Saturday 28 June 2014

My vision for SERS came true!

9 years ago, after my 35th birthday, I started my journey to find a HDB 3 room flat under the Single Singapore Citizen Scheme.

The first priority was to find a place to call my own. 

But at the back of my mind, I had a vision to find a place that could be an en-bloc potential many years down the road. No harm right?

Since I've lived in Queesnstown all my life, and would like to continue living in close proximity to my siblings and parents who are also living in Queenstown, it made my selection easier - just focus on Queenstown HDB resale flats.

My first criteria was to find an old HDB 3 room flat - the older the better! Mine was built in 1971. It's the early "Simplified" version of a HDB 3 room flat. The type where the toilet and bathroom were joined together as one. Yucks! Thankfully, when I bought it, it's already upgraded where we have a new extra bathroom attached. Phew!

Next was to find as low rise a block as possible. Mine was a 10 storey flat. Put yourself in the shoes of a developer - would it make more financial sense to tear down a 10 or 16 storey flat to rebuild into a 30-40 storey flat?

My HDB estate is located near One North. Just thought if one day One North needs more space for expansion... And by the way, if I need to rent out a room or the whole flat for income, I think those FTs working in One North would be interested? It's good to have options!

Also, opposite my flat are those black and white bungalows from our colonial days where there's huge development potential many years down the road. Only one catch - we were separated by the Malaysian railway track... I remember thinking we cannot let this "anomaly" continue where another sovereign country has a dagger that stabs right into our city center. Was cautiously optimistic that in 20 years time, we should be able to get the land back from Malaysia - especially with Mahatir out of the way. Was pleasantly surprised we got it back so much sooner! Now that's new Malaysia/Singapore relationship for you!

So location wise, wearing the lens of a city planner, the HDB estate where I bought my flat looks very likely to be in the way of future development.

Yesterday, I got a pleasant visit by HDB officials personally knocking on my door. It's to inform me that I just won the SERS lottery!

It was in the TV news yesterday. I'll be part of the New Beginning at Dawson en-bloc development.

The 5 new development sites are near Commonwealth Avenue and Margaret Drive. I know that area well. My old Hua Yi Primary School was torn down for this development.

It's always nice to exchange old for new. Especially when I remember being a bit sore that as a single, I can't buy a new BTO flat directly from HDB. I guess my turning a lemon to lemonade vision has panned out well. Now I will have a brand new HDB flat in Queenstown just like you all married couples.

Hmm. The new HDB flats got fight with Pinnacle - got roof top gardens and sky bridges.
As I've always said, I prefer to be lucky than smart!

P.S.  I'll explain in another post why it's a vision and not a plan or goal.

Thursday 26 June 2014

Trust is Good; Control is Better

For maximum effect, we should say it out loud with a German accent.

Just to be clear, I belong to the "Trust but Verify" camp. Life is easier that way.

I love to poke my fellow Steering Group members when we get overboard with "control" -

- we need another KPI to measure this...

- we need another report to track the progress...

- we need to reformat the reporting to better...

Blah, blah, blah...

Times like this I will say out the above headline in my German accent, and most of us will have a good laugh - except those anal control freaks who are now daggering me with their eyes... 

Verification measurements or KPIs should ideally fit into a single A4 sheet of paper; not a telephone tome...

If not, we would be spending so much time analyzing than on what's we are supposed to do - make decisions. Hello? What's the meaning of "steering"? 

I guess we know those who love "control" in our midst. Heck! We could be one ourselves!

Parents who like to control "what" their child should do and think may want to pause and remember you were a child once.

Let the child have their own dreams; they are not the plan B for your own failed dreams. 

For those who love control, I guess Investing and Trading can be hard for you. 

Outsourcing is out as your would prefer to DIY.

But then you will have a hard time squeezing the trigger as you are forever "analyzing".

Even if you do squeeze the trigger, you would have sleepless nights as markets never behave in accordance to what you have planned.

Perhaps consider a career as a regulator, auditor, inspector instead?


Monday 23 June 2014

Trust but Verify

It's not about being cynical.

Nor is it about being skeptical.

It's about basing our opinions or decisions on some backing of facts - if any.

