Missed Opportunity to Invest to Jack Ma with Rajeev Gupta
There was a little man standing in the corner foot eleven and he had this ambitious plan changed the way that China, and Greta China, specifically impossibly the world would trade commerce, and that ended up being Jack Ma and my worst investment has been not taking that meeting in nineteen ninety eight and investing in technology, full heartedly. Hello, fellow risk-takers in 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 risks. But the win big you've got to reduce it. My name is Andrew stance from a stock investment research. And I'm here with featured guests Rajiv Gupta. Rajiv? Are you ready to rock? Absolutely, andrew. Let's rock this. Let's do it. All right. So let me tell the audience about you. Rajiv Gupta is a partner at album capital. He has twenty years of experience investing in and building technology companies Reggie began his investment career, Goldman Sachs where he worked for almost a decade in the investment group in Hong Kong, Singapore and New York with a focus on listed and unlisted technology companies Rajiv, then used his technology investment experience as a portfolio management at manager at both Tribeca and Merrick's capital where he ran global. Funds you then built his own twenty five person technology startup called gecko life before he's Sambo seeing on the capital Rajiv has an honours degree in law, finance and all my God. This one is scary econometrics from the university of Sydney, but gee, take a minute fill in any further tidbits about your life. Andrew thank you for the welcome. I also am passionate not only about technology investing. But also, my family I have four kids from the ages of five to twelve. So it's an intense household in the evenings. And when I'm at work, we generally made somewhere between night and ten companies, and I love doing that every day of the week outside of work and family, I like to travel I love watching television. And I'm not a barrister about it. Currently watching Ozarks on Netflix and loving every episode others. In addition attaching go skiing and through that other Balazs fifteen to twenty. I've busted my hip. I've done three ICL's, and I'm an old, man. And I'm not even sixty. One thing is visiting, you know, meeting with companies, why do you meet with companies? I just wonder now some people say they meet with companies to learn the story some say they want to see if they can trust management. Some people say you're not gonna get anything. They're not going to disclose anything to you that they haven't disclosed the market. Why do you meet with companies? So it's a combination of a few things because we're meeting listed and unlisted companies. You will certainly see delineation in the information that a share listed companies are generally more cautious. And we'll share information that they share with the public generally. However, it's the private will unlisted companies that we made win probably more frequently. If I talk about ten meetings die, we're probably getting six or seven of them. And what you goner is knowledge. You learn something new about a person of product a mockery enthused that you get confirmation by. In terms of what some of the listed company site, and you meet the companies of tomorrow. And that's what excites me about doing. What I do day-to-day from an investing standpoint fantastic person, product market and a look into the future. Those are great reasons to meet a company. Well, now, it's time to show 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. So my worst investment started in nineteen ninety eight I was looking at Goldman at a time in home call I was summoned from the sixty fifth floor to the sixty eight all my colleague today. Businessperson. That's coming in. You've got to meet him because it could be a big business at some point. So when upstairs went into the conference room of the looking Hong Kong Kaaba, and there was a little man standing in the corner fulfilled eleven Chinese. Individual. And we great at each other. And he had this ambitious plan changed the way that China, Greta China's specifically possibly the world would trade commerce, and that ended up being Jack Ma and through that meeting, Jack Ma for those of you that is the founder of Alibaba. So is nineteen ninety eight met Jack. And there was something that was inspirational about him. He was a teacher. He was trying to do something in an area that he had some knowledge, but executing would have been real challenge. What it taught me was tenacity is the greatest aspect. Someone needs to have when the building the business, and as an investor must be able to detect to nasty, first and foremost, it's a key differentiator, you want your leaders, and you want your operational manages to have tenacity to not give up. We isn't investor. Need to have tenacity to believe in those companies to believe in investment. So from nineteen ninety onwards, I had the benefit being a golden a minute global technology funds to see what was going on in technology, and it was changing every aspect about lives in nineteen ninety eight. My parents refused to have a mobile phone in two thousand