Thursday 31 January 2019

Are you retail or industry insider?

I suspect you can guess I'm quite bored with the markets...

Nothing to do so go find friends to poke lor!

Sometimes it backfired big time! 

Like my recent feeble attempt to poke CW's grammar... Ouch! 

That is classic what my kindergaten teacher complained to my Ah Ma many years ago, "Your grandson himself don't know still like to teach others!?"

You can say I've not grown up or improved one bit... I'm still stuck at kindergaten level!


Oh! Must give CW a compliment. He let me off without giving me a slap. Hee, hee. He big hearted or what?

Either that or he has developed calluses against my "bau" nonsense! 

Then there was my poke to B when he swallowed what the newspaper wrote instead of trusting his own eyes. Newspaper can't make mistake one?


Where is the biggest public library in Singapore?

It was so funny.

Eh, no one cares or is counting the admin departments lah! Just include the floor area with books.

So, is the one at Bras Basah bigger or the new one at Vivocity bigger?

Remember a time when the most "valuable" section of a library was the reference section?

What happened to the reference section in our neighbourhood libraries for "retail" today?

Got Google people forget how old fogeys used to do "research". Wink.

Regular readers know all I've written above is just "foreplay". 

Where is the real poke?

Coming lah!

Some words used in common everyday language meant one thing, but inside the industry we use more specific industry terms as the common everyday words are just too vague... 

If not, how to tell who is "retail" who is "pro"?

Just take annualised returns for our portfolios.

Most just assume its IRR (Internal Rate of Return) and use the excel tool XIRR to calculate it.

IRR is actually quite black and white specific; annualised return is grey.

Eh? Are they not the same?

What if I tell you under "annualised return", there are 2 major computation methods?

One is Time-weighted (favoured by public fund managers)

The other is Money-weighted (which is IRR by another name)

I won't bore you with the specifics. You google yourself if you interested to know the differences.

But I'll give you a simple summary for you to ponder over:

Time-weighted returns measure how well the investor did at growing their assets over time.

Money-weighted returns measure how well the investor did with the timing and amount of inflow and outflow.

So the poke is not whether which method is better or more "superior".

The poke is what kind of investor are you?

Are you a long term or buy-and-hold investor?

Or do you practice market-timing with your entries and exits?



  1. I rarely get the chance to be the first to comment so I'll take it. If you still have recurrent cash-flow coming every month (be it through work or passive income) AND is only concerned with seeing your own bank account grow from investing activities, then by all means use IRR or money weighted returns. But if you no longer have any recurrent income coming every month OR if you are interested in whether you truly have skills in trading/investing activities, then time-weighted returns is a better metric to use.

    1. Macroanalyst,

      I'm saving another poke for those who "grew" their portfolios through cash injections ;)

      That's a bit like a fund manager bragging he "grew" his AUM from $1 billion to $2 billion.

      Sexy if its through trading/investing skills; if its from investors putting fresh funds in, that's marketing prowess ;)

      Just as power!!!

      If people can pay me 1% annual fee to sit on cash, I'll do it too!

      I can even give them a capital protected 100% your money-back guarantee ;)


  2. Those "grew" their portfolio with capital injection are measuring performance of their human and financial assets. Power! :-)

    1. CW,

      Turbo boost!

      Some got "hidden" support from parents, significant others, children, sugar daddy or mommy.

      If not, how else when they are near 100% vested, still can say if prices go lower, they will buy more?

      Fresh funds come from where?

      Under the mattress or inside biscuit tin?

  3. Hi SMOL,

    XIRR or IRR still the best practically speaking for retail investors, due to most having ongoing fresh inflows from jobs or windfalls, & outflows for expenses or to separate "safe funds" etc. Plus it's easy to generate using Excel (or Google Sheets) :P

    For fund managers, I prefer looking at their 5-yr or 10-yr Sharpe or Sortino ratio. I'd like a feel of how much volatility I'd have to stomach to see those returns. ;)

    E.g. Bill Miller was famous for beating the S&P500 for 15 straight years, but his lowish Sharpe ratio showed that it was obtained with much higher volatility.

    I know some people e.g. Buffett, don't believe in such things coz they don't equate volatility to "riskiness" (his long-term Sharpe ratio is superb btw).

