Ep6: Paul Gambles – Why a Solid Investment Policy Framework is Important

Paul Gambles is the co-founder of the MBMG Group and the Chief Investment Officer of MBMG’s Asset Management Division—which now oversees clients’ assets in excess of US $400 million.

Paul is a member of the Advisory Board of IDEA Economics and a well-known expert commentator who appears regularly on national and international television. Paul has written a great number of academic research papers, articles, and opinion columns, while also finding the time to write over 2,000 editions of the blog, “MBMG Update” and “Paul’s Update.” Paul Gambles holds a degree in English and European Literature and Studies from the University of Warwick. Furthermore, he is licensed by the Thai SEC as a Securities Fundamental Investment Analyst and a financial planner.

In this episode, Paul Gambles shares his experience working as an advisor for a range of investment fund in Mauritius. Learn how the organizational, institutional and regulatory changes affected the investment that eventually prompted the suspension of the fund by the Mauritius regulators.

 

“We found ourselves in the situation that we were acting as an advisor to a range of funds. We entered into that with a certain range of assumptions. Those have changed as time went on. The investment mistake was we did not fully realize just how much that will going to impact the investment.”

-Paul Gambles

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Topics Covered: 

01:22 –  Paul Gambles’ professional background

03:09 – Paul describes his investment background and his investment personality

06:23 –  Paul shares his worst investment story: Setting up an investment business in Mauritius

08:52     - Where things go wrong: Situation change in terms of the overall structure of the entity, the parties behind the entity, and the people who were involved in the entity

09:43 – The difference between having an investment idea versus putting the investment idea into action

10:37 –  How he reacted when he realized that there are many risks going on

11:44 – Suspension of the fund by the Mauritius regulators

13:53 – Growing problems of the Mauritius Financial Services regulators

15:48 – What Paul learned from the experience and how it affected how he does business now

19:23 – Andrew summarizes the critical learning point from Paul’s experience

Main Takeaways 

  • Lesson 1: Do not miss the idea that the financial infrastructure and framework is just as important to any investment thesis. And must remain absolute as it should be at all time.
  • Lesson 2: When investing in start-ups you got to have trust. You’ve got to have a great idea and that person has to have good execution. If the trust falls apart or the structure falls apart you are not going to get the gain even if the gain is in the vehicle.
  • Lesson 3: We need to be consistently checking our investment. Monitor how the things change over time. Is the person that you entered into business with a year ago, still acting the same way and in the same trustworthy way as the year previously? Or if they have been bought out by somebody else, be very careful and fully understand all the implications of every change that can impact the investment.

 

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About the author, Andrew

Dr. Andrew Stotz, CFA is the CEO of A. Stotz Investment Research, a company that provides institutional and high net worth investors with ready-to-invest stock portfolios that aim to beat the benchmark through superior stock selection.

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