Wow a Value Investor who got very wealthy through his investments! It's an inspiration for all value investors out there! Or maybe it was his various high-powered positions brought him the wealth?
Though I do wonder - would it have been possible to avoid the carnage at Fibrechem and China Sun-Biochem? Most of the net margins and consistency in profits were too good to be true. As a value investor, you can't afford to take things at face value....
Oct 10, 2010
Army days led to money making ways
It was during national service that Mano Sabnani acquired an interest in investing
By Lorna Tan, Senior Correspondent
Mr Sabnani - with daughter Natasha, wife Mohini and sons Karan and Dev - has made building up healthy savings for his family a central part of his financial planning. -- ST PHOTO: LAU FOOK KONG
It was during his national service in 1975 that Mr Mano Sabnani became interested in investing, especially in stocks. He remembers the army officers talking about the market and their investments during their free time.
His stock investments have paid him handsome dividends. In the past 20 years, Mr Sabnani, 60, has managed to grow his stock portfolio from $200,000 to $4.8 million. Another $250,000 is invested in private equity and unit trusts. During the same 20-year period, he earned about $1.4 million in stock dividends. At present, he enjoys an annual flow of dividend income, which is sufficient to cover his basic annual expenses of $150,000.
Mr Sabnani has worn many hats in his 35-year career. He joined The Business Times as a reporter in 1977, became BT editor in 1986, and was managing editor of The Straits Times and head of the editorial support unit of Singapore Press Holdings' English/Malay newspapers from May 1992 to late 1995.
He then moved to DBS Securities as its director of research in 1996 before joining DBS Bank a year later. He was managing director for investments and later managing director for equity capital markets. In 2001, he left the bank to join Corporate Brokers International as executive director.
Two years later, he joined MediaCorp as Today's chief executive and editor-in-chief, leaving in 2006.
For the next year, he was executive director at consumer group Novena Holdings, after which he served at Multistar Holdings as group managing director until last year. He is currently chairman and chief executive of Rafflesia Holdings, which assists SMEs with growth strategies and corporate governance. He set up the firm in 2008 with $200,000.
Mr Sabnani graduated from the University of Singapore in 1973, with a bachelor of science degree. He is married to housewife Mohini R. Nathani, 56, and they have a daughter, Natasha, 22, and two sons, Karan, 21, and Dev, 18.
Q Are you a spender or saver?
I believe in the power of savings. My family has been putting aside between 30 per cent and 50 per cent of our income over the past 30 years. This is after provision for premiums on various insurance plans and monthly contributions to my (late) retired father and dependent younger brother as well as contributions to charity, which is allotted 2 per cent of annual income.
Q What financial planning have you done for yourself?
My portfolio covers bonds, unit trusts and equities with the focus on SMEs and real estate investment trusts. The average yield is about 4per cent net per annum. When selecting stocks, I read annual reports, attend annual general meetings, and analyse the business model and the credibility of the management.
The children and my wife are covered for up to $500,000 each. My own cover is about $750,000 and the plans range from health and endowment to whole life and group term policies.
Our fixed deposits of $500,000 are enough to cover three years of family expenses. There is an additional similar amount for unforeseen or extraordinary expenses which could arise in the future. It is a form of self-insurance.
For the children and my wife, I have built up separate, private endowment funds. About $8,000 is set aside each year for each member for the past 22 years since our daughter was born in 1988.
I hope to set up the Mano Sabnani Trust Foundation in the next two years. It will focus on financial literacy, nature/environment and community needs. The money will be drawn from the portfolio.
Q Moneywise, what were your growing-up years like?
I grew up with five siblings and I am the third child. My mother, a housewife, developed complications and died following childbirth at the young age of 40 in 1963. I was then 13. My father was a textile merchant. My two elder brothers had to work after their O and A levels. I was lucky to be allowed to go to university but my dad could cover only the fees, so I had to give tuition or teach in adult evening classes to cover my personal expenses.
We lived in a rented flat in Joo Chiat until 1963, when my dad managed to make a down payment on a flat in Katong.
Q How did you get interested in investing?
I got interested in stock investing during my army days. Joining BT in 1977 allowed me to develop my knowledge of financial markets and people in business. I am a value investor and agree with Warren Buffett when he says one should be greedy when others are fearful; conversely, one should be fearful when others are throwing caution to the wind. I buy stocks with good business models and governance during crisis periods; the time to sell is during euphoria in the market.
Q What property do you own?
