Hello Yogi, This is more of a note to myself, for my web-logging :0)
I was 28 years of age in October of 1987 and not married. I was the CFO of a 3,000-worker/3-plant Sino-US joint venture (Tianjin Otis Elevator). Tianjin Otis, together with Beijing AMC Jeep (later Beijing Chrysler Jeep, and then Beijing Daimler Chrysler Jeep), was one of the earliest large scale US industrial investments in China. There is a series of three Harvard Business School case studies on the Tianjin Otis Elevator Company, its trials and tribulations. In the first case, a CFO was mentioned. I was he.
There were 12 expatriates from different countries (Japan, Italy, France, Brazil, US, etc) stationed at Tianjin Otis, all were in the technical field, except the GM and myself, and a personnel type.
I had been the finance man on the negotiation team starting in late 1983, and by 1987, the novelty of a well-paid pioneering posting in a harsh environment had already worn off.
Together with the wearing off of novelty of being looked upon with importance at the work place, and the delight of being surrounded by bouquet of adventurous single and fun girls (overseas teachers and students at the local universities) at every weekend party, and the regularity of exotic Philippines holidays with some girl of some dreams, I began to worry about my future.
I remember I used to do a personal financial savings plan each year on VisiCalc, with a five-year rolling horizon, and I remembered I had a problem that required a drastic solution.
The problem was, while I was living off the largess of the company (it paid for housing, food, taxes, one-week holiday for every 6 working weeks, … videos, books, and haircuts) and was saving about 90% of my annual income, I could not achieve financial independence by any civilized time.
By June of 1987 I had slackened off on my work. I took time to go-carting at an amusement park while on way to work. I played hooky during board meeting and entertained Hulda and Janice who were playing a board game in my suite at the same Tianjin Crystal Palace Hotel.
By October of 1987, I had been investing in stock picks from Value Line for 6 years already, without material success and substantial allocation. The bulk of my assets were in two rental duplex houses and a pile of cash.
I paid no attention to the bond and currency markets.
On the day of the crash, I remember the one US expatriate’s gloom. He was a nice guy about 60 years old, a long time Otis employee, and was hit, badly, due to margin debt. He quickly became resigned to the idea of falling back on company pension, working additional years, and social security to make up the difference.
The rest of the expatriates did not have too much on the line, but never the less we did not work that much on the Crash Day, because we all felt something important was in progress in the world, and that we should take it easy – like a snow day for kids.
The Chinese managers of Tinajin Otis, lacking access to international TV news, all wanted to know what was happening, and they asked their CFO ;0)
The lessons I took away from the experience were that (a) we have a duty to time the market, and (b) given that we may not be good at timing, we should diversify across asset classes, geography, industry, and purchasing time, and we should pay attention to events and actions, bonds, and currencies, not just stock prices.
Two months later, during a return flight from a Philippine holiday, I decided to quit the company and do independent business consulting out of Hong Kong.
Chugs, Jay |
