Monday 29 September 2014

Song choice and Music styles

I can still remember clearly the day when I discovered I can sing (in tune at least).

I was in Sec 3 and was sitting in the toilet doing my "big one".

Feeling bored, I started singing the chorus bits of "Always on my mind" by Willie Nelson.

The night before, I was watching the Grammy awards where Willie Nelson and this song won several awards... I guess it sunk in unconsciously.

When I opened the door out of my stall, I got a loud round of applause and whistles from my school mates that were present. (It's not my singing, it's the acoustics in the toilet)

The simple pleasures of these impromptu moments! Of course we have to be in the here and now to recognise these sprinkling of stardust that were unplanned and unrehearsed.

For those of you who enjoy singing, would you agree that we quickly realise there are some songs and music genres, that no matter how hard we practice and try, it just sound weird or bad when we sing them?

And yet, when we sing certain songs and music styles, it just fit us perfectly?

Strange right? It's not exactly that we do not know pitch, melody, rhythm, and beat....

For eg, I love this song "Stand by me", but it always came out bland and terrible when I sing it. On the other hand, when I sing "Amazing Grace", I can sing it with so much soul and conviction that you wouldn't believe I am agnostic.

What gives?

When it comes to investing and trading, what's the first thing that we should ask?

No. It's not about song choice and selecting the right music styles for us. 

That comes after.

It's whether or not we can or want to sing!

Not everyone have to sing.

We can let others sing to us. We do the listening.

However, music appreciation may need to be cultivated and learned.

And yes, it perfectly OK too if you don't like to sing nor listen to music.

I was glad that a female reader wrote to me recently sharing with me she is not really into financial stuffs... 

The smile on my face was wider than the Cheshire Cat's.

Thursday 25 September 2014

Famous Failures

If you have not failed before, it simply means you have not tried something new.

Tuesday 23 September 2014

I hunt alone

Have you noticed students of 2-4 studying together at fast food outlets?

It reminded me of my school days.

I never can study in a group.

Someone I liked asked why I don't talk or blog about the stocks I own.

Simple. I hunt alone.

OK, I do reveal some of my trading positions. But that's only when I am talking shop to a veteran full-time trader (he hunts alone too). And I only do so in the comments section where it will do less harm to the casual reader.

(When you are learning from someone wiser and more experienced than you, the etiquette is that you have to strip first.)

It's interesting if you think about it. 

Those who hunt in a pack like wolves or lions, they gravitate towards forums, chat rooms, seminars, etc.

There will be an opinion leader, sometimes you can spot the no.2 and no.3 too, and then most of the rest are xxxxxxxxs....

And then there are those that hunt alone like tigers. 

I am not a tiger; more like the HDB neighbourhood cat that meows.

Those of us who hunt alone may meet up at the water-hole from time to time.

We meet; we shoot the breeze together; we go our separate ways when happy hours are over.   

Friday 19 September 2014

Life Insurance with No Commissions (coming soon at a theatre near you!)

I'm not a bleeding heart.

I'm not a Bodhisattva.

I'm more of a man-whore who believes in self-cultivation and walking our own way.

But then, sometimes man-whore also got passion.

So here goes:

Life Insurance with No Commissions 

Old news leh!

Want to bet? 

Those of you studying business finance courses at tertiary institutions, do you know about it? 

Have fun taking a survey on how many of your classmates knew about it? Do exclude the lecturers. Wait you embarrass them and they black-mark you, don't come crying to me!

If this is the reality for business finance students, what more for the common person out there in the workforce? 


These insurance products are only available early 2015 next year....Cheh!

You mean you can make the choices all by yourself already?

For those of you who are still in school or National Service, and will be joining the workforce next year, the timing couldn't be better!

Now you have months to ask the questions you've always wanted to ask (not to me!), do all the research needed to discover what's the critical differences between Term and Whole-life policies. What actual illnesses do this Critical illness rider cover? What is a rider anyway? Etc, etc, etc.

"Free from commissions" means Do-It-Yourself. Which also means if you made the wrong choices, you have no one to blame but yourself!

Of course if you have no time, no interest, or you prefer to have someone tell you what's better for you (The man who wants to buy new shoes) it's perfectly alright to pay someone to make that decision for you, if you so  wished.

