My Worst Investment Ever Podcast

Catherine Flax has had a distinguished multi-decade career in financial services, fintech and commodities. She is currently an advisor and board member to numerous start-ups and mature businesses, bringing expertise in business and strategic growth, innovation, talent development, regulatory affairs, and more. Catherine was the CEO of Pefin, the world’s first AI financial advisor. Before Pefin, she was the managing director and head of commodity derivatives, foreign exchange and emerging markets sales and trading for the Americas at BNP Paribas, was chief marketing officer at J.P. Morgan, as well as the CEO of commodities for Europe, the Middle East, and Africa.   “What I didn’t factor in was what might be the damage beyond the dollars … I put myself in the position of mixing friendship and business, (and) that it would destroy a friendship.” – Catherine Flax Worst investment ever Catherine had been a professional in financial services for some time when she got into her worst investment about 15 years ago, so she was well versed at examining possible outcomes and potential loss cases. A good friend approached her with a business investment that was outside of her usual range of expertise. It was an established business, not a start-up and, from an analytical point of view, she was thorough in examining the probability of loss, the upside and all the typical calculations a financial professional goes through before getting involved. She did, however, neglect to factor in the “damage beyond the dollars” if the investment did not pan out. While the outcome was not beyond her expectations of the potential downside risk, the investment did not go well. So her math was fine. But, as this was the first time that she had mixed business and friendship, she didn’t realize the biggest loss would be the friend who had involved her. For Catherine’s part, she wasn’t angry about the financial loss, but her friend was so embarrassed that the friend felt too uncomfortable to maintain ties with Catherine from that time onwards. In retrospect, Catherine feels that the outcome should have been obvious to her, but that it was not a result she had thought about at the beginning. While she calls this damage, “irreparable”, she was happy to say that similar arrangements have worked out better since this time. Some lessons Be very cautious about going into business with friends. Communication, as with all relationships, is paramount. Vital are clear conversations about exit strategy, as in a normal business. Discuss how failure could affect your friendship and “really look somebody in the eye” to help them understand that a bad outcome is certainly possible. Then you can move forward as friends, if not as business colleagues, when a venture or investment doesn’t turn out as positively as was expected. Andrew’s takeaways Place principles before personalities in the business. This is a powerful concept that offers a simple guide on how to survive without letting our personalities destroy us. Our personalities are ultimately driven by fears, and not higher thought or principle. In his own businesses, Andrew has practiced this and even made an agreement with a friend and business partner that if they ever felt their business was going to destroy their friendship they would close the business. Actionable advice Sit down and think deeply about the worst-case scenario in an investment or business venture and what you would do if the friend or person you’re in business with is angry or humiliated. Plan and set the stage to be helpful, to let them know that you are still their friend, and to not let this bad decision or investment ruin your friendship. Then you can make the investment after having the planning conversation and most likely you will be able to mitigate a bad social outcome, even if the financial outcome falters. No.1 goal for the next 12 months Catherine aims to continue advising the numerous companies she is linked with and help them flourish to the best of her abilities this year, and to avoid all the kinds of mistakes discussed here and in other episodes of My Worst Investment Ever. Parting words “This is such a great format. I’ve enjoyed the previous podcasts and thank you so much for having me.” You can also check out 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 Connect with catherine Flax: LinkedIn  Twitter   Connect with Andrew Stotz astotz.com  LinkedIn Facebook  Instagram Twitter  YouTube My Worst Investment Ever Podcast 

