BULLy the BEAR

How I read (almost) 52 books a year

2012-01-20T16:06:00.002+08:00

Since a lot of readers commented that they had only been reading 1-2 books max in a year, I thought it'll be a good time to share what I did to read that many books. First of all, let me add that in my opinion, reading many books is not as important as reading the right books. I rather read less books but books that are important and crucial to your mental well-being, than to say, reading many many books that are just trashy. But it's the law of diminishing returns that really makes it harder and harder to find those books that bring the right amount of inspiration and motivation to pump your hand in the air and gave a mental shout of victory. The best books are books that told you what you know internally already, in a way and mannerisms that makes it so easy for you to absorb. If I can read a handful of such books in a year, I think it'll be a great literary adventure for that year.

I read a lot more after I wanted to have a more disciplined approach towards it. In the past, I only read like less than 5 books in a year. I thought there is something wrong with this because there are so many things - wisdom and experiences - captured in books, written by people who had lived entirely different lives, that if I didn't know about them, I couldn't be living a full life, so to speak. It's a very good habit, I'll say. Things that I never though I knew, I actually knew. Besides being able to talk about almost anything, I find it useful in my work when I can relate certain facts or story and weave them into my lesson plans when teaching.

These days, I'm more likely to hold a ebook reader than a physical book

Anyway, here's how to squeeze more time and have some spare time to read:

1. I never watch tv. In fact, I don't even have a tv at home now, a fact that I'm proud of (despite the many cries by relatives and friends for me to go get a tv). I watch things from my computer though, because firstly I can skip by all the advertisements that a show usually will be splattered with, intermittently every 15 mins or so. I used the spare time to read instead. Roughly I can save around 2-3 hours like that to spend on reading.

2. I read while commuting. Though I don't bring my gigantic kindle dx around with me when I travel, I either have a physical book with me or an ebook saved in my handphone for idle time that pops out occasionally. I make it a point to always have something that I want to read in my bag (or handphone) so that when I'm commuting or when friends I'm meeting are late, I can whip it out to spend the time. Since I've reduced the amount of time that I spent travelling now, I read in between classes while waiting for students to come. I think I can save around 1 hr per day reading by doing this.

3. I always read before going to bed. Minimum of 30 mins or until a suitable stopping point in the book. It had been a habit since a long time, so besides calming me down to ready my mind to go to rest, it also serve as a routine that brings me to sleep. If I don't do it, I might even have problem sleeping! I think everyone needs to prepare for bed by doing things that will relax their body, so that when they actually go about sleeping, their mind will not be so alert and restless. This bedtime reading will allow me to spend a minimum of 30 mins to 2 hours reading.

So, in total, I think I can do about a minimum of 3 hours of reading time per day on average. Of course, there are other hobbies that I would do occasionally if I'm not reading, like guitar and playing computer games. But I think spreading between these few hobbies that I have, it's not too hard to be able to read an average sized book (around 2-3 cm thick) in a week.

Try it, you might find how easy it catches on!

(I'm off for a trip on 21st Jan, will be back on 26th Jan)

Reflection on 2011

2012-01-09T12:02:00.000+08:00

After doing my end of month accounting for the Dec 2011 and thus wrap up my financial year 2011, I realised that a lot of my networth was wiped out. Okay, everyone's definition of networth is different, so here's mine - it's defined as all my assets (includes cash, marked to market investment portfolio, whole life insurance cash value, mmf and cpf) but excludes my residential property. I also didn't include debts that I owed to the hdb because of the property. I think you can roughly say that's my investible networth since most of it is cash that I can utilize at short notice. I know you can't use cpf anytime you want, but then again, I don't have much of it anyway, so it doesn't matter significantly.

With this kind of definition, I realised that my networth is whacked down to around 2008, way before I had started any kind of disciplined savings. I had never had so little money in my savings account; the last time being just right after I had graduated from university. Wow, what a journey that I had in 2010/2011 right? But I had never had so much satisfaction and fun, so it's all worth it.

I realised that I had to begin from scratch again, working hard, savings hard and building up that excess money that I can hoard away for maybe another life's big bombs to hit me again. Sometimes I wondered if I had spend way more than I can handle. But the deed is done, so there's only one way to go and that's forward. I guess it's back to the 50k per year savings target. I'm really trying hard to double that savings but I think realistically, it's not going to happen this year 2012. There's simply no way to save more than I can afford to do so without sacrificing my current standard of living, so I'll have to do it by upping my income level. That's the challenge isn't it? I think if I can manage to save up 50k this year without including my mortgage payment, it'll be quite a feat already. That's technically 60-70k in total. Gulp.

So what had I set out to do in 2011?