Home is a 3,687 sq ft freehold semi-detached house in Katong. We bought it in 1998 for $1.25 million. It has 5,000 sq ft of built-up space over three floors and is now worth about $3.75 million.
Before moving into the semi-detached house, we lived in an HUDC maisonette in Bedok, which I bought in 1984 for $230,000. We rented it out from 1998 and received an en bloc buyout for it at $660,000.
Q What's the most extravagant thing you have bought?
I bought a Volvo S80 T6 in 2000. It cost me about $200,000. I had to do major repairs from the sixth year onwards and, finally, the flood got to it three months ago. It was not worth repairing the car and we scrapped it.
Q What's your retirement plan?
I have been financially independent since I was 55. My dividend/interest income is sufficient to cover our basic expenses of $150,000 per annum. What Rafflesia Holdings earns in future will be channelled into investments to grow the pool and provide for the family's needs as well as support my philanthropy effort in my own small way.
Q I drive....
I now drive a black Toyota Camry 2.0. My wife, Nisha, drives a black Toyota Wish 1.8. They are both good value for money.
lorna@sph.com.sg
--------------------------------------------------------------------------------
WORST AND BEST BETS
Q My worst investment to date...
My worst investments have been in private equity and mostly in software firms whose shares were bought from 2000 to 2002.
The problem with small companies is that they run out of funds while still developing their products and the founders often lose interest, leaving shareholders in the lurch. I have written off more than $100,000 on these investments.
Despite due care, I have also lost about $100,000 on listed S-chips like China Sun Biotech and Fibre Chem from 2005 to now.
One moment, the companies appeared to be normal with steady business. The next, they were down and out with large amounts of money missing or unaccounted for. Investors have had no chance with such China-based companies and their downfalls were unexpected.
Q My best investment to date...
I have done well in earlier years with Malaysian shares like RHB Bank and Kulim Plantation and Singapore-listed Straits Trading. I bought them during the Asian financial crisis in 1997/98 and sold them by 2007, multiplying values between four times (Straits Trading and RHB Bank) and 7.5 times (Kulim).
Properties and plantations usually do well in the long term, with appreciating assets.
I am also currently sitting on good profits for stocks like Sunningdale and Ellipsze. I bought them when they were completely out of favour and trading below five cents in March last year during the United States financial crisis.
Though I do wonder - would it have been possible to avoid the carnage at Fibrechem and China Sun-Biochem? Most of the net margins and consistency in profits were too good to be true. As a value investor, you can't afford to take things at face value....
Oct 10, 2010
Army days led to money making ways
It was during national service that Mano Sabnani acquired an interest in investing
By Lorna Tan, Senior Correspondent
Mr Sabnani - with daughter Natasha, wife Mohini and sons Karan and Dev - has made building up healthy savings for his family a central part of his financial planning. -- ST PHOTO: LAU FOOK KONG
It was during his national service in 1975 that Mr Mano Sabnani became interested in investing, especially in stocks. He remembers the army officers talking about the market and their investments during their free time.
His stock investments have paid him handsome dividends. In the past 20 years, Mr Sabnani, 60, has managed to grow his stock portfolio from $200,000 to $4.8 million. Another $250,000 is invested in private equity and unit trusts. During the same 20-year period, he earned about $1.4 million in stock dividends. At present, he enjoys an annual flow of dividend income, which is sufficient to cover his basic annual expenses of $150,000.
Mr Sabnani has worn many hats in his 35-year career. He joined The Business Times as a reporter in 1977, became BT editor in 1986, and was managing editor of The Straits Times and head of the editorial support unit of Singapore Press Holdings' English/Malay newspapers from May 1992 to late 1995.
He then moved to DBS Securities as its director of research in 1996 before joining DBS Bank a year later. He was managing director for investments and later managing director for equity capital markets. In 2001, he left the bank to join Corporate Brokers International as executive director.
Two years later, he joined MediaCorp as Today's chief executive and editor-in-chief, leaving in 2006.
For the next year, he was executive director at consumer group Novena Holdings, after which he served at Multistar Holdings as group managing director until last year. He is currently chairman and chief executive of Rafflesia Holdings, which assists SMEs with growth strategies and corporate governance. He set up the firm in 2008 with $200,000.
Mr Sabnani graduated from the University of Singapore in 1973, with a bachelor of science degree. He is married to housewife Mohini R. Nathani, 56, and they have a daughter, Natasha, 22, and two sons, Karan, 21, and Dev, 18.
