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  1. #1

    Talking Finance expert spills the beans on his boo-boos.

    Very interesting article in Straits Times:

    AUG 24, 2003
    Good economy and investment know-how are no protection against mistakes, says financial planner Leong Sze Hian
    Finance expert spills the beans on his boo-boos
    By Leong Chan Teik

    THE stock market is recovering, and the economy is getting back on its feet. Yet sometimes, the worst investment mistakes are made during such periods.

    And it is not just the naive who fall into all sorts of traps, but also the very financially literate.

    Take financial planner Leong Sze Hian, who has:


    Three masters degrees in financial planning and financial services;


    Two bachelor degrees in economics and insurance; and


    13 professional qualifications.

    An alumnus of Harvard University, he has strong views on many issues, not just finance, which he ventilates by writing to the forum pages of the Singapore media.

    In addition, he is widely quoted in newspaper articles.

    In all, his name has appeared about 200 times in the last 12 months in the four English newspapers published by Singapore Press Holdings.

    When it comes to investing, he has had more than his fair share of success. People who know him reckon his net worth runs into a few million dollars - but that's for another story.

    Here, the 49-year-old musters the courage to reveal the investment boo-boos he has made, in the hope that readers can glean lessons from his mistakes.

    His own favourite lesson and a humbling one at that: 'No matter how much you think you know, you cannot know everything. And you won't know what is the next big one to hit you.'

    LORDSHIP TITLE


    SINGAPOREANS sometimes make offbeat investments which look promising but don't quite pan out in the end. In Mr Leong's case, it was a lordship title.

    He was intrigued after hearing a BBC radio programme about a wealthy Canadian grandfather buying lordship titles for his grandchildren.

    At that time, British lordship titles - many with origins dating back to hundreds of years - were deemed a good investment as they had been rising by about 10 per cent per annum in value.

    In 1992, Mr Leong was in Britain for a conference when he checked out an auctioneer and proceeded to buy a title - Lordship of Newsham - for around $20,000.

    Though he has been feeling bemused at having become a Lord, he has not drawn attention to it.

    'I don't tell everyone about my title but those who know get curious. It makes for great conversation,' he says.

    Its monetary value has stagnated, though, at the level at which he bought it, instead of having doubled by now.

    PAKISTAN FUND


    THIS was another investment Mr Leong fell for, partly because of its exotic appeal. It was a closed-end unit trust listed on a US stock exchange which invested in Pakistan.

    The fund did badly and when it was liquidated three years later, Mr Leong got back only a few hundred dollars on his original investment of US$5,000 (S$8,745).

    COUNTRY CLUBS


    HE BOUGHT a membership at Fort Canning Country Club for $19,000 when it was launched in 1995. 'It was then fashionable to be a country club member, and appeared to be a good investment too,' he says.

    But he hardly used the club as it was far from his home.

    Despite that, he later bought a second membership at Fort Canning for $11,000.

    The club ran into financial trouble last year and its new owner subsequently asked members to pay $4,000 each to retain their membership.

    At that point, Mr Leong called it quits.

    SINGAPORE SHARES


    TEN years ago, Mr Leong bought shares in engineering and property investment company Guthrie, which have fallen in value ever since. It is the longest period that he has held a loser.

    He had bought the shares with his Central Provident Fund (CPF) savings soon after CPF money was allowed to be used for investment, opening a floodgate of funds pouring into the stock market.

    'I called my remisier and asked him to recommend stocks for me to buy and hold till I'm 55,' he remembers. He was 40 years old then.

    Guthrie was among the so-called CPF trustee stocks deemed safe for people to invest their retirement savings in.

    He invested around $2,500 at 70 cents a share. Now it has fallen to around 25 cents. 'Typical of many people, I just left the stock alone as it was losing money and it was CPF money, not cash,' says Mr Leong.

    FOREX TRADING


    IMAGINE losing US$59,000 in one night. That is what happened to Mr Leong during his maiden foray into forex investment in 1995.

    'I received a call in the middle of the night from my broker saying the US dollar was plunging against the yen. He said: 'Your margin has been breached. Have to cut all your positions'.'

    Mr Leong suggested selling one lot at a time. By the fifth lot, the US dollar had recovered enough for the sale of the rest of his holdings to be held back.