1. Save 50k. Okay, that's old story, been there done that. Even though halfway along the year, I had to start paying mortgage for my flat, so the 50k includes all the mortgage payment too (I don't have much cpf, as mentioned earlier, so all of it is through cash)

2. Read 52 books a year. Nope, didn't manage to do that but I came quite close at 50 books. Here's the books that I read in 2011. Most of it is fiction, not some financial books that I've been gorging on since 2006. I realised that fiction taught me a lot on how to be human being. I haven't been reading so much fiction since my primary school day. PRIMARY SCHOOL - can you believe that? My brains must be super lopsided, haha!

You can see that I'm a loyal reader. If I like a particular author, I tend to 'cheong' all his/her books.

3. Set up and finish up the house. Okay, that's mostly done too. I still haven't got my bedside table and a tv. Yes, most people who came up to my house will definitely remark on the fact that I don't have any tv at home. I just don't see how a tv will fit into my life, so that's quite a low priority in my waiting list of things to buy.

In retrospect, I think 2011 had been a fulfilling year. It's a year that I had spent more than I had ever done in my life. It's a year that my friendship with my parents had just begun. It's a year that I had experienced a lot of new things (like cooking and maintaining the home, buying furniture, supervising renovation etc). It is certainly a year that is a big milestone in my life

Making mistakes

2011-12-30T14:30:00.000+08:00

I made a couple of mistakes these few weeks as I shifted over to my new home. Most of them happened in the kitchen, because that's the part of the home that I had least experience in. In school, we make mistakes when doing tutorials. In work, we make mistakes in handling people and other more technical stuff. At home, what kind of mistakes can I make?

Well, I'm going to list it out:

1. As I was sweeping stuff into my dustpan, I moved it over to the rubbish chute (which is inside my home) to clear it. But without concentrating on what I'm doing, I didn't grip the brush hard enough, as a result, the whole brush fell into the chute, all the way down to the bottom. It's so silly that when I told my wife about it, we all laugh at the kind of clumsiness we can exhibit. My wife had her own episode too - she was putting some door stopper on the window when it dropped off. All the way down from the 22nd floor! Thankfully it's made of sponge, otherwise who knows what damage it can cause!

2. Things that look like silicone might not be silicone. Silicone has high melting point, so it can withstand temperatures up to 250 degree celsius plus minus. I had a scrapper that I had bought which I thought was made of silicone (maybe it is, but not the heat resistant kind), so I used it to fry pancakes with. As a result, part of it melted. Luckily I saw white marks on the pan and ceased using it, otherwise I might become plastic man instead.

3. I first started using the oven by re-heating frozen pizzas bought off the shelf from supermarket. I preheated the oven to a certain temperature, accordingly to the 'instruction manual' at the package of the pizza. Okay, what's so difficult about preheating the oven. Just turn the knob to the desired temperature and wait right? Wrong. I didn't know that there is a temperature light that goes off when the temperature is reached. So the pizza is half cooked. Seriously, it's silly.

4. Cooking without researching (meaning sufficient youtubing and reading through the recipe thoroughly) is a sure fire way to fail. Fail to plan? Plan to fail. There are countless times that I thought the wife knows what she is doing, and she thinks I know what I'm doing. In the end, nobody knows what they are doing.

I think making mistakes is part and parcel of trying out new experiences. I haven't made so many mistakes for so many years since I left school. That means I haven't been trying out so many new things in the past. While new mistakes are unavoidable, repeated mistakes are totally avoidable. I think that mistakes are life's great teachers, if you wish to learn from it. If you live your live to avoid making mistakes, then I'll say your life is pretty safe and conservative. Not much adventure too.

I think the same goes for investments. I've made countless mistakes, many of which I'm still living through the repercussions. But that's life - we have to learn from our mistakes and move on. If because of this and that mistake, you totally give up, then you'll never see the breakthrough. Thomas Edison is said to have made 2000 life bulbs before successfully finding the right material to make the filament. Did he have 2000 failures? Nah, he discovered 2000 ways that a light bulb will not work.

So, don't be afraid of making mistakes. If you haven't made a mistake today, you haven't tried something new!

Taking on full responsibility

2011-12-22T18:39:00.001+08:00

The recent mrt episodes in Singapore highlighted a couple of bias that can be equally applicable in the investment/trading mentality. I saw some report saying that since the CEO had been in the company, the company had grew its profit from xxx to yyy per annum. This implied that the CEO is responsible for creating the profits. But when the spate of incidents causing the train to breakdown happened, there's no report saying that the CEO is responsible for it. I mean, why is it so easy to attribute good things to the CEO but not the bad things?

Will that happen to people who invests or trades too? I guess so. When the stocks that you bought went up, it was a good call or a good investment decision. You picked a stock that ran up, so you are good. But when the call turns sour, you start blaming the general investment sentiments, or the euro crisis, or the fact that you are not there to execute the orders, or that you are busy with work. A thousand and one event happened to prevent you from making the right decision, it seems to me. That's just self delusional.

