Kaypoh at AK's 3rd chit-chat session

I just came back from attending AK's 3rd chit-chat session and I didn't come home empty handed!

I enjoyed myself - and that's the most important!

Since I am not a bleeding heart like somebody, I expect to get something in return. I'm a taker.

I wasn't disappointed.

During the interactions, one guy shared his kicking the tyre knowledge on one particular stock based on his day job in the air-force. Another man working for big daddy also shared on what he knows on this same company from his day job. Yup, this company got backing from big daddy's sovereign wealth fund.

No.

I'm not going to tell what stock they were talking about. Told you I'm not a bleeding heart!

These 2 gentlemen have an edge over you and me.

Just like I have an edge over you when it comes to shipping and port related stocks  - once upon a time I was acting Transport Manager and have worked in Supply Chain for more than 7 years....  


What's your edge?

If you have no clue, pause and reflect a bit next time you buy a stock. Try figuring out who is selling to you? For your sake, you must be hopping the counter-parties on the other side of the transaction are clueless retail investors who are selling on a whim! 

How to make an educated guess? Next time you make a buy or sell, see the trades done on your platform. Most platforms will reveal who are the counter-party brokerages' codes.

I always feel better when the opposite side are made up of several brokerages with tiny lot counts.   


Start from your own backyard

Duh?

If you are now working in one of the 3 local banks, how?

I know you may not be working in the "right" department, but there's such a thing call networking.

There's a Treasury Department in my ex-company. You think where I asked questions on hedging currency risks?

How about minimising the tax a company pays? Where did you think I learn about transfer pricing and related parties transactions? And what are the common financial engineering tricks of the trade? Not all companies have a legal department, but I'm sure your company have a finance department or at least a Financial Controller?


Do have dealings with suppliers?

I did share my experiences as a purchaser before. 

Just as long you have "buying" duties, you would know that some suppliers are very "atas". Can "suka suka" raise prices but your company still "LL" will continue to buy from them. 

Place order must 30 days upon receipt of invoice. If you try to negotiate 90 days, they politely tell you to "F" spider.

The worst is deliver late and not in the quantities ordered, you don't even dare to complain since you have been told off before: "Not happy don't order lor!"

What would you do when you have such an experience? 

Check whether the supplier is listed in SGX!!!


Got work with customers?

You are working at a shipping carrier as sales executive. This customer of yours normally books 5 x 40' containers per week. Interestingly, you noticed in recent weeks, this same customer is now booking 10 x 40' containers!?

I mean Singapore non-oil domestic exports have been declining in recent quarters, yet this customer is going against the general market trend with more and more exports!? What gives?

And if this customer is listed in SGX, do you have an edge over other retail investors? 
 

What was my take away?

Stay away from that company! (This applies to me and me alone)

I know there may be people in this chit-chat session will get excited and start to buy because the 2 gentlemen I mentioned above have given their "insider" stamp of approval. And plus that bleeding heart also vested.

But that's because they know more than me on that company which they are already vested in.

And if I follow them blindly without doing my own homework, I would be no different than from buying on tips - and that's not investing.

I'll stick with those stocks that I know more than the average retail investor riding the SMRT train.

Wink.

Do you know your HAIR quality?

Big daddy was so impressed with the HAIR model of Shell in recruiting and developing talent that it adopted it for it's own Civil Service.

I've never worked for big daddy and I don't think I'll ever pass through Shell's gates. Although I did get to work as a technician at one of the petrochemical white elephants at one of our offshore islands during my "lost years" - that only lasted 1 month.

So don't worry about me asking you loads of psychological and aptitude test questions. I've no clue myself.

But that doesn't mean we can't have a bit of fun and see how much we know ourselves.

All we need is some empathy and powers of observation. OK, here goes!


H for Helicopter ability

Do you often find yourself focusing on more on MRT breakdowns than let's say the impact of China's burgeoning blue water fleet's impact on China/ASEAN relations?

How about this CPF thingy? Do you get all flustered with all this commotion about CPF - believing that when it's your turn to collect - there's no money there? Or do you spend more time on earning more; saving more - knowing this is what you can control?


A for power of Analysis

This one should be easy for investors and traders! Were you more often wrong or right in the triggers you have pulled?

I mean you buy or sell based on some analysis right?

If you only "followed" the analysis or others, then put your power of analysis as zero.

It works the same if your opinions are mostly shaped by what you've read or heard in the media, and by what others say or do.

Your favourite catch phrase when others ask you for your opinion is: "No comment."


I for sense of Imagination

When you see into the future, do you dream about it? You know those fuzzy, blurry, surreal visions?

Or do you see projections of black and white precise numbers and goals? Especially those SMART ones that were "drummed" into you.

By the way, have you wondered why no one has to be taught how to dream?

What to we call people  who dream big or have outlandish dreams?

Visionaries and Crazies.


R for sense of reality

We have our siblings; relatives; classmates; army mates; colleagues as benchmark.