Ian Dunlap is an investor with one of the highest win percentages in the country and founder of Red Panda Academy. Through Red Panda, Ian teaches his blueprint for success to students, who often have little to no experience with trading. Using completely custom formulas, Ian is able to teach in 30 days what took him years to grasp. In December 2018, Ian celebrated his third highest day in trading, earning US$56,000 in about 2 hours. Ian’s passion for investing is rooted in his upbringing. Growing up in East Chicago, Indiana, he didn’t come from an affluent area or a rich family. Perhaps what had the greatest impact on him most was when a relative was taken advantage of by a dishonest investor. Through that experience, Ian witnessed the fear and distrust that can accompany investing. “One of the biggest ones (mistakes I made) was not investing early enough in the market. I got started late at 24. And the stock market is the easiest thing to invest in.” – Ian Dunlap Worst investment ever A college friend called Ian into his dorm room one day in 2005 and showed him a social media website, asking if he had seen it and if he was on it. Twenty minutes later, he had signed up for an account and was hooked, spending maybe two to three hours a day on the site. He mainly using it for his party promoting and other business, and started using it to run advertising. He called a relative and said: “Listen, I don’t call and ask you for anything. When I tell you, this is the greatest thing I have come across in life, I’m willing to take the last of my money, if you will take some of your money (he had a lot of money), and invest in this company with me.” His relative answered: “What the hell are you talking about? You’re in college … What do you know about investing in a technology company?” This clearly was a different time for venture capital. His relative refused. He tried to get other friends and other family members involved also, but got the same answer. And Ian was young black college kid. At the time, one of his friends worked at MySpace, which at the time was the hottest thing that was being tipped to destroy Instagram. Referring to the website Ian wanted to invest in, his friend said: “I think this company is going to kill us … I know we have all the artists, all the kids are on here, but this thing that you’re on, is nothing like we’ve ever seen.” It turned out that the US$125,000 investment, of which he would have put $10,000 of his own money would have turned into $26.4 million. That company was what was known as TheFacebook.com. Now every time he sees his relative on the holidays, the relative says: “I probably should have given you the money you wanted. Ian says we all have made such “boneheaded decisions”, in which if we would have just invested a little bit of capital, it would have changed our lives forever. Some lessons Be more convincing. Ian laments not being persuasive enough to get the family member to put in some money so they could invest in Facebook (FB:US, FB.OQ), which is currently trading at - US$190.56/share. Facebook turned into one of the biggest tech companies in history, and he regrets not following up more and failing to make a better case for the investment. Stay true to your convictions. Whenever you have a position that is true to your heart and you know it is going to work, you may be the only person on the face of the earth that believes it, but you have to let your conviction carry you. “Most top investors did not start out in the industry. They took back roads, got into the industry and formulated their own strategy. And that’s how they became so effective.” – Ian Dunlap Andrew’s takeaways Investigate. When you see a business that you think is interesting, investigate it, ask questions, and find out if you could invest in it. At some point, an investor has to take action. But do not act without doing research. Do not act without assessing the risk. Size your position. This is a critical risk management concept because sizing your position matters so much. Investigate, do your preliminary research, and try to invest US$10,000 (if you have US$100,000 liquid) to get the step of taking the action going, but then size that position carefully. Actionable advice Put some money into the market every month. Start with a small amount. Then you will have the financial freedom that you want. Even in a down market, especially when we hit a recession in a couple years. Buy more.   “I always tell people just buy index funds, hold them … You don’t have to be the second coming of (Warren) Buffett to make money, just buy the S&P 500, the Dow or the equivalent in your country. I got started late. That’s why I’m so passionate about it.” –  Ian Dunlap #1 goal for next 12 months To have a more balanced life. The money is fun but first and foremost, take care of your health. “I’ve had 14 family members died in 17 years. At no funeral have I ever thought about business. Not once. I didn’t care about a chart, long-term, short-term. It doesn’t matter. Take care of your health. That’s the most important thing. The money will be there … especially if you’re investing automatically.” – Ian Dunlap Parting words “Listen to every past episode (of My Worst Investment Ever) so you don’t make the dumb mistakes and that the other guests made.”   You can also check out 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   Connect with Ian Dunlap LinkedIn Twitter   Connect with Andrew Stotz astotz.com  LinkedIn  Facebook  Instagram  Twitter  YouTube  My Worst Investment Ever Podcast      Further media mentioned Michael Lewis (2010) The Big Short Inside the Doomsday Machine  Gregory Zuckerman (2009) The Greatest Trade Ever: The Behind-the-Scenes Story of How John Paulson Defied Wall Street and Made Financial History  Michael Burry (2006) A Primer on Scion Capital’s Subprime Mortgage Short Adam McKay, director (2015) The Big Short  

