Embrace all experiences - good and bad!

I am now back in Athens. The last 3 weeks were a blur....

3 weeks ago I was in Warsaw, Poland. Then a quick detour to Basel, Switzerland, and after a quick 1 day return to Athens, I was back on the road to Helsingborg, Sweden last week.

Travelling is "2nd nature" to me now. But I realise that for someone "new" to travelling, it can be quite stressful and bewildering..... 

Let's take the recent Iceland's ash cloud scare again.

When the news broke last Monday, my Singaporean colleague was all knots and very distracted. I was cool like a cucumber (there's a reason for it) and tried to calm her down.


Do not worry about things we can't control

Since we cannot control Mother Nature, we should focus instead of what we can influence:

1) Check the flight status via internet.

2) Plan an alternative travel path if our flights are cancelled. (Wost case scenario)

a) For me, I just have to take the train across to Copenhagen and then transfer to a rail service that will take me to any Italian coastal port with ferry connection to Athens :)

b) For my Singapore colleague, she can easily change to a flight to Stockholm (instead of her original Frankfurt connecting flight) and fly across the North Pole to Asia.  


My past newbie mistakes made me looked cool like a cucumber today

It is cool to look back at all the angst and stress I have experienced in the past that have paid off finally. Below are a lists of "blur spider and blur sotong" (it's a Singaporean expression for silly or stupidity) things I've done:

1.  Turning up for a 1.00 am Monday morning flight on Tuesday morning - 1 day late!!!  (I hate such flights as I always assume it's a late Monday night flight instead.)

2.  Missing my connecting flights due to flight delays or cancellations. (Learnt from savvy travellers how to get limited alternative flights ahead of the complaining crowd. Others complain; we get boarding passes.) 

3.  Forgetting to get a valid visa on arrival to India; lulled by Singapore's visa free travel to most countries.  (Luckily there is such a thing called visa on arrival!)

4.  Losing my Singapore passport in Shanghai 2 weeks before my CNY home trip. (A great way to get first-hand acquaintance of Shanghai immigration and pulling "guanxi" or connections.)

5.  Being fabulously late to a flight. (Discovered how to cut the airport queues; but I promise not to do that too often - it's not fair to others. I apologize.)

6.  And many more "stupid as stupid does" experiences that were only "funny" looking back now :)


What doesn't kill us can only make us stronger

The above story can be applied to our other experiences:


Our investing/trading journey - if we have survived 911, Nasdaq crash, Sars, the recent Great Recession, we will be better prepared than the next person who has just entered the market. Remember the time when we were behaving like "headless chickens"?

Confidence is good; but watch out for hubris.


Relationships - If we have made and fall out from more than one relationship, the pain is quickly replaced with the anticipation of what joys the next relationship will bring!


Journey of life - Memory is based on past experiences. If not, they are mere dreams or fantasies (some can even be called hallucinations). Don't mix them up!



If our memory up till today is a bit "hazy", perhaps it's time to loosen up and start making more mistakes!?

(Well, at least I learn more from my mistake than my success)

How would I know I didn't need anything?

Peter and John were good friends.

One day, both of them came to an electronics shop.

Peter went in and took the opportunity to browse around. John meanwhile just window-shopped from the outside.

After 15 minutes, Peter came out empty handed.

"Did you find anything you liked?" asked John to Peter.

"Nope. I didn't need anything at all." said Peter shaking his head.

"Then why did you enter the store?" John pursued with an incredulous look.

Peter smiled: "How would I know I didn’t need anything had I not gone in?”


This short story is an adaptation of a buddhist parable.


Pause for a while.


Do I  have strong opinion on subject matters that were formed by window-shopping outside the store? 

莲花山



Taken at Lian Hua Peak in Guangzhou, China Feb 2011

酒肉穿肠过，

佛主心中留。

名利以淡薄，

今身无他求。

Leverage for equities– good or bad?

In continuation of my previous post on the topic whether it made sense to take on a 30 years loan for HDB, (http://singaporemanofleisure.blogspot.com/2011/05/are-hdb-flats-public-housing-affordable.html ) I would like extend it to the realm of investing/trading in equities/futures.

