I believe in impactful donations
Executive chairman of investment firm GCP Global Gabriel Yap, a veteran investor who retired in 2009 to focus on philanthropy, is known for his insightful analyses of stocks and the economy.
Mr Yap, who now splits his time between Melbourne, Singapore, Hong Kong and mainland China, speaks to My Paper about investing in volatile markets and his charitable work.
Tell us about your personal experience with volatile markets.
I love volatile markets as they are the essence of capital markets.
At market turning points or crises, many people panic and are unsure about their investments, or look to "expert opinions" when they should be doing their own due diligence.
Greater volatility presents great buying opportunities - you only need to catch crises like the 1997 Asian financial crisis and the 2007 Global financial crisis, and you can afford to take it easy for the rest of your life.
How do you identify a mispriced stock?
I do an in-depth analysis on companies' operating cash flow as opposed to profit metrics, which are more commonly used by the market.
These are normally businesses which generate huge cash flow way above their normal capital expenditure, which means the excess can be paid out as dividends to shareholders.
Many of these stocks become even more attractive when their stock prices are sold down due to short-term earnings disappointment, a common trait in modern markets.
What do you think is the outlook for the Singapore stock market for the rest of the year?
I was predicting a market correction throughout April and early May, as it was clear that a correction had to come.
After the recent sell-off, I expect the Straits Times Index to be on an uptrend again after a period of moving sideways to consolidate.
The linchpin of this forecast is that company earnings still continue to be positive.
Do you think Reits (real-estate investment trusts) are still good investments in Singapore?
Underpriced Reits should definitely form an integral part of one's investment portfolio.
The sell-off in Reits last month saw Ascendas Reit, Suntec Reit and Mapletree Logistics falling off by more than 20 per cent.
What is the most unconventional investment you have made?
In the course of my philanthropy work, I have travelled through most of Africa.
Four years ago, I invested in diamond and gold mines in Sierra Leone and Liberia through Golden Saint Resources (GSR), which was listed on the British Aim market last Thursday. I am now a special adviser to the company.
The forecast is that prices of diamonds, especially loose diamonds, are on the rise after a 50 per cent cutback by diamond miners during the last crisis. This is not only an investment with high returns, but also one with a longer time horizon.
It is of higher risk than other kinds of investments, as investing in diamonds is still considered exotic in the commodities sector, and therefore not as well-researched and published.
What is the most important principle for any investor to keep in mind?
Understanding your own risk profile, and mastering market timing.
Tell us more about your charitable work.
I believe in impact giving - making sure that every $10 I give will result in maximum impact on the community I am helping.
I donated all my earnings from my Money Savvy column in Reader's Digest to Charities Aid Foundation in Australia, which has given more than A$100 million (S$116 million) to various non-governmental organisations (NGOs) across the globe in the past decade.
I'm also the international liaison director for Little Bird NGO, which is the largest NGO in China assisting the families of migrant workers.
In addition, through GSR, we have been running anti-Aids clinics in Sierra Leone and Liberia for the past four years. The government of Burkina Faso has invited us to run a similar programme.
CHEW HUI MIN
Mr Gabriel Yap will speak at Shareinvestor's Invest Fair 2013, to be held at Suntec Convention Centre from next Friday to Aug 4. For more details, visit http://sg.invest-fair.com
Disclaimer: All analyses, recommendations and other information herein are published for general information. Readers should not rely solely on the information published and should seek independent financial advice prior to making any investment decision.