seven they refused to have an ipad in two thousand and twelve two thousand thirteen never fused to get a new ball. And here we are in two thousand nineteen twenty automating Jack technology's not only a pot of their lives as part of my lives in this part of my kids lives, and my worst investment has Bain not taking that meeting in nineteen ninety eight and investing in technology full heartedly, I had opportunities to invest in Alibaba. I had opportunities to invest in ten cents at opportunities to invest in Twitter on EBay long before they would public assets. And this isn't as an individual. I did it for the funds always out and the funds did very well. I did. Well. As a result. I didn't supersize sublime worst investment has been eight not having conviction bait not putting my bowls on the line and say not writing things that you hear about. But do nothing about. Through that journey. I have saying companies like as I mentioned Twitter obscene EBay of saying, Microsoft, S interior him say obscene, tencent of saying Tektronix, Hong Kong six not I will these businesses. The funds did very well said very good for investors. I should have made so much money as an individual pooh-poohed may for not doing that the convictions to me is the most most important part of investing, positively and negatively the mind worst investment is not putting more money to work in. What was looking at me in the face people often in finance talk about animal I took about financing to about fund managers specifically, they talk about the efficient frontier in the efficient. Frontier is a job that is in summer in many ways looks like an arc and on that arc by suggests that you should factory Scotto your investments. Some should be high-risk some should be Lois. And I completely disagree with the efficient. Frontier. I think the best way to invest is have a big chunk of what you do. And I'd say fifty percents maybe slightly more in super risky self which will give you at exorbitantly high return. It can also be with zero in the fifty percent in completely boring things that will never go low zero or generally inflation adjusted maybe plus or minus. If you focus on the risky stuff, the risky investments. Yes. They can go to zero. But if you do your work, you have your conviction, you know, that the Matic talking to companies. You will like an enormous return. Think about the individual that backed Travis at Yuba very early on with two hundred and fifty thousand dollars potentially when that company lists next year with one hundred twenty million dollar valuation hasn't been worth four and a half billion dollars. Now that is conviction. The guy made that investment seven or eight years ago is gonna from that small amount to this amount. It'll be worse a small African country, which is extraordinarily semi worst investment is going thinks Pacific, but it is not having conviction. I think not having conviction when you've done the work. You know, this is a very weak way of investing in. I do regret it. But I'm doing something about it. Because lost three or four years. I've had high conviction Inc. Themes, and I'm playing the very hard willing to lose hope by win fantastic. Ethic. So let's try to help our listeners out imagine that guy that's sitting there. He's got the conviction in the store. He's about to make the same mistake that you made of not getting into it. Now, it's very important that we highlight the the two things you said, you've got your C Maddix. Another words, you know, your theme what you're playing and you've done your research. So once you've got those two things in place. The what is the feeling that you felt or that that guy today that man or woman is feeling like, I'm not sure and a textbook tells me to be diversified in? What if I lose all this? I mean, those are the feelings that I'm sure you felt and they felt so if they're feeling those feelings and they've done the homework and they've got the the Matic. What is the advice that you and this is gonna skip right into the actionable advice? What is the one piece of advice that you'd give them in that case? If you've done the work, and you believe in the attic, I think you go hod and supersize positions as early as you can and to support that comment, you take some like Warren buffet, however, you want to pronounce it. A buffet is renowned for being the world's best. Invest all customers mind back to two thousand two thousand one technology boom that was occurring than in Boston. And go back to the GMC and go back to twenty ten twenty eleven he is always stayed clear of technology investing, and as it turns out to two and a half years ago. He came out and started to find we believe in apple. But compare the return that he will get on apple from being six hundred billion dollar company to a trillion dollar company these Veda person in nineteen ninety eight's that invested in apple when they launched. The I MAC that individual has basically gone from a four dollar stock up to a thousand. Dollars. Stock. You decide ways think is the greatest return. So the may being early could certainly mean being wrong the bane early. If you believe. The greatest investment you