Wednesday, July 30, 2014

Opportunity comes - we recognise it?

I had a lot of fun the last few days facilitating a moot question here recently.

One spin-off which deserves a post by itself is this thing - If opportunity knocks, can we recognise it?

When I was working on the selling floor as retail sales assistant, the dream for most of us was similar to police constables aspiring to be plainclothes CID.

In retail, most of us want to be Buyers! It's the "glamour" part of retailing. No need to wear uniforms, no shift-work, normal office hours, and weekend offs!

To be precise, we all want to be Fashion Buyers. Who doesn't want to have buying trips to Milan, Paris, and Tokyo?

But what if one gets an offer to be a Stationery Buyer instead? 

As a Stationery Buyer, there's hardly any overseas buying trips as we are mostly dealing with local distributors and suppliers.... Bummer.

I watch in disbelief as some of my younger colleagues turn these "opportunities" down!? Didn't they say they want to be buyers? 

They rather wait for that "cookie-cutter perfect and ribbon tied and nicely gift-wrapped" opportunity to appear. Meanwhile they moan and groan that company never give them opportunities to grow... How retailing no future...

How about your dream to trade full-time to achieve? We all know its notoriously difficult to break-into trading for others.

Guess what? A commodities trading house is willing to take a chance on you and offers you a position as Coffee Trader.

Instead of grabbing it immediately, you still want to counter-offer and negotiate terms? Hello!

I know. The reality is you wanted to be a Bond or Forex trader at a big investment bank or hedge fund - these 2 markets by themselves are much much bigger than the equities market. Is it glamour you after or the love of trading?

While you were dithering, that Coffee Trading position was given to another leaner, meaner, and hungrier applicant.

Imagine you are a medical student. Study so long and hard, finally graduates. And to reward your "success", as part of your housemanship, you got assigned to the A&E department where you have to do the graveyard shift occasionally.

Hello? Isn't those kind of graveyard shift jobs "belong" to those who never study enough? Like those working at convenience stores, supermarkets, fast food outlets that open 24 hours?

So do you still want to be Doctor or not?

Unless we can claim "who we know" or "who my daddy knows" privileges, for the rest of us, we all have to pay our dues.

Be it as a cook or as a lawyer.

The trick is to do it first and quickly use this experience as a stepping-stone for something closer to what you really desire.

And ask yourself - is it better to be inside first then plot a transfer, or is it better to be outside hoping and waiting for someone to let you in?

Sunday, July 27, 2014

Round Table Reflections on Rental Property or Dividend Stocks exercise

Thank you everyone who participated in our exercise on which we would prefer - a rental property or dividend stocks?

Again I stress there is no "right" or "wrong" answers, only opinions. Who is to judge whose opinion is better?

For those who have attended workshops or trainings, at the end of the session, there usually is a round the table reflections from the participants and facilitators.

Let's start with me! 

Tip! Always start your reflections early. If wait till the end, whatever you want to say has already been said by others - boring!

1.  I noticed from the responses, there are broadly 2 groups of decision makers - one group thinks from the head; the other from the heart.

2.  It's interesting most of the respondents are bloggers themselves. Some I know better than others. Most have chosen and gave the reasons why that are in harmony to what they have previously blogged about - their investment philosophy. But a minority, eh.... have responded in a way that's not really "aligned" with what they have blogged in the past... A bit of 自相矛盾... Wink.

3. Guess why I added the genie element to the question? Have you noticed when we ask a question, we get 10,000 questions back? It's human tendency to renegotiate, counter-offer, argue, and do everything else just so we don't have to answer the questions directly.

Have you noticed one blogger who have no problems commenting everywhere, very self-assured, confident, simply can't bring himself to have a bit of fun with this exercise? Why do you think so?   

The one minute dateline is just a subtle cue not to think too much. One respondent picked up on it. Wink. 

4. Most of the time, opportunities do not come in a nice cookie-cutter packaging or format that we prefer. For example, how do I reply if I prefer gold or cash right here right now? Especially if I am of the opinion both rental properties and dividend stocks may suffer a correction soon?

To choose either rental property or dividend stocks will create cognitive dissonance in me. And that's painful. But I still want the million $...

La papillion has successfully demonstrated a way out!

Just choose either one, the genie does not care which you choose. Reasons why? Can say I happy what! Isn't that a good enough reason?

If we choose dividend stocks, we can sell them off this coming Tuesday. If we choose rental property, OK, may take longer as in weeks or months to sell it off, but still very doable.

Either way, we still can convert it to whatever we really prefer once we have sold them off. Wink.

It can be gold, money market funds, or blow it all on wine women and song!


Who says to be financially literate we should read more financial books?

Those who are parents, you may want to encourage your children to read widely - yes, even those frivolous fiction stuffs like 1001 Arabian Nights. Wink.


Thursday, July 24, 2014

Rental Property or Dividend Stocks?

If you only have a million $ and you are allowed only 2 choices:

1) To buy a rental property to collect rent.

2) To invest in equity to collect dividends. 

Which one would you choose and why?

My esteemed reader temperament asked this question and I think this can be a fun exercise to see what others think.

I believe most people would say:

a) It depends...

b) How can buy either at current prices?

c) Can choose half/half?

d) And other "wu liao" (silly) questions...

To make this exercise more interesting and clearer, let's imagine a genie pops up with a gift of a million $ to you. The condition is you have to make a decision right here right now in 1 minute - either buy a rental property or invest in dividend stocks. Failing with, the genie disappears with the million $.

Clear enough?

OK, own time own target.

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