Meet the Investor - ShawSpring Partner's Dennis Hong
The session was so impactful that students' feedback and reflections were overwhelming!
The Generation Z Club was honoured to have Dennis Hong as a guest speaker during the “Meet the Investor” session on December 1, 2023. Dennis is the founder of ShawSpring Partners, a Boston-based investment firm that manages over a billion dollars and runs a concentrated global public equity portfolio.
Xinfei TAN and Pyae Phyo SHUN, new members of the Z Club, conducted a lively and engaging chat with Dennis as they asked him a myriad of questions ranging from his personal background, to his investment philosophy and advice for students. Here are some of the takeaways:
Educational and Professional Background
Yale University: Dennis' journey in investment began at Yale, where he pursued a B.A. in Ethics, Politics, & Economics. His time at Yale was significant, not just for the academic exposure but also for his experience working at Yale University's Investments Office. This period was crucial for his exposure to professional investing.
Mentorship and Influence: A notable influence during his time at Yale was David Swensen, who managed Yale's endowment for 36 years and made it one of the best-performing in the world. This relationship played a pivotal role in shaping Dennis' understanding of multi-asset investment strategies and the importance of meeting boutique managers.
Harvard Business School and Early Career: Despite attending Harvard Business School, Dennis chose to leave to start his investment journey with ShawSpring Partners, demonstrating his commitment and belief in his investment philosophy. Prior to this, he had a remarkable stint at Altimeter Capital Management and Matrix Capital Management. Investment Philosophy and Strategies
Concentrated Strategies: One of Dennis' key investment philosophies revolves around concentrated strategies, such as holding positions in as few as three stocks. This approach suggests a deep confidence in his investment choices and an emphasis on quality over quantity.
Three-Dimensional Approach: Dennis emphasizes the importance of a three-dimensional approach to investing: 1) Business Analysis: Understanding the fundamentals of how a business operates and generates revenue.
2) Valuation Work: Assessing the value of investments to make informed decisions.
Trade and Market Intuition: Evaluating the success rate of investments and having a sense of market trends.
3) Replicability and Scalability: His success in investments is attributed to a replicable and scalable strategy, which involves thorough study of companies and, if possible, meeting with management teams.
Advice on Networking and Career
Maximizing Luck in Business: Dennis advises that success in business often requires a degree of luck, which can be maximized by expanding one’s network. He emphasizes the importance of adding value to discussions and developing a likable reputation.
Career Choices: He suggests looking for roles that provide personal satisfaction, mentorship, and fair compensation. He also highlights the importance of finding a mentor and being in a group that invests in personal and professional development.
Investment Mistakes and Selling Points
Learning from Mistakes: Dennis candidly discussed his investment mistakes, such as misjudging a stock's potential. Learning from these mistakes is crucial in the investment journey.
Reasons to Sell: He outlines three main reasons for selling an investment: recognizing a mistake, identifying overvaluation, and when the company's growth or valuation no longer makes sense.
Book Recommendation
"Margin of Safety": This book recommendation suggests an emphasis on risk-averse investment strategies and a fundamental approach to investing.
In summary, Dennis's insights offer a comprehensive view of his investment philosophy, emphasizing concentrated strategies, in-depth business analysis, and a resilient, non-transactional approach to both investments and professional relationships. His journey and advice provide valuable lessons for anyone interested in the field of investments. The Club would like to thank Dennis for his invaluable participation in sharing his knowledge and experiences. His contribution has undoubtedly enriched the learning experience for all attendees and has left a lasting impact.
Following Dennis' sharing, we conducted a fun round of investoon game show using our Investor Z Impact! sustainability-themed investoon.
Then we ended the day with some networking and some of us had the privilege of having dinner with Dennis too!
We look forward to the next time Dennis is here in Singapore, and we cannot thank him enough for his utmost support for the club and the next generation of students.
Of course, not forgetting the lovely venue and logistics provided by GoodWhale. This event could not have happened without your support!
Written by:
Jordan GOH (edited by Persis HOO)
ESG Investing Program Class of 2023
Dennis’s sharing left me with deep, positive feelings that will continue to inspire the future career journey of mine as well as many of the Gen Z members who were present in that room.
I have had many big takeaways from the 1.5 hour sharing session but the biggest of them all was his will and tenacity to succeed that made him such a successful fund manager that he is today. I believe that Dennis’s strong humility is also another driver of his success, and he really taught many young, ambitious and hopeful students the importance of staying humble even in success.
- Jordan GOH
Reflections
“Heart of a champion” are the four uplifting words that constantly struck a chord within me ever since the sharing by Mr Dennis. Personally, I am inspired by Mr Dennis’s bold ability to transcend boundaries to truly commit to his passion and his investing philosophy. As a finance enthusiast, I found myself deeply engaged and enlightened by his unique perspectives on investment strategies and personal development within the industry. I particularly admire his deep confidence in his investment choices and his philosophy that prioritizes depth over breadth in market analysis. This method, rooted in extensive research and profound understanding of each business’s fundamental value, offered a refreshing perspective on fund management. Mr Dennis’s emphasis on a three-dimensional approach to investing was another key takeaway. He highlighted the importance of comprehensive business analysis, meticulous valuation work, and an intuitive grasp of market dynamics. His methodical approach to understanding how a business operates and makes money, combined with his keen sense of valuation and market trends, provided a blueprint for successful investment strategies. During the second half of his sharing, the emphasis on the human aspect of business, such as adding value to conversations, was a timely reminder of the soft skills crucial in the often cut throat world of finance. Mr Dennis’s candidness in sharing his investment oversights and his criteria for selling investments (recognizing mistakes, overvaluation, and growth valuation mismatches) were both humbling and instructive. It underscored the importance of continuous learning and adaptation in the investment field. Overall, the session with Mr Dennis was not just an exploration of investment strategies, but also a masterclass in professional growth, personal integrity, and the importance of a well-rounded approach to business and life. His insights have left a lasting impression, encouraging a more strategic, thoughtful, and ethical approach to both investing and personal career development. His down-to-earth demeanor and willingness to share both successes and failures made the session not only educational but also genuinely inspiring. Thank you so much for the eye-opening sharing!
As the first "Meet the Investor" session that I have attended, it was truly eye-opening listening to Dennis Hong, Founder and CEO Shawspring Partners, share his experiences and insights as a professional in the field.
Dennis’s approach to networking as a young investor was particularly refreshing. He views networking as an opportunity to pay it forward and to develop genuine friendships rather than solely focusing on how to add value in a transactional sense and that resonated deeply with me - the best way to add value to someone may very well be to be their friend! This positive-sum, non-transactional mindset advocated by Dennis will be a guiding philosophy that I will adopt when approaching networking moving forward.
Among Dennis’s advice on how to stay updated and adapt to changes in industries, two key points stuck with me:
Be aware of your blind spots and find sources of disruption by building a mosaic of businesses as the greatest risk to our businesses over the long term could be an up and coming entrepreneur doing something highly disruptive to our businesses. This could be done through travelling widely and visiting a diverse range of businesses.
Simply live life and experience new things! This could mean using new forms of social media to understand emerging trends.
Dennis’s insights serve as a fresh perspective to me that success in the world of finance is not just about transactions and numbers, it is also about building authentic relationships and experiencing life!