If you keep on coming up with excuses on why you cannot do this or that, then perhaps you are shifting the blame to anything or anyone but yourself. By doing so, you are empowering others, making yourself a victim of the circumstances. Playing the victim is such a good role to play, it would seem to me, because a lot of people like to complain about their lot in life. Okay, granted that everyone needs a space to vent out their frustration and to release the emotional steam that builds up inside you. But what do people do after they complained? They'll just go about doing the same thing again. If you keep doing what you have been doing, you will keep on getting what you have been getting. I don't know about you, but I try to distance myself far from such people because they tend to be quite infectious in their negativity. I call them vampires - real life vampires do not suck blood, they suck energy from people around them and make others vampires too.

So, this coming new year, how about putting up a resolution to change this mentality? Instead of thinking that "I could do this if only _____", how about thinking that "I could do this by doing _____". Only by taking full responsibility of your situation can you empower yourself to do the necessary changes to improve it. Unless you're contented at playing the victim, of course.

Choosing quality over quantity

2011-12-12T10:00:00.000+08:00

As I get older and hopefully more mature, I realised that if I have to choose between quantity and quality, I'll go for quality these days. It's not always like that. There was a time that I thought more is good. For example, having more of a cheaper share is better than having less of a better one. Or eating more lousy food in buffet is better than eating less but higher quality ones. There are many many such examples where I can quote you that lets you see how I chose quantity over quality. Hopefully I will reduce such nonsense from now on.

Specifically, here are the areas that I would need to rewire my thinking regarding the choice of quantity vs quality:

1. I've always had a target to read 1 book a week. Initially that target was set so that I can read more. I remember the times when I was reading maybe less than 5 books in a year - that was not okay for me. I wanted to change that, so I set up a target of 52 books per year, since 5 yrs ago. While I understand why I set the target back then, I think the reason for such a goal no longer exists. I don't think I need to force myself to do such a target anymore.

As such, I want to read less and enjoy more. Instead of reading 52 books per year, how about reading 12 good books in a year?

2. Trading 20 ideas in the stock market can be further reduced to trading 10 good ideas in a year. Slowly but surely, I'm getting more patience about the kind of setup I want to see before entering a position. I am no longer looking at the market as fervently as, say 2 yrs ago. When there's nothing to do, do nothing. That doesn't mean that you totally ignore the market - it simply means you wait for the right time and right situation before doing anything. If I miss it, so be it. I realised that there are many ways to make money, but unfortunately, going through the stock market is not my way. That's an important realisation. With that thinking, I not longer try to showoff my skills (not that I have any) or trying to hit certain targets. There are other ways that I can earn my money and fulfill my other goals at the same time. I would focus my time and energy on that instead.

3. Playing 15 so-so computer games is something that I simply cannot afford to. If I want to fulfill my gaming needs (yes, there is such a thing in me), I would rather play 1-2 good game. Again, it's a conscious choice of quality over quantity. I will have to reduce the amount of games that I buy online over steam.

4. A few good friends is better than 30 so-so friends?

The whole point of quality over quantity is really also to reduce the clutter in your life. With less stuff and stuff that you really really want, you can increase your satisfaction and happiness while not cluttering and filling your life energy with all sorts of rubbish. Life works best if it's simple but not simpler. Perhaps when one gets older, you'll realise that time is about the only asset that is decreasing whether you use it sensible or not. Not money.

Hill Harper's "The Wealth Cure"

2011-12-07T10:00:00.000+08:00

If you're looking for prescribed, step by step ways to kick start a healthy relationship with money and wealth, then Hill Harper's "The Weath Cure" is not your type of book. Initially when I read the book, I found it rather strange because of the way the book is structured. There are 5 big parts to the book, which each part having a couple of smaller chapters that is related to the parts. But here's the thing - I don't see the relation at all. Perhaps I had been to used to seeing other financial related books that are usually more straightfoward. I'm not saying it's a bad thing, it's just different.

Halfway through reading the book, I realised that this is a chicken-soup-for-the-soul kind of book. Each of the smaller chapters are actually stories written in the point of view of the author himself. I thought it's a very refreshing way of looking at financial related stuff. The chapters are not written in the typically sermon like way, "You must do this..." or "you should do that...". Instead, the chapters are really just reflections of things that had happened to the author as he lives his life. Like chicken soup for the soul, this book can be re-read again and again. Depending on your situation at different points of your life, I'm sure you'll get different perspective from the stories. Same story, different life stage, different interpretation and meaning. That's why this book is a keeper - it's not something that you should just read and never pick it up again.