Q Are you a spender or saver?
I believe in the power of savings. My family has been putting aside between 30 per cent and 50 per cent of our income over the past 30 years. This is after provision for premiums on various insurance plans and monthly contributions to my (late) retired father and dependent younger brother as well as contributions to charity, which is allotted 2 per cent of annual income.
Q What financial planning have you done for yourself?
My portfolio covers bonds, unit trusts and equities with the focus on SMEs and real estate investment trusts. The average yield is about 4per cent net per annum. When selecting stocks, I read annual reports, attend annual general meetings, and analyse the business model and the credibility of the management.
The children and my wife are covered for up to $500,000 each. My own cover is about $750,000 and the plans range from health and endowment to whole life and group term policies.
Our fixed deposits of $500,000 are enough to cover three years of family expenses. There is an additional similar amount for unforeseen or extraordinary expenses which could arise in the future. It is a form of self-insurance.
For the children and my wife, I have built up separate, private endowment funds. About $8,000 is set aside each year for each member for the past 22 years since our daughter was born in 1988.
I hope to set up the Mano Sabnani Trust Foundation in the next two years. It will focus on financial literacy, nature/environment and community needs. The money will be drawn from the portfolio.
Q Moneywise, what were your growing-up years like?
I grew up with five siblings and I am the third child. My mother, a housewife, developed complications and died following childbirth at the young age of 40 in 1963. I was then 13. My father was a textile merchant. My two elder brothers had to work after their O and A levels. I was lucky to be allowed to go to university but my dad could cover only the fees, so I had to give tuition or teach in adult evening classes to cover my personal expenses.
We lived in a rented flat in Joo Chiat until 1963, when my dad managed to make a down payment on a flat in Katong.
Q How did you get interested in investing?
I got interested in stock investing during my army days. Joining BT in 1977 allowed me to develop my knowledge of financial markets and people in business. I am a value investor and agree with Warren Buffett when he says one should be greedy when others are fearful; conversely, one should be fearful when others are throwing caution to the wind. I buy stocks with good business models and governance during crisis periods; the time to sell is during euphoria in the market.
Q What property do you own?
Home is a 3,687 sq ft freehold semi-detached house in Katong. We bought it in 1998 for $1.25 million. It has 5,000 sq ft of built-up space over three floors and is now worth about $3.75 million.
Before moving into the semi-detached house, we lived in an HUDC maisonette in Bedok, which I bought in 1984 for $230,000. We rented it out from 1998 and received an en bloc buyout for it at $660,000.
Q What's the most extravagant thing you have bought?
I bought a Volvo S80 T6 in 2000. It cost me about $200,000. I had to do major repairs from the sixth year onwards and, finally, the flood got to it three months ago. It was not worth repairing the car and we scrapped it.
Q What's your retirement plan?
I have been financially independent since I was 55. My dividend/interest income is sufficient to cover our basic expenses of $150,000 per annum. What Rafflesia Holdings earns in future will be channelled into investments to grow the pool and provide for the family's needs as well as support my philanthropy effort in my own small way.
Q I drive....
I now drive a black Toyota Camry 2.0. My wife, Nisha, drives a black Toyota Wish 1.8. They are both good value for money.
lorna@sph.com.sg
--------------------------------------------------------------------------------
WORST AND BEST BETS
Q My worst investment to date...
My worst investments have been in private equity and mostly in software firms whose shares were bought from 2000 to 2002.
The problem with small companies is that they run out of funds while still developing their products and the founders often lose interest, leaving shareholders in the lurch. I have written off more than $100,000 on these investments.
Despite due care, I have also lost about $100,000 on listed S-chips like China Sun Biotech and Fibre Chem from 2005 to now.
One moment, the companies appeared to be normal with steady business. The next, they were down and out with large amounts of money missing or unaccounted for. Investors have had no chance with such China-based companies and their downfalls were unexpected.
Q My best investment to date...
I have done well in earlier years with Malaysian shares like RHB Bank and Kulim Plantation and Singapore-listed Straits Trading. I bought them during the Asian financial crisis in 1997/98 and sold them by 2007, multiplying values between four times (Straits Trading and RHB Bank) and 7.5 times (Kulim).
Properties and plantations usually do well in the long term, with appreciating assets.
I am also currently sitting on good profits for stocks like Sunningdale and Ellipsze. I bought them when they were completely out of favour and trading below five cents in March last year during the United States financial crisis.
