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Lesson #5: Knowing When to Engage is Half the Battle

Article Overview: To the entrepreneur, the saying ‘Timing is everything’ has a sacred significance. No matter what your business or how many people you serve, there is such a thing as catching the right waves. Anticipating the market and timing your entry or exit is one of the most difficult, yet crucial aspects of starting any business. It is, however, one that Li Ka-shing has managed to master over his almost sixty years in business.

Lesson #5: Knowing When to Engage is Half the Battle

To the entrepreneur, the saying ‘Timing is everything’ has a sacred significance. No matter what your business or how many people you serve, there is such a thing as catching the right waves. Anticipating the market and timing your entry or exit is one of the most difficult, yet crucial aspects of starting any business. It is, however, one that Li Ka-shing has managed to master over his almost sixty years in business.

Li is an avid poker player. He enjoys bluffing and upping the stakes as much as the next person. But, when it comes to the business world, Li is proving to be equally as skilled in recognizing an opportunity, and when that opportunity will sour as he is around the poker table. He has developed a reputation amongst his peers for having a talent to both spot an opening and also knowing when to sell.

For years, Li has been trading his property assets in Hong Kong, relying on both research and instinct to predict the market’s peaks and drops. His skills in doing so have also been applied to his other businesses. In 1999, in what Li considers one of his most significant accomplishments, he sold the British-based Orange telephone network to the German company Mannesmann in a deal that saw Li make a profit of $14.6 billion. Just one year later, the technology market collapsed and the value of Orange took a severe nose-dive.

Li demonstrated similar prowess in interpreting market trends when he took control of Alberta-based Husky Oil in 1991. For years, the company had been suffering poor returns and skeptics questioned whether Li had in fact lost his magic touch. Today, however, Li is laughing in the face of those skeptics. Husky Oil was returned to its profitable state and is now one of Li’s most prized possessions.

Li is fond of reciting the traditional Chinese proverb, the application of which in the business world is all too clear: “If you think, then you will be prepared. If you are prepared, then you will have no worries.” To that end, Li became alarmed a decade ago when there was a property frenzy and decided to increase the diversification of his holdings to reduce the impact of any trouble in the real estate market. “Before the Asian financial crisis stuck, the signs of a bubble economy were already glaring,” says Li.

Li knew it was the right time to get out, much like in 1991, when he knew it was the right time to get into the broadcast business. Sensing that it was going to take off, Li started Star TV, a satellite television service, which beamed reruns of popular American soap operas throughout the day to Asian audiences. Just a few years later, Li was able to sell almost two-thirds of the business to media mogul Rupert Murdoch for a profitable $525 million.

For Li, the how’s and why’s of business are often not as important as the when’s. Understanding that the windows of opportunity in the fast-paced commercial world are narrow helped him determine his best courses of action.

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Article Tags: chinese proverb, german company, husky oil, li ka shing, magic touch, mannesmann, market trends, matter what your business, nose dive, orange telephone, poker player, poker table, prized possessions, profitable state, property assets, sacred significance, sixty years, skeptics, technology market, telephone network



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