If we don't verify what we've heard or read and pass the same message to others, we are merely parroting and passing hearsay to others. Rumour-mongers?

And if the message was indeed false or misinterpreted, what do we do? We say it's not our fault and blame it on whoever passed us the information right!?

Let's focus on the verify part.

If we can't, don't know how, or where to start, etc; I hope alarm bells are ringing in our heads.

That means we are out of our depths. Outside our circle of competence?

Think about it for a moment. 

Keep this thought next time you were tempted into an investment opportunity or trading setup offered by others. 

Ask if you are basing it on your own independent analytical, fact verification, and decision making skills; or is it based on faith and trust of the messenger?

P.S.  It's a great habit to have in the Corporate world too. There's only so many times you can apologize to your Board or Steering Group that you have not verified the facts...

Saturday 21 June 2014

I don't have everything; but I have enough

I don't have hair. (I not bald OK? I just shaved if off to frontload the balding process)

I don't have six packs. (But I have 1 big round pack that looks like me having my 2nd trimester)

I don't have eyes that make women want to squeeze their thighs...

I don't have a yacht. What talking me? I don't even have a car!

I don't live in landed property.

I don't have a wife. (Boo hoo hoo)

I don't have children. (I very unfilial. For eugenics, I stopped the spread of my defective genes)

I don't pay income tax. (So can't talk loud loud on social-political matters. I'm a freeloader?)

But I have enough.

P.S. Lucky I got pay GST whenever I make a purchase. And I got pay my property tax very promptly even though I live in a 3 room HDB flat.
You know the feeling right? Whenever we are in a group and if we only take and never contribute, we feel guilty or self-conscious right?

Thursday 19 June 2014

Bernard Baruch - A Stock Speculator

Baruch was recognized as one of Wall Street’s financial leaders and his teachings are as valuable today as decades ago. These are well documented in his book Baruch: My Own Story (1957) in which, among others, he said: “I have heard many men talk intelligently, even brilliantly, about something – only to see them proven powerless when it comes to acting on what they believe.”

Baruch started out as most traders do – i.e. losing lots of money because he lacked the knowledge, experience and discipline. “You have to lose money in order to better yourself.”

Real success in the market takes time and money. Unfortunately “most people view the market as the place where the miracle of great and quick riches can be performed with little effort”.

Overtrading and holding too many positions in his early years caused Baruch to go broke many times before he developed the discipline to succeed.

A successful speculator is “a man who observes the future and acts before it occurs”. Acting swiftly in the market is important.

After losing money as a result of the recommendation of others, Baruch focused on the facts. “One must search through a maze of complex and contradictory details to get to the significant facts … Then he must be able to operate coldly, clearly, and skilfully on the basis of those facts.” The challenge for the successful speculator is “how to disentangle the cold hard facts from the rather warm feelings of the people dealing with the facts.” Moreover, “if you get all the facts, your judgment can be right; if you don’t get all the facts, it can’t be right”.

Be honest with yourself and expect to be wrong as many times as you are right. “If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he is wrong.” Cutting losses quickly was THE most important trading rule.

Don’t underestimate the power of thinking. “During my eighty-seven years I have witnessed a whole succession of technological revolutions. But none of them has done away with the need for character in the individual or the ability to think.”

If your stocks are keeping you awake a night worrying about them, you should sell them to a “sleeping point”.

The way to truly succeed in the market is to devote oneself full-time to the task. “Because of the extreme challenge, one must commit full attention to it.” Market speculation is “no different than trying to be a successful doctor or lawyer … you simply must devote yourself full-time to the study of your craft”.

Through experience, Baruch learned the golden rule – never take stock tips from others. Self-reliance and “doing one’s own thinking” are a must.

Baruch found it best to keep silent about his positions and trades and he believed it was “best to trade alone”. When he retired from A.A. Housman & Company and went on his own, Baruch did so because he thought it was best to trade independently and remain focused in order to achieve the greatest profits. “Most of the successful people I’ve known are the ones who do more listening than talking.”

Baruch would often trade both sides of the market – long and short. “Having flexibility should not be underestimated.”

About risk, he said: There is no investment which does not involve some risk and is not something of a gamble.” Moreover, “what we can try to do perhaps is to come to a better understanding of how to reduce the element of risk in whatever we undertake”.

