Tuesday 30 December 2014

Cash Flow versus Net Worth

Let's have a bit of fun as the year comes to a close. 

Cash flow versus net worth, which is better?


Gold digger

If I am a gold digger, I'll definitely go for net worth - especially if he got a 40 million dollar landed property. 

Look, it's much easier and natural to whisper to him during "pillow talk" to have my name added to the title deed. 

Now try doing that with a partner who is asset light (rents a penthouse condo) but have a 5 million dollars annual salary... 

"Dear, can you include my name in your bank account?"

Now that's a little too obvious, isn't it?   

Wages, salary, and remuneration

Would you prefer to have a 10 baggers in 10 years with no yields; or no capital gains but you get 15% yield annually for the next 10 years?

Let's put this question in another light.

Those of you who are working in the corporate world, you know you have it good when you can negotiate your remuneration in annual terms. Now who wants to be paid in weekly or daily terms?

I am paid in hourly rates for my weekend job :(

(Consultants and lawyers who charge by the hour don't you pretend to cry crocodile tears... You know you will jump at every opportunity to sign a retainer agreement whenever possible!)

Those who have applied for Alibaba IPO may know of Joseph Tsai from Taiwan. He gave up his US million dollars annual salary to join Alibaba in its infancy 15 years ago in exchange for the equivalent of SGD100 per month salary - and of course a share of Alibaba.

Now, if you just have graduated and have 2 job offers - one from a brand name MNC that pays $10,000 per month; the other from a unknown startup that pays $1000 per month but with stock options - which would you choose?

One has good, better, best cash flow from the get go. 

The other sucks in cash flow but offers the opportunity if you are lucky, you could be an instant millionaire if the start up survives and thrives with an IPO 10-15 years later.

So how?

Saturday 27 December 2014

马云谈创业 沒钱沒技术沒计划是成功的三大原因

Sorry! I just can't help myself.

No. I won't be doing an English translation.


No point.

If you are already too deep into western way of thinking - think like ang moh, talk like ang moh - you won't accept it anyway. Too much vested interests. Letting go is hard.

If you still have some "cheenaness" in you, how? 

What do you think of what Jack Ma has said? 

Monday 22 December 2014

It's how I React that matters

"No one reacts to things as they are but to one's own mental images; Keep me aware that it is not what happens to me in life that matters, but how i react to what happens."


By an anonymous Christian.

This post is a dedication to temperament who has tirelessly spread the above saying in quite a few blogs and forum already.

Buddhist friends can easily identify with the above saying - it's about Awareness isn't it?

If we are not in the here and now, how do we see things as they are? And not misled into thinking it's the wind moving or the flag flapping in the wind; it's our hearts moving...

This is the time of year where many will start planning new goals and new year resolutions for 2015. That's the easy part. 

Why easy? 

Everyone and anyone and do goal settings and planning. And if everyone and anyone can do it, it's a low level skill. No? Think about it for a moment. 

Now review 2014 - are there any instances you wished you had responded or reacted better to what had happened to you? You didn't plan that, did you?

See the difference?

LOL! Don't think too hard!

P.S.  I'll be working this Christmas and New Year to contribute my part to servicing the general public during the holidays - I guess that's why they call it the service industry - someone has to do it.

I sincerely hope we can spread the holiday cheers to all co-workers and professionals working during the holidays.

A Merry Christmas to our Bus Captains, a Happy Holidays greeting to the salesperson or waiter serving you, a hug to our angelic nurses and doctors on duty, and if you are shy, a simple Smile will do just fine. We appreciate it.

And do be a little patient, a little bit more understanding if we fail to live up to your expectations - more customers and reduced manpower are not exactly helping.

Happy Holidays everyone! 

Wednesday 17 December 2014

Trading and Zen

Don't worry. I am not a bleeding heart so no proselytising from me!

For newer readers, I am agnostic.

However, I do use Zen as my spiritual and philosophical anchor. It's the closest metaphysics I can find that's has the least conflict with Science.

I'm into verification that sort of thing...

This post is not about sharing how to apply Zen into your trading. For that, you can easily search under Google and many others (bloggers/traders) who have already done so.

I shall instead share how trading has helped me in my understanding of Zen, and in turn, myself.

Do we want too see the truth?

For some of us trading for some years, we can see this phenomenon quite often: 

Entering a good trade yet lost money; and winning money with a bad trade.

Yet there are traders who will never admit to it or are puzzled how can it be?

Seeing and admitting the truth takes courage.   

With trading, the feedback is a lot quicker since we practice mark-to-market every closing. 

In real life, we do have an "inkling" how the world works, where we fit into this pecking order, and how we are all different from one another. Yet we tell little lies and make up fantasies not only to ourselves, we tell them to our children and share it with other people!?

