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What Lee Kuan Yew Can Teach Us About Investing

What Lee Kuan Yew Can Teach Us About Investing

The late Mr. Lee Kuan Yew is without a doubt, one who has shaped the landscape of modern Singapore. Regardless of one's political views, I think most people would agree that Singapore would be in a far worse situation now if not for his hard work over the past few decades in building the country.

But I'm not here to talk about Mr. Lee's political contributions – the Motley Fool is after all, an investing website. After reading through his books and memoirs, I realise that the story of his life contains some pertinent lessons about investing as well. Here are my top three takeaways on the topic.

On having conviction

"You must have convictions. If you don't have convictions, you are going in for personal glory or honour or publicity or popularity, forget it."

In everything we do, including investing, we must know our purpose for doing it well and we must stick to our guns. We must know why we are doing it and focus on that objective. If our purpose for investing is to create a safe and stable income stream for us in the future, there is really no reason for us to invest into speculative companies that might never be profitable or produce meaningful cash flows.

On being pragmatic

"I've told the Cabinet, when I'm dead, demolish it. I've seen other houses, Nehru's, Shakespeare's. They become a shambles after a while. People trudge through. Because of my house the neighbouring houses cannot build high. Now demolish my house and change the planning rules, go up, the land value will go up… I don't think my daughter or my wife or I, who lived in it, or my sons who grew up in it will bemoan its loss. They have old photos to remind them of the past."

Mr. Lee is a pragmatic man and the quote just above is one of many examples of him displaying that characteristic of his. And that should be how we approach investing as well. We should always be practical about our investments and we should never become emotional about them as that might cloud our judgment.

If you are thinking of investing in a company like luxury massage chair maker OSIM International Ltd. (SGX: O23), being practical means that you would have done your research and be convinced of the growth opportunities that the company has. You're notbeing practical if you like OSIM as an investment simply because you like the design of its logo, the comfort of its massage chairs, or the ambience of its upscale TWG tea cafes.

On not having regrets

"I did what I thought was right, given the circumstances, given my knowledge at the time, given the pressures on me at the time. That's finished, done. I move forward. You keep on harking back, it's just wasting time."

Lastly, you should know that you will make investing mistakes along the way. It is normal and it will happen to everyone. Even the best investors would only get around six out of 10 decisions right, according to investing legend Peter Lynch.

The important thing is to learn from those mistake, move on, and don't feel regret. If you linger too long on your losses, you might miss out on the next opportunity even if it appears right in front of you.

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This article was first published on fool.sg in November 2014, and edited for March 2015.

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Stanley Lim does not own any companies mentioned above.

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