#6 The Asian Mavericks - Dr. Tan CK (Pheim Asset Management)
Short Summary:
This podcast episode of "The Asian Mavericks" features Dr. Tan CK, founder and CEO of Pheim Asset Management, a successful asset management firm in Singapore and Malaysia. The episode explores Dr. Tan's journey, highlighting his investment philosophy rooted in value investing, his ability to navigate market crises (like the 1997 Asian Financial Crisis and the 2008 global financial crisis), and his remarkable track record of consistently outperforming market benchmarks over several decades. Specific examples of his successful investments in companies like Hibiscus Petroleum and RE are discussed. The episode also touches upon his entrepreneurial journey, the challenges of starting a boutique fund management firm, and his advice for aspiring investors and entrepreneurs. Dr. Tan's approach emphasizes careful market analysis, avoiding over-investment during market highs, and having the cash reserves to capitalize on opportunities during market crashes.
Detailed Summary:
The podcast is structured as an interview with Dr. Tan CK. The interview can be broken down into the following sections:
Section 1: Introduction and Early Life: The episode introduces Dr. Tan and Pheim Asset Management, emphasizing their success and long-term performance. Dr. Tan shares his humble beginnings, describing his upbringing in a large family and his initial aspiration for a stable accounting job. He attributes his entrepreneurial drive to his wife's family and his desire to improve his circumstances.
Section 2: Education and Career Beginnings: Dr. Tan discusses his university education, his choice of finance as a major, and his early career in a commercial bank, which he found unfulfilling. He then describes his transition to an investment company (Seco), where he gained valuable experience analyzing data and writing articles for financial magazines. This experience laid the foundation for his future success.
Section 3: Early Career Success and Value Investing: Dr. Tan details his move to a merchant bank and his early successes, particularly his ability to anticipate and profit from market crashes. He emphasizes the importance of value investing, highlighting his strategy of reducing exposure during market highs and capitalizing on opportunities during downturns. A key quote: "The most difficult part is to sell when a market is too high... when the market is going up if you're practicing value investing you will reduce your exposure." He cites the 1987 Black Monday crash and the 1997 Asian Financial Crisis as examples where this strategy proved highly effective.
Section 4: Building Pheim Asset Management and Expanding Regionally: Dr. Tan explains his move to Singapore in 1988, driven by a desire for greater international exposure. He describes his experiences working for a German bank and then an asset management company before ultimately deciding to start his own firm, Pheim Asset Management, with support from Bank Negara Malaysia. He emphasizes the importance of building trust with institutional clients and securing early investments from key players like GIC.
Section 5: Navigating Crises and Investment Strategies: Dr. Tan discusses his approach to navigating market volatility, particularly during the Asian Financial Crisis. He reiterates his philosophy of never being fully invested and using market downturns as opportunities to buy undervalued assets. He provides specific examples of successful investments in companies like Hibiscus Petroleum and RE, explaining his rationale for choosing these companies and highlighting the significant returns generated.
Section 6: The Book and Future Plans: Dr. Tan discusses the motivation behind writing his book, "Rising Above Financial Storms," emphasizing the importance of sharing his long-term experience and investment philosophy with others. He outlines his future plans for Pheim Asset Management, focusing on continuing to provide long-term value to clients and creating opportunities for young professionals in the industry. He concludes by offering advice to his younger self, emphasizing the importance of passion, mental strength, luck, and integrity.