Ep755: Jitipol Puksamatanan – Let Time Be Your Friend

Andrew Stotz 00:02
Hello fellow risk takers, and welcome to my worst investment ever stories of loss to keep you winning in our community. We know that to win an investing, you must take risk. But to win big, you've got to reduce it. Ladies and gentlemen, I'm on a mission to help 1 million people reduce risk in their lives. And I want to thank you for joining this mission. And today is November 29. And for the world of investors, we woke up to the news of the passing of Charlie Munger at the age of 99 years old. So for this episode, I dedicated it to Charlie Munger who gave us all so much wisdom. Fellow risk takers, this is your worst podcast host Andrew Stotz, from a Stotz Academy, and I'm here with featured guests, Dr. Jitipol Puksamatanan. Dr. Jitipol, how are you?

Jitipol Puksamatanan 01:00
I'm great. Good afternoon, Andrew.

Andrew Stotz 01:05
Good, good to have you with us. And I'm going to introduce you to the audience. Dr. Joe heads, macro and wealth research at CGS CIMB securities, Thailand, he develops actionable investment ideas, independent economic analysis and asset allocation strategies. Over the course of two decades, Dr. Joe has worked with securities banks and asset management companies, why don't you take us take a minute and tell us a little bit about the unique value that you're bringing to this world, I see you in a lot of places doing so many things. Tell us a little bit about what makes you unique in this world.

Jitipol Puksamatanan 01:48
So basically, I'm not that kind of unique by myself. So I kind of believe that every investor have to have a little bit unique background, so therefore, it's combined to yourself, I come from quite different backgrounds. So basically, I have been studied in Bangkok, Thailand, so I'm studied a static. So basically, right now is called data science, but back to my day, just a statistic in a finance, hire a thing. So it's the combination of like mathematic and also like, the accounting stuff like that. So basically, I just will, the number is different compared to other people's, okay, do my first job is a security broker or the marketing so basically, I try to sell the stock and try to use my knowledge to understand stock better than somebody else. But I just realized that you know, the, when you have finally the data for some certain period, you would lead yourself toward like, so called technical analysis, more than the fundamental analysis and you'd have more to be like, Trader compared to like, there's the stock analyst stuff like that, therefore, I like to, you know, change my career path and try to make it more like me or don't like me, so, I met the another, you know, different business here in Bangkok, which is the FX trading from from the bank. So, I just fascinating by the environment of trade FX, the interest rate, so, I left the security and rejoined the band, okay, I work as a quantitative analyst for like, some period of times. Back then, I also studied the master degree and also the part time doing the doctoral degree as well as working at a bank. Okay. Afterward, I just feel like you know, when you when you study the informations about the market, okay. And you have the theoretical point of view of the market, but most of the time when you look at the market participant or you know, the market analysts or even economists, that tell you another story that you don't feel like you know, it attached to what your feel, okay, so I just another different way, okay, maybe, maybe I will be the one that held the narrative or the story, and people might be, you know, get into what is right or was it wrong on a different perspective, therefore, I change another job to be like, economists and market strategies or change the job to be like more work at here or, you know, more transparent to the market and I have been working as this role for like, almost 10 years already

Andrew Stotz 05:01
interesting, what did you study for your PhD? What was your topic for your dissertation?

Jitipol Puksamatanan 05:06
Oh, for the topic of my dissertation, you don't believe it. So basically, what I have been study, and I, what I feel like more interesting on is the return and how to decompose the return. Basically, it's like fama and French, three, five factor stuff like that back to my day in 1993, stuff like that, then afterward, I just, you know, building up for that model and try to use it for Asian equity, but back into my days, and at that I studied the PhD. So that interesting topic in Thailand, back then, was the governance, okay, so we just develop the good governance kind of scheme. So therefore, my voice searches, you know, asked me that, you know, you could be, you could be the one that, you know, try to decompose what constitute the performance by the governance itself, therefore, what I have been doing back then it's like, tried to make the relationship between corporate governance and equity return that that the stock would give to the investor.