Baruch did not believe in diversification, but that it was “better to have a few stocks and to watch them carefully”.

Having a “good supply of cash on hand at all times in reserve is important” to take advantage of market declines and major crashes.

He believed that traders should focus on one thing at a time. He thought no one could be an expert at too many things. He liked to focus on “one thing at a time, perfect it, and do it well”.

Baruch believed the two main mistakes that contributed to his early losses were the same mistakes most investors make, namely 1) “They know too little about the company’s management, earnings, prospects, and possibility for future growth” and 2) “They tend to trade beyond their financial capital capacity”.

Baruch was a fundamentalist versus technical focused investor. In essence he required strong real assets of the company (cash and properties), that the company produced or performed something that is needed and valued, and that it had good management.

“Successful speculation requires staying on top of changes in industries and companies that either create new industries or improve on existing industries. The majority of your profits will come from these two … The shrewdest traders throughout history all adapted the skill of reactionary change, as the market constantly presents new and different opportunities.”

What drives stock prices is human reactions. Ironically, the key to successful speculation is to remove our decisions from our emotions. “Without control over your emotions, there is very little chance for profitable success in the stock market.”

Baruch often described the market as a thermometer and the economic environment as the fever. “The market does not cause economic cycles but merely reflects them and the judgments of what traders believe business and the future will be like.”

He believed no one could sell at the top and buy at the bottom (both for stocks and the market itself). “Don’t try to buy at the bottom and sell at the top. It can’t be done except by liars.” That said, Baruch said that through all of his time and research, he would develop a “feel” for when it was time to reduce positions. “I made my money by selling too soon.” While he didn’t have sell rules per se, he developed more of a sense that one gets when one trades for many years and follows the market with intense study.

“It is much harder to sell stocks correctly than to buy them correctly.” Because of the emotional aspect of trading, if a “stock went up, the average investor would hold because he wants more gains – he’s exhibiting greed. If the stock declines, he also holds on and hopes the stock will come back so he can at least sell and break even – he’s hoping against hope”. Baruch worked hard to avoid these emotions by recognizing mistakes early and taking immediate action to own up to his mistakes quickly.

Baruch believed that you had to take responsibility for your decisions. “Do not blame anybody for your mistakes and failures.” In addition, he blamed most of his losses on the failure of judgment and taking time to think. “Whatever failures I have known, whatever errors I have committed, whatever follies I have witnessed in private and public life have been the consequence of action without thought.”

It is important to “follow what the market is currently doing as opposed to following what one might personally think the market should do.” As he said, “Every man has a right to his opinion, but no man has a right to be wrong in his facts.”

Knowing your biases and weaknesses is important. “Only as you do know yourself can your brain serve you as a sharp and efficient tool. Know your own failings, passions and prejudices so you can separate them from what you see.”

Baruch was highly regarded and well-respected, but he frequently practised humility and understood the challenges of the market. He is often credited with the saying “The main purpose of the stock market is to make fools of as many men as possible”.
Taking time away from the market is necessary. He took many vacations and used the downtime to “reflect on past transactions”. For Baruch, this time away was important so he could have the peace of mind and concentration to reflect and improve his abilities. He devoted lots of hours and effort to examining past trades to find out why he lost money.

Source: Charles Kirk, The Kirk Report, 05 June 2008

Monday 16 June 2014

The Little Notebook - Write it down!

Our thoughts are fleeting.

Ever had a good idea, didn't write it down, and poof that idea vanishes as quickly as it surfaces?

I carry a small notebook in my backpack nowadays.

When I have an inspiration for a blog post, I write it down immediately.

When an investing idea pops up in my mind, I jot it down.

When I spot a trading opportunity, I write down my trading plan.

Home toilet paper low... Must remember to replenish.... Check! 

I am a believer on the power of our sub-conscious mind. Putting a notepad by our bed stands can be a good way to write down what our sub-conscious mind is trying to tell us through our dreams. Those of you into Science would know the examples of scientific breakthroughs inspired via dreams.

I am quite old school.

I still prefer paper and pen.

