The Model: 37 Years Investing in Asian Equities

This book is not only an important milestone of Overlook’s 30 years history but also Asia’s value investing. Despite its outstanding long-term performance of 14.3% p.a., Overlook is not a household name in Asia, however, it is one of the most respected investment management companies by institutional investors. Richard Lawrence, the author and the founder of Overlook, arrived in Hong Kong in 1985 and launched the business in a window-less room in Central in 1991. The author shares with the readers his rich experiences of turbulent stock markets, including at least two major crises – the Asian Currency Crisis in 1997-1998 and the Global Financial Crisis of 2008. The book is important because there are not many active Asian investors who have gone through both. The book’s namesake Model was a ironclad framework of how responsible investors should invest in order to, not only flourish, but survive. Over the last 30 years, there were so many Me-Too Buffets in Asia, but none of them is still here today. The author considers himself not as a copycat of Buffett, but a rival, in my view.I was fortunate to meet the author in 2012 in Hong Kong. I was 32 years old. Like the author, I was about to start my own multifamily office business. The 30-min meeting with the author taught me the principles, which I still follow to manage my own business. Yes, the Model worked for me as well. It is a philosophical and practical framework. Overlook set the investment philosophy at its inception and never had a need to change it. It helped the firm to stay focused on its core competence when other opportunities looked appealing. This consistency helped them from chasing value-destroying opportunities. The book also shares the importance of having a sound business practice, which many investment management companies “overlook”.I highly recommend this book for all levels of investors. At different levels of experience, they will find different messages that will help them to reach the next level.Again, the Model works and will work for you.

This book describes the history and the investment model for Overlook Investments. It is worth paying attention because Overlook has vastly outperformed relevant benchmarks, and most importantly over a very long 30-year horizon. The upshot is that there is something is very right with Overlook's approach, and so there are valuable lessons here for both professional and individual investors. In a nutshell, Overlook's approach rests on two pillars. The first one is superior stock picking, gravitating to highly profitable and stable companies with solid pricing power and low debt. The second pillar is outstanding business practices that basically make sure that the value earned in stock picking accrues to actual end investors. Most importantly, this includes cap on subscriptions, cutting fees, returning massive amounts of capital, and other practices that basically align the interests of fund managers and investors. Simply put, the asset management industry would be vastly better if most fund managers adopt Overlook's business practices. A prominent element of Overlook's success is that its capital-weighted returns (which are true investor returns) are about the same as its time-weighted returns, which is in contrast to most funds where capital-weighted returns lag time-weighted returns, often by a significant margin.

The author shares his story in a unique format.This book is not a "dry" investment book that teaches by you reading "an X is good and Y isn't" principles. Instead, it is a series of events going back in time, with actual letters written regarding the events taking place.The full spectrum of emotions and difficulties that ensued presented so transparently I felt lucky to read it. The duties of a fund manager shine through hard times.The first thing I noticed is the author crediting success as "We."I thought investing to be a single-player game, but as you will read, there is power with the right team and system, although challenging to achieve.If you are young and relatively new to the markets and have never experienced a real bear market like I am, the Asian market collapse will feel like an action movie.Reading between the lines, you will realize how rare the required personality traits are to become an excellent fund manager and survive.I understand why so many people don't believe in funds' ability to beat the market. Even though many principles are simple, holding the required personality traits in practice is rare.Success is a byproduct of psychology, mentality, philosophy, honesty, expert financial analysis, patience, humbleness, and much more blended together.Although the text itself is written in a simple to understand way, many new terms, ideas, and players are presented that I had to pause frequently and dive deeper into the subject to grasp what I am reading thoroughly.This book is a must-have; the lessons are not just for the Asian markets and relevant for every investor who wishes to become a better one, especially aspiring fund managers who have to deal with clients.

I read a LOT of investment books and this was one of the best books I have read on the subject. Richard's long-term track record gives him credibility and the book is filled with real life, transparent, examples which is extremely refreshing among a sea of books based on economic theory (which often doesn't pan out in reality).The book is full to the brim of useful anecdotes that one can apply on their journey to becoming a better investor. Whilst focused on asian equities, many of the lessons are market agnostic and would be equally relevant irrespective of your fishing grounds.Definitely one for the book shelf and one I will refer back to from time to time.

The 14% returns for investors are real net of fees for investors, long-term. The book comes with recommendations from Prem Watsa and Jeremy Grantham. Richard clearly has a passion to share his experience and teach both from his picks that panned out best and the one's that didn't.Uniquely to this book compared to other investing books, the reader can learn:*Value investing in Asia*A 40 years perspective on Asian markets*Draw lessons from the gigantic Asian crises at the end of the naughties*Understand how China is evolving*What it means to know the companies you own*Activism as a fiduciary duty*Helps reinforce a long-term mindset