    But for emotional human retail, knowing that your star fund manager or investment method can crash more than the markets during bad times serve as a reminder. At least I should know what I'm getting into! LOL!

    1. Spur,

      Most retail's eyes will glaze over if you mention Sharpe ratio...

      Its not about which method of measurement is best ;)

      Most will say XIRR is the only "tool" they know how to monkey see monkey do - so no choice lah! School never teach mah...

      My poke is in my last paragraph ;)

      Especially if the person using Microsoft excel XIRR has self-declared he/she is a LONG term investor, and does not believe in trading or market timing. Eh... LOL!

      Then there are those who like to benchmark with STI performamce.

      Individual portfolio got take into account money inflows and outflows...

      STI just using static point in time, and definitely not adjusted with dividends received. Are they not money inflows?

      Again its I'm "retail"... I don't know how or where to get STI returns adjusted for dividends received...

      Everything so far has been "agar agar" or using the next best guesstimation solution.

      But own portfolio must write in 2 decimal places to give illusion of precision!?

      That I find hilarious ;)

    2. Hi SMOL,

      For overseeing own portfolio can agar agar ... But when comparing with other alternative methods or analysing potential investments then need 2 decimal places 😃

      XIRR can also be used for 30+ yr buy & hold, in addition to mkt timing. I prefer XIRR over time-weighted as it gives more conservative figures. Time-weighted can be a bit too optimistic at times 😉

      Worst will be those who simply bombard CAGR or some other annualised returns computation without taking into consideration cashflows in & out and the time/dates performed. Resulting in exaggerated returns via cash injections. 😣

      Hmm MSCI provides almost 50 yrs of Singapore stocks performance, with & without reinvested dividends. With so much free online data, retail can also be precise ... but only when necessary 😉

    3. Spur,

      With your level of sophistication, you are not "retail" ;)

      We can see your contributions at the fisherman's blog with facts and figures from freely available data. And no, we don't need a Bloomberg terminal to get the data! LOL!

      How many retail "investors" bother with risk-adjusted returns?

      Or is aware STI ETF or Singapore only mutual funds suffer from Narrow Country Focus risks?

      There are many ways to skin a cat.

      Some in the community got the gall to "pooh-pooh" big daddy's GIC and Temasek returns as "too low"!?

      When big daddy's returns are inflation adjusted ;)

      OK, now my maiden attempt to poke you. I like to poke people I respect or smarter than me ;)

      When comparing potential investments, between 10% or 15% got material difference.

      Between 15.2% and 15.8% got difference? Really?

      And I thought they are just rounding errors ;)

      Past performances are written in stone as its driving with the rear-view mirror. We ignore backward revisions ;)

      Evaluating future performances in 2 decimal places when we are just sticking our index finger into our mouths and then pointing it to the sky?

      OK lor!

    4. Hi SMOL,

      😆 😆 😂

      I like ur poke!👉

      Use past performance to infer future performance ... what to do, easiest option mah. I'm lazy you know! 😄

      That's why I prefer using large datasets over 20, 30 years e.g. country/sector/regional/global indices and ETFs ... greater probability of repeatability & reduce flukes or ending up with potential time bomb companies. Auto self-renewal and auto-implementation of survivorship bias 😉

      After all, investing using price action with prices at 2 decimal places ... Is that historical performance or future? 😛

      15.2% vs 15.8% .... rounding error over 1 year, but may be difference of $1.85M for an initial $1M portfolio over 20 yrs. LOL!

    5. Spur,

      Glad you can have a bit of silly fun with me ;)

      And to a day trader who makes hundreds of trades a day, a difference of 0.01% in brokerage fees is BIG difference over the course of a year!

      To me? I don't care, don't count, don't bother ;)

      I see you are a top down guy like me.

      We look at the hair, the face, the cleavage, the waist, the hips, then down to the legs ;)

      Cool guys wear shades; not cool to be caught leering mah!

  4. Quote : "Especially if the person using Microsoft excel XIRR has self-declared he/she is a LONG term investor, and does not believe in trading or market timing."


    I catch no ball. What is XIRR function has to do with market timing, investing and trading?

    1. CW,

      My point exactly!

      That's why I refuse to jump onto the XIRR bad england bandwagon!