For the younger readers, you would prefer using your smart phones or iPads, I guess that could work too. But then you would miss the fun of ripping pages off your notebook and tossing it into the dustbin NBA style!

Why love yourself less?

Ever notice we take notes during school days on what our teachers say.

Grow up take notes during office meetings - low down the food chain mah! 

Attend self-help seminars and trainings we take notes on what gurus say.

How about our own thoughts and reflections?

We respect and honour others more than ourselves?

Like that how to be shepherd?


Saturday 14 June 2014

Complain some more!

At a NATO conference where a French General made a fuss because the meeting was held in English. A US General responded that without English speaking troops on D day, the French General would have been speaking German!

After smirking for a while, it then sank in....

Oh! I've been the French General quite a few times...



Thursday 12 June 2014

What do you want to be when you grow up?

Remember this exercise when we were in primary school?

I am always envious of classmates who are so clear on what they want to be:

I want to be a teacher!

I want to be a doctor!

I want to be a fireman! (Now that's cool or what? What's with boys and fire engines?)

I want to be...

I never can answer such questions.

It's quite evident from "My Story" that I have ding ding dong dong in quite a few jobs. Even though I spent 14 years in my previous company, I still average a new "position" every 3 years in that organisation...

What do I want to be?

I still can't give a straight answer even now when I am very middle-aged...

I get bored easy?

I need to move on to new pastures like the wildebeest in Africa? Always migrating, always on the move?

And people ask why I still single?

Monday 9 June 2014

Know your CPF queue number

During 2011, when the Greece economic crisis was brewing, I remember an interesting conversation with my Greek colleague in his early 30s.

This colleague came from a privileged background - let's say his parents were the equivalent of the Bukit Timah landed class.

My colleague questioned his dad on how his dad's generation has fuxxed-up the whole country...

His dad admitted to the many mistakes they made upon Greece joining the EU in 2001.

With access to cheap credit, Greece went on a spending spree. Both in the public and private sectors.

It was boom time charlie as the Greeks spent USD15 billion for the 2004 Athens Olympics - most of the venue infrastructures are now abandoned or rusting away... 

During my 3 years there from 2009 to 2011, there were announcements to lower the taxes each year. Not that I was complaining. 

Of course the planned tax reductions did not materialise in 2011 and I had to participate in the extra Solidarity Tax (nice name to mean a tax to bail out the country) when the government admitted to EU they had "cooked the books". 

I had to cough up the tax savings I received during 2009 to 2010 - sounds a bit like some Singapore REITs doesn't it?

The retirement age in Greece during 2011 was 57 years young. And for selected class of workers (if you meet the requirements), the retirement age can be as young as 50! 

That's what another of my Greek lady colleague did at age 50 in 2011. She told me she better do so before the rules get changed. Now that's savvy! The berry in my pocket is worth two in the bush.

Of course taxes got raised, pensions got cut as part of the austerity program imposed on to the new Greek government in return for EU bailouts. If you are a German tax payer, would you want to subsidise your Greek neighbour?

During my last months in 2011, suicides there started picking up, soup kitchens sprang out everywhere, and rioting and strikes were common affairs. Entitlements easy to give; hard to take back.

Everyone suffered. But those retired Greeks age 50 and above at least got to enjoy 10 years of generous pension benefits from 2001 to 2011 till the party ended.

Imagine the sense of betrayal if you were in your mid 40s as a Greek during 2001? Now in 2011 they say you must work longer, and by the way, the pension benefits will be a fraction of what were promised by the politicians that are now no longer around...

And if you are in your mid 20s, retirement is far from your consciousness when youth unemployment is more than 50% today. I think you have more pressing issues to focus on.

I will be 47 years young end of this year. The recent CPF thingy don't really affect me. It's a case of heads I win; tails I win.

But if I am 25 this year, I don't think I would be carrying any placards at Hong Lim Park. Even if the rules changed, 30 years is a long time. My queue number is quite a bit far off.

If I withdrew every CPF cents at 55, and come crying back at 60 that I've lost everything to wine, women, and song, would you make it whole to me again? What say you for those 25 years young now?

Don't be so like that lah! 

Weren't you the same one who cried murder when you saw senior citizens collecting cardboard cartons and clearing dishes at food centres?   

