Update: Teh Hooi Ling has left Aggregate Asset Management and is currently the Director and Portfolio Manager of Inclusif Value Fund.
That is the last word one would associate with a high flying senior editor of Singapore’s foremost financial daily and a 22 year veteran of financial reporting. But there she was, across the table from us fresh from her yoga session, still togged out in her gym wear and tucking into her fried kway teow supper, and that word just sprang into my consciousness.
Early this year, Alvin and myself got in touch with and shamelessly name-dropped ourselves into an interview with Teh Hooi Ling. We have read her articles and we have bought her books. We would have imagined that someone who deals with complex financial numbers, writes in absolute terms and has done well for herself in the cut throat world of journalism would be hard headed and absolutely no-nonsense.
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To interview an veteran journalist is akin to giving Michael Schumacher a ride to work, stressful to say the least. Hence we were pleasantly surprised to discover that despite being somewhat reserved, she was great fun to speak with. Between chomping on mouthfuls of sinful supper, she shared with us her take on the financial markets, property prices in Singapore and the satisfaction she derives from work.
For some reasons the original article never saw print. Some weeks ago we opened our emails and saw that she has moved on from her position in the newsroom and has joined a local boutique fund as a fund manager. We knocked on the door again and badgered her to tell us more. It took a while but she finally relented.
Here in her own words, Hooi Ling tells us about herself and how she got started in finance and investing.
I guess part of it comes from the environment I grew up in. My mum, even though she has very little formal education, is very enterprising. Her mum died when she was very young and her father remarried. So my mum had to fend for herself from a very young age. She grew up in Penang during British occupation. When she was old enough to work, a friend wanted to recommend her to work as a helper in a British family. At that time, salary as a helper in a British home was very high. But my mum didn’t think that was a good idea. She wanted to pick up a skill that would be with her for the rest of her life. So she became an apprentice in a hair-dressing salon instead, earning a significantly lower pay. To save on bus fare, she’d walk two to three hours every morning to get to her work place. Eventually, she gained enough experience and saved enough to set up her own shop. From then on, any extra savings that she had, she’d put them in the bank to earn interest, participate in tontine schemes, or buy some stocks based on tips from her customers. She’d make some, and lose some in her stock punting.
So I grew up listening to stock market talks in a hair-dressing salon, and seeing for myself that money can make money.
I guess my interest in investing started then.
When I started work at The Business Times, I had access to all the various data sources on companies in the newsroom. We had terminals which showed the “live” prices of stocks, their financial highlights, their previous price movements and technical charts. That got me very excited. Remember this was in the early 90s when the internet was not widely available yet.
But like most investors, I started buying stocks based on tips, based on what was in the news. I wasn’t making much headway. Like my mum, there were hits and misses.
It baffled me how the market valued a stock, how an analyst arrived at a fair value of a company. So in 2000, I signed up for a Master of Science programme in Applied Finance in NUS, as well as the Chartered Financial Analyst (CFA) programme to formally educate myself in this field.
The Master’s programme exposed me to empirical finance. That’s when I discover my love for back-testing, of trying to find proof or evidence to see if a theory or strategy works from past data. And I’ve made that my career for the past 11 years.
And now you have sold out from the establishment and switched sides! Tell us how did that happen and what prompted you to make the move. Was it a difficult decision to make?
Firstly, Aggregate is not ANY fund management company. Aggregate is implementing all the things that I’ve been writing about all these years, all the things that my studies have shown to have worked, and will continue to work because of natural human tendencies, because of how the market is organised, because of the incentive structures of the financial industry.
When Eric (the driving force behind Aggregate) met me for the very first time six or seven years ago through my varsity hostel mate, the very first thing he said to me was: “Why are you revealing all the secrets to the world?” Independently, Eric and I have arrived at the same conclusions based on our years of research, and for Eric, the actual implementation of his personal and his firm’s portfolios.
We came to the conclusion that consistently buying a big basket of value stocks, based on measures like price-to-book, price-earnings, dividend yields and free cash flow pays handsomely.
We’ve kept in touch through all those years. When Eric set up Aggregate late last year, he told me. He need not convince me that his process works, because I know it does. And when he told me about Aggregate’s fee structure, that the firm doesn’t make any money until and unless it makes money for the investors, then I’m completely sold. I decided to write a story on them in the Business Times because I felt that more people should know about products like the Aggregate Value Fund.
Readers of my articles would know that one of my pet peeves is the high fees levied by financial intermediaries on the poor retail investors. The expense fees on many investment products in Singapore are too high for long-term investment and can eat up to about 20 per cent of expected return through time, according to a recent paper by Singapore Exchange and global consultancy Oliver Wyman on retirement savings.
I was so sold on Aggregate Value Fund that I decided to invest in the fund myself. And after a few more meetings with Eric, he convinced me to join Aggregate. “You can be of more value to investors by actually executing the investment process rather than just writing about it,” he said. So I decided to take that leap. (Find out more about Aggregate here and here)
I try to employ Amazon founder Jeff Bezos’ regret minimising framework. At age 80, when looking back on my life, will I regret doing or not doing something? That’s the question he said we should ask ourselves when faced with a major life decision. I probably will, if I don’t at least try and see where Aggregate will bring me to.
I also love Mark Twain’s quote: “Twenty years from now you will be more disappointed by the things you didn’t do than by the ones you did. So throw off the bowlines. Sail away from the safe harbour. Catch the trade winds in your sails. Explore. Dream. Discover.”
I’ve been waiting for years to apply this quote in my life. Now, I feel, the right boat has come calling.
I couldn’t sleep in the first month after I made the decision to move. Singapore Press Holdings is after all the one and only employer in my 22-year career, and journalism is the only thing I’ve done so far.
But it felt right. The timing was right.
During my time in The Business Times, I’ve received numerous job offers to join the financial sector. I didn’t take up any, either because the job didn’t appeal to me, or I felt that I’d have to compromise my personal value system in order to thrive there. I couldn’t and wouldn’t do that. I was happy just sharing my research and my thoughts with readers, in the hope of influencing minds and changing behaviour for the better.
It’s been a month since I joined Aggregate. Now, I sleep like a baby every night – but more from exhaustion! Haha!
When things are more settled, I intend to start a blog, and continue to share some of my new perspectives from life as a fund manager.
In our interaction with her, the word ‘values’ came out more than once. It is interesting and definitely inspiring to see an idealist holding on to her beliefs and standards and yet thriving in the extremely realist world of finance and money. We wish her the very best. Good luck and Godspeed Hooi Ling!