We do this as it feels comfortable when more people believe the same shit we do. 

That's why we have people eager to share with others how easy it is to make money without realising they were already a "victim" of a financial scam.... Or to recruit you into MLM, or cell group, or political party. 

By applying the trading process of constant reviews, re-evaluations, and reflections - it helps me see the world as it is; not what I wished it to be.  

How do we know we know?

In school, we do it through tests and exams. 

That was easy!

How do we know we can do it?

Professionals do it via articleships or housemanships and acceptance by professional bodies. You don't call yourself a practicing lawyer or registered accountant just by having a relevant degree do we?

There are quite a few engineers in our financial blogosphere. Many have engineering degrees, but how many are certified professional engineers? 

Outward manifestation of Zen

Mindfulness, living in the here and now, no mind - all wonderful concepts to show off and pretend I know.

But when I started trading... Shit! 

Knowing and doing are not the same!!!

That's where I go, "Jared, you are such a fraud!"

I don't make money with knowledge (unless I teach); I make money with execution.

In trading, it's all about execution - entries and exits. 

If I can't tell whether I've made a good trade or bad trade (what has profit or loss got to do with it?) what's the point with Zen again?

Sunday 14 December 2014

A Good Year, A Great Trading Year

Last year, I mentioned to coconut in the comments that I doubled my futures trading account for 2013.

This year 2014, I tripled it.

Yup, for those good in math, you will immediately realise I've got a 6 bagger in 2 years.

A small speculative trading account has turned into a respectable size. (I only wished my investment account had the same performance!)

Did I planned for it? Was it the result of my goal setting?

If you are asking these questions, you may want to pause and reflect got logic or not?

I can think of 2 possible explanations:

1.  Luck.

There are losing streaks, and there are winning streaks. I could just happen to be in a winning streak now. Better enjoy it while it last!

2.  Sharpening the saw

My secondary 2 Geography teacher Mdm Foo motivated us "slower" students by saying:

"Others study 10 minutes they understand, you need 7 hours to understand - so be it! Once you understand, there's no difference."

I never doubled or tripled my trading account when I had a day job. I guess I am not as brilliant as those who just spend 10 minutes a day can make money trading part-time already...

Maybe spending more time in improving my trading craftsmanshiip - the hands on kind as in improving my entries and exits - finally paid off? 

You "hao lian" show-off lah!

Maybe. Mouth in your face, you can say whatever you want.

For the past 3 years, when strangers ask what I do, I would say I am taking a sabbatical from full time work. 

From today onwards, I'll say I am a Trader.

I trade to achieve; I invest in order not to lose.


Monday 8 December 2014

To see a friend get Rich

“There is nothing so disturbing to one’s well-being and judgment as to see a friend get rich”

Economic historian Charles P. Kindleberger (1910-2003) wrote in Manias, Panics and Crashes: A History of Financial Crises (1978 and subsequent editions):

Don't pretend!

Very true right?

That's why you see people who many years have swore property investing is not their cup of tea "capitulates" just in time to get themselves an investment property right at the top of the property cycle...

It's hard to stick with your convictions when all you see are colleagues and relatives who have made hundreds of thousands in just a few years.

Same for those who wished they had left their money in CPF or fixed deposit accounts and not invested in REITs or other income stocks. 

The 8% yield on income stocks may look a lot sexier than 2.5%, but if you are nursing a 20% plus capital loss... All of sudden, purchasing power erosion by inflation is a lot less scarier than "your own worst enemy".

External financial missteps are painful, but they don't destroy the soul.  

The more insidious ones are those of envy and jealousy.

We don't need to look far.

We just have to look at the person in the mirror.


Wednesday 3 December 2014

城市少女 - 年輕不要留白 (1987)

I went for my National Service from Dec 1985 to Dec 1987.

It was one of the more memorable periods of my life - looking back.

These 2 years of NS were my "Mandarin music" phase. 

Prior to this period, I was more into Western songs and bands like ABBA, Bee Gees, Boney M, etc.

My switch to Mandarin pop was thanks to this top 10 Chinese MTV show every Saturday afternoons that  got me hooked.

I remember I had a lighter sized pocket radio that I would listen to in bed every night, and especially during my duty storeman shifts alone at the guardhouse.

After reading some of the young financial bloggers out there, a question popped into my mind - why didn't I take up a part-time course to better prepare myself for future employment or work part-time to earn money to build up my opportunity fund?

Did I let my youth go to waste?

On second thought... Nah!

There's a season and time for everything. 

Even if you had explained to me on the importance of planning for my future, I don't think I would have listened or understood.

I had my music, and that's what I was interested then.

Things didn't turned out too badly I think - 傻人有傻福.


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