Image Credit: futbolfinanzas.com
Much of Lim’s wealth was the product of an unlikely venture. His single investment of US$10 millionin Wilmar, an Indonesian palm oil startup, seemed far from promising in the late 90s, when Indonesia was facing political and social unrest. At the time, the currency fell from 2,500 to 16,000 rupiah against the US dollar. But against all odds, Wilmar began to pick up the pieces and Lim’s faith in the company paid off — in 2010, he cashed out his shares for US$1.5 billion.
“My Indonesian partner was asking me the other day: ‘How the hell did we make so much money?’Up to a point after people tell you a story and a vision, don’t write it off. Sometimes it comes true. You just make sure that if it doesn’t come true, you don’t get hurt too much.”(Source: The Business Times, AsiaOne News)
https://sg.news.yahoo.com/8-wise-lessons-wealth-singapore-053251357.html
Comments:
1998. US$10 million
2010. US$1,500 million (1.5 billion)
Period 12 years
Compound Annual Growth Rate:
51.82%. (WoW.
)2015. US$ 3,000 million (3 billion). His present net worth.
CAGR from 2010 to 2015. 14.87%
CAGR from 1998 to 2015. 39.87%
He bought Wilmar in 1997/1998.
It was at the time of the Asian Financial Crisis.
Prices of stocks were very low.
Indonesian currency and regional currencies were at historical lows compared to US dollars and Singapore dollars.
He made a big investment. (Fat pitch when the opportunity came.)
He was in the position to make this investment and he took the risk, knowing his downside was protected. (My analysis.) (Luck = preparation + ability to seize opportunity when this presents)
He stayed with the company long term (12 years).
He cashed out in 2010. (Perfect timing or pricing. How did he do this?)
Since 2010, he has grown his wealth around 15% per year, doubling in 5 years.
There are many lessons one can learn from this investing behaviour of Peter Lim (almost sounds like Peter Lynch). :-)
For references.
CAGR
61.41% (Land - short term frenzyl)
8.14% (Property capital appreciation)
9.75% (Plantation capital appreciation)
17.79% (Land - long term)
9.65% (Property Total Return)
10.61% (Plantation Total Return)
15%+ (Equity)
Unlimited (Business)
calvintaneng
This is a good article!
I first heard of Peter Lim investing in Wilmar around the time before and after the Asian Financial Crisis of 1997/8. I also heard that he owned a block of Condo Apt in Orchard Road and he is the Sole inhabitant in the entire block with no other neighbours.
I was surprised to read in Spore papers that Peter sold off all his other shares and bought only Wilmar.
As it turned out his Stock pick hits Bull's eyes. It was right on target when Palm Oil Rose to All Time High & Rupiah rebounded.
In Iskandar Peter Lim has 2 very Prime Assets; both JV with His Royal Highness The Sultan of Johor.
Vantage Bay Medical Hub is only A stone's throw from JB CIQ Custom Complex. And Motorsport City Only 5 Minutes from 2nd Link Crossing to Spore.
His investments are very strategic with progressive upside in future years.
This investment style of buying real estates near Boom Centers have been successfully done by others
1) Spore Govt owned Temasek bought a share of CITYSQUARE In JB CBD. It is located right across the Immigration, Bus & Taxi stand. A Hub of feverish activity with heavy human footfalls every day! So CitySquare Thrived.
2) The Properties in Shenzhen nearest Hong Kong command the highest prices.
And For Wilmar's Palm Oil?
Palm Oil is used in 50% of our processed foods like biscuits, ice cream, chocolates, pizza and as a milk substitute.
Milk substitute?
Yes! Palm oil is used in every cup of your favourite teh tarik. Your 3 in one milk coffee/tea actually contain palm oil and no milk at all.
Palm oil is also converted into biodiesel oil that powers our cars, MPVs, SUVs, Buses & lorries and even ships and planes.
So in food Palm Oil powers our human bodies with energy and in biodiesel the same processed energy powers our cars. Palm oil literally makes the whole world go round!
Not only that. Palm Oil Cleans our bodies when converted to soap. The first soaps produced were made entirely of Palm and Olive Oils. Remember Palmolive?
And our cars too. Palm oil is made into detergent that wash our cars and our homes.
As the world population increases there is more demand for energy from Palm Oil - both in food and in biodiesel.
On the precious lands where palm oil are planted development will finally reach it one day. These lands eventually convert into valuable housing lands. See how IOI Converted them to properties - IOI MALL. Same for Genting Plantation. Johor Premium Outlets are located side by side with Oil Palm Trees.
And Right now in Desaru and Tanjung Belungkor KULIM is converting Oil Palm Lands into future Thriving Housing Enclaves To Capture the Boom in Pengerang's Rapid.
So there is complete logic in investing into Palm Oil Counters when it is hit during a down cycle like now.
Peter Lim bought into Wilmar at a time when Market is depressed & Rupiah weak. And the market enters into crisis mode.
The Cycle of Fortune is here again!
KULIM Has Weakened in Price and the Ringgit has Collapsed!
This is the most opportune time to load up on Kulim on weakness.
Who knows?
In 12 years' time there might be another billionaire in waiting.
2015-06-06 10:46