For eg, I prefer to buy breakfast from hawker centres in the morning than make one myself.

Now make a wild guess why did MAS only start with Term and Whole-life policies, and with only one Critical illness rider?

What about other insurance enhancements? Why they not included?

In the words of Pua Chu Kang: "Use your brain, use your brain!"

And while you are at it, do ponder on this point 7 from the MAS website (I added the bold fonts):

"7   The sub-limit of $200,000 for whole life products seeks to alleviate the risk of consumers buying whole life products beyond their means and protection needs.  This is because whole life products have higher premiums than term life products, and typically require a longer-term premium commitment.  Policyholders who surrender their whole life policies in the early years of the policy also stand to lose a significant portion of their premium outlay."

Is it because big daddy don't trust us (the consumers) to make our own decisions or they don't have much faith in paid agents to look after the interests of their clients?

Of course they are great professional agents out there; and in all industries, there will be black-sheep.

And there will be consumers who make bad decisions, no matter how much publicity out there :(

Wednesday 17 September 2014

Dollar Cost Averaging is Voodoo or what?

I must first qualify myself that of the 3 - Averaging down, Scaling in, and Dollar cost averaging - I've never done Dollar cost averaging myself.

So unlike my other posts on this topic, I'm totally speaking from an "academic" perspective.

Dollar cost averaging is usually spoken in the same breath with passive index funds or ETFs. Although I think its just as valid as an accumulation strategy for building a core position in a single stock.

Most people who practice Dollar cost averaging have in fact outsourced this activity to their broker or the financial institution where they have signed up for the plan. 

Sometimes it's better to not peek into the kitchen of your favourite eating places.

Let's take a moment and make believe you prefer to do this Dollar cost averaging for let's say the STI ETF DIY style.

Your plan is to allocate $1,000 as your Dollar cost average to be invested per month. 

Immediately you are faced with 2 head scratchers:

1) Which day of the month should you buy? One the first Monday, third Wednesday or last Friday of the month?

2) After deciding on a fixed day of the month, what time of the day should you buy? At 10:00 am? 1:00 pm? 4:00 pm?

Have anyone discovered the voodoo part?


Price is not on the menu!

You just close your eyes, pinch your nose with your thumb and index finger with one hand, and press the buy button with your other hand!

Is that voodoo or what!?

Be honest. When was the last time you bought a stock without looking at the market price? 

So what's the main benefit of Dollar cost averaging? There must be one, right?

Well, you get to say: "Look mom! No brains!"

Just kidding!

The main benefit is that come high water or brimstone, you just calmly stick with your Dollar cost averaging plan. 

You don't care whether there's a war, coup, revolution, fire or flood. Neither are you bothered with nuclear radiation, Sars or Ebola. Whether the market is up 20% or down 50%. You just continue to close your eyes, pinch your nose, and jump into the market at your pre-determined calendar day and time of day.

That would also mean you don't have to monitor the markets, don't have to sharpen the saw on your investing/trading skills, don't need to watch the news, and definitely no need to read financial blogs!

You free up your precious time to focus on your career, business, and more importantly - your family.

Without this benefit, I can't think of any other reasons why anyone would want to engage in Dollar cost averaging...

Want to bet whether Dollar cost averaging is something you bought into yourself through your own volition? Or is it, like most insurance, something you were sold to?


Monday 15 September 2014

Scaling In is not the same as Averaging Down

Scaling in is simply the building up a core investment or sizable trading position through a series of entries. 

It's usually practiced by those who have been humbled by the market and realised they are not so great at picking tops and bottoms. By spreading their entries, they hope to get a reasonably good average entry price - the shotgun approach.

This is the opposite of the 100% all-in entry normally practiced by those with a smaller portfolio or trading account. 

Having said that, there are of course exceptions where big investors and traders who are great at market timing, will just skip the scaling in process and go all-in with one big giant high conviction entry - the rifle approach.

Let's take the example of an investor who has a rule where no single stock position can be max more than 10% of his total portfolio as a risk management control.

This investor has high conviction on stock ABC. 

He allocates $50,000 for this stock ABC since his total portfolio is half a million dollars.

Since he likes to enter in multiples of $10,000, for broker's trade commission efficiency, he has 5 arrows for this stock ABC.  (Some people prefer 10 arrows, some 2 arrows, it's an individual's choice!) 

