Buy, hold, and prosper - Cover Story - investment strategies

HUMBLE BEGINNINGS

Lee-Chin wants to spread this wealth-building philosophy across the globe. Fifty years ago, such a notion would have been unfathomable for a poor kid from Port Antonio, Jamaica. He is one of nine children born to a Chinese and Jamaican father and a Jamaican mother, both of whom worked as grocery clerk. Lee-Chin, however, always had the talent to create opportunity in the face of adversity. In 1971, saddled with a $1,600 tuition bill at McMaster University in Hamilton, Ontario, he flew home to Jamaica and convinced then-Prime Minister Hugh Lawson Shearer to give him a $10,000 scholarship so he could complete his engineering degree. His pitch: Jamaica should finance its best and brightest to ensure they will bring their new skills back home.

After returning to Jamaica, Lee-Chin's career as an engineer was cut short in 1976 because his wife, Vera, a Canadian of Ukrainian descent, persuaded him to move back to Ontario. (He is now divorced with three children.) "There, Lee-Chin's employment opportunities were stifled by a recession, forcing him to take a job as a bouncer at McMaster University's pub bar for $1.64 an hour. While working at the bar, a friend told him of the lucrative commissions he made as a financial advisor. That conversation changed Lee-Chin's life forever.

He landed a job at Investors Group, approaching his new career with loads of energy and a bit of cunning. To look the part, as well as gain potential clients' trust, Lee-Chin upgraded his wardrobe and replaced his age-worn jalopy with a leased Rolls Royce sedan.

Next, he talked to investment professionals and pored over every book and publication on investing he could find. In those days, Lee-Chin was searching for an investment strategy and wasn't drawn to those adopted by his colleagues, which included everything from "buy low, sell high" to technical analysis, or the historical tracking of stock prices. After reading John Train's The Money Masters in 1980, Lee-Chin settled on Buffett's buy-and-hold investment philosophy to shore up his fundamentals. At the same time, he was earning credibility among his clients by proving he wasn't just another quick-buck artist. Lee-Chin spent hours listening to their concerns and aspirations, focusing on their goals, and encouraging them to engage in long-term investment practices.

After working for Investors Group and building a solid track record at Regal Capital Partners Ltd. over a nine-year period, Lee-Chin became interested in portfolio management and running his own firm. In 1983, he took his first gamble by borrowing $327,000 from a local bank to buy a stake in Mackenzie, the budding firm of his former mentor, James O'Donnell. Within three years, Mackenzie shares skyrocketed by 600%, and in December of 1986, Lee-Chin cashed in his gains and purchased a small financial services company for $132,000 that had one mutual fund and $526,000 in assets. That company was AIC.

GAINING ADVANTAGE

Lee-Chin immediately revamped the company. He began managing the AIC Advantage Fund himself and, staying true to Buffet's formula, trimmed its more than 100 holdings down to 17. He has since expanded the firm's offerings to include 25 funds, growing the assets of the firm from $7.1 million in 1990 to $97 million in 1993 to $7.8 billion in 1998. Using word of mouth. Lee-Chin quickly expanded his customer base and today serves more than one million Canadian investors.