Why We Do What We Do - 17 Jun 2020
I woke up at 6:15am this morning. One of the first few things I saw on the web shook me. Investor Bill Brewster wrote in his Twitter account that his cousin-in-law – a 20 year-old young man in the US – recently committed suicide after he seemed to have racked up huge losses (US$730,000) through the trading of options, which are inherently highly-leveraged financial instruments.
A young life gone. Just like this. I’ve never met or known Bill and his family before this, but words can’t express how sorry I am to learn about the tragedy.
This painful incident reinforces the belief that Jeremy and myself share on the importance of promoting financial literacy. We started our personal investing blog, The Good Investors, with the simple goal to help people develop sound, lasting investing principles, and avoid the pitfalls. We also intend to run Compounder Fund with transparency, so that its return and actions can be a source for investor education. Bill’s cousin-in-law is why we do what we do at The Good Investors and Compounder Fund.
In one of my earliest articles for The Good Investors, written in November 2019, I shared an article I wrote for The Motley Fool Singapore in May 2016. The Fool Singapore article contained my simple analysis on the perpetual securities that Hyflux issued in the same month. I warned that the securities were dangerous and risky because Hyflux was highly leveraged and had struggled to produce any cash flow for many years. I wish I did more, because the perpetual securities ended up being oversubscribed while Hyflux is today bankrupt. Perhaps, with Compounder Fund as the platform, my voice on similar matters in the future could be louder. The 34,000 individual investors who hold Hyflux’s preference shares and/or perpetual securities with a face value of S$900 million are why we do what we do at The Good Investors and Compounder Fund.
Whatever that happened to Bill’s cousin-in-law and the 34,000 individual investors are preventable with education. They are not disasters that are destined to occur.
Compounder Fund is a business, so Jeremy and myself do have economic benefits if it is run well. But Compounder Fund is also more than just a business. We want to benefit society through its existence. Jeremy and myself are also not running The Good Investors to earn any return. Okay, maybe we do want to ‘earn’ one return. Just one. That people reading our blog can develop sound, lasting investing principles, and avoid the pitfalls. “A candle loses nothing by lighting another candle” is an old Italian proverb. We don’t lose anything by helping light the candle of investing in others – in fact, we gain the world. This is why we do what we do.
R.I.P Alex.