I don't like all the stories, to be honest. Some of them are inspiring, some are just puzzling. The inspiring ones touch on the key points of important ideas without giving you too much details. Thankfully, there is a bibliography at the end of the book for readers who wish to dig more into the subject matter. This makes the book an easy read, without all the (boring) details and leaving the motivation to find out more solely on the reader. The puzzling stories are those that I think shouldn't have a place in the book. It's either because I do not have the life experience to appreciate the reflections that ought to follow after each story, or I simply don't see the point of the story. Fortunately, such puzzling stories that leaves you duh and speechless are few and far between.

If you've read about other financial related books, you'll find familiar concepts and principles. How many new ones are there? But that's not the point. What I liked about the book is that the same old concepts are put into fresh new perspectives - the author's perspectives - and that makes this book an interesting read. I don't really know the author as a celebrity (sorry, but I don't watch the CSI : NY at all) and you can't really tell from the style that the author writes. The author writes in a very down to earth, honest manner, which is kind of endearing especially if you know his background as a celebrity. He certainly doesn't seem like those financial wreckball kind of celebrities that the mass media loves to publicize.

Would I recommend this book? Yes, if you're just starting out on changing your relationship with money and trying to find out more about wealth. If you're looking for more detailed answers, this book isn't your cup of tea. Nevertheless, it's still a good and enjoyable read to see how different people interprets age old principles in their own way. I'll say it reads like a blog, haha!

Positive mindset vs possibility mindset

2011-12-05T10:00:00.000+08:00

I was reading this book by Dr. Robert Anthony "How to make the impossible possible", when I discovered that the author actually differentiate between positive mindset and possibility mindset . We know the usual positive thinking - if we think positive, then the outcome can also be positive. This is opposed to thinking negatively about a situation. But I've always wondered about the limitations of having a positive mindset and the book addresses exactly that problem.

I thought that if I think hard enough, will things really happen? For example, if I 'will' a book to move, will it really do so, even if I'm ultra positive about it? To the majority who don't have special powers, I guess the book is going to stay there. So there is a limitations to how much positive thinking can do to us. It's like if you never study hard for your exams, no matter how positive you are about it, you probably wouldn't do very well in it, unless you're a genius. You can ever call such a person naive, or overconfident. Positive thinking can make a person in denial of the actual situation.

Now what is possibility thinking? That is when you think that things are possible in the first place. For example, if you think that the book is going to move, having a possibility mindset means that you know that the book is not going to move on its own (though it's possible to move it), so you're going to move your butt and move it yourself. Or if you know that sitting for a test without studying isn't going to work but it's within the realm of possibility to pass and even to ace it if you just start working hard on it. Having a possibility mindset essentially entails that things are possible, if you are willing to do it. This mindset takes into account of reality and places power in your hands, because only you alone can change an impossible situation and make it possible.

It's a subtle difference but it makes all the difference to me. So actually, when I referred to having a positive mindset in the past, I'm really talking about having a possibility mindset - an attitude in life that views that things are possible if you are willing to take actions to do it. I'm not saying that having a positive mindset is not good - it's just not good enough. A possibility mindset allows you to think that something that you deem impossible is possible in the first place, and then forces you to address on how to achieve it.

Here's more examples:

So are you ready to take on the world? Haha :)

Am I certified to trade?

2011-12-02T23:24:00.001+08:00

As I logged into my poems account, I saw this screen asking me to do a test. I think it's the new ruling that is going to take effect on 1st Jan 2012. If you do not satisfy certain criteria, you'll be asked to take a test to determine whether you know what you are doing. If you fail, you won't be able to buy (though you can sell your existing holdings, from what I read from the site). I don't know who the ruling is trying to protect - the advisors or the consumers. Anyway, it seems that I do not have to take the test since I had made more than 6 trades with regards to shares. I can't do CFD or unit trust myself though, until I take the test, that is.

Anyway, I would like to take the test and see if I 'know' my stuff or not. It'll be interesting, haha!

The joys of working from home

2011-12-01T15:21:00.001+08:00

As I was starting work in my new flat, I realized that there's a few things that I liked about this arrangement. As I was slacking now after my student left, I realized how fortunate I am to be able to finish work and still be at home. I cherish this feeling and felt an immediate sense of satisfaction. On reflection, I think that working home allows me to :

a. Multitask things with regards to my personal and work life. For example, I could be in between doing household chores and having tuition at the same time. Of course I don't do it while teaching, but I do it during the lull moments like when the student is doing work. These kind of stuff are important to me as a time saver because in the past, I had to work outside and come home and settle my personal stuff. In the future, I would even be cooking lunch/dinner while working. That is something that most people would not be able to experience.

b. Since I'm at home, I can start using some stuff that are useful teaching aids. For example, during today's lessons, I was showing a student about how sounds waves though invisible can actually be felt. My desktop and my big subwoofer is just in the room, so I popped over and asked her to bring a piece of paper to place is near the subwoofer while I played a sound with a good beat to it. The paper became vibrating and I began linking that to the lessons itself. I think such interactive learning cannot be done in the student's place, because I cannot possibly carry all my stuff with me when I travel. Since I'm now stationary and fixed in one location, I can truly add another dimension to the lessons.

c. I feel more energised because usually it's the travelling and walking that tires me out. With that out of the picture, I can have more time of my own and that alone is priceless. I can free up the travelling time in between locations (usually takes up to 1-2 hr per day for a fully booked day). I can nap, I can settle my household stuff, I can prepare lessons, I can play games....infinite combinations with one single result - it's making me a very very satisfied and happy man. I wonder why I didn't do this sooner!

