Date
21 November 2017
Lee Kuan Yew's far-sightedness would have made him a good investment manager. Photo: Bloomberg
Lee Kuan Yew's far-sightedness would have made him a good investment manager. Photo: Bloomberg

If Lee Kuan Yew were a fund manager …

One Man’s View of the World, written by Singapore founding father Lee Kuan Yew, offers his insightful and candid views and forecasts for the world.

Some of Lee’s analysis applies well in investment.

Chinese understand that they need another 30 to 40 years of peace to catch up with the developed nations. And any potential turmoil or unrest could plunge the country into long-term struggle again, Lee wrote.

Therefore, for Chinese, it’s quite sensible to consider that “We’ve already spent such a long time waiting for this opportunity to catch up with the developed world. Why would we be in a hurry to do something that is detrimental to the rise?”

China’s economy may go through ups and downs in the future; however, the broad trend will be upward.

Lee noted that the United States still has its strengths despite its challenges, as the country has the most attractive immigration policy.

The US has never been so attractive for Chinese, and it attracts tens of millions of smart immigrants who are not happy with the status quo, he said. Many of them have succeeded in various sectors.

The US helps immigrants to merge into society and offers them equal opportunities to pursue their American dream. These immigrants contribute to the creation of new technology, products and business models in the country, Lee said.

That has helped the US recover from various crises.

Lee’s analysis is based on his personal interactions with leaders in various countries, as well as his understanding of their countries’ history and society and observations during his visits to them.

He does not rely merely on impressions or figures, but more on direct sources and the underlying essence that he perceived.

Cracking data is just a basic step in economic or stock analysis. Investors should care more about the style and characteristics of the management, whether they are consistent and keep their promises.

Digging to the bottom is far more useful than scratching the surface.

If the outlook for both the US and China remains positive, will investors be affected by mainstream chatter such as “the US market is likely to peak out after several straight years of sharp gains”, “China’s market has disappointed investors for many years, and investors should not expect too much”?

Lee, who is now in his 90s, says the reason he wrote the book, published in 2013, is that Singapore is at a crossroads.

He said Japan may become mediocre as a result of its aging population, and Europe may lose its competitive edge, because of its welfare society and rigid labor laws.

How will Singapore be positioned in a complex 21st century?

In recent years, some companies have figured out new ways of breaking up companies to make easy money. However, should investors trust companies who rely too much on financial tactics? Will the trick benefit small investors in the long run?

If Lee was a fund manager, would he be interested in such companies? Or would he try to avoid the risks and uncertainty?

Singapore has neither natural resources nor backup from a mother country; the underlying reason for its economic miracle is the sharp-sightedness and prudence of Lee and his colleagues.

Lee bet on the destiny of the city state, while investors bet on companies that will make them money.

Actually, it works pretty much the same.

Lee would definitely outperform most fund managers.

This article appeared in the Hong Kong Economic Journal on March 9. [Chinese version中文版]

Translation by Julie Zhu

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JZ/MY/FL

Columnist at the Hong Kong Economic Journal

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