What I am sharing is what I am doing in practice right now. But please be aware from “My story” that I have lost an arm using margin to speculate on stocks previously.

Why still play with “fire” when I’ve been burnt before? Eh… Since I’ve paid my school fees, I might as well finish the whole course?

To make things easier to explain, let me use a hypothetical example if I have SGD 50,000 (once upon a time it was a true reflection of my savings).

No leverage camp

If you belong to this school of thought, then if you are fully invested, that would mean you would have max SGD 50,000 worth of equities.

When the stock market corrects, you have more “holding power”; and be less prone to sell in “panic”. Plus you don’t incur margin interest costs.

Judicious use of leverage camp (me!)

What if I say I put SGD 40,000 into a fixed deposit or money market fund, and put SGD 10,000 into a CFD or futures account?

This SGD 40,000 can be called an opportunity or emergency fund. It’s equivalent to 12 months of salary for someone earning 3333.3333 per month or 6 months of salary if you are earning 6666.6666 per month (And you think I plucked this 50,000 from thin air! Don’t the numbers look nice?).

I will only use max 5 to 1 leverage for my CFD or futures account. This way, I have my peace of mind that the “borrowed” SGD 40,000 is backed-up by my opportunity or emergency fund.

Why pay margin interests when you can pay in full?

Nothing is free! For those who value cash flow over accounting profits when analyzing companies may understand me better:

Emergency fund

Imagine if you are fully invested in a dividend stock and 1 week before the ex-dividend cut-off, you have a pressing emergency need for SGD 40,000? It’s painful to sell at the wrong time right?

Even more painful if you don’t believe in cut-loss and after months of waiting/hoping, the moment you have to sell due to an emergency need, the price starts to recover!? Blistering barnacles!!! I know! Been there; done it myself. Sigh…..

By the way, you may also want to visit this “Will you use your emergency fund to invest” discussion/poll from Derek’s blog: http://thefinance.sg/2011/05/11/will-you-use-your-emergency-fund-to-invest   No prizes on how I voted!

Opportunity fund

Have it happened to you when you are fully invested, spot an opportunity but just don’t have the funds and have to watch this opportunity slip away?

Here I am talking about a real risk/reward opportunity that is in our favour – not a “Hail Mary pass” kind of speculation.

Let’s use an inspiration from a recent blogger who bought a 2^nd hand iPad: http://fivecentstencents.com/blog/2011/05/16/rewarding-yourself-within-your-means-my-2nd-hand-ipad

Imagine this iPad is a SGD 40,000 stock ;)

If you spot someone selling a 2^nd hand first generation iPad for SGD 200, and you are technologically savvy to know that it’s a genuine product, would you grab it?

Of course it’s a “safe” arbitrage trade if you know the iPad product and market. You can easily flip it and sell it as SGD 400 or more!

You can say you apply for loan or borrow from friends. I am talking about first mover advantage here. By the time you have raised the money, it may have already been sold to someone with the ready cash on hand.... They don't say cash is king for nothing ;)

Make your quick profit and deposit the capital back to your money market fund. The profits you can decide to put it to the money market fund or add this to your margin account (Hey! It’s your money, you decide!).

Don’t listen to me!

I am merely sharing my first hand practical experiences. Hypothetical examples are used merely as props to make it easier for me to put it in words.

What works for me may not work for you. I belong to a generation where I value the advice from seniors who “ate more salt than rice” compared to me. I would recommend you to one such “senior”: http://createwealth8888.blogspot.com/2011/05/following-someone-investing-idea.html

I don’t learn how to swim by reading or watching. Learn by doing?

Then we can swap war stories all we want!

I got accepted by Google adsense!

Life is about not giving up easily!

Just thought I share my experience so that new bloggers after me may benefit.

During my first month of blogging, I was in my monkey see; monkey do phase. So I innocently applied to Goggle adsense when I was only averaging 2 visitors a day. 

I got rejected with a cryptic message that it was because I have too many keywords and cybersquatting? What's that in english? 

