I will enter it to get some value. Buy low, sell high.
Lots of people buy high and sell low. They don't have the patience or discipline. I'm not 100 per cent contrarian. I won't short-sell when markets are high and investors are buying, but I will try to be more conservative when people are buying.
If the market keeps going up, I will keep selling down to reduce my exposure.
When there is a big correction and people don't buy, I'm prepared to take some risks.
Q How do you counter greed and fear in investing?
A Only through experience and patience. The main thing is how to resist temptation. Know what you want and be comfortable. Over the last few years, I have not lost money in any investments. I won't chase markets when they are high, and I buy into the market during corrections.
There is no perfect timing as long as the market is already quite low, and don't put all your money in the market.
Be prepared to buy more if it comes down further, if you believe in the instrument, be it a fund or a stock.
Q How much do you save?
A I don't have a monthly target. I use half of my monthly income on the house mortgage payment, and about 20 per cent to 30 per cent goes into savings.
I try to pay as much as I can, so that I can speed up my mortgage payments and save on interest. I plan to be debt-free from my mortgage in five years.
Q What are good investments right now?
A In general, the Japanese yen is undervalued. I think the upside is higher than the downside. If the yen goes up, it will be very fast, so you cannot chase it. Better be invested in it now. I started investing in the yen about 18 months ago. I'm prepared to dollar cost average if the yen falls further. It is a small portion of my portfolio.
I'm also holding some currencies, such as the Chinese yuan, pound sterling, US dollar and Hong Kong dollar.
Q Where are you invested in?
A Prior to the recent market correction, I put aside some cash to invest in Hong Kong stocks, mostly at the initial public offering (IPO) stage. It was easy money, as long as you have the money and you know what you are investing in. On average, the IPO stock goes up 20 per cent to 50 per cent and up to even 100 per cent by the first day or week. So far, the majority of IPOs have made money in the last 18 months. On a case-by-case basis, I will sell if the returns are good.
I'm also invested in global equity, fixed income and emerging market equity. My returns have averaged 20 per cent a year over the last two years.
After renting a flat for three years, I bought an apartment this year, so most of my cash went into the down payment. Since I can't guarantee returns from other investments, my strategy is to cut down debt as much as possible. If the property market slides, I don't want too much liability or negative equity. My mortgage interest is 5 per cent.
Q What about insurance planning?
A I am insured under a whole life plan for a few hundred thousand HK dollars.
Q Any other investments?
A I have just started collecting limited edition watches. They are not too expensive. I bought an Omega about four years ago at above US$1,000 (S$1,529), and the price has since appreciated above US$2,000. It was a Snoopy limited edition. I also have a golf edition Tiger Woods Tag Heur, which I bought in Singapore in June at just below US$2000. It was out of stock in Hong Kong.
Q Moneywise, what were your growing-up years like?
A I grew up with five sisters. I was the youngest and only son. My parents were poor immigrants from mainland China, and we lived in a 200 sq ft government flat. My father was a construction worker and my mum was a hawker until her poor health prevented her from working.
We used to walk half an hour to school. My four elder sisters had to start working in their teens to support the younger ones. I used to wear my sister's school jacket and, because it was the female version, I was laughed at in school, but I had no choice.
Q What has been a bad investment?
A My worst investment was investing in a particular warrant. I lost nearly 90 per cent of the HK$30,000 I invested in it. After that, I stopped investing in derivatives.
Q What is your best investment to date?
A My best investment is in my MBA. It has helped me get into the fund management industry. Besides the hard knowledge that came with the MBA, I also treasure the soft skills, such as a mature attitude and mentality.
Learning from my classmates and friends has enabled me to develop a more mature personality, and I can present myself and manage time better. It has certainly given me lots of confidence.
Q And your home now is...?
A A freehold 1,248 sq ft in Kowloon, near the old airport. It cost me more than HK$8 million.
