Value Investing

What Lee Kuan Yew Teaches Us About Investing

What Lee Kuan Yew Teaches Us About Investing by Lukas Neely, Endlessrise Investor

“If you will make a study of the life and the work of Lee Kuan Yew, you will find one of the most interesting and instructive political stories written in the history of mankind. This is better than Athens…and you will learn a lot that will be useful in your whole life.” – Charlie Munger

The world lost a visionary leader on March 23, 2015. Lee Kuan Yew was the architect behind Singapore’s rise through the global ranks.

Let me be clear — I am not condoning everything that Lee Kuan Yew did in his life to accomplish the things he did. I simply want to point out that the political system the Lee created (and executed) in Singapore is one of the GREATEST examples of how an organization can adapt, evolve and grow despite its “less than ideal” circumstances.

And remember, just because I think it may be the single greatest political system doesn’t mean I think it would work in the U.S. I think our current system is the best system for us as a nation. However, I do admire the speed at which Lee was able to solve problems — the only issue: you better hope you have a benevolent leader making the decisions or else you might have the second coming of Leopold II on your hands (that’s a joke).

Whether you’re a fan of Lee Kuan Yew or not — you have to admit that taking a swamp riddled country like Singapore and transforming its GDP into one of the highest in the world at $54,000 per head — is no easy feat. The country had no real resources. They even had to import water. In addition, they were surrounded by some hostile folks that were not too high on the Christmas party invite list (if you catch my drift).

His decisions and policies may not have been ideal for everyone, but he changed the fortunes of millions of people for the better. Lee was Singapore’s Prime Minister for more than three decades. Although he was known by many to rule with an “iron-fist” — there is no doubting his impressive accomplishments (and creative solutions).

Here are just a few of the problems he helped fixed while in power:

**Got rid of independent trade unions,

**Reconfigured the education system to produce workers who have skill sets of foreign investors,

**Terrible Malaria problem — so he drains the swamps,

**The country has a drug problem — so he researches and searches the world over and eventually comes across the U.S. Military drug policy and clones it for his own country,

**He weeds out the bad applies and made it very “user-friendly” for the kinds of people and investors he wanted to attract,

**He has a race issue between the Chinese (70%) and the Malays (30%) because the Chinese believe they are far superior to the Malays — he thinks it’s incredibly counter productive to say such things, so he passes a law stipulating the Chinese cannot say they are superior to the Malay. Of course this is an impediment to free speech but it works again.

And he didn’t do all of this for “shits-and-giggles” — he was a benevolent leader who wanted the country and its citizens to be prosperous. His rule of law was one big experiment. It could have easily gone up in flames, but it didn’t — IT WORKED.

In closing, I wanted to share one of my favorite lighthearted stories of Lee with his approach to marriage. If you’ve read Poor Charlie’s Almanac or study Charlie Munger, you’re sure to recognize it.

Lee grew up a very studious man — very hard working. And for some reason, the above average successful male in Asian culture married a incredibly good looking woman that was less intelligent than he is (similar to many cultures). Lee was so smart that he ended up being the second ranked student in his high school. The person that beat him out by 1/10th of a percentage point was female — so he married her.

Instead of following what many successful males were doing (marrying the beautiful woman with big boobs and below average intelligence). He opted for the logical choice and wanted to be with the woman the beat him out for a 1/10th of a point. I guess Lee had a bit of a contrarian streak in him too (he would’ve made a great value investor).

Bottom Line: There are lessons to be learned in all walks of life to help you become a better investor. If you have not studied the life of Lee Kuan Yew, I implore you to grab a couple of books and start reading. You’ll be better off for it in the end.

Lee didn’t grow up in a life of luxury. There are so many lessons to be learned by Lee to do justice in this small piece. However, if I had to choose the biggest lesson from my studies of Lee Kuan Yews it’s this: people’s perception of genius and “smarts” are sometimes masked by the real reasons for accomplishment: hard work and perseverance.

These are incredibly important attributes to have as an investor. Investors haven’t had to show much perseverance or adversity in the face of this 6 year bull market. So, it will be interesting to see if investors have the fortitude and patience to withstand potential corrections in the future.

ALSO, in the case of the story with his wife, he shows it doesn’t hurt to act counter to the crowd and have a contrarian streak at times too.

Farewell Lee — I may not have agreed with all of your polices, laws, or decisions. But who am I to argue the incredible results. I admire what you accomplished in changing the lives of millions of people for the better.

Whether you love him or hate him — his legacy will live on forever.

And in case you were wondering — I married up in the intelligence category.

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What Lee Kuan Yew Teaches Us About Investing