The answer to the question whether the expensive resale and expensive renovation is worth it or not, should be obvious to me by now. A resounding yes. It's one of the best thing that can happen to me in 2011.

Cbox outing @ Beng Hiang

2011-11-28T15:13:00.001+08:00

Bullythebear had a lunch outing on Sat 26th Nov 2011. It had been quite some time where we had a gathering with the guys/gals from the cbox community. Anyway, thanks to Neophyte who initiated it and passed the baton over to me to handle the rest of the logistic. Not to forget sfry who sponsored the lunch though we had never met. It was always the kindness that we experienced from strangers that we will always remember deep in our hearts. Had a great time that day from 'our' restaurant Beng Hiang at Amoy street.

Here's all the dishes, in chronological order. Sorry for the first dish, I forgot to take pictures until we're deep into the dish, haha!

Are you expecting to see people's faces here? Nah, I'm too smart for this. Anyway, it's a unwritten rule that no pictures of faces are taken during the outing. Interesting to see how the faces match up to the online personality, haha!

Starting a new friendship with an old friend

2011-11-24T19:18:00.001+08:00

Today I went to Sitex (the computer exhibition at expo) with a new friend. Rather, he was an old 'new' friend because I've known him for many years but perhaps this time round, I really treated him like a friend. Kind of sad, but I'll always say it's better this way then never. You will never know the unintended consequences when you sow a seed into the universe. In my case, the seed is me getting a flat, renovating it and eventually moving out of my current home into it to live another sort of life. The known consequences are the drain into my financial resources, and of course the time and effort needed to ready the flat into a livable and homely place for me to start a family. The unintended consequence of this seed is that I started to know a friend all over again. Unintended is not necessarily bad, it's just...something that is not known in advance until the event happens. This new friendship that I started is, by no means, bad, of course.

This is my new Xerox printer that I got from Sitex 2011

So we went around Expo getting the things that I needed to get the new flat ready for my move-in. Firstly, I needed to get a broadband connection so that I can access the internet at the new flat. Since during computer fair, there's usually a good discount or extra freebies for new sign ups, I wanted to go there early to queue (if necessary) in order to get the good value plans that I wanted. Eventually, when we reached there, there wasn't such a promotion for the plan that I was looking for, so I didn't even queue for it. But for the few days before Sitex even started, my friend and I began discussing different possible set ups in my new flat. He is used to (and still is) tinkering around with his computer, ever since he got one maybe like 25-30 yrs ago and had been an avid computer hobbyist ever since then.

After getting my printer, we went over for lunch at Lerk thai there, where I treated him to thai food. It was a rather strange feeling because I can't remember having lunch with him in a restaurant for ages (maybe never, sad-ctually). We never really have a close relationship and I would so like to begin one right now. What better time than now, because we're never going to get any younger and more energetic than we are today. With that thought in mind, I also went to book a tour with him and his wife, even though I hated those guided tours and much prefer to go free-and-easy. In guided tours, you are more like having a work schedule with a fixed agenda every day, rushing from one tourist hot spot to the next, snapping this photo and that, buying the must-eat snacks and visiting the must-visit localities. It doesn't feel like a holiday at all; it feels like work.

But for them, I'll do it. It been a while since I went to a tour with them. The first time was a trip to Genting Highlands when I was 15. The next was a trip to HK when I was in my early twenties. This up and coming trip would be the third. Three pathetic trips in over three decades of us knowing each other. I think I can and should do more.

After all, they are my parents and I am their son.

(Thanks smol and ak for their blog posts so that I was suddenly 'jolted' to spend more time with my parents. My parents are still younger and I'm younger still, so there's a good many years to begin a fresh new relationship with my parents - to know them as friends.)

My reshuffled priority in life

2011-11-15T21:09:00.001+08:00

I realized as I sat in my new home, that setting up a home is financially draining yet at the same time is very satisfying. As the furniture slowly trickles in and your house transforms into your home, with all the little imperfections that you will come to appreciate and all the weird corners that you can stand on to view the home that nobody knows but you, an immense sense of fulfillment fills me up. A place that you can truly call your own is such a powerful feeling to have. I think the feeling would be multiplied many times if the next month is the last month that I have to pay the mortgage loans.