After 5 months of fun experimenting with different kinds of post, and thanks to all of you, I've finally managed to average more than 20 visitors a day -  a 10 fold increase!  (See? Everything is relative! Why spoil my fun by comparing myself to blogs with thousands of visitors a week?)

I re-applied to Google last week and they said OK today. Nothing has changed at my blog! Why don't Google Adsense just say the requirement is X minimum of visitors a week to be accepted in the first place?   

Anyway, I've just "pimped" my blog with Google ads. Hope I've not overdone it.

Little things that make me happy!

Price Tag by Jessie J - The theme song for my Singapore Man of Leisure blog

If El Condor Pasa is the theme song for my aspirations and outlook of life, then this recent Euro top 20 song by Jessie J is the theme song for my blog. 

See http://singaporemanofleisure.blogspot.com/2011/01/el-condo-pasa-my-aspirations-and.html for my El Condor Pasa theme song :)

Money is important; but there's more to life than counting the zeros in our bank accounts. Lossen up and have fun!

Whenever I hear this song, I can't help but do the "stir-the-barrel" dance move!

3 little pigs – how we react to change

Once upon a time, there lived 3 little pigs in a small enchanted island not far from the equator.

They were the best of friends.

The first pig was called “Nimble-feet”. Nimble-feet does not like to carry a heavy load and have chains tied to his feet. True to his nature, he built his house made of straw within a week.

The second pig was called “Sit-on-fence”. Sit-on-fence does not have any strong views and opinions. He prefers to let others tell him what to do. As a compromise between easy to gather straws and backbreaking use of stones, Sit-on-fence decided to use sticks to build his house – it took 1 month to be completed.

The third pig was called “Blur-spider”. Blur-spider is a bit “clueless” at times, but he made up for it by his strength and hardworking nature. Not surprisingly, he built his house out of heavy stones; after 12 months’ of toil.

One late afternoon, a big bad wolf approaches the houses of the 3 little pigs.

Nimble-feet, ever so alert, were the first to notice the big bad wolf approaching. Since he has relatively little sunk cost invested in his house, Nimble-feet scampered away safely without much second thoughts.

The only reward the big bad wolf got after blowing down the straw house was hay flying onto his face. A funny sight I must say!   

Sit-on-fence was watching in horror in his stick house after being alerted by the commotion. He wanted to run away like Nimble-feet, but the thought of abandoning his four weeks' of labour invested in his stick house held him back…..

Then the big bad wolf turned his attention to Sit-on-fence’s stick house. After huffing and puffing, the big bad wolf blew down the stick house. Sit-on-fence ended up in the wolf’s belly. It wasn’t a pretty sight……

But the big bad wolf is still hungry for more. He walked up to the stone house of Blur-spider. He huffed and puffed, but no matter how hard he tried, the stone house held its ground. Disappointed, the big bad wolf walked away. At least he did not go home empty handed.

All this while, Blur spider was in his stone house enjoying his afternoon tea. He thinks to himself: “Today very windy!”

The next morning, Blur-spider opened his door and watched in surprise that his friends were gone!? They even relocated their houses!?  

“How rude! Move house never even bother to say goodbye? I don’t friend them anymore!”

Blur-spider slammed his door and went back to his stone house without ever realizing what has happened……



Illustrated by La Papillion May 2011



Moral of story

Some people see change coming and act!

Some people see change coming and do nothing….

Some people ask what happened.

I don’t want percentages; I want money!

4 years ago, my Romanian boss in Shanghai went for a business navigation course. I like this “navigation” word – it sound a lot better than business steering or financial control.

Anyway, he came back and tested his new skills on me.

He asked: “Jared, what pay raise you would like to have this year?”

Unwittingly, I uttered with glee: “50% thank you very much!”

My boss then scribbled 50% on a piece of paper and handed it to me: “There you go. You got what you asked for!”

There and then, I had my moment of “enlightenment”.

I muttered….. “Boss, I should have asked in terms of how much I want in HKD dollars right?”  (Since RMB is not fully convertible, our contract is normally written in HKD or USD)

You should see the smile on my boss’ face.