Ian Ng is currently the CFO at Nielsen China and he has spent six years providing accounting and auditing services at Big Four accounting firms, covering manufacturing, construction, and trading services. Prior to that, he spent 13 years in corporate finance, doing mergers and acquisitions and all kinds of business support and business strategies. His expertise incorporates business partnering, which includes contract review, price setting, and market outgrowth approaches. He’s also applied his talents to compliance and effective reporting to US and China accounting standards including GAAP, business performance forecasting and control and strategic planning for organizations to achieve the best use of their resources.   “Makes more friends. Because once you have more friends in the markets, you tend to learn more about other industries.” - Ian Ng Lessons learned Past trends of performance are definitely not a good or mandatory reference. China had been on a growth trend if you look back 15 years, China growth, GDP, investment, and all the indexes seemed good. But everything changed. A lot of the time when we are uncertain about the future, we tend to look at the past trends to give us some comfort and confidence that things will repeat, but in today’s world, this is not the case. Don’t be stubborn. Be flexible and practice self-reflection. His lesson was he relied excessively on his our commercial team and had little close connection with the customers. Be ready for change because today’s world is ever-changing. Prove all assumptions that you make in business. Andrew’s takeaways Don’t fight the price. In some ways, in corporate finance and in business, this idea does not apply at all, but in many ways, it does. It is often said “the trend is your friend” or, “understand the direction that a price is going”. Pay a lot of attention to the price of your final product. Go out and meet the potential customers to confirm real demand. Sales people are naturally optimistic so be very careful about accepting their word for the level of demand for a product. When you are making an investment decision, it is critical to meet potential customers and verify that there truly is demand. “In other words, don’t totally trust what the sales team says.” Observe the market before making business or investment decisions: try to figure out is there any market or demand for particular products and make survey from the external environment not just only from internal staffs. “No matter how great a business person you are, it is extremely difficult to build a successful business in an industry where the price is falling, and falling significantly.” – Andrew Stotz You can also check out 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 Connect with Ian Ng LinkedIn Connect with Andrew Stotz astotz.com  LinkedIn  Facebook  Instagram  Twitter  YouTube  My Worst Investment Ever Podcast 

Eric Choe started his investment industry career as a sell-side equity analyst in Korea, where he worked with Samsung Securities, ABN AMRO, and Deutsche Bank. After earning his MBA at The University of Chicago Booth School of Business, he worked at Fidelity Investments where he ran the Fidelity Thailand Fund. Currently, Eric manages multi-asset portfolios for high-net-worth individuals at a private bank based in Singapore.   “We must have an investment checklist … every investor has different factors they look for when they make investments and watch their investments. And I think everyone has to have a different checklist for what they’re comfortable with … (which) can evolve over time.” - Eric Choe One lesson learned One item on Eric’s 10-point checklist: If a stock is trading at a price-to-earnings growth ratio (PEG ratio) of above one, don’t invest in it. (The PEG is a stock’s price-to-earnings [P/E] ratio divided by the earnings per share (EPS) growth for a specified time period). Now if he’s invested in a stock in which the PEG goes above 1.0, he sells it, and if it’s trading at about 1.0, he will not buy it. Andrew’s takeaways Avoid investing in a company that is competing against the government. However, one exception would be when the government is truly failing in its strategy. The entry of the government into an industry isn’t the end of the world. But it can really affect the multiple of your target company and can lower the price that people are willing to pay for stock as their assessment of future growth will have fallen. Companies can survive, adjust and thrive, but their valuation will slide a little. You can also check out 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  Connect with Eric Choe LinkedIn Connect with Andrew Stotz astotz.com  LinkedIn  Facebook  Instagram  Twitter  YouTube  My Worst Investment Ever Podcast 