Andrew Stotz 06:23
And I guess, you know, at that time, corporate governance was kind of a new thing, or let's say, a strongly promoted thing that was coming up and coming in Thailand was moving up in the corporate governance scale, maybe at that time, it would have had a bigger impact than it does now. Because everybody's doing it or I wonder, what what what was the findings that you had, and like, what, what, what has changed over the years,

Jitipol Puksamatanan 06:48
I think nothing much change over the years, by definitions of the governance, so. So basically, we just changed the name from just covenant to be like the ESD. One, that is a bit harder than a fall in Bangkok, but basically, back into my so this is the government is the biggest thing that people care, not the environment are not so chill and stuff like that. And the debate in the past was, is, you know, just the corporate PR kind of thing, or it held in reality. So they're going to be the couple of debates about just the spending on the governance, or maybe just the sustainable factor. What I found, is that, okay, so in the return perspective, basically, when you have a good government, so it's like, the insurance against the backdrop, or the downturn, or if you have, you know, the event of financial crisis that will trigger global sell off and your stock will gonna affect the governance, we'll help you radio, that kind of breaks, okay, in terms of equity returns, another thing is that when you have good governance, or maybe you know, stronger than normal government, so basically, another reason that you can be an answer, if they can be reduced by having a good governance, right now and back then you can attach more liquidity into your stock. So basically, the beta will the weather be drops significantly when you have the event of breaks. Okay, that the back then is work right now work, but right now, when you change it to be like the ESD. So maybe you have to, like care more about the enrollment care more about the social impact that could harm your firm. So it's kinda, it's kind of developed and everlasting.

Andrew Stotz 08:59
Yeah, the ESG movement has really gone out of control, I'd say at this point, and they attach to governance, governance is a very different thing. You know, governance is a way that we make sure that minority shareholders are represented when they invest in individual stock. And some different groups opinions about environmental and social issues can be very different. And it's too bad that those things kind of got caught together. But you know, now, right, like, it's, it's, it's out of control. And, in fact, I was just doing a little study on the US market and seeing, you know, the number of D listings in the US markets incredible. 20 years of D listing. So about 9097 was the first year where US had more D listings than new listings. And, you know, Sarbanes Oxley came in as a registration legislation after the truth 1008 a 2000, Crash 2008 Crash we had? What was it Dodd Frank regulations that just made it harder. And then you've got all of the ESG regulations that are being put on top of listed companies, that many companies think it's not worth it anymore. And I think hopefully, I was trying to finish that research, I couldn't get it done in time for finishing it today. But I was trying to use it as an example of say, Be careful Thailand, if you over, over regulate with ESG, or any other things, you disincentivize people from wanting to list in the stock market, because it's just overwhelming. You know. I'm curious, high stock markets, you know, just hasn't really been a great performer for a long time. And I'm wondering, like, on the one hand, you've got a group of people who think that the Thai stock markets kind of over, there's no future, there's no competitive advantage, there's no future, there's nothing. And of course, you've got another group of people that say, just when all hope is lost, is the time to invest. Myelin has been down for a long time, and now everybody's out of the market, and nobody feels good about the market, and therefore it's time to invest. I'm just curious, what are your thoughts on the time market? You know, these days?

Jitipol Puksamatanan 11:29
Yeah, to me is like, you know, I've been working as a top now manager or maybe like, top down strategies for quite some time. So, most of the time when I have the question like this, so I would ask, you know, the investor first What do you like to have from the investing? Okay, in Thailand, the different kind of investment so if you try to fi you know, the growth companies stuff like that you can find in Bangkok, basically, actually, I could tell you that even though if it was Bangkok, you can try to find from, you know, some auto market in Southeast Asia, okay, you can find it extreme God company is not like in the US, the environment is kind of different, okay. But if you try to find something that you know, very broad, our can be diversify, or maybe like, when we promote ASD by a lot. So basically, we try to change the company to be a little bit more like sustainable firms like that. And it reduce the risks by its nature. So basically, I will say that, okay, if you want to find, you know, the Wari growth, or hybrid court, harmony, so basically, there will be no place for them. Here in Bangkok, it's not easy, maybe not in next decade, it cannot be you know, it, like, you know, that one narrative that attached to my idea is like, you cannot, you know, you cannot grow the unicorn, everywhere in the world, they're only someplace that they can grow, and they can, you know, they can grow and they can, you know, become become not mythical beasts have, like, the stock that you can buy, but in Thailand, you cannot have that unicorn, but you can have like, the Phoenix. So, the thing is that different is when you have the company that you know, that operate for quite some times, and then okay, there are some changes that happen to the economy. So in Thailand, the different is we are very open to the change, if we find some change that would attach to your business or our business. So basically, we try our best to change ourselves. Okay. And you can see from, you know, for example, like the banking in Bangkok, so basically just the banking, if you compared the banking in Bangkok and banking in, you know, Hong Kong or maybe in the US in Singapore, or China. So basically the degree of change, or, you know, eager towards a change is quite different here in Bangkok. I think the many banks know that, you know, there will be a dinosaur in the future if they do not change, they change a lot and they embrace any, you know, technology. Okay? They just the bank, so basically, what can they become? It's just like the unicorn, it's not the unicorn, it's just like that, you know, you die first and then Okay, after you die, you reborn and you become like another good investment for investor.

