I think this guy sounds grounded, probably except for the part about the Hedge Fund!
Unless you are a superb investor who knows how to deal with OPM very well, perhaps it's better to stick to investing on your own?
Business Times - 27 Jun 2011
STARTING YOUNG
Gamer-turned-successful investor
NUS undergrad Scott Lee tells ENYA LIM about how he saved every dollar to pursue his interest in business
CREDIT cards may be one of the five Cs that many young Singaporeans aspire towards, but not Scott Lee Dong Yi. The economics major, who considers Warren Buffett an idol of sorts, is rather disdainful of the cashless mode of transactions often lauded for its convenience.
Mr Lee is set to pursue his third and final year of undergraduate studies at the National University of Singapore (NUS) when the next term resumes in August.
The self-proclaimed 'ex-gaming freak', who used to play computer game Counter-Strike competitively with friends during his secondary school days, has changed his tune quite a bit since then. Mr Lee now divides his free time mainly between investing and reading financial reports or books on business and finance.
He does these on weekends as well as in his free time, as he serves an internship with the Bank of China during the week.
After his mother died in late 1998, Mr Lee was forced to be independent and to take care of himself, which resulted in him realising the value of money quite early on. Money was tight then, and he recalls living in the same four T-shirts - outside of his school uniform - back in secondary school, while his father drove taxi to sustain the household finances.
Q: How did you handle money when growing up?
A: I was frugal from a young age and saved every single dollar I could, as far as possible. I remember once, when I was in secondary school, I walked all the way from Bukit Gombak to home in Bukit Panjang - just to save those 50 cents or so of bus fare!
Apart from a little spent on comics, the rest of my money went into the bank, and I got entertainment from playing computer games at home, without having to spend money.
Q: What sort of financial planning have you embarked on?
A: My financial planning is quite basic, actually. I am currently covered by one to two types of standard medical insurance. All my other financial resources go into investing. Q: Do you spend more or save more?
A: Definitely a saver - I don't shop much. Being a guy helps as well, because I am less bothered about clothes.
Q: Do you use credit cards?
A: I did last time, but only for a while. Banks charge interest on credit cards - it just doesn't make sense to use them because you're really just helping the bank make money and helping yourself spend more. I personally don't advocate credit cards, and would go so far as to totally rule them out of my finances, even in the future.
Q: What got you interested in investing?
A: Prior to doing business studies in polytechnic, I had no idea what business or finance was about. It wasn't even a conscious decision to learn about these things at that time - I initially chose the course because my friends chose it. So it was only in poly that I started learning about business proper in a whole 'real way', and getting more seriously interested. Then in the army I pored through books on investing and other finance-related books.
Q: What are your current investments?
A: At the moment, my stocks are mainly in the United States: American Express (Amex), Moody's, General Electric, Goldman Sachs, and BYD Co. Hong Kong is the only other market where I have one investment, too.
Q: How would you describe your risk appetite?
A: I am extremely risk-averse - because of my background - so you could say it is very low.
Q: What has your best investment been so far?
A: Overall, it would probably have to be Amex, not only because they are an outstanding company. I bought the shares over two years ago at a relatively low price, and today those have approximately doubled.
Q: What has your worst investment been so far?
A: Definitely Las Vegas Sands. I may have earned between 150 to 160 per cent on those shares but those gains were lucky ones; it was a bad decision because I didn't understand the business well enough. I could have lost a lot of money - it was purely luck that I didn't. Had the economy continued seriously declining, it would have been really bad.
Q: Any tips to share from your own experience with investing?
A: Investing won't make you rich in a few months; rather it has everything to do with hard work and rational thinking; luck is an inherent element of business but it doesn't work the same way with stocks. Never trade - common advice is to buy and sell. Trading is gambling with luck, which won't work out in the short or long term.
The key is to understand the companies you are interested in, and understand them well. Then buy low, when the price is right. An understanding of companies is very, very important. If you don't understand the company, it's as good as gambling your money away. Investing need not be about low risks and low returns - it doesn't make sense. If you do your homework, you can have low risks and high returns too.
Q: What are your long-term investment goals?
A: I eventually hope to start my own company - a hedge fund - and get shareholders to invest. But that would depend on whether I can get clients, of course, as well as convince them to stay.