Azran Osman Rani is currently the founding CEO of Naluri a digital health technology company that provides a cost-effective and accessible digital health psychology service to help users adopt healthier lifestyle behavior changes. He is active in the internet technology space is a co-founder investor and advisor to iFlix, MoneyMatch, Cognifyx, and YellowPorter. He was previously the CEO and group COO of iFlix – a disruptive Internet TV-and-video-on-demand service that was launched in Kuala Lumpur, Malaysia in May 2015. It now operates across more than 30 markets in Asia, the Middle East, and Africa and has 700 employees, all in less than three years from its launch. Previously, Azran pioneered the long-haul, low-cost-airline model as the founding CEO of Air Asia X. He led the airline’s growth from start-up to US$1 billion in revenue, 2,500 employees, and a public listing, all in just six years, breaking many low-cost airline industry conventions and introducing innovations along the way.   “I ended up with a seven-digit net-cash loss … and eventually had to part company with the board on that journey. So it was a very, very tough and painful, financial ending … But you know, I learned an invaluable amount from that experience, and I wouldn’t have traded it for anything else.” – Azran Osman-Rani Lesson learned Be very wary of what banks or investment bankers tell you or advise you to do. They are getting paid their fees and commissions even if your business suffers. Have a back-up plan. Every organization or individual should have a back-up plan or alternative way to survive or cover from loss. Andrew’s takeaway The damage of leverage. There are really only two financial risks: debt and currency. If a business is run without debt, a huge amount of risk is reduced. In business and in life, the damage of leverage can never be understated. Obey the principle of trying to remain debt-free and the principle of diversification. Never listen to financial people. Investment bankers and analysts and other players in finance usually never run a company. They sit on the sidelines doing research and giving advice, without risking anything, without having any “skin in the game”. In fact, they are making money from getting a business owner to follow their advice, which is quite distracting. Finance adds no value. This is something Andrew tells his finance students. Value is created through products and services. Value is created on the asset side of the balance sheet, where the assets of the business and the brains and the commitment and determination of the people go into creating better products and services. This is what creates value. The job of a CFO of a company is to use finance as a tool to support management decisions. Remember this, a CEO or a young CEO, who is out there trying to build their business should not get lulled into thinking that financial maneuvers are going to create long-term value. You can also check out 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 Connect with Azran Osman-Rani: LinkedIn Twitter Azran Osman Rani Instagram Connect with Andrew Stotz  astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast 

Md. Nafeez Al Tarik is head of research and investment at City Brokerage Limited in Bangladesh. He has eight years of research and investment experience in the equity markets of Bangladesh and provides his research to foreign and local institutions. Prior to working at City Brokerage, he served as the chief investment officer at Asia Tiger Capital Partners Asset Management Limited, where he was responsible for several mutual funds valued at around US$12 million. In 2015 and 2016, his flagship fund generated cumulative performance, with respect to the benchmark, of about 8%. He also had experience and expertise in asset-liability management, having worked for the treasury department of Eastern Bank Limited and as an assistant vice president in Royal Bengal Investment Management Company Limited. Nafeez holds an MBA and a bachelor’s degree from the University of Dhaka, from the department of finance within the faculty of business studies. He’s also a CFA charter holder and a certified Financial Risk Manager (FRM). In his spare time, he’s an entrepreneur running the financial coaching institute, Professional Finance Studies, where he provides training in the fields of financial modeling, equity evaluation, risk management, advanced excel skills, and CFA and FRM preparation. He also has been a guest lecturer at the finance department of Jahangirnagar University, where he’s taught financial engineering and advanced financial engineering courses in the BBA and MBA programs. Finally, he’s also a CFA Society Bangladesh volunteer.   “I should have trusted the market and should have done some more due diligence to understand why the stock was falling with such large volume … I probably would have found that the asset quality was very poor compared to what I had thought, and from there I could have cut my position and taken a stop loss.” Md. Nafeez Al Tarik   Lessons learned There are many value traps in the market so don’t fall for them. Most of the time, the price is right. You have to look at the price action and you have to go deeper than the mere appearance of the market, as price could be pointing to an internal problem. Particular due diligence is required when you are investing in banks. Look carefully at the board, governance, management, accounting policies, risk management policies, loan rights policies, and provisional policies. Listen to your peer analysts and fund managers, especially those who are taking the same kind of contrarian angle as you and pay attention to their hypotheses. Understand that you are a human being and we have a lot of biases. Pay attention to your behavioral biases. In Nafeez’s case, he had confirmation, conservatism, overconfidence, and status quo biases. Talk to management to get a feel for where they are coming from. Find out about them, what their incentives are, if