Eye for value (Dr.Niwes Hemvachiravarakorn)
โพสต์แล้ว: จันทร์ พ.ค. 26, 2008 10:49 pm
Eye for value
Retirees shouldn't be afraid of risk, says former financier who lives off dividends.
By Chadamas Chinmaneevong
Conventional wisdom suggests that the older you get, the more conservative your investment strategy should be, as you have less time to recover from market volatility.
Nonsense, says Niwes Hemvachiravarakorn, a leading value investor.
"In fact, I think that the older you get, the more opportunities you have. You're basically saving for your descendants," Dr Niwes said.
While he says he is officially in "early retirement", the 52-year-old former financier keeps busy as a visiting scholar at the National Institute of Development Administration in addition to managing his portfolio.
"Many people allocate their wealth across different asset classes. That's not my style though," Dr Niwes said. He estimated that just 0.5% of his wealth is in bank deposits, with the rest invested in the stock market.
"A retiree who doesn't have a job or investments cannot increase his wealth. If you want money, you have to go to the source, which is the capital market."
Dr Niwes said he was the youngest son of a poor family, the only one with a chance to advance through education.
"We had rice to eat, but nothing more," he recalled. "If I wanted to go to university, I could do so only if I received a scholarship."
He did receive a state scholarship, and eventually obtained an engineering degree from Chulalongkorn University and a doctorate in business from the University of Mississippi.
He worked at Nava Finance and Securities up until the 1997 crisis, when he and thousands of other financiers were left jobless by the crash.
Dr Niwes said it was then, at the age of 42, that his stock investments took on greater importance.
"At my age, it was impossible to find a job. I had around 10 million baht at the time, and needed to find a way for me and my family to survive," he said.
A decade later, his wealth has risen by 30 to 40 fold, and he can live comfortably on dividends of around 10 million baht per year.
Dr Niwes laughed. "I'm not handsome, but short and dark-skinned. In my life, I didn't have any right to choose a beautiful woman to be with me. But in the stock exchange, anyone can pick the best stocks."
He says he takes his rights and responsibilities as a shareholder seriously. "I always tell my daughter she should be proud to hold the best stock in each sector. You are the owner of the country's best companies."
He recommended that investors avoid holding too many stocks, as it made it difficult to monitor and study each at the same time.
Instead, concentrate on just five or six top companies in the portfolio.
Cutting losses is also a necessary skill - if a stock continues to underperform after a few years, sell and start somewhere else, he says.
While sophisticated investors would look at a range of fundamental and technical indicators to guide their investment strategies, Dr Niwes says beginners should start with the basics, such as comparing price-to-earnings ratios.
No one should make the mistake, however, in thinking that successful investing doesn't depend on hard work.
"Investment in stocks is an art. Investors must do research on the company that they are interested in, and ideally trace its development over the previous five years," Dr Niwes said. "If performance has fluctuated, then you should consider where the problem lies."
He added that short-term price gains were not his goal.
"I pay no attention to capital gains. For me, stock investment is a form of savings. If it's a really good stock, you can always convert your holdings to cash."
Keeping one's wealth in the bank is a losing proposition in his view, particularly as inflation rates outpace deposit interest rates.
"But money held in good stocks always grow, because these companies are growing," Dr Niwes says.
http://www.bangkokpost.com/Business/26May2008_biz05.php
Retirees shouldn't be afraid of risk, says former financier who lives off dividends.
By Chadamas Chinmaneevong
Conventional wisdom suggests that the older you get, the more conservative your investment strategy should be, as you have less time to recover from market volatility.
Nonsense, says Niwes Hemvachiravarakorn, a leading value investor.
"In fact, I think that the older you get, the more opportunities you have. You're basically saving for your descendants," Dr Niwes said.
While he says he is officially in "early retirement", the 52-year-old former financier keeps busy as a visiting scholar at the National Institute of Development Administration in addition to managing his portfolio.
"Many people allocate their wealth across different asset classes. That's not my style though," Dr Niwes said. He estimated that just 0.5% of his wealth is in bank deposits, with the rest invested in the stock market.
"A retiree who doesn't have a job or investments cannot increase his wealth. If you want money, you have to go to the source, which is the capital market."
Dr Niwes said he was the youngest son of a poor family, the only one with a chance to advance through education.
"We had rice to eat, but nothing more," he recalled. "If I wanted to go to university, I could do so only if I received a scholarship."
He did receive a state scholarship, and eventually obtained an engineering degree from Chulalongkorn University and a doctorate in business from the University of Mississippi.
He worked at Nava Finance and Securities up until the 1997 crisis, when he and thousands of other financiers were left jobless by the crash.
Dr Niwes said it was then, at the age of 42, that his stock investments took on greater importance.
"At my age, it was impossible to find a job. I had around 10 million baht at the time, and needed to find a way for me and my family to survive," he said.
A decade later, his wealth has risen by 30 to 40 fold, and he can live comfortably on dividends of around 10 million baht per year.
Dr Niwes laughed. "I'm not handsome, but short and dark-skinned. In my life, I didn't have any right to choose a beautiful woman to be with me. But in the stock exchange, anyone can pick the best stocks."
He says he takes his rights and responsibilities as a shareholder seriously. "I always tell my daughter she should be proud to hold the best stock in each sector. You are the owner of the country's best companies."
He recommended that investors avoid holding too many stocks, as it made it difficult to monitor and study each at the same time.
Instead, concentrate on just five or six top companies in the portfolio.
Cutting losses is also a necessary skill - if a stock continues to underperform after a few years, sell and start somewhere else, he says.
While sophisticated investors would look at a range of fundamental and technical indicators to guide their investment strategies, Dr Niwes says beginners should start with the basics, such as comparing price-to-earnings ratios.
No one should make the mistake, however, in thinking that successful investing doesn't depend on hard work.
"Investment in stocks is an art. Investors must do research on the company that they are interested in, and ideally trace its development over the previous five years," Dr Niwes said. "If performance has fluctuated, then you should consider where the problem lies."
He added that short-term price gains were not his goal.
"I pay no attention to capital gains. For me, stock investment is a form of savings. If it's a really good stock, you can always convert your holdings to cash."
Keeping one's wealth in the bank is a losing proposition in his view, particularly as inflation rates outpace deposit interest rates.
"But money held in good stocks always grow, because these companies are growing," Dr Niwes says.
http://www.bangkokpost.com/Business/26May2008_biz05.php