Remisier Ernest Lim's education and career trajectory have always been steered by his thirst for investing, so his full-time job in the stock market is something of a dream come true.
Mr Lim started his career at GIC's private equity arm, GIC Special Investments, in an entry-level position and later moved to a boutique fund house.
Managing the assets of wealthy clients was a "steep learning curve", one that taught him about active portfolio management. But the global financial crisis hit in 2008 and Mr Lim was retrenched.
He eventually took up his ideal job in 2010 as a remisier.
Mr Lim, 35, says: "Since the day I became a remisier, I have only taken one day of medical certificate as I love to go to work as it lets me do what I love. I dislike public holidays the most."
His first step towards investing was making sure he had a solid foundation and wealth of knowledge.
He studied accountancy at Nanyang Technological University (NTU) with the sole purpose of developing a deep understanding of financial statements and took up relevant internships and part-time jobs at places like Merrill Lynch and DBS Treasury.
He also joined the NTU Investment Interactive Club and became a research director, leading a team of researchers with another director to publish research reports.
"After knowing what to look for, I had to know how to invest. For example, if I want to do a daily screening of all the stocks listed on the Singapore Exchange with my preset criteria, I'd have to find the easiest and most efficient way to do it.
"If I wanted to do a sensitivity analysis or stress testing on a company, I needed to know how to use Excel to do so."
Mr Lim recalls taking up Bloomberg courses to increase his proficiency in using the terminal, making at least 30 trips from NTU in the western part of Singapore to Capital Square in the Central Business District.
"I also took up special electives in NTU such as financial modelling and external Excel and Visual Basic for Application courses to increase my proficiency in Excel. That pertained to the fundamental analysis aspect.
"For charts, I read extensively and learnt to use (trading software) Metastock, and customised my personal template of charts and indicators to look at stocks."
Mr Lim has honed his investment strategies over the years through hard work - and mistakes - and reminds investors to persevere. He has also developed an emotional detachment from investing, which helps him to keep a clear mind.
"When I make losses or gains on a stock, I do not have strong feelings about them.
"Even if I lose a few thousand dollars or the stock appreciates after I've sold it, as long as my investment strategy remains the same, I'm at peace with myself."
Q Moneywise, what were your growing-up years like?
A I am from an average family. My parents are Chinese-educated with minimal to average education. My dad was the sole breadwinner and my mum was a housewife, and they did their best to raise a family of four children.
When I was younger, I would eat less or walk the distance of a few bus stops instead of taking public transport just to save a few cents.
From a young age, I understood the concept of delayed gratification. Before buying anything, I'd calculate the costs and the benefits.
I had to move around to study - in the kitchen or the living room - at home as I have three older sisters, and there is not much space in a three-room Housing Board flat. I slept in the living room too.
I am happy as I learnt to be prudent, down to earth and careful in investing and trading.
Q How did you get interested in investing?
A I have been interested in the stock market since Secondary 1, being inspired by TV drama The Magnate, which starred actor Li Nanxing in 1994.
The main character was poor but managed to make his mark in the stock market and business.
I knew I needed the knowledge to spot good investments, so I learnt about the basic fundamental and technical analysis, investment psychology, portfolio management and mistakes made by other people through reading.
In the later part of my national service, I would sleep less and use the evening time to read. I would summarise the points learnt from each book.
Through actual trading and back-testing over the years, I consolidated my tenets of investing.
I started investing when I was in NTU. However, the steepest learning curve I faced was during my second job as an investment manager.
Besides studying for my accountancy degree, I also studied for the Chartered Financial Analyst programme in order to gain a better understanding of fundamental analysis, portfolio management and the various types of asset classes.
I also made it a point to read one investment or trading book or magazine every week.
Q Describe your investing strategy.
A Over the years, I have refined my investment strategy. This is crucial as everybody is different in terms of risk profile, returns expectations, core competencies, investor psychology, for instance.
What works for Mr Warren Buffett may not work for me. I typically focus on small- to mid-cap stocks, where I believe I get the most "bang for the buck". If I'm familiar with the counter, I'll take on the risk.
There are six things I must do to look out for small- to mid-cap out- performers.
Near-term catalysts are the first things I look out for. These are usually company-specific factors - such as a first site visit in years or an improved quarter after quarters of consecutive losses.
After that, I make sure I understand the company and have access to management - this could be through annual or industry reports, and I also try to reach out to the investor relations team or company management for meetings.
You should also understand the industry, as most industries have business cycles which take time - usually in years - to pan out. I then buy the stock at relatively lower valuations as that offers a larger margin of safety.
Finally, I use charts to support my thesis of whether a stock will be an outperformer.
Q What's in your portfolio?
A My portfolio was 90 to 100 per cent in equities earlier this week, and I later sold all three stocks I was invested in.
Now I'm holding cash. I'm unable to disclose the amount but its comfortable.
As a full-time remisier, I can change my equity allocation fast to capitalise on the markets' movements. I can easily raise the percentage of what I'm invested in to more than 100 per cent using contracts for difference (CFDs), which are leverage instruments.
For instance, I reduced my equity allocation from 128 per cent, with leverage using CFDs, on Feb 12, to 54 per cent on Feb 26.
It has given me a return of 15 per cent a year ever since I started investing and even including the losses I made from 2008 to 2010, and that is the inspiration behind the name of my financial website.
Q What does money mean to you?
A Money means having the freedom to do what we like. And even if I win an $8 million Toto draw, for instance, I'd still like to do what I do now - portfolio and stock allocation.
Q What's the most extravagant thing you have done?
A Besides my executive condominium, which I bought for $811,000 but is a necessity as I live there, the other most expensive thing is my website.
I spent $5,000 on my website ernest15percent.com, on design, website and software development.
This was outsourced to a good friend. I'm satisfied as my friend has done an excellent job, and it is better to give the job to a friend than to someone who I do not know. In business, it is good to help one another.
My new website can draw in as many as 1,000 readers per day. Although it is not a lot, it beats my expectations.
Q What are your immediate investment plans?
A I am researching a few Singapore listed stocks and waiting to accumulate them on signs of a weakness in price.
Although many people have lamented on our stock market having low volatility, depth and volume, I find that there are still gems in our Singapore market as long as we put in sufficient effort to research and understand them.
I always tell my clients there are always opportunities. Different stocks move at different times as long as we put in effort to research.
Q What are your long-term plans?
A In the next five to 10 years, I aspire to either start my own discretionary fund or work as a discretionary fund manager for another fund.
If and as my portfolio grows in the years ahead, I am likely to diversify some part of my time and portfolio into other forms of investing such as property, private equity, or building businesses and the like.
Q Home is now...
A 1,049 sq ft executive condominium in Buangkok.
This article was first published on April 10, 2016.
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