they have any conflicts of interest, and, especially when your position is big, do extra due diligence. Asset allocation involves some key decisions. Think and research thoroughly so you can make appropriate asset allocation decisions. To do that effectively, the macro environment must be understood. Andrew’s takeaways Properly analyze and manage risk. Some of the ways to do that are looking carefully at asset quality, putting in place some kind of stop-loss, and carefully sizing the position you take in an investment. So if you like a stock, the decision as to how big a stake you will take in it for your portfolio is one that needs careful research and consideration. On banking, if asset quality drops, you can be wiped out as banks operate on low multiples. If the assets, meaning the loans that a bank has awarded, deteriorate just a little, say 10% of total assets, all loans at the bank can go bad, which can literally wipe out all the equity of the bank. Even in a bubble time, the multiples of banks will be lower than the multiples of the overall market. A great investment can go very wrong because of the macro environment. An investor must never dismiss the macro environment. The Price is Right. When Andrew was growing up, he remembers watching a TV game show called The Price Is Right. In the stock market, there are many people looking at the market, which affects what the price is. But there’s a paradox, the price is right, but in order to be a successful active fund manager, at some point you have to bet that the price is wrong. When you make that bet, you really must have a great amount of high-level research in support of that decision. Connect with Md. Nafeez Al Tarik LinkedIn Bloomberg Twitter 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 Women Building Wealth The Build Your Wealth Membership Group Become a Great Presenter and Increase Your Influence Transform Your Business with Dr. Deming’s 14 Points Connect with Andrew Stotz: astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast  

Beth Azor is a 33-year veteran of the commercial real estate industry and owns Azor Advisory Services, which specializes in consulting services in training, sales, leadership, coaching, acquisition, due diligence, and market analysis. Beth owns and manages a US$79 million portfolio of commercial retail properties in southeast Florida and recently wrote and published a book called Don’t Say No For The Prospect, a collection of stories from her career, and her career as a retail leasing rock star. She is also a frequent guest on business and commercial real estate podcasts has her own Retail Leasing for Rockstars podcast and hosts the Rockstar Book Club Monthly Call, where she and guests review nonfiction, business-related books. A graduate of Florida State University (FSU), she is also chair emeritus and founder of the FSU Real Estate Foundation.   “Timing is the key and I would rather go for it and make mistakes, and even lose money than to never go for it ever.” – Beth Azor Lessons learned Timing is everything, but arrogance can the cause of failing to act in a timely fashion. Beth waited too long and rejected another, a cheaper offer that could have saved her in the long run through the 2008 real estate crash in the US. Pay very close attention to due diligence. In this case, it was due diligence about the location of her property and its demographics. Beth failed to appreciate the negatives about the location, which was surrounded on three sides by unpopulated areas. Andrew’s takeaways 1. Never underestimate the quagmire that bankruptcy swamp you in. Whether it is you as a company or you as a person, bankruptcy courts can change things suddenly and for the worse. At the bang of a gavel, a judge can make a judgment on bankruptcy that you really can go against an investor. 2. Arrogance and overconfidence is among the most prevalent of the mistakes investors make.                a. Macro factors are a major thing investors should always think about when investing. Sometimes it’s about preparing for events, such as the 1997 financial crisis in Asia, or the 2008 global financial crisis, which in a way started in Beth’s world with real estate. 3. Andrew recommends people follow his six-step investment process.               a. Find an idea               b. Research the return               c. Assess the risks               d. Create a plan               e. Execute the plan               f. Monitor the progress All those suggestions apply, whether it is a land investment or a stock investment. The key item for Andrew is that he separates the research on return from the research on risk. “Everybody who’s getting ready to make an investment needs a devil’s advocate … (who) must be focused on what can go wrong, and why it will go wrong, and what will be the impact when it does go wrong.” – Andrew Stotz   You can also check out 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   Connect with Beth Azor  Beth Azor  Twitter LinkedIn  Connect with Andrew Stotz astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast

Jeyabalan Parasingam is a Certified Public Accountant (MICPA) and a Chartered Financial Analyst (CFA). He has more than 25 years of corporate experience in areas such as finance, taxation, auditing, investment banking, private equity, real estate, and investment management. He’s been instrumental in the set-up of several successful start-ups over the past 15 years with a range of companies involving BPO (business process outsourcing), private equity, real estate, and technology. He has raised more than 600 million US dollars in equity commitments over the past 10 years.    “One of the best lessons I’ve learned in stock investment is that there is no amount of under-investment that you can do in due diligence. You’ve got to start due diligence in advance by reaching to the internal stakeholders.” – Jeyabalan Parasingam   Lessons learned  1.Detailed take on vital nature of due diligence behind any stock investment. Start vigorous due diligence a long time in advance. What he means is:                       a. Speak to the competition                       b. Speak to bankers                       c. Pick up the phone and call a supplier or get someone else who you trust the call a supplier pretend to be a purchaser. That can give you a good understanding of the company’s actual strength and weaknesses                      d. Don’t just use due diligence to confirm the investment. Instead, ask the question:     “Should we walk away now and lose a little bit of money that we have spent on due diligence and bringing the deal to the market, or do we continue this transaction and spend a lot and have a lot of grief later?” – Jeyabalan Parasingam    2. Forget the fact Big Four accounting/audit firms or big banks are involved in doing the due diligence because they too can make mistakes or miss crucial items.   3. Take a central role in the due diligence. Personally oversee the proceedings and be the duty person, as you can hire an accounting firm to do the books, but the people are doing the due diligence might have little to no experience.   4. Make sure the people helping you with due diligence understand the sector well enough and have good enough relationships in that sector, so they can provide information that would not otherwise be available.    Andrew’s categories of mistakes and their antidotes   Andrew has gleaned from the Worst Investment Ever series of podcasts and blogs six main categories of mistakes made by respondents, starting from the most common:   Failed to do their own research  Failed to properly assess and manage risk Were driven by emotion or flawed thinking  Misplaced trust  Failed to monitor their investment  Invested in a start-up company  He also mentions his six-step investment process, which can help to avoid such mistakes  Find an idea  Research the return  Assess the risks  Create a plan  Execute the plan  Monitor the progress  Andrew’s takeaways  1.Often (Error No. 2) investors fail to properly assess risk. And this research on risk should be clearly separated from research on return.   2.Due diligence 1: Set up a team within your organization or your group solely to assess risk and do due diligence. Its sole responsibility should be to prove why the investment shouldn’t go ahead, the reasons why and explain what the risks are.  One of Andrew’s prior interviewees from London talked about having such a peer-review process within his investment team to produce counter debates, requiring it as part of their stock/company-analysis process.   3. Due diligence 2: Be an eyewitness and just go to see.               a.                a. If you’ve ranked a company they are among your top-10 customers, go and meet them.                b. If a company is shipping goods to a warehouse, go to the warehouse and see.  4.Due diligence 3 and the idea of misplaced trust (Mistake No. 4). People that are cooking the books and playing games, are always going to use big brand names to hide what they are doing. But it doesn’t stop at products. Other brand names can also be used:                a. Customers’ brand names and suppliers                b. Brand names in the audit firms.                c. Brand names of the banks, so:     “To be a great analyst, you must start with the premise: trust nothing, trust no one. In other words, get evidence … even branded companies and big companies and successful companies can easily miss the things … particularly when someone’s really working hard to hide stuff.”  – Andrew Stotz You can also check out 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 Connect with Jeyabalan Parasingam  LinkedIn  Email    Connect with Andrew Stotz astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast

Manit Parikh has worked across sectors on transformational programs with organization-wide impact, leading two companies to reach US$300 million in revenue. He is currently working with number three. This has led him to earn the nickname “The Michael Bay of Business”. Manit is working with Yellow as a director of investment and head of the business. Prior to Yellow, Manit has worked with leading Fortune 500 companies in leadership positions. Along with his current position at Yellow, he is also an advisor to various start-ups’ early-stage investors and an international keynote speaker. “Suddenly, a boy who made a million dollars just saw a million dollars go away. And I think that is when I really truly learned the value of hard-earned money and not being greedy, and actually analyzing everything to the core.”  - Manit Parikh    Lessons learned  Analyze and study the business you are planning to invest in.  Don’t be “cocky”, arrogant.  Ask the right questions, ask the wrong questions, but ask them. Why? Because every question brings an answer that raises another question that needs to be asked.   Never be afraid to say “no” to investment, because there are many more out there.  One occasion of success investing with one person or company is no guarantee that they can or will make you money again.   Analyze every facet of a business model, tear it apart and ask every possible question from the founders, because they are the ones asking for money.    Andrew’s takeaways  Andrew has gleaned from the Worst Investment Ever series of podcasts and blogs six main categories of mistakes made by respondents, starting from the most common:   Failed to do their own research  Failed to properly assess and manage risk  Were driven by emotion or flawed thinking  Misplaced trust  Failed to monitor their investment  Invested in a start-up company    Referring to Start-up businesses are usually very risky, so you have to be very careful about having anything to do with them.   Never be the sole creditor for a start-up. When you are the sole provider of funds or the start-up has very limited sourcing for the fund, the company can run out of cash quickly, and the company becomes desperate.   Never invest in a business whose success is dependent on government policy. The policies and economic decision are changing along with the government. To sustain the business as an investor, do not deal with government contracts as they are not stable.  Warning bells should sound when a start-up’s directors claim they have special access through relationships with governmental or regulatory contacts  Diversification of investment sizes and types is always wise.       You can also check out 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     Connect with Manit Parikh   LinkedIn  Twitter    Connect with Andrew Stotz  astotz.com  LinkedIn  Facebook  Instagram  Twitter  YouTube  My Worst Investment Ever Podcast 

Verawat Kirinruttana holds an MBA from MIT’s Sloan School of Management. He also holds a bachelor’s degree in engineering from Chulalongkorn University with first-class honors and gold medal. Verawat is currently a vice president of investment advisory services at Siam Commercial Bank (SCB). In his role, he provides asset allocation strategies and investment recommendations for private banking and affluent customers. Prior to this, he was a vice president of corporate strategy at SCB where he shaped the direction for the bank by developing strategic and tactical business plans and drove many transformation initiatives, such as the national e-payment. Before joining SCB, he was a management consultant at the Korn Ferry Hay Group (now Korn Ferry) at its Southeast Asia office, where he spent more than four years in human capital management, organizational development, and performance management.   “With a lot of analysis and valuation you would believe that found a diamond but management, the corporate governance of that company might not be good at that at the level on the status” – Verawat Kirinruttana Lessons learned  When investing in foreign markets, expect the unexpected. Things can happen that are beyond the mind’s ability to comprehend, events way beyond your control. This can be the case of a management decision and can happen even after a lot of analysis and careful valuation, which you believe puts things within your power. Management or corporate governance of a target company may not be good and when you try to even try to figure out what happened, the unclear nature of the market and the how you access the information can be very really limited.   Solution: Cut losses as soon as possible but in frontier markets, liquidity can be the problem and may not be able to sell your position.    Andrew’s takeaways  Be careful about frontier markets. They can be very attractive, but the actual performance of an investment target may not turn out as good as is shown by the underlying economy. If you can access that market, it does not mean that it will also give you access to the same returns as those that exist in the market. Also the flow of information can be non-existent or scarce so that you don’t really know what is going to happen, even of you know people on the ground.    Liquidity issues are key. A company that is the target of investment should have about US$ 1 million dollars a day in average daily turnover, or else it is too dangerous to put money into.   Using a stop loss methodology for quantitative strategy doesn’t always work. Even having a stop loss in place makes it hard to execute where there is thin volume.   Looking carefully at corporate governance is crucial. Ask yourself, does the management show any real concern about minority shareholders    You can also check out 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    Connect with Verawat Kirinruttana  LinkedIn  Verawat Kirinruttana Connect with Andrew Stotz  astotz.com  LinkedIn  Facebook  Instagram  Twitter  YouTube  My Worst Investment Ever Podcast Further reading mentioned     Alice Schroeder (2008) The Snow Ball  Michael E. Porter (1979) How Competitive Forces Shape Strategy