Is it worth so much money? I think, so far, it's a resounding yes. Except for a few parts that I think could be further improved (I realized quite early in this renovation game that there's no such thing as a perfect design - there's always this little corner that you can do better on and that little space that you regretted doing...ah, the perfect vision of hindsight), I'm overall satisfied with how the whole thing transforms an old dilapidated resale flat to the present renovated and modern look.

I'm sorry if readers coming in to the blog to read some financial stuff about making money in the stock market have to endure reading me talk about housing and renovation. It's just that such things are taking a bigger part of my interests now. I've little patience for the market these days and I loathe to spend so much time on it. Interesting how life turns out eh? haha!

The last few ticks of my to-do lists

2011-11-12T01:10:00.001+08:00

Finally finished the bulk of my work year! The rest of my work schedule are just some 'stragglers' from the graduating batch and maybe a few students for the preparation in the next academic year. I always said that I've never worked so hard before in the previous years, but I've to say that again this year too. Now that the bulk of it is over, I can finish settling some issues in my personal life.

1. Need to settle my housing once and for all and get ready to move in. This housing project had been dragging on for ages, perhaps starting around June/July and lasted until now. I really have no time to put my energy and effort into it, but no excuses now. I'm hoping to move in towards the end of the month. I've still got a few things to settle, mainly just the buying of the things I'll need to use when I shift over to the new premise and setting up some infrastructure to start a classroom. Sounds like fun :)

2. Catch up on my social life. Life of a tutor is pretty much like the life of a bus driver, or any service oriented staff. Ask yourself the next time you're shopping on a weekend or on a public holiday. Who's the one driving the bus? Who's the one serving you food in the restaurant? Who's the one serving you when you are buying stuff in the shopping mall? Well, the nature of my work is such that I'm busiest when others are not and vice versa. As such, I missed out on a lot of social occasions that I need to go but couldn't. It's time to play catch-up on those. Sorry people, if you've not been hearing from me, you'll do so soon :)

3. Shares? Market? Don't know if there's anything that needs to be done in this area because my cash is mostly drained out from the various bombs that hit me in this year and the last. I'll need to boost up my cash reserves first, so it'll take some time. I've already upped my savings target for this year to 55k (though it's no big deal because this year, I didn't take into account the money that I've to pay for the mortgage of the home loan). Still, I'm proud of the fact that I can keep a cool financial head despite all the turmoil happening around my life. I can handle the storm as they come. Next year I'm not sure if I can maintain my 50k savings (this time round, it'll be 50k after mortgage payment....gasp, a big big target), though I'll do my best to do it. Already did some back of the envelope calculation on how to get an income of 10 (actual target is 12k, but it'll take some time to achieve that). All I'm left to do is to execute it. No buts, no ifs.

4. Got to catch up on my reading. My perennial target of 52 books per year is still not hit yet. Not many days left to the end of 2011, so I better buck up on my reading. Left a few more chapters before I can do the review that I've promised on a book that I'm currently reading. Oh, need to finish up some drawings that I did too. I hate to leave work uncompleted - that'll always be a nagging feeling that makes me uneasy.

Probably will start blogging more often from now on. Can't leave my readers wondering what's happening right? haha!

Adult quitting

2011-11-01T12:46:00.000+08:00

When kids quit, they just stomp their feet and leave the game. The quitting is physical and mental at the same time. When we're adults, we can no longer quit physically because we either need the job or we can't afford to sour the relationship. So adults quit mentally. They would just stay in droning mode and do what is just needed in order not to quit physically, but their mind had already been switched off. They would do what is needed just to get the job (barely) done, but don't expect too much out of it.

I wonder how many people had adult-quitted at least some aspects of their lives? Perhaps most likely it's their jobs that they had quitted mentally. It's not necessarily a bad thing actually. When you can't find a job that fulfills you but you still needed to pay the bills that comes at the end of the month, you just have to suck it up and play adult quitting, until the next better thing sails along. Actually, I kind of think that the next better thing won't sail along...you sort of have to sail towards them incrementally. But that's another story altogether.

But adult quitting harms you spiritually. It is like a leech that sucks your energy, making you harder and harder to wake up in the morning just to do the job that you hate to do. You get less and less motivated and eventually this sort of quitting can affect other aspects of your life too. It's ultimately an energy sucking vampire. May I never be in such a situation in my life.

Tech hack for android

2011-10-27T00:32:00.001+08:00

I'm so glad I found the ultimate technological hack for android phones. Some of you may be aware that amazon had this new amazon app store, supposedly to cater for their new kindle fire tablet so that people can shop for apps through their site. They have this wonderful way to promote their amazon app store by giving free apps on a daily basis. Here's a list of full apps (not the lite version) that had been given away. I came to know of this when I was about to buy a fully paid version of officesuite pro, after trying it for a couple of weeks. I really need to access my spreadsheet on my phone effortlessly, so I thought getting a paid app is great for this specific purpose.

