Updated: Jul 21
Exclusive Trusted Magazine Q&A with James Wong, Portfolio Manager @ GaoTeng Global Asset Management
How could you describe your career path in a few words?
“Credit” has always been the focus all along my career path. I was so fortunate to work in buy-side, sell-side and rating agency for the last so many years. I also worked in both bond and loan sides, giving me the opportunity to get involved in both the public and private credit markets. Different positions do look at credit from different perspectives. After all, I consider all these positions require one particular skillset - to analyze a company’s capability and willingness to repay its debt within a certain period of time. In fact, analyzing a company in a research perspective can help us to distinguish between a good and a bad company. However, the responsibility of a portfolio manager is far beyond that. Instead, our job will also need to decide if the valuations of those companies are cheap or expensive. A price tag has to be put on the target before we decide to place the bet. This additional element is the reason why I think being a buy-side investment manager is both a challenging, but at the same time a very interesting profession. Now that I have been a buy-side fixed income portfolio manager for over 10 years. I am very positive that this is the job that I would like to work for the rest of my career.
What’s the most important key success factor for you based on your experience?
For me, downside risk management is the most important key success factor for those who are very capable in bond investments. Unlike buying equity and expecting stock price can go up to the sky high, bond investments generally offer a limited upside. A bond transaction essentially means lending money to a company and expects to receive the early-agreed interests and principal within a specific period. If you buy a bond when it is first issued and hold it till maturity, your return will only be your first agreed coupon interests. In contrast, if the issuer cannot repay its interests or principal for any reasons, a bond default will be triggered and all your principal might turn to ashes at an instance. As a result, bonds investment generally put more focus on downside risks, while equity investment looks more at the upside potential. Due to such significant potential downside, a successful bond investor must have a very strong sense in risk management. In particular, a fixed income portfolio manager should always consider the inherent investment risks not only at the individual bond level, but also at the portfolio as a whole.
What was your most challenging experience and it has changed your mindset?
For most investment professionals, cutting loss perhaps is one of their most challenging experience. Cutting loss indeed feels like admitting an initial judgement error at your investments and giving up chance for a rebound, if any. Frankly, I had similar issues during my first few years as an investment manager. I tended to be very stubborn sticking with my original investment decision while there were uncertainties and issues consistently surfacing during the course. My ego and stubbornness essentially clouded my judgement, even the market had been giving different warning signs. However, a bad mistake always teaches a good lesson. A substantial loss has then become a painful reminder for the rest of my career. From that time onwards, I believe I have become more flexible in my investment decisions in order to navigate through such constantly changing financial market.