Put your money where your mouth is. 

Pay for my 2nd bite of the retirement cherry?

I promise. This will be my last time asking you for bail-outs.

Thursday 5 June 2014

Journey to Achieve versus Journey to Escape

Why do most retail investors embark on their journey towards Financial Freedom?

Don't look at others, look at yourself. Yeah, you!

What was the catalyst? The key motivator?

It's "to escape" right?

It's hard not to let these "escape" and "achieve" words colour your answers or judgement.

Maybe it's best I start with myself before everyone gets defensive:

1) I trade to escape the boredom and unbearable lightness of being.

2) I invest to escape a regular day job and to pay for my days of leisure.

If I were to say I invest or trade to achieve, I would not be clinging to a day job while investing/trading part-time in hope.

With single-mindedness, I would fight tooth and claw to muscle myself into the financial industry. I'll take any entry-level job be it a dealer, remisier, sell-side analyst, etc. Even office boy or data-entry clerk also can!

There will be no X amounts in Y years goals as money is not my objective. I just want to get my foot into the door and work my way up to what I aim to achieve - either to be a buy side money manager.or a institutional prop trader. I just want to invest or trade. Period.

We are not after titles or glamour; getting paid well for doing what we love is just a bonus!

And there's no such thing as "retirement" - we will do it forever and ever. Like that guy from Omaha? Is George Soros and Jim Rogers still doing what they do?

Can you see the difference between investing/trading to escape and to achieve?

One is just a vehicle; the other is our ikigai (reason for being).

There's another way of telling the difference.

When we journey to escape, there is usually a "I'll show them!" element.

The motivation may come from a moribund career, girlfriend leaving you for richer guy, unhappy family life, mid-life hormonal changes, etc.

We seek to compensate what we did not get from our regular life. Hence you can see a lot of affirmation seeking behaviours from financial bloggers and regulars at forums.

No, I'm not going to spell it out. You have fun spotting them yourself. Wink.

See? Serve you right for dropping Literature lah!

If we journey to achieve, we can be a little bit self-centred, a little bit selfish, a little bit egoistic. We only see ourselves in our eyes. We only care about how we feel and what we want.

Hence we don't really care about the approvals of others; we fear more about letting ourselves down...

Just make a wild guess whether it would be fun to work with Steve Jobs?

Tuesday 3 June 2014

Choose me! Choose me!

During the 70s, we often do the mad dog and Englishmen thing - play soccer or basketball under the hot noon sun.

Remember how we choose the teams then?

2 natural leaders will normally self-appoint themselves as the team captains (ever wondered who died and made them Indian Chiefs?).

Then in alternate turns, each Captain will choose 1 player for the pool of us.

This is the time where the pecking order of who is who is put on full nudity display. If you are a good player, team Captains will fight hand over fist to get you in their teams. 

It's a nice feeling to be picked during the early rounds.

Not so fun to be picked near the bottom...

When we grew up, we realise it's pretty much the same old same old.

Some teenage girls and boys are the popular picks for dating and hanging out together. Everywhere they go, they seem to have an entourage.

Reading here, old fogeys in the corporate world would have hit their forehead with their palm: "Alamak!"

Simple right?

The secret of success in the corporate world is just this:

1) Get to be the Indian Chief who picks others.

2) Failing with, you position yourself to be picked during the early draft rounds.

Have any other department heads of your organisation drop hints that you'll be most welcomed to join their teams if you ever wished for a change of exposure?

Have your suppliers or business clients ever made job offers for you to switch over?

Have any of your competitors made offers you can't refuse to betray your alliances?

Some of us are technically brilliant; but we always seem to be passed-over. You already know the answer - we are bad at marketing or selling ourselves. 

What good is this knowledge if we are too proud or unwilling to change? Selling is beneath you...

Some of us are loners - lone wolf. So no amount of marketing or selling will help as that would make us even more miserable; trying to fit us round pegs into square holes...

Maybe self-employment or starting your own business would be better as we can be our own Captains - we choose ourselves!   

Perhaps that is the biggest motivator for people to start their own business?

Think about it. Why would you want to start a business if you are already a success in the corporate world?


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