Compared to them, after reading here, where do you think you rank when it comes to the HAIR model?

Now look at your chosen vehicle for financial freedom.

Is it still appropriate for you?

Success is what we have to sacrifice to achieve it

And what bigger sacrifice than to dedicate and give up your whole life to it?


Respect.


I'm of the beneficiaries. A child of 67. 


Gratitude.


 

I challenge you on the 80/20 Pareto Rule!

Have been coughing my lungs out this whole week and even losing my voice for a few days due to the sore throat...

Today feeling better and will be off to work soon.

Now that I've got most of my mojo back, can't help myself to have some fun...

Readers who have thin skins or if you are not familiar with my style, you may want to stop and desist - stop reading.

Only regular readers who are already immunised are recommended to read further. If not, guarantee you will be moody the whole weekend!


First, let me refer you to this interesting blog post by B (I like him; but not in that you OK?): 


The Pareto Principle (80/20) Investing Strategy

Let me ask you some poking questions to see if your understanding is only "skin deep":

1.  Look at your portfolio. Now tell me were they bought based on using the 80/20 rule? (Be honest now)

2.  Explain what is that -40% stock doing in your portfolio? Is it still part of your 20% focus?

3.  Between your earned income and investing returns, which is bigger? Pray tell how much time resources are you spending on your job versus your investments? Explain your understanding of the 80/20 rule to me again?  (And you wonder why you are not doing well in your career)

4.  And for those who have set your financial freedom goals, milestones, and plans; have you done the same for your career? Your family? How about your spiritual goals if you are not an atheist? No Life goals? 

So you are saying the rest are not part of the equation? They belong to the 80% trivial? Your happiness comes from the 20% activities that you have identified as financial freedom? (Please don't let your boss, wife, children, and spiritual leader know)

5.  Do you want our teachers and tuition teachers to practice the 80/20 rule on us and your child? In practice, what's reality? Who's your favourite teacher when you look back? Did they practice 80/20 on you? Are you one of those who support more resources should be spent on elite schools and less on neighbourhood schools?

6.  You are definitely not one of those who complain about income inequality. If those 20% of the elites are ones who generate 80% of the revenues, they should be rewarded with 80% share of the profits! Wrong meh? 

7.  If you are an aspiring writer, singer, or entrepreneur, and you are now "wasting" your evenings and weekends on doing what you really love - your passion. How would you respond to that well meaning friend/relative who is trying to convince you to end your dreams with: 

"Look, you are earning peanuts from your passion. Stop your silly dreams and focus on your day job - it's providing the 80% of your livelihood!"



Its fun and you feel empowered when you agree with the 80/20 rule. That's knowledge. 

You know what's wisdom?

Wisdom is what you do when you discover:

Your boss, your company;

your spouse and family;

your friends;

your teacher, spiritual leader, mentor;

your broker, insurance/property agent, banker;

big daddy


they somehow don't see you as belonging to that famed 20% that they should spend 80% of their time and resources on...

Love Your Husband

Life is not a straight line extrapolation

Successful in career, eat healthy, exercise regularly - what can go wrong?

Well, you may want to read the story of CEO of SAP Indian Subcontinent Ranjan Das below. Just click on the picture.

Success if what you have to sacrifice to achieve it.

In Ranjan Das's case, its his sleep.

You may want to pause and reflect what's yours?

 
 

 

How to be REALLY REALLY rich

Add coconut milk, cream, butter, sugar, and oil.

Guarantee very rich!

 Burp...

Risk Management vs Loss Management

When I was a purchaser with my previous company, there was this big Taiwan supplier that won my respect.

This supplier was reliable, makes good quality products, and their prices were competitive. So it was no surprise that many purchasing teams often compete with each other to source our products from this Taiwan supplier.

However, as part of their risk management, this Taiwan supplier will only offer us max 30% of their production capacity. Yup, its one of the few suppliers who will turn us away!? 

Every time I visit this supplier, I have to turn myself into a "salesman" to convince this supplier to do more of our business! Talk about role reversal!

On the other extreme end, there are suppliers who have no qualms in giving us 90% of their production capacities. I felt like a king visiting these suppliers... 

Guess who survived better during the 2000-2003 global recession? 


Those who buy 4D may have this frustrating experience of being told your number is "sold-out"...

Have you wondered why Singapore Pools is turning away business?

It's risk management like the Taiwan supplier right?


Using the same analogy, those who trade spot forex will understand why some spot forex brokers have to be liquidated while some are able to weather the EUR/CHF storm without bodily harm to their reputation?

Those brokers that failed only practiced Loss Management - making sure clients have enough margin to support their trades. 

But were there Risk Management to make sure the brokerage is not taking too big a position risk by accepting all the same number "4D" bets by clients?


And that's why I give people a queer look when they tell me they are well diversified with 100 stock positions - fully vested,

The Art of Benchmarking