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"When I was in my 20s, I changed my signature from Cheah Cheng Hye to 'Learn'. This is how I sign my name still now. I want to remind myself every time I sign, I should never stop learning, and to be humble." This is the key to success for Cheah Cheng Hye who is managing over US$13 billion of assets and is called the "gold finger" of the stock market.
"In 1980s, capital markets in Asia were very inefficient, very emotional and very speculative. I saw an opportunity to become a pioneer to introduce the western value investing concept into Asia. It is a concept that investment should be based on good fundamental researches, that is 'Investing through discipline'. I later set up a fund management company with my partner and have been pursuing investing through discipline all these years. We are not speculators. We are not emotional. We are not short-term traders."
“I can’t think of any job more fascinating than asset management."
Cheah Cheng Hye describes finance as the bridge that links savings and investment. "The role of finance is to mobilize the savings of a society and put it in the best and most productive enterprises. I think I can be a good bridge and invest through solid research instead of speculation." His diligence in following value investing over the years has led to the continuous growth of the assets he managed.
Cheah is now 62 years old but he is still an active fund manager. He frankly admits that it is stressful to be a fund manager but he is still enjoying it.
"Stock market is about hopes and fears of a society. Stock prices go up or down in response to people’s hopes or fears. You have to also understand psychology, politics, social affairs, and put things in historical and cultural context. Only when you understand the whole range of factors that make people feel hopeful or fearful, then you can make good decisions about whether the market is likely to go up or down. I cannot think of any job more fascinating than this."
"The outlook of the Hong Kong financial services industry is a little bit cloudy in the long term."
He believes that Hong Kong, as a leading financial services centre for China, has the opportunity to contribute and make an impact in the short to medium term. Over the long run, however, the future is a little bit cloudy. "China is the second largest economy in the world but its financial services industry is still under-developed. In the next few years, short to medium term, Hong Kong has the golden opportunity to position itself as a premium financial services centre for China. At the same time, I must warn you, over the long run, in more than 10 years, Hong Kong will face increasing challenges. We cannot be too relaxed."
"Our financial services strengths are not diminishing but others are really catching up. For example, in the capital market and the offshore RMB market, Shanghai is beginning to post huge challenges. Singapore and London have never stopped fighting for market share in IPO, and offshore RMB business. Hong Kong must continuously upgrade and aggressively innovate."
He stresses that the financial services industry is a high value added and knowledge based industry which is critical to Hong Kong’s future.
Tips for young people
1. Good mix of hard skills and soft skills
"Hard skills are something you can learn in school or from textbooks, like financial analysis, accounting, business practices, and management systems. In fact, there is a big supply of hard skills, and we are not short of it. Soft skills are where you can really make a difference. It is about leadership, ability to make good decisions, communication skills, high EQ. I do not only look for basic skills and good language ability but also one’s potential to develop soft skills. In the long run, like in 10 years, you are on your own, really!"
2. Fund managers must be able to withstand high pressure
"Strength of character is a key to fund managers. They have to face extreme stress, huge setbacks including their own mistakes, financial crisis, and markets just not working as they think. It all really tests your character. Bad things usually come together. They come frequently and are particularly acute in our industry."
"Fund managers are the guardian, the trustee and the manager of other people’s savings which may be for their children’s foundation, buying residential apartments or retirement. If you lose money, they feel really bad and do not hesitate to let you know how bad they feel. Fund managers need to figure out how to overcome this and uphold the principles of making decisions in the long term."
Cheah Cheng Hye was a financial journalist with Asian Wall Street Journal and Far Eastern Economic Review, where he reported on business and financial news across East and Southern Asian markets. He worked at Morgan Grenfell Group in Hong Kong, where in 1989 he established the Hong Kong/China equities research department and was the head of research and proprietary trader for the firm. In 1993, he co-founded Value Partners which became the first asset management company listed on the HKEx in 2007.