Ep79: Ian Ng – It is Hard to Fight Against Falling Prices

Ian Ng is currently the CFO at Nielsen China and he has spent six years providing accounting and auditing services at Big Four accounting firms, covering trading services, manufacturing, and construction. Prior to that, he spent 13 years in corporate finance, doing mergers and acquisitions and all kinds of business support and business strategies. His expertise incorporates business partnering, which includes contract review, price setting, and market outgrowth approaches. He’s also applied his talents to compliance and effective reporting to US and China accounting standards including GAAP, business performance forecasting and control and strategic planning for organizations to achieve the best use of their resources.

 

“Make more friends, because once you have more friends in the markets, you tend to learn more about other industries.”

– Ian Ng

 

Lessons learned

  1. Past trends of performance are definitely not a good or mandatory reference. China had been on a growth trend if you look back 15 years, China growth, GDP, investment, and all the indexes seemed good. But everything changed. A lot of the time when we are uncertain about the future, we tend to look at past trends to give us some comfort and confidence that things will repeat, but in today’s world, this can never be relied on.
  2. Don’t be stubborn. Be flexible and practice self-reflection. His lesson was that he relied excessively on his commercial team and had little close connection with customers. Be ready for change because today’s world is ever-changing.
  3. Prove all assumptions that you make in business.

 

Andrew’s takeaways

  1. Don’t fight the price. In some ways, in corporate finance and in business, this idea does not apply at all, but in many ways, it does. It is often said “the trend is your friend” or, “understand the direction that a price is going”. Pay a lot of attention to the price of your final product.
  2. Go out and meet the potential customers to confirm real demand. Sales people are naturally optimistic so be very careful about accepting their word for the level of demand for a product. When you are making an investment decision, it is critical to meet potential customers and verify that there truly is demand. “In other words, don’t totally trust what the sales team says.”
  3. Observe the market before making business or investment decisions. Try to figure out if there is any market or demand for particular products and make sure of information via the external environment, not just data received from internal staff members.

 

“No matter how great a business person you are, it is extremely difficult to build a successful business in an industry where the price is falling, and falling significantly.”

Andrew Stotz

 

You can also check out Andrew’s books

Connect with Ian Ng

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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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