My Worst Investment Ever Podcast Eugene Ng – Keep Playing the Long-Term Game of Investing
BIO: Eugene Ng is the Founder and Chief Investment Officer of Vision Capital & Vision Capital Ventures. He is also the author of the Amazon best-selling book Vision Investing: How We Beat Wall Street & You Can, Too!
STORY: Eugene invested in a three-day course in a bid to accelerate investment learning. The course involved playing a simulated stock investment game. Eugene lost in the early stages of the game due to overconfidence.
LEARNING: It’s okay to make a mistake. Keep playing the long-term game of investing.
“If you want to invest long term, avoid playing Russian roulette. You don’t want to be a hero and then end up in a cemetery sooner or later.”
Eugene Ng
Guest profile
Eugene Ng is the Founder and Chief Investment Officer of Vision Capital & Vision Capital Ventures. He is also the author of the Amazon best-selling book Vision Investing: How We Beat Wall Street & You Can, Too! He also teaches investing once a year to educate new investors and to give back.
Born and raised in Singapore, Eugene studied economics and finance and received his Summa Cum Laude from the Singapore Management University in 2008.
Eugene’s career in finance spans over 11 years. His career started in 2008, joining Citi as a Management Associate for 3 years. Subsequently, he was with J.P. Morgan providing FX and Interest Rates sales & advisory for corporates for over 8 years, where he was a Vice-President.
Worst investment ever
Eugene had a near-death accident when he broke his neck almost ten years ago. While intoxicated, he decided to do a somersault into a very shallow swimming pool. Eugene broke the top of his head after hitting the bottom of the swimming pool. This type of injury is so severe that 99% of people who get it die, and of those who survive, 99% become paralyzed in some form or another.
After that near-death incident, Eugene got thinking about what to do with his life. Before the accident, he was living a meaningless life and just wasting his money. Being a reasonably logical, curious person, who is also fairly good at numbers, Eugene decided to look into investing. He had never even read an investing book. Now he wanted to master investing. Instead of reading books, taking time to figure it out, and making costly mistakes over a period, he took a different route to accelerate his learning. Eugene decided to pay for a three-day investing course.
The participants played a simulated stock investment game on the second day of the investing course. They were given five stocks to choose from, of which the financials were provided. They were to play this for ten rounds. A participant could decide to buy or sell each round. There was an additional advantage; a participant could take up to 10 times leverage on the limited amount of capital they had to buy the stocks.
Eugene believed he was brilliant, having been in finance and banking. So in round one, he chose three of the five companies, equally split them, and took the maximum leverage possible. So he took 10X his capital. The stock was 10% up, making Eugene one of the few winners of the 60 participants. Then the second round came, and the stock market was up again by 20%. Suddenly, Eugene was the top guy in his class due to his power of leverage. When round three came, a massive stock crash occurred due to a recession, and the market was down 50%. He was completely wiped out. As the game continued through ups and downs, there were just a handful of people left, and ultimately, only one was left.
While this was a simulated game, and Eugene didn’t lose anything in reality, the kick to his ego tore him apart mentally.
Lessons learned
- It’s okay to make a mistake, especially early on.
- Don’t use margin, leverage, or complicated derivatives, no matter how attractive they are.
- Don’t sell short.
- Keep playing the long-term game of investing.
Andrew’s takeaways
- Overconfidence bias will lead to poor investment decisions.
- There’s no point in playing a game with an unlimited downside.
Actionable advice
Avoid making the same mistakes that Eugene made.
Eugene’s recommendations
Eugene recommends reading his book Vision Investing: How We Beat Wall Street & You Can, Too!, where he shares his learnings and lessons so you can invest better and beat the market.
No.1 goal for the next 12 months
Eugene’s number one goal for the next 12 months is to start his journey of investing full-time. He wants to build a hedge fund and manage capital for others and himself.
Parting words
“Figure out what game you want to play in investing. Do that well, and you’ll never be wiped out.”
Eugene Ng
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Connect with Eugene Ng
Andrew’s books
- How to Start Building Your Wealth Investing in the Stock Market
- My Worst Investment Ever
- 9 Valuation Mistakes and How to Avoid Them
- Transform Your Business with Dr.Deming’s 14 Points
Andrew’s online programs
- Valuation Master Class
- The Become a Better Investor Community
- How to Start Building Your Wealth Investing in the Stock Market
- Finance Made Ridiculously Simple
- FVMR Investing: Quantamental Investing Across the World
- Become a Great Presenter and Increase Your Influence
- Transform Your Business with Dr. Deming’s 14 Points
- Achieve Your Goals