Ep48: Franki Chung – If Trust is Lost, All is Lost
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Guest profile
Franki Chung is a CFA charter holder and has a massive 24 years of experience in equity/fixed income analysis and portfolio management in Asia Pacific ex-Japan. He was the Chief Investment Officer of MEAG HK, the asset management arm of Munich Reinsurance. Based in Hong Kong, he and his team cover Asian equities and fixed income portfolios for Munich Reinsurance. Before joining MEAG in 2010, he was the deputy head of Asia Equities in Baring Asset Management and responsible for country allocation, stock selection and managing equity portfolios in the Asia Pacific. He currently heads Prosper Global Asset Management, an investment company, as its Chief Investment Officer.
Get to know Franki as he shares his worst investment story as a fund manager studying a recycling company portfolio. Learn the operational frauds that he discovered as he was studying this company. Know why it is important for a traditional active management manager to visit the company, know the stakeholder’s values and build trust around the business model before considering adding the business to the portfolio.
“At the end of the day, the complete avoidance is almost impossible. If they want to hide from you, they can always hide.”
Franki Chung
Topics Covered:
01:09 – A brief introduction of the guest and how they crossed paths with Andrew years ago
03:05 – Franki narrates on how he, as a Fund Manager in CIBC (Canadian Imperial Bank of Commerce) studied a recycling company and the unusual and odd operational transactions he discovered in it
09:03 – Unveiling the lessons he learned from this experience
10:10 – Andrew sums up his takeaways
15:17 – Franki’s advise as a passive investor
Main Takeaways:
Lesson 1: “At the end of the day, the complete avoidance is almost impossible that if they want to hide from you, they can always hide. So, the only thing is that through diversification to put all the extras. Understand the management, but you can do as much as you can.”– Franki Chung
Lesson 2: “(As passive investors), we just actively studied the company, but in the end, we do not have the operational control or did intervene. We have to be active to some part, but like any one of us, we have to know our limit, how active we can.”– Franki Chung
Lesson 3: “Fraud does come as a surprise at times. And so, there’s nothing you can do sometimes if someone’s a very good, sneaky, tricky person.”– Andrew Stotz
Connect with Franki Chung:
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:
About the show & host, Andrew Stotz
Welcome to My Worst Investment Ever podcast hosted by Your Worst Podcast Host, Andrew Stotz, where you will hear stories of loss to keep you winning. In our community, we know that to win in investing you must take the risk, but to win big, you’ve got to reduce it.
Your Worst Podcast Host, Andrew Stotz, Ph.D., CFA, is also the CEO of A. Stotz Investment Research and A. Stotz Academy, which helps people create, grow, measure, and protect their wealth.