Mr. Tan has always been fascinated with the stock market, having been a "student" of the market for almost 30 years. He strongly believes that investing intelligently in equities would provide superior investment returns. Having seen and experienced his first bull and bear market in 1972-1973 was not enough. It was a passion that had to be whetted and Capital Dynamics was the manifestation. But having a passion, although a powerful motivating force, is not enough.
What are the choices available to investors, be they individuals, corporations or institutions, when they want to invest in the stock market? Who can they turn to for sound advice?
The investor can do it himself or depend on the stockbroker or turn to the investment or merchant bank. We have, of course, not forgotten the common method of relying on rumours or tips or "hot news" that are commonly available.
To do it him or herself, he or she needs the know-how, time and other resources. To invest based on tips or rumours or "hot news" have inevitably proven to be too risky and foolhardy, whether the source comes from the many web sites or glossy looking publications or even from the horse's mouth. To turn to the stockbroker or investment banker, there is the danger of getting advice filled with conflicts of interest.
To better illustrate this dilemma facing an investor, we quote from the book "Where are the customers' yachts?". Written in 1940 by Fred Schwed, it says:
At Capital Dynamics, we realised that there are many investors who needed an investment adviser that has a "partnership" attitude towards clients, one whose success is unquestionably tied up with the performance of clients' investments. There is a dire need for an investment adviser that has no conflicts of interest, either hidden or obvious. One that has a very clear focus.