This firing of all his arrows may range from several days, weeks, months, and even years! It all depends on his criteria for entry.

The execution of Scaling in, depending on the entry price of the first arrow, may look like a combination of averaging up and averaging down. 

It can just as well be the case it's all averaging up or all averaging down in execution - the investor is agnostic whether he is buying at higher prices or at lower prices - just as long the criteria for entries are met. 

I shall stop here.

Readers, you have to figure it out yourself whether you can see the difference between Averaging down and Scaling in. 

It's entirely plausible and perfectly OK for you to say I am just engaging in wordplay - A rose by any other name is still a rose! 

And if your conclusion is derived from your own investing experience and/r trading track record, it's more POWER to you!

I'll say purge what you've just read and don't let me poison your mind. 

Don't you dare change a winning strategy just because of my personal musing nonsense!

P.S.  For traders, it may be easier for you since Scaling in is frequently found in trading's parlance. 

For investors who have never experienced a > 20% plus bear market, it could be harder for you since you could be mistaking Buying-the-dip in a rising bull market with Averaging down... 

LOL! Confused yet?

Tip for potential snake-oil salesperson wannebe:  If you can't win them over, confuse them!


Thursday 11 September 2014

Average Down versus Scaling In versus Dollar Cost Averaging

Nothing draws in new batches of cannon fodder like the bull market of 2013 - be it STI or S&P.

I think its good to revisit this never ending average down topic once again.

Experienced investors and traders (lived through 1 bull/bear cycle) you can move along now. Nothing to see for you. You won't be where you are today without a well established opinion. Don't change a winning formula. Wink.

For newbies curious to hear the arguments from "lao qian beis" - Average down or up?
Read the crazy comments  

And for those above 21 and don't mind a more RA content - Whip-cream or leather whip?

Note: I never say listen to others; I merely said hear their arguments.

Once you have finished a complete bull/bear cycle, you would have your own answer. Nothing illuminates more than your own track record

Homework: Can you tell the difference between Average down, Scaling in, and Dollar Cost Averaging?

Are they the same?

Or are they miles apart in differences?

Monday 8 September 2014

How Jim Rogers Fluked His Way To Success

A little knowledge can be a dangerous thing.

And if your idea of research and hard work is reading blogs, participating in forums, perusing the Business Times, and watching CNBC, just take a look at your portfolio. Something is missing right?

Cash rotting in bank anyone?


Friday 5 September 2014

Crash Got Sound - Management by Stumbling Along

Crash got sound is a wonderful Hokkien saying in Singapore.

It never really sunk in until I started work at this wonderful previous company of mine. 

Let me share some of the interesting anecdotes of the company's early years that introduced me to this not so well known management concept of Management by Stumbling Along.

The bloody chair is too big

One evening, pioneer employee X was trying to load up a wooden chair into the boot of his car to make a delivery to customer.

But it just didn't fit into the boot or the back seat of the car. Frustrated, he sawed off the 4 legs. Now they fit!

Yup, this led to the interesting idea that if we can apply this "saw the legs off"  concept to our other furniture products, we can ask customers to transport back and assemble the furniture themselves!

One thing led to another... Resulting in tremendous savings both in transport and warehousing costs.

Just imagine how many more tables and chairs we can load on a truck and/or to store them in our warehouses if they were flat-packed and not fully assembled?

And when containerisation took off, guess who got the most savings on sea freight?

Too many customers!

Now that's a great headache to have as a business owner!

Remember, retailing of furniture is pretty much like you shopping at Courts, Novena, or any other furniture shop today - there is someone to serve you.

Now imagine if there were too many customers, you either get lost sales or frustrated customers not happy with the waiting time...

Most management hired hands would just employ more salespersons to cope with the increased customer flow - linear thinking what?

Our pioneering Senpai (先輩) colleagues simply gave up instead.

They opened the store's warehouse to our customers and invited them to pick the furniture themselves!?

It's a bit like that famous Ryanair story where due to an airport porters' strike, Ryanair were able to get volunteer passengers to load the luggages themselves so the plane can take off. Now that's cool!

We have a similar example here in Singapore. More "senior" Singaporeans may remember a time where we don't have to carry our own food trays when ordering from hawkers. Hawkers got stall assistants where they delivery the food to us. Remember those days?     