could've. Okay. And I think I'm going to add mine little two cents that and see what you think the first is warning warning warning to the listeners. Remember, what he said was you've gotta have your thematically. Right. And you've got to do your homework achieve is not saying just have a conviction just having a conviction without the support of the evidence and the ability to continue to build either a positive or negative case. You're not you're not you're not you're not playing very safe. So now, let's just talk about conviction from moment. I just looked on Google, and it says conviction a firmly held police. It's a belief opinion view thought persuasion, so remember that conviction is something that's very strong. So we also have the risks that you could be wrong in your really strong. So I think the the thing the lesson that I would say is that build your? Story as as Rajiv's said, build your CM, do your homework, but also never be afraid to try to find someone that disagrees with your conviction and get their input. And I think that's a really important risk management measure, but don't let that persuade you from taking the risk now. Let's talk about the other word that Rajiv mentioned in that is too nasty. The quality. Let's say the quality or fact of being very determined of continuing to exist to persist to nasty what a great thing to look for in a CEO. And the fact is that doesn't come out through an annual report to the financial numbers as we started. This whole interview we started with the idea of why are you meeting companies? And I think what we learn from this is that you can if you can spot tenacity. In a good, you know and find a good person with a good idea. Then you've probably got something you should back for a long long time. And I'll tell you one personal story about tenacity when I was a young guy in one thousand nine hundred ninety three I became an analyst in Thailand. And I found my dream job. I'd love to be an analyst in my best friend, Dale Lee came to visit me from the US, and we basically decided to set up a coffee business in Thailand that was twenty three years ago, and I can tell you our sales started in nineteen ninety six we were hit by the ninety seven crisis. We were crushed. We lost all of our customers. Almost all. We had a factory roasting coffee. We had our staff, and we literally I lost my job working at the time at peregrine, some some of my this, Houston will know peregrine, Hong Kong investment Bank. And I lost my job. We moved into the factory to survive. And what I learned after many years as it took us to get on our feet after that ninety seven crisis, which was a massive crisis in Thailand was at my business partner, Dale had to nasty. He also had sincerity. In what he did throughout that time was to never give up on the idea number one. But also never betray the other stakeholders in the business, and I say that when I say about partnerships. I always said there's only two times that you have to worry about conflicts in partnerships when you're losing money, and when you're making money, otherwise, you don't have to worry. And when we were losing money. I saw the true nature of DALE'S Tanaz and sincerity, and that may mean winning to invest everything I could in what he believed in what he did. And twenty three years later, we have a thriving coffee VDB coffee roasting company that I'm going to go after this call to meet with Dale. So that's my story of tuna city. Other is anything else that you'd like to add did I miss anything? You know, the other comment I'd make on that is add from me, you and dial had. Conviction in coffee, roasting coffee, and you had to individuals that understood business and one was particularly strong with tenacious. I think that combination is critical. Sometimes we tend not to look at the financials or look at valuation because you can sometimes fall into a value trap. And sometimes you could miss something because it seems expensive tonight but apple uphold olas look very expensive to to some people and clearly to Warren Buffett when it was the six hundred billion dollar companies still looked cheap. Right. So numbers can sometimes be very deceptive on the numbers should be seen as something that's supportive. You cannot ever trade person individual thematic and tenacity. They will always Trump financials valuation. A man let's wrap that up in a bow listeners. You've got another story of loss now to keep you winning to find more stories like this, previous episodes and resources to help you. Reduce your risk. Visit my worst investment ever dot com. As we wrap up Rajiv. Thank you again for coming on the show. I know it's painful talking about are losers or in this case are missed opportunities. But our listeners are learning to win as a result. Do you have any parting words for our audience? If you come across anything in technology that sounds dumb tonight. You can be almost guaranteed. You look back in ten years inside. Why did I not supporter? So if you think something's dumb don't be dumb. All right. That's a wrap on another great story to help us create grow and protect our wealth, fellow risk-takers. I'll see you on the upside.