When veteran finance industry executive Terence Wong started his fund management firm in 2015, he found himself facing far greater challenges than he had anticipated.
Mr Wong, 43, told The Sunday Times that when he set up Azure Capital - which focuses on investing in listed companies here and the region - the stock market was still nursing its pains from the penny stock crash of 2013.
That traumatic meltdown, which is now the subject of a high-profile court case, killed all interest in small-cap shares for three years or so. "Investors were disheartened and liquidity dried up," he says.
"Investors look only at the Singapore market for real estate investment trusts (Reits). But knowing more than 400 companies across all sectors, I feel Singapore has so much more to offer. There are many exciting gems to uncover."
Unfortunately, illiquidity begets illiquidity and this "cycle of poverty" has resulted in lacklustre valuations for stocks listed here.
A believer of investor education, Mr Wong says that while investors in his fund are high-net-worth, he also looks out for retail investors.
"I have given nearly 200 seminars to over 35,000 investors in the past 20 years. I share my ideas over TV, radio, print and social media. I hope that through my sharing, investors would look more closely at fundamental analysis," he adds.
Worst and best bets
Q What has been your biggest investing mistake?
A I invested in some technology stocks just after the dot.com boom in the early 2000s. I didn't go in when stock prices reached stratospheric heights, but I was tempted when they started to nosedive.
I thought they couldn't go lower after companies like Chartered Semiconductor - then a blue-chip tech name - crashed by 70 per cent from its peak. It fell by another 30 per cent by the time I sold out in less than a year.
Low can get lower. Don't invest just because the stock has capitulated. In most cases, there are good reasons for that.
Q And your best investment?
A Investing in tough times yielded the best returns for me. In 2016, the Singapore market was facing a very challenging period and that allowed me to invest at a low. The recovery in 2017 was strong and my stock portfolio was up 40 per cent within a year. I had similar returns investing during market troughs in 2003 and 2009.
I hardly ever get stocks right at the bottom as negative sentiments have a way of bashing the stocks down further when you think it is the "right" time. But the consolation is that even if you don't invest at the bottom, the returns for quality stocks will still be solid if you have the patience.
In all three downturns, I made money on stocks which traded at massive discounts to their fair value. Some of the stocks were even trading below the cash they hold in the banks, which meant that you were buying the business for free!
Mr Wong, who had accumulated 16 years of experience in managing equity research teams by the time he ventured out on his own, says Singapore cannot be a first-world economy with a third-world stock market.
"I believe we can turn things around and I take this as my second national service stint. This time around, I am out to protect Singapore's status as a global financial hub," he says.
However, he knows he cannot do this alone. With the collective strength from other stakeholders in the market, he hopes that excitement can be injected back into share-investing.
Mr Wong adds that he is fortunate in having supportive anchor investors, including Super Coffee founders David Teo and family, and Oxley Holdings executive Eric Low, who subscribe to the same vision.
His track record also suggests that he can achieve his goal.
Mr Wong, who was voted the best country analyst in the Asiamoney Brokers Poll in 2013, managed RHB Investment Bank's research team in Singapore before founding Azure.
RHB was named the top research house in the Starmine Analyst Awards in 2013 and 2014 and has consistently been ranked No. 1 for small-cap research by Asiamoney.
Before RHB, Mr Wong was the chief executive and chief investment analyst of SIAS Research.
He obtained a joint honours in finance and economics and a certificate of liberal arts from Simon Fraser University in Vancouver in 1996. He is a Chartered Financial Analyst charterholder.
He is married to Ms Mindy Fang, chief operating officer at Azure Capital. They have two daughters, Aurora, nine, Evabelle, six, and a son, Alcide, four.
Q What's the next stage of growth for your businesses?
A I will continue growing my assets under management and building on the Azure brand. Though I have a regional mandate, I have committed to invest at least half my money in Singapore-listed companies. There are a lot of good companies here, but due to the lack of interest, many are trading for a song. I believe I will make the best returns from my investments in Singapore.
I would also like to focus on investor education as it is something close to my heart. Having spoken to more than 35,000 investors over the past 20 years, I want to continue to arm investors with investment knowledge. I share my thoughts on the market and discussions with the management of listed companies on traditional and social media, so that investors have the opportunity to see the key people behind the companies in a different light.
Q What's in your portfolio?
A Stocks, property, insurance and my fund management business. Equities have given my portfolio the strongest boost. Luck also played a part with my portfolio return as the property market turned up just as I bought my first house in 2006. By 2010, the price of the apartment doubled and I was able to cash out on the home equity and use the money to buy another apartment as well as invest in the stock market.
While I believe in insurance, I am no fan of life insurance. Since 2013, I have stopped all my life policies and converted to term instead.
Q What are your immediate investment plans?
A I am focused on investing in my business. It combines my twin passions of being an entrepreneur and investing. I believe the value of Azure will see good appreciation over the next few years as my vision takes shape.
Q How did you get interested in investing?
A I started young, just a couple of weeks before my PSLE exams, when global markets saw a record plummet of over 20 per cent in a day! That was the 1987 crash and it sparked my interest, so I started learning more about the stock market and investing. Anything that could get the adults off my back from studying for the exams can't be all that bad.
Q Describe your investing strategy.
A I like to be ahead of the curve and invest in listed companies before they get "on the radar". They could be turnaround stories or simply ignored or unloved stocks.
Given the state of the market, there are many of such stocks. Some are even trading at below private equity valuations, which just goes to show how perverse the market is. Such stocks have the potential to see exceptional returns.
On top of looking at companies with solid fundamentals and attractive valuations, I focus a lot on the quality of the management. They make or break companies. I know most of the founders/CEOs of the companies that I am invested in well.
Should there be any issues, they are just a call or a message away. I will be able to get the lowdown of what is happening to the company instead of relying on rumours on the street.
Q What else is in your financial plan?
A I have mortgage insurance. It is my single biggest monthly outlay and I want to make sure I have got that covered.
Q How are you planning for retirement?
A Investing has always been fun to me and I will likely do this for as long as I am able to. I believe I should have saved enough for all my financial obligations within the next 10 years and subsequently have enough to give back to the community in a meaningful way.
Q Moneywise, what were your growing-up years like?
A My parents have trusted me with money since young, hardly questioning me on what I spent on, even when I was studying overseas. My dad is a businessman and my mum is a director in a pool maintenance company.
Luckily for them, I was a "low maintenance" kid who had few wants. Back in secondary school, Ixiz wallets and Ocean Pacific clothes were all the rage, but I wasn't tempted to get any. My only indulgence then was the "limited edition" Far Eastern Economic Review magazine. Because of a partial government ban, there were only 500 copies available every week in Singapore and I was always excited to get hold of a copy.
Q Home is now...
A I live in a landed property in Bukit Timah. It has a land area of 4,100 sq ft and a built-up area of 8,400 sq ft with six rooms. My wife worked with the architect and interior designer for close to three years to build this home. It is calibrated to our lifestyle and is very much centred around the children, with an entertainment room, a library and a swimming pool.
Q I drive...
A A black Toyota Alphard. It is a really comfortable seven-seater that is great for ferrying my three kids. The only downside is going into carparks of old buildings whose ceilings may be lower than 1.9m, which is the height of the car. I hold my breath whenever I drive in.