      I stick with grey grey annualised returns.

      No need to give the illusion of "precision" when none is needed ;)

      Microsoft excel XIRR is the tool to calculate IRR, which is another name for Money-weighted method for computing annualised returns ;)

      Of course monkey see monkey do-copy cat-parrots have no clue:

      Money-weighted returns measure how well the investor did with the timing and amount of inflow and outflow.

      Is this the "optimum" computation method to use to measure LONG term investment performance without the noise from market timing?


    2. You made me dig up my old post to revive memory on what is XIRR. LOL.

      Question - how do you measure time-weighted returns? (I thought XIRR also takes into account time?)

    3. Rainbowcoin,

      Don't get caught up with the different methods of computation ;)

      The % results may differ (sometimes quite wide), but the dollar amount of your portfolio remains the same. And that's the important focus!

      Shoe sizes come in US, UK, and EU versions. Can argue unitl blue which is "better". But what's important is whether the shoes fit your feet ;)

      If you interested, you can google Time-weighted returns versus Money-weighted returns and you will get loads of explanations.

      See the formulas you will faint!

      Make a wild guess why I don't put up a link for your all?

      You want fish or learn how to fish?

      By the way, do you know what is simple rate of return (also known as accounting rate of return)?

      I use that for my annual trading performance. I keep it simple. I only Pentium II CPU.


    4. Hi SMOL,

      Aiya, I come and post link lah!

    5. Unintelligent Nerd,

      Spoil market.

      I was hopping interested readers can discover Investopedia on their own.

      Your link even better. Got examples and lots of hand-holding ;)

      Its a great way to verify those who got CFA qualifications whether they had muddled through their course.

      But then, no one takes CFA to be a better "investor"...

      We make our money first, then consult CFAs how to protect them ;)

  5. Some people use jargons and financial lingo to give the impression that they are very savvy mah.

    Like you said before, either trying to snake-oil bei kambings or ownself snake-oil ownself without even realising.

    Hello! Count in percentages? It's like counting biscuit tins to see if our 'long lui gong' got grow in numbers or not. Inside keeping 5-cent, 10-cent coins or $50 bills doesn't matter lah. It's the weight that counts and more tins than others means win liao!


    So bad dare to laugh at people when I know nuts about calculating returns. :P

    1. Endrene,

      Beyond the jokes and laughters, the technique of a well timed poke is to help jolt us to reality.

      Like asking, "Are you serious?"

      Some may discover they don't know fundamental analysis as much as they thought...

      Maybe that 2 day workshop cannot replace a 3 year business finance degree afterall?

      Then again, some have MBAs or CFAs also kenna "smoked" by the snake oil charming skills of statistical/financial manipulations ;)

      Tell me about it! I'm walking on thin ice judging by my competence with numbers...

      But that's precisely the point!

      Self awareness meant I put more effort on "Trust but Verify" when it comes to numbers :)

      More importantly, know when to consult those who are better at reading numbers than me ;)

      And pray I have the wisdom not to go to a snake oil peddler!

  6. Performance metrics should be designed according to the mission. My purpose is to grow wealth. So, the best performance metric I can think of to measure growth of wealth is growth in net worth, with preference for liquid assets because I like peace of mind. I don't care what time-weighted or money-weighted returns in percentage terms. I do care about the absolute gains from investment and job because I want to know which activity is worth spending more time on to grow wealth. If most of the growth in net worth comes from job and the gains from investment is negligible despite spending lots of time in it, then it's time to be a passive investor and focus on career. Conversely, if most of the growth in net worth comes from investment despite spending less time on it than job, then it's time to consider becoming a full-time active investor. If absolute gains from both investment and job are impressive but growth in net worth is not, then it's time to put more emphasis on saving money and less on earning money.

    For professional investors, I think measuring investment performance down to 2 decimal places in precision do make sense. Professionals need to impress their clients and bosses. In competitive sports, winning by seconds is still winning. So, winning by 0.5% matters if someone is deciding which fund manager to hire, who to promote because only one person can take the job. I am so glad as retail investor, I don't need to care about this kind of wayang show. I just do what I think is right, and not what impression it will leave on clients/bosses. LOL.

