Seems this guy has a love-hate relationship with Jiutian Chemical!
Business Times - 25 Jul 2011
STARTING YOUNG
A mission to accomplish
Stanley Chia aims to teach young people financial literacy, reports TAM YU LING
AT age 24, Stanley Chia is no ordinary investor interested only in money making. He has a grand mission, and that is to increase the financial literacy among the youth of today.
It was with this goal in mind that he took a 10-month long sabbatical from his current course of study at the Nanyang Business School. That sabbatical resulted in Envisage Social Education, a social enterprise Stanley founded with the aim of developing social responsibility in young people.
Starting first with financial education, Envisage will eventually broaden its scope towards inculcating social responsibility among youth at the family and national levels too, says Stanley.
He tells BT about his investing journey so far, and how his new social enterprise ties in with his investing.
Q: How did you handle money when you were growing up?
A: My parents are extremely strict in terms of educating me on the value for money. For example, I had to do household chores so as to earn my own pocket money. As such, I am always conscious about my spending, and actively save up to 50 per cent of my pocket money.
Q: Are you a spender or a saver?
A: I am definitely a saver. I am extremely thrifty and selective in my spending on anything else other than food. Even then, I set a budget for food expenses so as to ensure that I do not overspend.
Q: Do you use credit cards?
A: Yes, I utilise supplementary cards from my parents but I pay them back for expenses that I have incurred. I track all credit expenses by keeping the receipts and being conscious about my total spending whether in cash or credit.
Q: What got you interested in investing?
A: It was in the early years in a polytechnic that I learnt about how I can grow my money through investments. My very first encounter with investing was when I signed up as a facilitator for an investment workshop.
At the workshop, the organisers made us sign a million dollar cheque addressed to ourselves, to encourage us to pursue financial success as an overall target. The exercise left a deep impression on me. I quickly developed an interest in investing which I now see as a means of acquiring financial freedom.
Nevertheless, I was conservative in how I approached this new found interest. I first started by reading more financial news and magazines to build up my knowledge in the area.
It was only when I was 18, and in my third year at the polytechnic that I started utilising my savings, coupled with some funds from friends, to co-invest in stocks listed on the Singapore Exchange.
Q: What do you currently invest in?
A: I started investing in stocks two years ago, and last bought equities a few months back. I've invested heavily in the stocks of companies in the retail and construction industries (CapitaLand and WingTai), and those in the commodities industry (Noble and Olam).
In order to obtain greater leverage against brokerage charges and also to promote wiser money management strategies among my peers, I also convinced some of them to co-invest their national service allowances.
Currently, I have liquidated most of my positions and diverted the capital into my start-up, Envisage Social Education Limited. Through my company, I hope to increase financial literacy among the youths so as to help them counteract the negative effects of consumerism.
Q: What is your approach towards investing?
A: I approach my investment choices by first conducting thorough research into industries of interest or growth. I also choose to invest in companies which I am familiar with, and which are supported by strong financial fundamentals.
Industry trends, specific companies' operational and growth strategies, management teams and competencies, and internal trade movements are among many other factors that one must have a clear understanding of before making a wise investment decision.
Q: What were your best and worst investments so far?
A: My best investment has to be a trade which I made in 2007, prior to the economic downturn, where I made more than 100 per cent profit from Jiutian Chemical Group.
But, Jiutian also turned out to be my worst investment. The profits I have earned from the trades I did in Jiutian have made me biased towards the company. After the global economic crisis, I became overly optimist about the economic recovery and took a position in the company.
I did not manage to recapture the earlier success that I had with the company in this trade. A change in management, coupled with the company's failure to manage the rising costs of raw materials caused the stock prices to hit a new low, plunging further than when it was during the economic crisis. After liquidating my position in Jiutian, I calculated my losses and realised that I have made a 75 per cent loss based on that trade alone.
Q: What was the key takeaway that you had after your bad investment?
A: Although I made a bad trade, I felt that the experience taught me an important lesson. First, I have learnt not to be too emotional and optimistic in one's outlook of markets, especially during highly uncertain market conditions.
Second, I have also learnt to be more disciplined in cutting losses and not allowing positions to decline too much before selling them off.