Koon Yew Yin 7 March 2021
Hong Kong richest man, Li Ka Shing in his twilight years wrote his philosophy of life, wealth, health, doing charity and happiness.
Mr Li Ka-shing is the Chairman of Cheung Kong (Holdings) Limited and Hutchison Whampoa Limited. Cheung Kong (Holdings) Limited is the flagship of the Cheung Kong Group which has business operations in 54 countries around the world and employs about 240,000 staff.
I just read Li Ka-shing life story which reminds me of my experience in equity investing in Hong Kong and how I became a full-time investor.
In 1983 when China gave notice to the British Government to recover the sovereignty of Hong Kong and Kowloon which was ceded to the British when China lost the 2 opium wars in 1842 and 1856-60. The Hong Kong stock market crashed. The Hang Seng Index fell below 1,000. Most of the Hong Kong investors were rushing to sell their holdings because they were afraid the Communists were coming to control Hong Kong.
There were so many listed shares with fantastic profit growth, selling below their NTA. I identified a stock namely Hong Realty & Trust (HKRT) which was controlled by a Jew, MR Willock Marden. Just before the stock market crash, HKRT was selling around $14 with $10 cash per share because the company just sold a multi storey building called Willock House. During the crash HKRT was selling below $4.00 per share. I used all my money to buy HKRT. As the price was recovering, I bought a lot more shares with margin finance. As soon as China agreed to give another 50 years extension to the British Government, the market rebounded sharply. HKRT shot above $20. I sold all my holdings and bought many other stocks which were still under-priced. I bought Henderson Land, the biggest property developer in HK, HSBC and Futuna Hotel Group.
After I found out how easy to make money from the stock market, I retired from IJM Board and became a full-time investor.
The broking company, Kaiser Stocks and Shares Co. Ltd was giving me margin finance to buy more shares to make more money. The owner wanted to sell his company to migrate to Canada. He wanted to help his manager Edmond Leong by selling the company for only $10 million which was the security deposit for the stock trading licence, all the computers, furniture and other accessories were free of charge.
The manager, Edmond Leong and I each bought 50% of the company. Edmond gave 5% to the chief trader and I gave 5% to the accountant so that no one had full control of the company.
After a few years, we sold the company to a Chinese rich man from main land China for a small profit.