    One problem with performance metric is some things that really matter cannot be measured and quantified into a number. Job satisfaction, feeling of accomplishment, being useful, how much sacrifice is made to health and family to hit that performance number, how much is one gaming the system to hit the KPI, proportion of substance versus form behind that impressive metric etc

    1. hyom,

      You've hit the nail on the head!

      People often forget WHY they started "investing" in the first place?

      Who invests in order to breakeven one day? No one!

      Why then would we accept the bullshit of relative performance?

      Of course only bei kambings swallow hook, line, and sinker what vested interests sold to them, "Look! STI tanked -30%; we only lost -20% managing money for you. We've outperformed!"

      I'm with you on absolute performance; so do other accreditted landowners when they select shepherds to tend their flock ;)

      If its a case of the more we invest the more we lose, or at best its CPF like returns, then might as well do voluntary contributions to CPF! Why bother?

      As for differences in 2 decimals places, I'm in marketing and sales. Its all spin from an insider perspective ;)

      Let use some examples.

      Can anyone tell the difference between 4K and FHD images on a smartphone with their naked eyes?

      How about spotting the motion smoothness between a 120hz and 144hz gaming computer monitor?

      A lot of tech reviews using industry benchmark tests will of course show up the "differences".

      More "honest" reviwer will share in REAL WORLD usage tests, there's no difference.


      What do you see in all professional fund management disclaimers?

      PAST performance is no indicator of FUTURE success!?

      Pray tell why a difference in 2 decimal places will matter in REAL WORLD conditions to you as an "investor"?

      You have alluded to the crux in your last paragraph. Some of the best evaluation tools cannot be quantified.

      Hence landowners value a skill that cannot be taught - the ability to READ people.

      Hire or put their trusts on the wrong shepherd...


  7. temperament,

    I've break my rule just for you; you being "special needs" and all...

    Compound Annual Growth Rate

    You read and figure out for yourself what you doing now is CARG ;)

    To be honest, the moment you mentioned you ruled out cash injections, I suspect those who got study Business Finance already rolled their eyes...


    But don't mind them!

    You ownself happy can oredi!

    Just don't share your own homemade toys with others ;)

    You mentioned: "i always look at in the end what U have is for real; not now and then."

    Well, are percentages real?

    When was the last time you bought anything with percentages?


  8. Hi Smol,

    I am neither of the both. I am just a simple "passive income" investor.
    I buy and hold the stocks (investment portfolio) and live on the passive income generated by the portfolio. I don't monitor the share movement and focus on my leisurely lifestyle daily. Live life to the fullest is my main focus.


    1. Ben,

      I suspect you are relatively new to this business of "passive" investing, and have not been through a -50% cut in dividends or porfolio value.

      I love "passive" customers. I'll quietly slip products and services to them. And unless they expressly write back they don't want, I'll bill them ;)

      At work I'm comfortable with "passive" colleagues. Less competition! Of course I'll blend in by saying I don't care or I lazy too. But after work and weekends, I paddle like mad under the waterline to get ahead of them ;)

      And in trading or investing, I'll love to have "investor" like you to be on the other side of my positions - the passive ones. Better you than to face those pros who spend all their waking hours trying to steal my candy ;)

      Simple good; I'm more wary of the smart ones!

    2. Hi Smol,

      I have been through the mentioned circumstances in which you mentioned. In fact, I am currently on 45% of the total invested portfolio. This is the learned lesson gained over the year.

      I still maintain the said counters which result in the said paper loss in the portfolio value. I have been making regular investment over the months till October 2018. This has resulted in increasing the paper loss to the current 45% from the early loss of 18% of the invested portfolio. You may have wondered how I ended incurring such paper loss. This is due to my inexperience during the younger days in which I invested 75% of the investment proceed into one counter. The share price of this counter dropped from the average purchased price of $1.71 to the current price of $0.31. Since that incident, I started to spread the fresh fund into many counters. This has increased my investment circumstance.

      I have gained great insight and experience from such investment. Lesson learnt.

      This has led me to focus on dividend growth investment which has been handy and beneficial to me on regular basis.


    3. Ben,

      This sounds more like the real life experiences I and others have gone through ;)

      Thanks for your honesty and sharing! Passive is expensive if its an euphemism for not knowing what we are getting into :(

      Hope you understand whenever I hear blue skies, sunshine, motherhood statements, I like to delve deeper as you may have noticed, although I "talk male-chicken" a lot at this watering hole, I don't take bullshit from anyone ;)

      The more I like and respect a person, the more I poke! How else to get to know the person beyond the niceties?