Percentage is just a statistical tool. But what we really want when investing or trading is MONEY!

And it’s important we don’t lose track of this. For focusing too much in percentages can get us into unnecessary competitive and mental traps……

Apples and oranges

1)  Leverage

Investor A got a 10% per annum return without leverage and is happy.

But he got upset when his colleague got 50% per annum return…..

What if his colleague had used 5 to 1 leverage? And if his colleague had used 10 to 1 leverage, on a risk adjusted basis, investor A’s return is much more superior! Can you spot the difference?

2)  Time frame

Noticed when we started out trading in our first year, our percentage returns per annum is quite high? Exceeding 20% per annum?

Have you wondered why if an investor/trader can consistently return 20% compounded annually for 10 years, he/she is regarded as a market wizard - ala Warren Buffet, Peter Lynch, George Soros, etc?

Yes! Just like a swallow does not a summer make, so goes comparing investing/trading returns.

Sometimes we confuse beginner’s luck with superior consistent performance......

With a short time frame, all of us can produce fantastic returns in percentages!

3) Level of capitalization

Once again, have you seen the posted testimonial returns from students of trading seminars? They can go up till 1000% returns in one month!?

What if I say the 10 bagger in one month is based on capital of SGD1, 000?

To “throw” SGD1, 000 in a heavy leverage “bet” with 10 to 1 payoff is one thing, but would you do it with SGD100,000 capital?

That is also why – all things being equal - smaller funds tend to outperform bigger funds.

Of course we can trade big capital the same way with small capital, but I am ever mindful of the sad ending of one of my favorite trading guru – Jesse Livermore. He blew his brains out. Anyone remember Nick Leeson?

Race against yourself

So next time you are discouraged by comparing annual returns, remember that high returns go hand-in-hand with high risks. In these “challenging time”, should we be maximizing returns by being fully invested? Or should we take some money off the table by “protecting” our profits?

Sell in May and go away?

Percentage is just a tool.

Ask how much we’ve made in MONEY terms. And then compare it with our annual salary. If our investing/trading returns exceed our annual salary, what are you waiting for?  

Singapore election 2011 - Wind of Change

I am glad I am witness to these interesting times in Singapore - albeit I am far away from home now.

Singapore is once again blessed that we can effect change with civility and respect for diversity.

I have not experiecend the blood and violence during Singapore's turbulent 50s and 60s - for this, I appreciate olders Singaporeans may have a different perspective on change.... And I am humbled by the energy and passion of younger Singaporeans who are voting for the first time.

One thing I am heartened - it's better to agree to disagree; than to have politcial apathy (bo chap attitude).

I personally don't think we are One People One Nation yet. But with this wind of change, we are making a stride forward.

Singapore is home to me.

Are HDB flats (public housing) affordable?

There’s lot of intellectual discussions on this interesting topic ever since MBT offered his viewpoint.

One quick way to find out:

Look at the take up rate of new Built-To-Order HDB flats. If all sold out, then the facts prove MBT right. But if there are lots of new HDB flat left unsold, then MBT is so “blond”. Let the facts speak for themselves. Or?

If we are not buying a HDB within this year, then the discussions are merely shooting the breeze NATO kind of kopi-tiam talk talk.

For those who must locate to a HDB flat this year (marriage or can’t stand your family), you would like to say: “Show me the money!” 

With this target group in mind, I would like to share my real-life experience for your reading pleasure and hope it can help you cut to the chase.

My first property purchase

When I hit 35, I bought my 3 room resale HDB (single mah!) in Queenstown at the end of 2003. I paid $125,000 for it.

To rent a 3 room HDB in Queenstown during 2004 is $1,000 per month.

I took the max 30 years loan of $100,000 from OCBC (Yup, owe bank until 65!). But the monthly bank repayment is $450 per month.

Fast forward to 2011, what’s the rent for a 3 room HDB in Queenstown now?  Around $1,800 or more? My monthly bank repayment is now $500.

Now you understand why I use the word locate above. There’re no ifs or buts. You have to move out within this year – must either rent or buy. Period.