Back to my story. This simple act of "giving up control" has resulted in us gaining a competitive advantage over our competitors - whether it be Sales Revenue / Salespersons or Sales Floor Area / Salespersons.

If you are a business owner, how not to be happy? Don't you just love employees that offer proposals to help you earn more and/or save more?

300 over restaurants in the world

When the first store was opened, it was somewhat the equivalent of opening a furniture store at the southern tip of Johor Bahru in Malaysia.

Using this JB analogy, that means our customers will take about average 1-3 hours to drive by car from rest of West Malaysia to our location.

What's the hospitable thing to do when receiving customers after such a long drive? Offer them some coffee and cake?

Yup! It didn't take long before one observant employee gave birth to our restaurant-in-store concept. 

How else to encourage more to make that long shopping trip? And having arrived at our store, stay longer?

Not many customers realise we are also one of the leading restaurant chains in the world. Wink.

Just make a wild guess. Did our business owner planned to be in the restaurant business?

Planning versus connecting back the dot

Crash got sound indeed.

This post is written primarily for those who are still in school and those who started their corporate careers recently.

What you've learned in school is goal setting, business plans, mission statements, etc. 

You may think most clever corporate moves you see in the market place are done behind ivory walled offices at the corporate headquarters. 

That may be.

But if you have the opportunity to talk with real business owners - not hired hands - do ask if their entrepreneur journey is one that is more synonymous with 5 year plans or more like Management by Stumbling Along....

Or you are a fan of Apple and Steve Jobs, you may want to think for yourself what Steve Jobs meant by connecting back the dots.

If you find Management by Stumbling Along too foreign a concept, you can start with Management by Walking Around first - there is academic literature here.

And for those who want to ask where to find literature on Management by Stumbling Along... I think you are missing the point.
It's more about being AWARE on the HERE and NOW.

May sound simple; it's not.

Tuesday 2 September 2014

Blogging for Hobby versus Blogging as a Business

Most of us are blogging as a hobby. 

Never mind the rather "lofty" goals some of us wrote in our manifestos.

Wait... Do I have a mission statement in my blog? Check here, check there. Phew! No. 

Good, good. No stress then. It's a hobby remember?

There are also bloggers out there who are CLEARLY using their blogs as an extension of their existing businesses. 

Think remisiers, insurance and property agents, financial educators, etc.

It's not any different than all those health and medical seminars provided by our medical specialists. The obvious message is to create awareness on certain medical conditions; the undertone pitch is really about the marketing of the services and products of whoever "sponsored" this medical seminar or talk.

Don't believe? Just look inside your goody bag. This activity is under the sub-set of public relations; although marketers will claim it belongs to them too.

Then there are those new bloggers  who started off looking like hobbyists, but they are aspirant Business Owners who started with the end in mind. And I applaud them.

I had great fun predicting who these bloggers are.

Here are some of the tell-tale signs:

1)  About us. It's in the plural even though it's clear there is only one blogger. After several months or 1 or 2 years, you'll see more partners or contributors joining the blog. More people means more resources as in time and money. The blog will usually quickly scale up to the next stage.

2)  The platform used. Hobbyists usually choose that free blogging for idiots platform. Those who blog with an end in mind usually choose another platform that is free in the beginning, but it can be easily scaled up by upgrading to the paid version.  

3)  Template chosen.  It's screams business-like to you. No silly and frivolous stuffs such as birds, camels, or amateurish pics of fruits picking...

4)  Blog topics.  Again, deadly serious here. No instant noodles musings, no lame jokes or parodies, and definitely no mature adult stuffs that would make an ex-convent girl blush. 

5)  Free giveaways.  You provide an email address and you will get something for free. FREE is a great hook!

Once their readership have reach a critical mass as in page views or email subscriptions, they will start to monetize this "asset".  Some will start to sell financial courses, some financial products, some financial services. 


Some do it so well that they can quit their day job and commit full-time to their blogging business.

Off course not all will succeed. Singapore being a small market and all. You think why big daddy wants to increase this domestic market to 8 million?

Its refreshing to see in this blogosphere where snakes and dragons intermingle, where most just aspire to be better traders or investors, there are a minority few who have their eyes on the bigger prize - Business Owners.

Standing ovation.

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