Andrew Stotz 14:56
Yeah, I mean, banks have definitely come a long way when I started as an analyst Since 1993, I was a bank analyst for my first 10 years. And banks were, you know, they were pretty confident, and then they crashed, and then they recovered. And then they rebuilt themselves. So they're definitely, that's the case. As an investor, I tend to stay away from banks now after knowing all about them. Because there really are tough commodity businesses, when one improves, the other one improves, plus, they're basically nowadays a bank is, you know, tends to be kind of an arm of the government implementing government policies related to KYC and tracking people and privacy and all kinds of stuff. So it just makes it harder for any one bank to like massively outperform, but I do think it's definitely an industry that has reinvented itself and banking in Thailand is very, you know, it's pleasant, it's not that painful, but when I think about banking in the US, and other places, I can sometimes feel very, very painful. Well, now it's time to share your worst investment ever. And since no one goes into their worst investment thinking it will be tell us a bit about the circumstances leading up to it, and then tell us your story.

Jitipol Puksamatanan 16:09
I think, to me is worst investment ever is Ay Ay, ay broke, when I were a first job. Okay, so basically, it's kind of different in the sense that when you go into the investment world, so you think about the investment as you know, as a theory of how to grow and, you know, the, the the way to grow, it's when you know, about the company, or, you know, you know, the insight about how the stock will go up or go down and stuff like that, but it's not that true, if you cannot, you know, reduce your lab is my worst investment is when, you know, I know many things about the stock one stock, I could not mention the name in the program. So I just know, you know, the CEO of the company, know, the management, know, what they are doing, okay, and, you know, not know, how they do the business and the Noosaville going out. So it's like, the weary inside the trading stuff like that, okay. But when the markets come to, like, moving in the different enrollment that I have been knowing, so basically, I just changed my idea from you know, the investor to be like, the glamour narrative. So when I lost a lot, okay, instead of I stopped, okay, I think that I know the company quite well. So I double now, okay, and borrow, and then, you know, try to reinvest with a very short period of time to gain back from the, from the, you know, the investment I have been lost. So, that is my worst investment when I think about the investment as the campaign. So most of the time, it's like, you went to the casino, and when you lost, okay, you double now is, and, and it you will be to me, 100% sure that eventually you will grow and I have been lost or my serving students, you know, 20 Okay. Yeah.

Andrew Stotz 18:32
And how would you describe the lessons that you learned from that? Okay,

Jitipol Puksamatanan 18:36
the lesson is that, you know, investment is not about what you know, or what you don't know. Yeah. To me, investing is more about, you know, yourself. And you know, what you doing, okay? When you, you know, maybe some time, maybe some time, for example, for me, yeah, when you want to, like in ways. So basically, it's not like, it's not like that, you put the money 100% And next day, you get a 200%, okay? It's not like that, okay? If you cannot, you know, control yourself, and think about investment, as gambling. So, it's like, when you go to the casino, and even though you feel like you want to make the money, but eventually, if you don't know yourself, okay, eventually it will turn to be like the games or maybe something that you make you lost in the in the short period of time.

Andrew Stotz 19:39
Yeah, and I think my big takeaway is that trying to win back prior losses, is a very dangerous game. It's probably better that you take a break, walk away, leave it, let your mind and your emotion get back on track, and then focus on that that event already happened. I remember a story from about 1995 or so I had a fund manager come from London, and he was very famous fund manager and successful and I was just a young guy. And he asked me about Bangkok bank at the time. And I told him, Well, the stock price has fallen, you know, X percent over the last six months, and over the last 12 months, it's fallen, you know, more, and I went through all of this, and he's like, I don't care what the stock did. I only care about what the stock is going to do. I mark to market my portfolio every day. And I was, you know, just young guy. I mean, I kind of knew that. But I just got caught up in trying to give him this information. But it just reminded me that what's done is done. And then the next thing you have to do is think, what's the best way to invest this money to get the return that I want to get, you know, over the next year or so. And in that case, it doesn't mean, just because the stock went down? It could be the best one, or maybe not. But a lot of people get trapped in a situation where particularly they own a stock and it goes down and down and down. And then they say, I'm not going to sell it. Because you know, I've lost a lot on it. But really, the question is, what is the best investment for this money? Right now? That's kind of one of the big things that I've learned. And I just think the danger of trying to recapture lost money is very, very difficult for the listeners, if you're in that situation, take a break. Anything you would add to that.

