Risky Business: Not to lose money is very important, says Paul Pong
Paul Pong thrives on the excitement of chasing a rapidly moving target. “The financial markets are changing very fast and it’s very challenging,” says the founder and managing director of Pegasus Fund Managers. “You never get bored.”
In his more than 20 years in the fund management business, Pong has been through several boom and bust cycles. One of the most profitable was the Asian financial crisis. “In 1997, we held more than 85 per cent cash in our portfolio. We locked up the profits, so we had about a 12 per cent return that year,” he recalls. “In 1998, we had cash and we invested when the market was very low. We made 68 per cent that year. Of course, we cannot time the market 100 per cent for the bottom or the peak, but I think from our experience we can time it quite well.”
Such returns led clients to seek advice on other aspects of their portfolios, resulting in the creation of Pegasus’s wealth management division later that year. The firm went on to become one of the founding members of the Institute of Financial Planners of Hong Kong with Pong as its immediate past chairman.
While Pong cites the importance of timing, he also stresses the need for proper risk management. “Time is money. It’s also doing the right thing at the right time,” he says. “If you have already thought about all the scenarios and you have a strategy for even the worst case or something unexpected, then you have a chance to perform better than the others.”
Much like the markets, Pong’s life has become much busier and faster-paced as his business has expanded. “Before, I never imagined I could manage this kind of role and responsibility. But I think the busier you are, the better you are at time management,” he says.
“Because you have a lot of tasks you want to fulfil, you set priorities. And then you have to set your schedule or time frame.”
While Pong has fewer opportunities to actively trade the market, he still takes research home so that he can review information and weigh the different pros and cons. “These days we spend a lot of time analysing the risk. To make money is good, but not to lose money is very important.”
He’s also teaching his children the importance of sound financial planning. He recalls when his daughter began collecting money from classmates to buy birthday gifts. “She went bankrupt, because she bought such good presents,” he says, laughing. “So that means the income does not support the product and the budget control is not very good.”
An avid tennis player, Pong sees experiences such as these as tools to becoming a more disciplined investor. “Making money is very difficult,” he says. “It’s a survival game.”