Michael Garcia is CEO and Chief Investment Officer of MDG capital, a boutique investment advisory firm based in Manila. MBG Capital serves as investment adviser to Seahedge Philippines Fund (Bloomberg: SEAPHFA:KY), a Philippines-focused equity fund domiciled in the Cayman Islands.
Before establishing MBG Capital in 2011, Michael worked for nine years as the Head and Chief Investment Officer of the Trust & Investment Services Group of Union Bank of the Philippines, where he oversaw US$1 billion of client portfolios. Michael is a CFA charter holder. He holds an MBA degree from IESE Business School in Barcelona, Spain and an undergraduate degree in AB Management Economics from the Ateneo de Manila University in the Philippines.
In this episode, Michael shares how he invested in one particular investment company in Vietnam without taking into consideration management ethics. He will also tell us how not sticking to step by step process in investing and observing due diligence could cost big time.
“You have to take the time in your due diligence to meet the management. There's a lot you can learn, in a personal meeting.”
-Michael Garcia
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Resources:
Topics Covered:
02:42 – Michael thoroughly relating to the ferry boat company he invested in Vietnam
04:12 – Mentioning about his particular stock portfolio and their Vietnam stock exposure
04:54 – The events that happened which contributed to the company's fallout
06:22 – The eventual failure of Michael's investment and the losses he incurred
07:36 – How Michael didn't see it coming, the fallout of the company he invested in and what to learn from it
08:48 – Michael's lessons on his worst investment ever
11:59 – Telling in hindsight about management ethics on this particular company Michael invested in
13:01 – On dealing with stocks in Asia and about liquidity, volumes and stop losses.
13:57 – Michael advises: "Don't rush into your investment capital."
Main Takeaways:
Lesson 1: “You have to take the time in your due diligence to meet management. I mean, there's a lot that you can learn, in a personal meeting, vis a vis, just reading financial statements.”– Michael Garcia
Lesson 2: “You don't rush into things, and you have to apply your investment process steps in a very disciplined manner.”– Michael Garcia
Lesson 3: “Ensuring that management ethics and interests are something that is aligned with minority shareholders is fundamental. Ensuring that you've got a management team in place that takes into account goal. Know your investment case.”– Michael Garcia
Lesson 4: “It's important not to rush into your investment capital. You need to apply your process diligently and if that means meeting management before you invest. Do it. It'll save you a lot of pain down the road.”– Michael Garcia
Lesson 5: “I often hear about when people are making their worst mistake, and that is where their worst investment is that they break their process.”– Andrew Stotz
You can also check out Andrew’s books
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