If new HDB flat with 30 years loan is cheaper than renting, buy! If renting is cheaper than buying with 30 years loan, rent!

And if you can’t afford to rent or buy, then the focus is not whether new HBD prices are too high. It’s whether you should consider looking at a smaller HDB flat or accepting a place further from the city centre.

If still cannot afford, then perhaps it is more self-reflection why your cohorts can afford you cannot – caution, this may hurt.

Perhaps you could explore HDB ownership schemes for the “disadvantaged” and/or talk to your MP? Take action. You need a place within this year remember?

What talking him?

I was scratching my head when I read in a blog that 99 lease cannot be counted as asset…… That means when it’s time for him to upgrade or downgrade – he will give it for free? Maybe it’s my lack of formal education, but with great humility, my instinctive response is: “What talking him?” 

Of course he is technically right. So is comparing the “wonderful” returns of a whole-life policy when we cash it at 100 years old. In the long run, we are all dead.

By the way, how many in Singapore can afford freehold and 999 years lease properties?

Wait, not that simple!

Ah! Some alert ones may say but if we take a 30 year loan, will it not incur lots of compound interests?

We have already settled the can afford or not equation. Now this loan interest thing is another thing else. It’s more about “heart pain” and being blinded by percentages….

Don’t pay any loan interests

If paying bank interests hurts, then the best solution is don’t take any bank loan at all! Pay in full. No? See affordability is not a problem for you mah!

Now let’s do some scenario playing using my personal example. If I don’t have the extra $100,000 cash/CPF I needed in 2003, and I don’t want to take a bank loan; I have to save first then pay in full.

Let’s assume I can save $20,000 per year. In late 2008, I happily take my $125,000 to the HDB resale market, what is the resale HDB price during 2008 for a 3 room flat HDB in Queenstown?

Exactly! Penny wise; pound foolish…

It works the same if you compare 2003 new HDB prices versus 2008 prices.

Pay yourself first

OK, let’s say I take a 10 year bank loan instead of 30 years, my monthly bank repayment is $1,500? (I using simple logic to make things simpler; don’t split hairs hor)

30 years loan = $500 per month; 10 years loan “pretend” = $1,500 per month.

Let’s assume $1,500 is my savings every month. Taking a 10 years bank loan would mean I pay the bank first every month, I leave nothing for myself.

But if I take a 30 year bank loan, I would have $1,000 every month for myself first, while the bank gets the remainder $500 second.

This $1,000 I can accumulate for my opportunity fund (Imagine the pain when opportunity knocks during 2009 but I no money to invest!), have an emergency fund to take care of life’s uncertainties, give myself a treat from time to time – travel or buy toys (Yes, grown man still plays with adult toys you know? Hey! Not that kind lah! I meant handphones, notebooks, etc.)

So what we save in loan interests may cost us more in non-monetary terms. Life is not always about money.

Would we want the words on our tombstone to read: “Joe saved/made $XXX, XXX, XXX”? (I got read “A Christmas Carol” by Charles Dickens)

Timing the market

Of course, 2011 is not 2003. Another dimension to consider is whether new HDB prices will go down in the coming years. This you can research yourself - how many times have new HDB prices dropped over the previous years? My promotion of financial literacy is self-help. Beware of free advice – trust but verify yourself.

But if you are considering resale HDB flats, do tread carefully. Those who bought at the top prior to 1997 Asian financial crisis have to wait 10 years to break-even.

This is a totally different ball game. It’s trying to time the property cycle and your guess is as good as mine! Good luck to you!

If you think prices will drop, rent first and hope it does then buy!

(You so clever!)

If you think prices will increase, buy and pray you are right!

(You so brave!)

Inflation protection

One last parting word:

If we believe inflation will get worse in the coming years, a new HDB flat that rise in valuation in tandem with inflation, and an outstanding loan that gets “cheaper” and “cheaper” since money is worth less and less – is a 30 years bank loan still horrible?

半斤八两 - Sam Hui

This song is my introduction to Canto-pop!

Even today, this song expresses the feelings of the "working class" perfectly. 

How's that for 70s retro?