A crisis can be a catalyst for wealth creation, according to billionaire entrepreneur Michael Lee-Chin and his mentee David Mullings. The two investors shared their insights on investing during turbulent times at the Re-align Business and Investment Conference held on Tuesday at AC Hotel Kingston.

Lee-Chin, group chairman of NCB Financial Group, and Mullings, founder and CEO of Blue Mahoe Capital, emphasised that the start of a crisis can be the right moment to invest. By making simultaneous connections and strategic investments, investors can capitalise on market inefficiencies and mispricings, setting themselves up for long-term success.

“Crisis equals danger plus opportunity. Don’t forget that,” declared Michael Lee-Chin, addressing a gathering of nearly 200 entrepreneurs at the conference.

Lee-Chin shared a valuable lesson on crisis management, drawing inspiration from the Chinese definition of the word ‘crisis’. Speaking to a captivated audience, Lee-Chin explained that the term encompasses two components: danger and opportunity. While many individuals tend to focus solely on the danger aspect, Lee-Chin emphasised the importance of acknowledging and seizing the opportunities that arise during turbulent times. He advised taking a step back to reflect, plan, and identify the potential benefits presented by the crisis. Citing the example of billionaire Jeff Bezos who founded Amazon in the midst of the 2000 crisis, Lee-Chin demonstrated how perseverance and strategic decision-making can lead to success. He concluded by stressing that wealth creation occurs when one buys wisely, echoing the sentiment that timely investments can yield significant returns.

“If you really buy it at a good price, someone will buy it at a little higher price. Irrespective of how illiquid the asset may be, you only get the opportunity to buy right when there’s a crisis,” said Lee-Chin.

Amuidst the eager participants flocking to the mic to ask questions, founder and CEO of Blue Mahoe Capital, David Mullings fielded inquiries about investment opportunities available to retail investors in the Caribbean and sectors showing growth potential. Mullings revealed that retail investors can explore listings on Jamaica Stock Exchange, including the Junior Market, social stock exchange, and Main Market. He highlighted tourism, financial services, consumer packaged goods, manufacturing, energy infrastructure, and the TransJamaican Highway as promising sectors. However, Mullings emphasised that while over 100 securities are listed, investors should not limit themselves to public opportunities. He suggested seeking access to private investments, echoing Lee-Chin’s advice to look beyond what’s already public and find ways to invest in private entities.

“One option I do think is overlooked is actually PJX, which’s listed on the Jamaica Stock Exchange. Portland Private Equity has a vehicle that has invested in private companies right now but PJX has a sleeve that’s actually listed, and you can buy shares in that as a retail investor that owns shares of private companies doing some big things across the region. And I think we need to look for more of those opportunities — not just the real estate deals and the ones that are listed,” Mullings advised.

Despite the local market experiencing rough times over the past two and a half years, Mullings remains optimistic. He noted that Jamaica Stock Exchange has not been the best-performing globally during this period, however Mullings views this as an opportunity, citing investing mogul Warren Buffett’s philosophy: “Things are on sale.” Mullings emphasised that great businesses in Jamaica are currently undervalued, making them attractive investments.

“We bought last week, I will buy next week, and I will keep buying. As long as you keep pushing down the price of really good companies domiciled in strong, long-term-growth industries, we will be buyers. Just look for good companies.” Mullings declared.

Mullings drew on wisdom from Warren Buffett who once said, “If the business is good, the stock will eventually follow.” Mullings applied this principle to the current market, emphasising the importance of distinguishing between temporary and permanent challenges.

“I don’t think what most of these businesses are experiencing is permanent so we’re going to buy all day, all week,” he said with confidence.

Lee-Chin also offered guidance on what entrepreneurs should look for in investors and angel investors, highlighting qualities similar to those sought in a partner. These include integrity, intelligent reasoning, passion in the relationship, and alignment. Additionally, he shared his framework for wealth creation, which relies on three key factors: a disparity between perception and reality, the presence of inefficiencies, and scarce capital. According to Lee-Chin, wealth is created when these factors converge, presenting opportunities for savvy investors to capitalise on mispricings and inefficiencies in the market.

However, Michael Lee-Chin also cautioned that a misguided approach can lead to wealth destruction. He highlighted three key mistakes to avoid: (1) Investing when perception and reality are aligned, as this indicates a lack of unique insights or opportunities since everyone has the same knowledge. (2) Investing in already efficient markets or assets where prices accurately reflect all available information. (3) Investing in areas with excessive capital inflow because this leads to market saturation and reduced potential for returns.

Notably, Lee-Chin observed that Jamaica currently lacks these characteristics, making it an attractive destination for investments due to its untapped potential.