Lo Kheng Hong: Saving in Banks Can Make You Poor, Stocks Are More Profitable

Since childhood, we have been taught to develop the habit of saving money as part of financial planning. However, veteran investor Lo Kheng Hong has a different perspective.

Dubbed "Indonesia's Warren Buffett", Lo believes that keeping money in banks will gradually erode wealth over time.

"Saving money in banks actually makes us poorer over time because its value continues to decline each day," he stated at the Capital Market Summit & Expo (CMSE) on Saturday (Feb 8, 2025).

Furthermore, Lo avoids investing in bonds or debt securities, arguing that their returns are too low. He also dismisses gold as an investment option.

Instead, Lo is solely focused on stocks, which have proven to be his path to building wealth worth hundreds of billions of rupiah. One of his biggest wins came from investing in PT United Tractors Tbk. (UNTR), marking the beginning of his success in the stock market.

According to him, Indonesia’s stock market offers the highest returns among major global exchanges, especially for long-term investors.

"It has been proven! I am grateful to be part of it," Lo said.

However, he regrets that 99% of Indonesians still do not believe that investing in stocks is the best option. Most people prefer to keep their money in banks or buy property instead of investing in the capital market.

As an experienced investor, Lo is known for his meticulous approach to analyzing financial statements before buying stocks. He never invests recklessly.

In 1998, he purchased UNTR shares when the company reported a net loss of Rp 1 trillion. Despite the loss, UNTR had revenues of Rp 2 trillion–Rp 4 trillion and operating profits of around Rp 1 trillion. Lo believed the negative net income was primarily due to currency fluctuations.

His success with UNTR became a pivotal moment in his investment career. He later applied a similar strategy to PT Indah Kiat Pulp & Paper Tbk. (INKP), purchasing shares at Rp 1,000 per share and selling them at an average price of Rp 10,000 per share.

As a result, his initial Rp 35 billion investment grew to Rp 350 billion in just 1.5 years.

Overall, Lo managed to gain 5,900% returns from UNTR shares and 900% from INKP shares.

According to him, the key to success in stock investing is the ability to control emotions and remain focused on company fundamentals.

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