      I don't treat readers as "customer" ;)

    4. Thank Ben for sharing real retail investing on compounding investment return. Compounding investment return is never 8th wonder. It is for us to wonder after few years in the market which is right for us to continue.

    5. You are welcome. I will say that this is my preferred way of investing after many many years of experiences in investing. No doubt. I have paid a significant amount of fund in learning this lesson. I still keep the counter which resulted me in having the so called "paper loss" as a significant reminder for me to record this well-learned experience.

      You may have wondered why I still maintain such counter. The remaining proceeds from this counter can be channeled into other counters which can generate dividends for me. I am the type who will buy and hold. I just maintain the investment in the existing counters. I no longer have a full-time employment which can generate fresh fund for new investment. It's alright for me as the generated divided from the investment portfolio is sufficient to last me for at least a decade based on the current expense. I can reduce the existing expense as I want to do so. Such approach will enable me to last me for at least another decade. I still have an option to do some part-time hustle like Smol is currently doing at the moment. This will increase the number of years with the additional income to supplement the existing dividends from the investment portfolio.

      I believe that this will last me for the remaining years in my existing lifetime with the above-approaches taken or pending to be taken. It's not a must must approach for me to remain status-quo. I make the necessary decision in accordance to the existing circumstances.

      The most important thing is to be happy in what I am doing and be content with the simple lifestyle which I am currently having. Life is precious and cherish every moment is my way of approach.


    6. Ben,

      Cherish the moment.

      Our body, heart, and inner spirit will tell us what to do, if we listen to them ;)

      Life is nothing more than tired rest; hungry eat.

      And before we know it, we would be gone to sell salted eggs...

      To return back to the state before we were born.

      Star dusts.

    7. Hi Smol,

      I like your phrase "tired rest; hungry eat". This is the way how life should be as such. You are right to indicate that one should follow his/her heart. I believe that this is the way in which the true voice and intention of our well beings desire to be in.


  9. temperament,

    Don't worry. There's no confusion for everyone here that you are not finance educated.


    Don't hit the face!

    See? You like to ask questions that you have already made up your mind oredi ;)

    We are on the same page.

    The percentage value will change depending on the chosen computation method. No need to go to advance ones like time or money weighted, just chosing to calculate using COMPOUND or SIMPLE interest oredi got differences!

    But returns in money remains the SAME.

    I prefer to calculate using simple interest. Its primary school math ;)

    And in dollars since I buy things with money; no businesses accept payment in percentages :(

    I'm sure you have made fun of the educated ones before right? Study too much until their brains become "sort sort teh"...

    You should see the hilarious discussion on networth!?

    Some don't include the property they living in? They definitely HDB heartlander!

    Some don't count CPF as its money they can't see or touch until 55 or later; not liquid enough? Those who voluntaruily contribute to CPF will be pissed!

    Got to love "educated" people like those above!

    If not, how can we "bo-tak-cheh" urchins run circles around them?


  10. Luckily there are still at least two blogs around to talk male chicken for a long time

  11. temperament,

    I see ourselves as the 8 immortals crossing the eastern sea - we each do it in our own way.

    CW has his 10 baggers at individual stock level. I have my multibaggers at trading account level. You? We have no clue except you got your 2nd investment property and a wife that's quite powderful in her career ;)

    Don't take benchmarking too seriously as most of us are computing it in our own "suka suka" unprofessional manner anyways; its one of those silly my one bigger than yours meaningless ownself lie to ownself exercise lah!

    The only metric that matters is ABSOLUTE RETURNS.

    Low threshold is got make money or lose money?

    Next threshold is got beat bank fixed deposit rates or not?

    Then the next hurdle rate is can beat CPF 4-5% yes or no?

    From the answers we can decide whether to carry on or stop and desist ;)

    That's the PURPOSE of any performance review - to make a bloody DECISION!


  12. temperament and CW,

    I've been AWOL before for several weeks because I was distracted by something else that's more fun...

    Simple philosophy for hobbyist blogger - happy blog; not happy don't blog lor!

