November 29, 2021

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Li Ka Shing : Cashflow Is The Most Important Thing - Hong Kong's Legendary Tycoon (2016 Interview)

Li Ka-Shing is one of my favourite businessman of all time. If I must pick the top 2 Asian businessman that is my role model, it would be Li Ka-Shing and Robert Kuok. Li Ka-Shing has long been regarded as the best "Chinese" businessman of all time until of course the recent wave of technology giants that have surfaced in the past 10 years. Why I look up to Li Ka-Shing is not only his business prowess that earned him the nickname "Superman" in Hong Kong but because of his life philosophy and business approach. 
He is the epitome of rags to riches and he done so via humility, hard work, sacrifice, brilliance and foresight. His impact is far reaching as he is one of the few Asian businessman who have successfully diversified outside of his home country and succeed globally in his business ventures. Today's topic is not so much about him but rather my emphasis on cashflow. Through him, I learnt the importance of cashflow as it is the secret to longevity of a business in order to sustain through good and bad times.
When I choose to invest in stocks, one of the key metrics I look at is cashflow, specifically "operating cashflow". It is part of "The Money Equation" and believe it or not, it was also the compass that steered me away from companies like Serba Dinamik. In fact, before Serba Dinamik issue surfaced, as early as 2020 I have highlighted to my readers that something is amiss. It is not about proving I am right or how clever I am. On the contrary, I would like to use the opportunity to point out the importance of cashflow when one decides to invest. One can manipulate many things in the company accounts such as receivables, order book, assets value but cashflow is one of the main metrics that you either have it or you don't. 
“Operating cashflow is like a blood that flows through the body. The heart will stop pumping when the blood run dry.”
Passage from "Once Upon A Time In Bursa : The Money Equation", Chapter 2, Page 24
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Last modified on Wednesday, 09 June 2021 23:12

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