Looking Back at Our Bank Investments: Smart Decisions, Luck, and Hindsight
Thursday, September 03, 2026Today, my husband and I had an interesting discussion about the bank shares that we currently own—and some that we used to own.
It started when we looked at the share price performance of several banks over the past five years.
Among them were:
- DBS
- HSBC
- OCBC
- Maybank
- Public Bank
Looking at the chart today, the difference is quite remarkable.
At the same time, Singapore bank shares, including DBS and OCBC, had experienced significant price declines.
We decided to sell our Maybank and Public Bank shares and reallocate the money into DBS and OCBC.
Looking back today, that decision turned out well.
However, it doesn't necessarily mean that we were particularly smart.
Because if we look purely at the final outcome, HSBC actually delivered an even stronger share price performance over the same period.
So perhaps we could ask:
If we were really smart, shouldn't we have bought more HSBC instead?
But investing decisions are never made with the benefit of hindsight.
At that time, our free cash flow was limited.
We could not simply buy more of every attractive investment.
We already owned HSBC, although its weighting in our portfolio was not particularly high.
During the market decline, we also did not have much intention to sell HSBC.
Its share price had fallen so much that we felt it had become too cheap to sell.
At the same time, we had other stocks and opportunities that required our attention.
The Danger of Looking Back
Looking back, it is very easy to identify the winner.
Today, we can see which bank had the highest share price return.
But we did not know that in 2020.
None of us had a crystal ball.
If investing were simply about identifying the stock that would produce the highest return over the next five years, investing would be easy.
The reality is that we made our decisions based on the information available to us at that time.
We considered:
- valuations
- the scale of the share price decline
- the quality of the businesses
- our existing portfolio allocation
- the markets most relevant to us
- the amount of capital we had available
At that time, Malaysia and Singapore were naturally the markets that influenced our lives and investments the most.
Therefore, switching part of our Malaysian bank investments into Singapore banks made sense to us.
The decision subsequently worked well.
But that does not mean we successfully predicted the future.
Perhaps we were simply making the best decision we could with the information and capital available at that time.
Another Question: Should We Be Concerned Now?
The discussion then moved to another topic.
Today, DBS, OCBC and HSBC have all reached very high share prices.
They continue to move higher, and naturally we started asking ourselves whether we should become concerned.
Should we sell?
Should we reduce our positions?
Or should we simply continue holding?
At this stage, we do not feel an urgency to sell.
The reason is simple.
A company reaching a record-high share price does not automatically mean that the company is overvalued.
Sometimes, the share price rises because the underlying business has become stronger.
The important question is not:
"Is the share price at an all-time high?"
The more important question is:
"Has the share price increased faster than the underlying value of the business?"
That is something we need to continue monitoring.
Could AI and Data Centres Be Another Growth Driver?
My husband recently read an article on Xueqiu discussing the recent strength of bank shares.
One of the ideas mentioned was the expansion of artificial intelligence and the data centre industry.
The logic is interesting.
The growth of AI requires enormous investment.
Companies need:
- data centres
- computing infrastructure
- electricity and energy infrastructure
- networking systems
- semiconductor and technology equipment
All of these require significant capital.
And companies that want to expand may need financing.
That could potentially benefit banks.
The relationship may look something like this:
Growth of AI
↓
More computing demand
↓
More data centres and infrastructure
↓
Massive capital expenditure
↓
More financing requirements
↓
Opportunities for banks
Of course, banks may benefit not only through traditional lending.
There could also be opportunities in:
- corporate financing
- syndicated loans
- project financing
- foreign exchange
- treasury services
- cash management
- bond issuance
- capital markets
Therefore, the growth of AI and digital infrastructure could potentially create a broader ecosystem of financial activity.
But AI Should Not Be the Only Investment Thesis
At the same time, I don't think we should simply conclude that:
AI is growing, therefore bank shares will continue rising.
That would be too simplistic.
Large banks such as DBS, OCBC, UOB and HSBC have many different sources of income.
Their businesses include areas such as:
- consumer banking
- corporate banking
- wealth management
- treasury services
- investment products
- foreign exchange
- trade finance
- insurance and other financial services
The recent strength of these banks is probably the result of many factors.
AI and data centres may become an additional growth opportunity, but they are unlikely to be the only reason why these banks are performing well.
So What Should We Do?
For now, our conclusion is simple:
There is no urgency to sell simply because the share prices are reaching new highs.
We will continue to hold for the time being.
Of course, we will continue monitoring the businesses and our portfolio allocation.
Things that matter to us include:
- valuation
- dividend sustainability
- earnings growth
- wealth management growth
- loan growth
- interest margins
- credit quality
- capital strength
- the percentage of each holding in our overall portfolio
The last point is particularly important.
Even an excellent company can become a risk if it becomes too large a percentage of the portfolio.
Therefore, we do not necessarily need to predict exactly when the share price will reach its peak.
Instead, we can continue to monitor whether the investment still makes sense.
The Lesson I Took from Today's Discussion
We sold Maybank and Public Bank and invested more in DBS and OCBC.
In hindsight, HSBC would have generated an even better return.
But we could not buy everything.
We also did not know the future.
Our decision was based on the opportunities, risks and capital available to us at that particular point in time.
And that is how investing will always be.
There will always be another stock that performs better.
There will always be a decision that, with hindsight, appears to have been more profitable.
But investing is not about finding the perfect decision every time.
It is about making sensible decisions repeatedly, managing risk, and allowing time to work in our favour.
A Reminder to Ourselves
Perhaps one day, we will look back at today's decision as well.
Maybe DBS, OCBC, HSBC and UOB will continue to rise.
Maybe they will experience a significant correction.
Maybe another bank that we are currently ignoring will become the best performer.
We simply do not know.
For now, our decision is to remain patient.
Not to sell simply because prices are high.
Not to buy simply because prices are rising.
But to continue watching the businesses, the valuations and our overall portfolio allocation.
And perhaps, many years later, we can return to this diary entry and see what actually happened.
That, I think, is one of the interesting things about keeping an investment diary.
The market will eventually tell us whether our thinking was right—but only after we have already made the decision.