    CW, you can be super prolific. One day can have several blog posts!

    I can't match your energy level but I think I can honestly say I've never ran out of ideas to "talk male-chicken"!?


    Quite a few bloggers have or are dropping out. But then new ones are popping up. Very normal. Cycles are everywhere ;)

  13. Hi SMOL,

    Not good lah. I'll rather have the old but gold over the ETF of bei kambings.

    Was telling the butterfly recently. If all the wisdom bloggers and synergistic bloggers leave the blogosphere, I'll also quit!

    The rest are no fun and cannot learn stuff from them :(

  14. Hi SMOL,

    Cannot like that say lah. Must applaud them for their creativity in getting assets off the balance sheet!

    Make oneself appear smaller than they seem mah!

  15. Unintelligent Nerd,

    Old? I hope you meant those old fogeys over the other side of the pond ;)

    Ahem. I not old OK? I mellow.


    You so bad one! People spend hours doing research to summarise a summary of a summary...

    You say learn nothing? Like that you go read the original book or article lor! Wink.

    You want fun, you want educational... You think we are the product of the Scandinavian educational model?

    Give chance!

  16. Unintelligent Nerd,

    Some can't wait to tell the world they got a million here, a million there...

    Some don't need to be so hard up... Just by discreetly showing you own bonds - not bond funds; not 2nd class SSB - will reveal the same without being vulgar ;)

    Or share with their passive income, they still can have $60-$80K per year leftover for savings. Now that's classy!

    I much prefer this kind of seduction - sheer chiffon ;)

    I'm not impressed with girls that reveal too much cleavage or butt cheeks.

  17. Hi smol



    1. sy sy,


  18. Too many "long-term investors" providing "weekly commentary" on the markets these days mah.

    "This week, the markets hit a new high. So, my counters are green."
    "The previous week, the markets were red, so my portfolio became red."

    I dunno what to say lah. If it does not merit scaling-in or taking profits/partial profits, but rather, staying the course, need to tell everyone every week you staying the course meh?

  19. Hi SMOL,

    Passive income from dividends still quite vulgar and in-the-face leh.

    I liked how the businessman bloggers around us allude to their wealth. That way very powderful!

    Agree on the bonds too. That is a subtle way of flexing.

    Let's say.....some ladies are more gifted in marketing themselves. I'm not too keen on those who utilize their net tangible assets in highly liquid markets. These same ladies tend to feel threatened when they get out-competed by other ladies with high intangible assets and can't even wonder why that is the case!

  20. Unintelligent Nerd,

    Saying the full nudity ammount you get in dividends is in your face vulgar; saying you can save $60-80K from your dividends is classier as it leaves something to the imagination ;)

    Just take the formal evening gowns of ladies. They can reveal a lot of skin...

    The trick is not to cross the line least others think you're a prostitute or a gold digger ;)

    Same for guys. We want to look successful; not nouveau riche ;)

  21. Unintelligent Nerd,

    Study psychology and enjoying literature got lots of common ground when it comes to "reading" people ;)

    Easy to spot what people SAY and DO often contradicts...

    And who is not wearing any clothes but smoking everyone its an exclusive cloth that only "true believers" can see!?

    If you think you can, you can!

    I just know when I get up in the mornings, I don't jump out of bed eager to help others get rich ;)

  22. Hi SMOL,

    I think it depends on how reflective the person is.

    I know of psychology majors who have minimal to no understanding of people and their motivations. They remain as solipsistic as ever to the realities of others.

    Just today, I had to hold my tongue and smile to myself when a high-flying business/finance relative shared that their wish is for their son to pursue work that is highly commoditized, competitive, and unscalable with low margins. Shouldn' managers know better?

    It brought to mind one of CW's example regarding his accountant colleagues who could have done decently in fundamental analysis but were totally oblivious of the skill-set they possess.

    Look who's talking. I am the poster child for ever learning but never understanding!

  23. Ah! I see. I failed to catch the nuance. ;)

  24. Unintelligent Nerd,


    That's why its important I let others poke me.

    Although I can poke others, its hard to see my own blindspots ;)

    A management position is just a job title. That's why we differentiate a manager from a leader.

    A leader is a shepherd.

    Not every manager is a shepherd ;)


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