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Alexander Cheung
Portfolio Manager - Monument Internet Fund
What do the experts think about the high flying and
swooning stock market these days? A conversation with Alexander Cheung, Portfolio Manager for the Monument Internet Fund, one of the market's hottest new funds, sheds light on America's favorite new pastime.
As Internet stocks have captured America's attention Mr.
Cheung has proven himself to be among the nation's most astute Internet investors.
AsianConnections originally interviewed Cheung back in
June, 1999. Now March, 2000 Chung's strategy in selecting a winning portfolio has proven itself again with the wild Internet stock rise in recent months.
The Monument Internet Fund has exploded onto the investing scene, currently
commanding $45 million since its inception just over six months ago and growing. "The Internet is still in its first stage of development," says Mr. Cheung. "As it moves
toward broadband access, DSL and cable deployment over the next 12 to 24 months, the Internet will begin stage two of its growth." In the meantime, says Mr. Cheung, we
can continue to expect some corrections as the stock market rises and falls (as it did during the course of this interview which took place over the period of May 26 to June 10, 1999.)
But such volatility does not scare Mr. Cheung, who has steadily bought
throughout the latest market downturn. So what's his strategy? He seeks "growth at reasonable prices" by using a two-pronged investment strategy. First, he attempts to
anticipate the evolution of the industry and invests only in those sectors he views as most promising. Second, he scrutinizes the companies within those sectors and
picks only the best of the best. This strategy forces Mr. Cheung to be extremely selective, which he says is different from many other Internet funds - a fact in which he takes great pride.
So what does he look for in a company? The key factor is good management,
because "a company can only go as far as its vision and drive." Financial and intellectual resources are second on his list of priorities because a successful
company must have both a viable business plan and the financial strength to make it happen. A strong market position is also crucial so that a budding company can fend
off current and future competitors.
What of concerns regarding interest rate hikes? Higher interest rates dampen
investors' interest in stocks. That's just simple economics. Thus, in the short-term, Internet stocks will be hit harder than most because they are more volatile. However,
in the long-term he sees a much rosier picture. Because the Internet can raise efficiency by lowering the cost of business, higher interest rates will increase investor
interest in Internet stocks as an alternative to non-Internet companies, which will be hit harder by the increased rates.
How does an Internet guru measure his own performance in this topsy-turvy world
of Internet investing? Annually. Despite all of the get-rich-quick talk, Mr. Cheung is a seasoned veteran in the stock-picking game with twelve years experience as a fund
manager, financial analyst, researcher and investor in the high tech, biomedical, and Internet industries. Rather than feverishly checking stock prices all day long, he
prefers to concentrate on the long-term performance of his investments. America Online, CMGI, DoubleClick, RealNetworks, C/Net, and Yahoo! are among his favorite
Internet companies to track as of the date of this interview.
What is it like to be an Asian American, to break through the glass ceiling to
become a successful Portfolio Manager? "You have to work twice as hard!," said Cheung, who had recently held a press conference attended by thirteen financial news
organizations including Dow Jones, Bloomberg, United Press International, and Business Week. One gets the feeling that his dedication to the long days and nights
he puts into his work is helped by his enthusiasm, passion and focus on the world's most exciting and dynamic industries.
Mr. Cheung obtained a BA in Economics and Public Administration from the London
School of Economics in 1980 and an MA in Economics from the University of Pennsylvania in 1982. The Monument Internet Fund is only one of three Funds that he
manages. The Medical Sciences Fund and Washington Growth Aggressive Fund are the other two.
www.monumentfunds.com (Ticker symbol: MFITX)
Michael Rakower, Contributing correspondent to AsianConnections.com, obtained a BA in
Communications from the University of Pennsylvania in 1993 and a JD from the University of Virginia in 1999. He began working for the New York office of Latham & Watkins this Fall.
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