Unfortunately, the free apps is only applicable for US, not for other countries including Singapore. I searched around and came to know of a way to get around it. It can be found here. I tried it and it works perfectly. Great! So now I had a way to get my paid full version of officesuite just by doing a little sleuth work. Saved me $18.89 sgd :)

(On a sidenote, it's interesting to see how your thoughts can turn into reality. I've been thinking whether to get a paid app for my android phone for weeks, searching around for the best kind of office software for my uses. It happened that I was again looking around for such applications when I had an intense desire to just buy the app for 18.89 SGD. But I've no idea how I got into amazon apps in the first place (it's through one of the youtube links, bizarrely) and I happened to see a limited time offer for a free officesuite pro app, which is only limited for today only. Serendipity? Coincidence?)

Investing in your life goals

2011-10-21T11:46:00.000+08:00

It's important to align your energy to fulfill your life goals. That's the only way to lead a purposeful and fulfilling life, isn't it? Why do you want to work so hard to buy things that you don't care to impress people whom you don't like? Once you recognize that doing certain things are not aligned to your life goals, then stop and prioritize your resources. Resources, like time and money (especially time), are limited, so we really have to think hard on where to expend it to achieve the maximum happiness and satisfaction.

People usually gawk when I told them how much I've spent on my housing. It starts from my parents, to my in-laws (I think they haven't yet know the extent of my renovation costs) and to my friends. But there's nothing that really satisfy me than to see a very homely property that I can call my own. In my vision of it, it'll be a place where many happy moments will be spent and where I'll start my family. It'll also be the place where I'll work and no longer have to travel around to earn my income. Many interesting conversations and laughter will be held at the living room when I invite my friends over for a simple meal. How is this not worth the money? I only lament that I didn't start early enough to enjoy it sooner. But life is seldom Utopian, timing is rarely perfect. We can only do what we can to make the best out of what life throws at us.

I guess I spent nearly 150k all in, which is nearly three years worth of my savings. That's what I call a substantial investment in my life goals. With it, I can utilize it for holding social gatherings, be independent and have a place that I call my own, work and possibly increase my career to the next level and lastly start my own family - all under one roof.

When is the last time you invested heavily in your dreams?

Winter is coming

2011-10-07T14:21:00.000+08:00

I'm seldom stressed about my financial situation because I don't really spend a lot and I save a major portion of my income. However, recently I've been trying to think out of my financial situation. Without giving specifics, I think I might have spent too heavily on both the COV of my resale and the renovation part. The COV of the resale cost me 40k and I don't even know what I'm paying for. At least for the renovation, I can see something tangible. COV? It's just an excess value above whatever valuation they come up with. It's something that I can do without. But this is Singapore - to get a flat fast in a matured estate, that is the price to pay.

The renovation bit is finally closed. Works out to be around 77k. Wah, jaws dropped... The bad thing about getting resale is that the condition of the flat is not that good. Hacking and planing the walls flat itself cost a few xxxx. I really really hope it's worth it after spending a big fortune on my house. If all things go well from next year onwards, I will be staying at home to work and making the best out of the money spent on the renovation. With such a big capital sunk into the home office, I've burnt my bridges. There's no turning back. I'll have to make it!

There's a couple of household appliances and furniture that still needed to be sourced out before the flat is livable. The major items include fridge, oven, dining table and a dining table for the study room (which is used for my work), sofa, a few tables (bedside table, coffee table, desktop for work), some lamps, a few fans, bowls and plates, cutlery, washing machin , cleaning equipment like broom, vacuum cleaner, mop etc. Did I put in TV and dvd player? No, I purposely left it out because that's going to be the last thing I'm going to need right now. That can wait...I'll have to do a few important things first in the proper sequence, so that my income stream can settle the cashout flow.

By end of this month, the bulk of my income stream would have run dry for this year. Hopefully my savings are enough to last me through the winter months as well as to settle whatever is necessary for the furniture and appliance part. I might need another 5k to tide me over, so perhaps I'll have to increase my saving target to 55k for this year. Just another 5k more to tide me through this extraordinary month, though 10k would seriously be nicer. If I can't hit that amount, I'll have to take off whatever bullets I have reserved for investments out. That would leave me with no emergency cash, though I still have quite a bit of holdings in equities that would serve as the emergency of the emergency. I don't think I'll come down to that though, unless I didn't stagger my purchases for the furniture wisely.

4Q plan:

1. Save up another 5-10k to bulk up my cash reserves before the winter month.

2. Work harder through the winter month instead of taking break. That would generate a low but still helpful cashflow in the winter months.

3. Stagger purchases of bulk items. More use of 0% credit installment, perhaps over 1 yr to ease out the cashflow bottleneck.

