Peter Lim, the man formerly known as the 'Remisier King' and who is estimated to be worth more than $2 billion today, reckons the stock market still has two good years to go. But he is getting concerned about the property market.
The good life: Nowadays, Mr Lim spends his time dispensing advice to deal-makers in the industry - and sends them a bill of $300K for it
'The market won't collapse for the next two, three years. It's all sentiment-driven. People are making more money, and so long as people are spending, we are OK. But one has got to start to think how to exit at the end of 2-3 years - 2009, before the casino starts operating,' he said.
Mr Lim is, of course, well known as an influential stockbroker and deal-maker in the Singapore and Malaysian markets in the early 1990s. That was also when he made his millions, but quit at his peak to take care of divorce proceedings.
Despite being out of the industry, it was in the last few years that his fortunes took a leap forward, thanks to the booming stock market. He was recently in the news for agreeing to put $150 million into Rowsley for its reverse takeover of a China solar company.
In a near four-hour interview with BT to talk about his market views and investment philosophy, Mr Lim said a lot of the big companies listed on the Singapore Exchange (SGX) today have a global presence.
Like Keppel Corp, for instance; it can't fulfil all the orders for its oil rigs. So even if there is a shift in investor sentiment and the market corrects severely, investors can still ride out the whole cycle, said Mr Lim - barring a global recession, of course.
The danger, he said, is in the small-cap sector. 'Some of these stocks have gone up a lot. Much of the potential has been priced in. If this potential is cut short by any unexpected unfortunate event, they will come down like a rock.'
Small-cap stocks run up fast because of their small float. But when the sentiment turns, everyone is a seller, he said.
As for the property market, Mr Lim thinks prices have gone up too fast. The sharp increase has taken everyone by surprise, even the government. 'Actually, it's quite simple. Singapore is small. You get a small bucket, and pour a lot of water, it'll overflow. This is what's happening. I think the demand just comes together at the same time. I don't think it's sustainable.'
Demand is so strong that people are knocking down buildings, and that's curtailing supply even more.
But the thing is, the buildings knocked down will have three times more apartments when they get rebuilt a few years down the road. 'When the supply comes out, property prices will drop,' he said.
Comparisons have been drawn between Singapore and London. 'But you tell me: how many en bloc (redevelopments) do they have in London? No en blocs means no additional supply.' he said.
Mr Lim is worried about the impact of high rentals on businesses - office rentals have gone up by 200-300 per cent in the last few years. 'Costs are going to bloat . . . most businesses' margins are going to be eaten up by costs.'
At the moment, many individuals and companies are making money from asset inflation, he said. 'You hope that this asset inflation becomes an income, becomes regular. But I don't think so. These are all situational. But it will go one day.
'I'm not a pessimist, but this is how I see it. That's why at the end of a bull market, you see a new generation coming up. Because all the old ones die. Now and then, you see one of those who stays - then he becomes a legend. And if you observe those legends, most of the time, they spend their time scolding people: 'don't gear, don't gamble'.'
And that exactly was the message that he kept harping on during the interview.
'A lot of people get it wrong. When the bull market is here, they build debts. Bull market is the time to build cash. Because today's market turns very quickly. When the market turns, you cannot sell, especially for the property market. You can only sell when things are going up.
'So I always tell my friends: 'Make sure you stay alive. The market won't die, so there's always a next time.' '
By BT's estimates, Mr Lim is worth in excess of $2 billion. He has just under 5 per cent in Wilmar International. Based on the company's current market capitalisation of $22 billion on SGX, that stake alone is worth $1.11 billion. He has about 11 per cent in FJ Benjamin, and that's worth $52.6 million. Meanwhile, his 25 per cent stake in Rowsley has a market value of $37 million. So his Singapore equities alone are worth $1.2 billion. On top of that, he has some Australian mining stocks bought in the 1970s and '80s.
Mr Lim says 50 per cent of his portfolio is now in equities, another 10 per cent in properties and the remaining 40 per cent in cash. The cash is from the dividends he received, which he has not reapplied to the market. So all in, he's worth more than $2.4 billion.
The 54-year-old believes that the fortune he has today is pre-destined. 'This size - substantially, it's your destiny. If today I have $10 million, I'd say over 90 per cent is due to my hard work. But getting it right is not $1 billion. Maybe it's $100 million. How that $100 million becomes $1 billion, you know it's because somebody likes you. You must believe it's somehow a path that's been drawn.'
The bulk of his net worth is in Wilmar, in which he was asked to pump in under $10 million in the early 1990s. By the second half of the decade, he had totally written off that investment. That was when the Indonesian currency fell from 2,500 rupiah against the US dollar (the exchange rate he invested in Wilmar), to 16,000 rupiah, and president Suharto was ousted. There were riots in Indonesia. There was no way of cashing out the assets. But in a few years, things stabilised in Indonesia and the pieces began to come together for Wilmar. Its China operations began to pick up, businessman Robert Kuok decided to inject his Malaysian palm oil operations into Wilmar and palm oil prices started to go through the roof because of the scramble to produce biofuels.
'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,' he said.
The most important factor to consider when investing in a company is the person running it; you look at whether the person is honest, and whether he or she is master of their trade.
'It works. It's a tested method of assessing companies,' Mr Lim said.
Wilmar is not his only lucky break. He escaped the Asian crisis as he had quit the broking profession in 1996 to prepare for his divorce proceedings. And he spent the next six months liquidating most of his stock positions. So when the crisis hit, he was mostly in cash.
He was also not in the market during the dotcom bubble as the hearing on the division of matrimonial assets dragged on until 2001. He thanks his lucky stars for having avoided the Asian financial crisis, but thinks he would not have been caught in the insanity of the dotcom bubble.
Nowadays, Mr Lim spends his time dispensing advice to deal-makers in the industry - and sends them a bill of $300,000 or more for it. He still gets a thrill out of structuring deals, which he says is similar to a chess game.
He described the recent Rowsley deal to acquire a solar energy company in China as 'beautiful', as one which allows existing shareholders to 'lock in the upside, but hedge the downside'.
He's also having to cope with the problems of having too much money. He worries if his children, a 15-year-old girl and 13-year-old boy, will be spoilt by his wealth. He reckons he may give the bulk of his money to charity eventually.
But going by the four-hour lunches that he takes - with Imperial Treasure at Great World City being his Canteen No 1 and Kuriya his Canteen No 2 - and sometimes squeezing in a game of tennis or two before dinner, the money problem can't be all that bad.
HIS VIEWS ON . . .
Maybe it's in the blood. It's quite exciting to pitch a deal, to make sure that you don't catch me. It's like a chess game: you make this move, the next one I make. I don't want to get checkmate.
Money is a funny thing. When you don't have it, you want it. But when you have it, you have a lot of problems. I believe that if I'd had no money, I wouldn't have had my divorce. Things wouldn't be good, but it wouldn't end up in a divorce.
Once you are old, every year makes a lot of difference. Your lease gets shorter, there's no extension. You go, you go.
Some of my school mates have passed away. So once you start to see all these things, your perspective on life becomes more measured, more considered.
It's very difficult to make money from trading. People who get rich are those who buy a company, build it, run it. Most of the traders, they come, they make money, because they have this gambling instinct. They take the money and spend it. The minute they lose money, they got no money to pay up.
The next downturn
Today's bull run can get cut short by a number of things. Just like our recent experience with Sars, or a bomb drops on the wrong person's head. Like anything else, the least expected thing can happen at the wrong time. I got a feeling the next downturn will be very severe.