    If all the 13 lots he held had to be sold, he could have lost US$200,000, he says.

    GIRLFRIEND TROUBLE


    THIS nightmare arose from several financial decisions he made. It began with his father running into business trouble in the late 1970s, which led to a bank deciding to foreclose on their 5,000-sq-ft semi-detached home in Serangoon Gardens.

    Mr Leong's architect-girlfriend of eight years offered to help by taking a loan to pay off the bank. It was a mortgage loan which was made possible by transferring the ownership of the house to her, though monthly payments would be made by Mr Leong.

    But subsequently, their relationship ended and Mr Leong married another woman.

    His ex-girlfriend then tried to gain possession of the house and evict the Leong family.

    They fought it out in court. 'My lawyer theorised in court that this was a case of the fury of a woman scorned,' he remembers.

    On the face of it, she was the legal owner of the house. But Mr Leong argued that they had agreed that she would merely hold the house in trust for him.

    This pact was alluded to in the love letters that he and his girlfriend wrote each other when she was in Hawaii on a study scholarship.

    To bolster his contention, he produced evidence that he was the one who had been repaying the loan in monthly instalments of $500. His ex-girlfriend countered that the $500 was for rental.

    The High Court and, later, the Court of Appeal ruled in his favour. It was a first-of-its-kind case, which became a case study for law students in the National University of Singapore.

    Mr Leong, his home-maker wife and their daughter, were able to continue living in their Serangoon Gardens home.

    'If I had lost the case, aside from losing the house, I would have become a bankrupt. I would have had to pay the legal costs for both sides which came up to about $200,000,' he says.

    E-mail: [email protected]


    --------------------------------------------------------------------------------
    Copyright @ 2003 Singapore Press Holdings. All rights reserved.

    http://straitstimes.asia1.com.sg/sto...06307,00.html?

  2. #2
    I particularly enjoyed reading about his last mistake.

    Hell hath no fury like a woman scorned...

  3. #3
    vintage cho09's Avatar
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    wow... that's some story

  4. #4
    Registered User
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    Who you marry as a spouse will determine your happiness in life.

  5. #5
    Drug Dealer cccp's Avatar
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    very exciting life he has
    One of the most addictive web-based game

    www.goldentowns.com

    Playing this web game which claims that the in-game gold is backed by real gold. Quite a vibrant community out there. Seems like the whole bitcoin thingie is spreading to the online gaming world. They are coming up with their own crypto-currency as well. Look for me, i am cccp1979lcw inside!

  6. #6
    jamesjoel
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    The many degrees he has are purely theories.

    When it comes to smart investments,the degrees are useless.He is one good example.

    Otherwise,my investions can't beat any fun manager.


  7. #7
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    I think his investment style is more like gambling than anything else. Buying a country club membership as an investment and then hoping that the price will go up....It doesn't even give you dividends or interest. And on top of that, you probably have to pay annual subscription fee to the country club.

    How can that be an investment? It's a doodad!

    And then going into forex to trade on margin. That's a financial roller-coaster for people with nerves of steel. It's high-end gambling because you are betting on whether the exchange rate moves favourably in your direction or not. The correct way to invest in forex is to move your own funds from one currency into another if the exchange rates goes in your favour. Never trade on margin!
    Last edited by bolts; Aug 26th, 03 at 01:59 PM.

  8. #8
    Again, I agree with your assessments on his "investing" style.

    As for trading on margins, I used to. I learnt my lesson painfully way back in 1993. Nowadays, I only trade with my own money, never borrowed money (especially those from overdraft facilities...:p)

    Originally posted by bolts
    I think his investment style is more like gambling than anything else. Buying a country club membership as an investment and then hoping that the price will go up....It doesn't even give you dividends or interest. And on top of that, you probably have to pay annual subscription fee to the country club.

    How can that be an investment? It's a doodad!

    And then going into forex to trade on margin. That's a financial roller-coaster for people with nerves of steel. It's high-end gambling because you are betting on whether the exchange rate moves favourably in your direction or not. The correct way to invest in forex is to move your own funds from one currency into another if the exchange rates goes in your favour. Never trade on margin!