Jitipol Puksamatanan 21:45
Yeah, sure. Even though, you know, most of the time when you reduce the, you know, the duration of the investment. It you know, there's try the beauty of the investment completely, for example, to me is like the company that I that make me Brock. So actually, afterward, after I you know, I completely lost my you know, there was it Okay, completely a decade later, the company growth like 10 backers, yeah, it is like you, even though the company is great, okay, when you try to win back, you are lost when you try to make any, you know, decision in the very short period of time and your state of mind is not, you know, on the right spot, it still can be harmful.

Andrew Stotz 22:39
Definitely. So based upon what you learn from this story, and what you've continued to learn in your life, let's think about a young person who's starting out investing what action would you recommend our listeners take to avoid suffering the same fate?

Jitipol Puksamatanan 22:55
Yeah, to me, it's like, the very, very good lesson for me is like, you know, investment is not the game that you have a certain period of time, it's like, it's not like, you know, ping pong, football and stuff like that, that eventually, it will end after some event. So basically, investment is the, you know, can stick to you with your time horizon, maybe for the whole life. So, it's no need for too rash, okay, for investment. So basically, maybe sometime, you don't have to be like the richest guy in New York City or in the world. But if you just, you know, want to be you know, financially successful, you want to have just financial freedom, you can just stay in West and let Tom to be like your friend. And, you know, if you don't rush, it won't be come, you know, you see, to success if you try to invest in the right way.

Andrew Stotz 24:03
So what's the resource, either a resource of yours that you do, or maybe a book or a website or some other resources that you've used in the past that you'd recommend for our listeners?

Jitipol Puksamatanan 24:17
I use a lot. Okay, but a race resource that I use right now, is that okay? Every site is a Bloomberg stuff like that. The book I find is like, I have a plan, the above you have a plan, you know, the different come from like, after the COVID-19. So many of you know, all theory just, you know, scrapping it, you know, try to rebuild our game. So I recommend so basically, right now, the reason that I think, in Bangkok or maybe some other places around the world, is work is a podcast right now. I'd really love to would tend to, yeah, too many podcasts that live on the stream. So basically just, you know, the refresh, and then, you know, they have a very new holy idea that you can follow. Okay.

Andrew Stotz 25:15
Great, great point. And I mean, I listen to podcasts a lot, I used to go to the park every morning, and then I switch my routine to doing yoga at home. And I kind of miss it. Because at the park, I would always listen to podcasts. And it's, you know, as a strategist or as a thinker, as an investor. Your best ideas come away from your desk, you know, and I found listening to podcasts would give me ideas, and many times I have to stop and think and rewind and, you know, and it's all for free. It's incredible. Great. All right, last question, what is your number one goal for the next 12? Months?

Jitipol Puksamatanan 25:55
Hmm, so my number one goal is, should be about the work or maybe about the life to me, anything's, okay. So, my number one goal in the next, you know, 12 months is I try to create myself, you know, the, the society that I can, you know, rely on and, you know, try to make friends talk about, I just, you know, turn like 40 For just, you know, a year and I've found that, you know, when your life it grow for some certain period of time, the number of people that around you, or maybe the society that you can rely on is very, very small, small, and I want to, you know, expand that one, I want to make my, you know, source ID to be more intellectual and, you know, more friendly for me in a video. Well,

Andrew Stotz 27:02
That's a great one. And for the listeners out there, you know, pick that up as a challenge for the next 12 months, find good people around you and get them closer. A couple of years ago, during the pandemic time, I was just so annoyed with how we couldn't really make contact. And so I started a mastermind group, and we meet every Friday, and we've met now for almost three years, let's say and it's helped me build deeper relationships. So I think it's a good reminder for all of us in the year 2024. Maybe it could be the year for all of us to build deeper relationships to our good friends. And also make new friends that bring, you know, exciting new times to us. Well, listeners, there you have it. Another story of laws to keep you winning. Remember, I'm on a mission to help 1 million people reduce risk in their lives. As we conclude, Dr. Joke, I want to thank you again for joining our mission and on behalf of a Stotz Academy, I hereby award you alumni status for turning your worst investment ever into your best teaching moment. Do you have any parting words for the audience?

Jitipol Puksamatanan 28:14
who like to make friends and you know, Happy investing?

Andrew Stotz 28:18
Beautiful and that's a wrap on another great story to help us create, grow and protect our well fellow risk takers. Let's celebrate that today. We added one more person to our mission to help 1 million people reduce risk in their lives. This is your worst podcast hose Andrew Stotz saying. I'll see you on the upside.