Coffee with FFN and Clive Tan

Clive learnt his investing skills personally from Curtis Montgomery, an American value fund manager, who was the most successful audited value investor in Singapore. During a 5 year period, Clive applied what he learned in investing and accumulated enough investment returns with that short timeframe to successfully launch his first business Curious Minds Childcare Pte Ltd. Clive then went on to co-establish a private investment company, 8 Investment Pte Ltd.

FFN: At what age did you get started in investing? 

Clive: In 2004. I met Curtis Montgomery and he enlightened me about value investing. It made a lot of logical sense to me as there is actually a methodology to do it. I worked for Curtis for free for a short while, learnt more by reading books and attended workshops. Before 2004, I was just speculating on the prices.

FFN: How did you get interested in investing and who inspired you to get started?

Clive: Warren Buffett and Curtis.

FFN: How do you choose which stocks to invest in?

Clive: I started off as a quantitive person. I’m more of a bottom-up investor. If the numbers make sense, I look at business model, management, industry and then the valuation. At a personal level, I also have to look at how much money I have at the time of investing.

FFN: What are some of the stocks in your portfolio currently?

Clive: Boustead is one of the biggest holdings. My biggest share is in this company itself.

I was a school teacher before and I invested whatever I had when I was teaching. After quitting my job, my wife and I put in about $150,000 into a childcare business. I put in quite a big amount of my investment profit in it. Subsequently, I rebuilt my investment portfolio again.

FFN: Where and how do you look for companies to invest in?

Clive: From my interests. I will share with you some companies that have done well for me. There’s this company called Unisteel Technology that makes precision screws. The profitability was quite good even though they were a small company. There’s a niche market. They are small but big at the same time in their own pool.

Another one is Sincere Watch. At one stage I was into watches – mechanical watches, mechanism inside watches. After I bought my first Swiss watch, I became more interested in the retail scene. I remember an instance where this particular person paid for his watch in a thick pile of cash. I realized that there are people who are buying such watches even though most of the time we see these shops being empty. I then looked at the numbers and it made sense.

FFN: Is Unisteel still listed?

Clive: Unfortunately, the best companies I invest in are always privatized.

FFN: Reminds me of Thomson Medical Centre (TMC). Did u invest in TMC?

Clive: I was very keen. At the price I assessed them at, it was not a gleaming buy but the price went up so much. I even wrote about it but unfortunately, it was one of the things that got away.

FFN: What are the mistakes you have done pertaining to investing and what are the lessons learnt?

Clive: I have lost money in S-chips. The numbers looked good but I didn’t take into account the corporate governance and management. I no longer invest in S-chips but I’m not saying they are all bad. There are some undervalued ones but it will require more homework if the numbers are true. You need to do a lot of due diligence.

FFN: What lessons have you learnt over the years as an investor?

Clive: I’m still learning. I learn a lot every day. When I first started, I thought I knew very little. But I when talked to people, they said that I really know a lot of things. I was like “Is it?” Anyway, I realized the more I learn, the more I don’t know.

FFN: How about an advice for the youth who are looking to build up their future?

Clive: Start young. If they don’t have cash, build up on their knowledge first and invest when they have income. Have simple lifestyle so that you can have savings.

FFN: What does financial freedom mean to you?

Clive: Financial freedom is really about having choices. At the end of the day, it’s like “Can you choose to do this?” and “Is it a choice or is a duty?” A lot of people go to work as it’s their duty. They need to pay their bills. I don’t think in terms of that. In retrospect it’s easy to say but people in that situation have to make a conscious effort to get out of that thinking and to really plan for their own finances.

I’m not sounding arrogant here but I’m really grateful and proud that we have built up this company from nothing. What you see here is the result of what we started with three guys, two desks and nothing else. I wouldn’t say it’s big now but it’s still “Wah!” At this stage we are looking further out and we have bigger plans for the next two years.

FFN: Give us an “insider look” of a typical day in your life from the moment you wake up to the moment you sleep

Clive: I wake up at around 6.30am. Go jogging and go gym. I leave house at around 7.30am and around 9am I will be in office. I stay in office till around 5.30pm but what time I finish work depends on what tasks I need to do. Like after this interview, I have to go for another meeting outside but that’s fine. I focus on what needs to be done rather on the time itself.  I go to sleep around 11.30pm. Before that, I always read.

FFN: If you could summarise your whole life in one word, what would it be?

Clive: Ah, that’s a very good question…. Legacy.

FFN: A parting shot for the readers…

Clive: From my experience, choose the life that you want for yourself and if you decide that’s the life that you want, go all out to create that.

FFN’s input – I conducted this interview on the same day but at different time as Ken Chee’s (featured last month). However, I decided to separate the interviews into two different posts. Combining the posts into one will make the post much longer, making it unpalatable.