Being online in the last few years, it’s hard to avoid hearing about cryptocurrencies, Bitcoin, and NFTs, more so when even one of the richest men in the world – Elon Musk – is peddling the awkwardly unseriously named “dogecoin” – with its Shiba Inu mascot – to his millions of followers on social media.
The internet has democratised and lowered the entry barrier to many things, and now it has come to stock market investing.
With Reddit forum WallStreetBets blurring the line between online memes and financial advice, a slew of people became instant investors, with many drawn in by the sheer fun of it, alongside those who really bought into the idea of turning into millionaires overnight.
Speaking to The Peak at his tastefully decorated office overlooking the hills of Bangsar, Devan Linus, the Managing Director and Chief Investment Officer of MTC Asset Management, did not mince his words when he was asked about the crypto craze, calling it the latest hype in speculative investment that ultimately leads to bust.
“There is always speculation because there’s always somebody who is not a very nice person who wants to make money off people,” Linus said.
“What they do is an evil deed of cheating people’s money.”
His stern position is not so much that these new form of investments is competing with his more traditional investments in global blue-chip equities but instead came from a strong philosophy that was honed from a generational knowledge of investing.
A Family Affair
Devan Linus’ family’s affair with investment started in the 1930s after his grandfather Mr Kok Ah Too taught himself the fundamentals of investing to grow his savings to support his family, through good old-fashioned hard work and common sense investing.
From there, “The Master” as he was known around the investment circle, made history when he became the first Malaysian to become the Chairman of the then Stock Exchange of Malaysia and Singapore.
Mr Kok became a very well-respected figure in the investment world and subsequently became the first Malaysian to become the Chairman of the then-Stock Exchange of Malaysia and Singapore.
In fact, the name of the firm, MTC Asset Management is a callback to Kok Ah Too’s Malayan Traders & Co (MTC), which the Kok family sold back in the 1980s, after deciding to walk away from the business.
Being born into a family with such a strong bond to the investment world, however, did not mean that his love for the craft was a given. Instead, it is something he honed himself.
“You don’t think of your grandparents and parents as ‘business people’ or necessarily successful individuals. You just think of them as parents,” Linus said.
“It was only much later when I started gravitating more towards investments that I remembered all those small little things that my mum told me about my grandfather. That’s when I started having more conversations with my mum about him.”
MTC was established in 2012 in Singapore, and subsequently headquartered in Kuala Lumpur as a global long-only equity manager employing a value investing strategy and has successfully delivered a return of 8-12% p.a. across its funds under management.
One thing Devan Linus carried from his family is their investing philosophy: value investing in stocks.
“It was not so much that he was the chairman of the stock exchange, but his philosophy, which became our investment philosophy,” he said.
Giving a peek inside his preferred portfolios, he said that a lot of his investments are in international tech companies, because being young men, “that is something we are familiar with”.
That, and his emphasis on only investing in things backed by solid, tangible value.
While not as sexy as what people would imagine, he stressed that there is one thing that is very important to him that is often forgotten by some in their chase for the next big investment opportunity, and that is capital preservation.
“I am being entrusted with people’s money, I need not only to grow it but to preserve what they have already acquired,” he said. “This is very important to me.”
Knowledge is Power
With all this in mind, he emphasised a lot on spreading the knowledge of investing which is not only crucial to see a meaningful growth but also to protect people against the myriad of scams that are happening nowadays.
Looking at Malaysia, Linus said that we are still on our way to having a sophisticated level of maturity in terms of investment compared to our peers in other countries.
“This will take time, so the idea of educating is so critically important, and it’s the cornerstone of how Malaysians can move forward,” he said.
Going back to the crypto craze and the dying buzz around NFTs, Devan Linus said that education had taught him that it is nothing new, and is instead just a new form of speculative investment.
“The same issue was there in the 70s and 80s. Even stock markets have their speculative stock,” he argued. However, his outlook on the future appears to be bullish.
“The sophistication will go up naturally, with the right form of education – the ethical form of education,” he said.
“The market forces naturally incentivize the market players like us and our peers to do the right thing.”