Note: This is Part 11 in a series of articles and cases on Asian Conglomerates. Read Part 10 here. You may read more about the Asian Conglomerate Series here, or view all the published cases here.
The accompanying case was an illuminating read for me; I went in expecting to learn about genius dealmaking and corporate maneuvering, but instead this reads more like the tycoon equivalent of Rocky Balboa’s boxing career.
My takeaway is that step 4 (have an unassailable source of cash flow) and step 5 (survive) from the Core Pattern of tycoons are what allowed Kuok to experience these JVs as major troubles instead of legacy-ending events; one wonders how many would-be tycoons have encountered quiet ends at the hands of their respective Yanis.
Is my viewpoint perhaps missing the highest order bit from the case?
No, that’s an absolutely accurate read! I guess the only thing I’ll add is that most tycoons we talk about have core moats; what differentiates Kuok is how successful he is, comparatively, at JVs with other tycoons.
Most other folks would’ve been burnt once and then stopped forever. Kuok just kept going (like Rocky, to your analogy). He really wanted to make money.
Found excerpts from an old (rare) interview Kuok gave sugar consultancy founder Jonathan Kingsman about a decade ago. It’s short enough to be reproduced here in its entirety:
Always take profits promptly
“Not knowing when to take a profit is the Achilles heel for a trader. Take profits! Don’t wait. If you have a profit you have to take it. If you wait it will be your downfall.”
The sugar market is prone to over supply
“In the sugar market, there is always over production. There is no point hoarding sugar. There is always a bumper crop coming up.”
Don’t be arrogant when trading
“You have to be humble because you are never always right. You don’t need to convince anyone. You can trade as a very humble man.”
You’re either a trader or you’re not
“Traders are born, not taught.”
Cut your losses and walk away if someone abuses your trust
“If you want, you can keep that person as a friend but do so at arm’s length; no more business dealings. But it is better to just cut the cord and part company. If you bear a grudge you are just hurting yourself; you are not hurting the other person. It is like throwing good money after bad. Keep your wits, keep your humour and if you are a good man, luck will come your way again. You will see another opportunity and you will grasp it.”
Always adhere to moral practices
“If someone asks you for a bribe you should say that neither you nor your company could do that. But stay polite. Don’t stand on your high horse and preach morality at that moment.”
There is nothing that can’t be traded
“I have a simple motto in life: every single material thing that I have in life can be traded. It is for sale. It is a question of, when, where, to whom and price. The first three are more important. If you like a person the price becomes unimportant.”
Notice the bit about cutting losses. 