Wanted to put (4) Rely on help from family and (5) Buy cheaper and low quality furniture. No, I'll not do that. In life, one has to learn how to be independent, because ultimately, it's the way we can outgrow ourselves. It's also for the best because I'll be debt free - not those financial kind but the relationship kind. It's important for me to stand straight and walk tall among my family, so I'll best rely on my own. What about (5)? I'm thankful my journey learning the ins and outs of investing/trading taught me this very important lesson. Rather than buy cheap and low quality counters, it's better to be patient and wait for high quality counters to become affordable. Price shouldn't be the concern here - it should always be the quality. Get the best that money can buy so that time and energy would not be wasted hunting for new, cheaper ones again.

Alright, I feel better now. I just got to get it out so that it clears my mind. I know what I have to do now.

"Don't let the noise of others' opinions drown out your own inner voice." ~ Steve Jobs

4 steps to problem solving

2011-10-07T10:14:00.000+08:00

Diagnose, Treat, Comply, Maintain.

Sometimes it's so hard to help students. I would diagnose that the reason why they are not performing well in their studies is because they do not have enough knowledge in their mind. Practicing past year papers a million times (without reflecting) just practices whatever you know, so it would be very hard to increase your knowledge base if they do not read the textbooks or attempt to memorise from the notes that I've written for them. What's the point of practicing the same stale knowledge base again and again - there's simply no attempt at all to broaden that base. Hence the treatment is given to them to read / memorise the notes but they do not comply. Even the best doctor cannot cure your disease if you do not comply with their treatment upon diagnosis.

There are times when students complied to the treatment, but they do not maintain it. It's called losing momentum. These people started sprinting from the start when they have another 5km left to run. Unless they have extraordinary stamina, they are going to stop and rest and restart again. Pacing is therefore important in order to maintain the treatment. It's not going to be very effective if they work very hard for 1 week but cannot maintain it and slack for another 3 weeks.

4 simple truths to solve problems and I'm surprised it can be used in a myriad of situations. This is just from the preface of the book by Hill Harper - "The Wealth Cure" which Victoria Taylor from id.pr kindly passed to me for a review. Will be doing that shortly once I get some free time to really immerse in the book. I haven't even started reading the actual chapters yet and I've already learnt something interesting. I think it's going to be a good read.

Quick thoughts on strategy

2011-10-04T12:52:00.002+08:00

Been super busy at work now, so this is just a quick post.

With the market going down, I think it's time to think of a general strategy to make the most out of it. Since I've already sold what I wanted to sell, there's nothing much more than I can do to raise cash to prepare for the ultimate bear scenario. I've limited cash as I've diverted most of it to renovation and stuff, so I'll just have to make do with what I have now.

The best thing to buy during a deep correction is not reits. No doubt that the price of reits will go down together with the general market, giving a very good and high yield. I think I've enough reits for the time being, so perhaps a smaller bite of selected reits at opportune time will be more than sufficient for generating some steady stream of income. Reits are good when the market is not moving - that is it's trending sideways. That'll be a time for it. The best thing should be the blue cheaps. Some of the major STI components will be sold heavily down and it will represent the best place to look for value. Combined with a small yield brought about by the low price, it'll be okay to hold it and waiting for the general market to recover. In fact, blue cheaps should be the first to recover rather than the mid-tier counters and reits.

As of specific counters to whack, I think it's still an early phase down. The charts will show the way. Patience is needed here.

3/4 year reflections and planning

2011-09-27T12:52:00.000+08:00

There's a few things that needs to be done before I can open up my classes at home and start on a brand new chapter for my career. I thought it'll be good to list it down both as a checklist for myself and also to bounce off ideas from others who knew me from this blog. Let's begin.

1. Set up the physically infrastructure for the classroom.

As it is now, I've already set up a separate room from my new old flat. That would be the place to work for the next couple of years - an home office if you will. The class room has a wall and a half full of cabinets and shelvings, so I think that's enough space to put in the stuff and I needed for my work, perhaps with extra for my personal stuff too. It'll look something like this, but not quite, because the flooring is of a darker colour then shown in this realistic computer rendered picture from my interior designer.

It should look bright and energetic. The green colour is specifically selected as a sort of colour therapy in education. I've read up some of this pseudo science regarding colours - orange and yellow is mainly for kids, green can be for teenage students (which is the bulk of my students) and blue is for hyper active students. I think green is the right colour to choose. A tad too neon bright for me, but still good. Keeping fingers crossed.

What needs to be done are the furniture for the room. I think a group size of 4-6 is big enough because I don't think I want to have so many students in one group. It's not going to be very efficient because everyone's learning pace is different, so I got to personalize the tuition for everyone in the group. Going to be kind of difficult if the class size is too big. Let's stick with that for now and adjust on the go a few years later. I'll be checking out Sungei Kadut very soon to see if there's suitable furniture for a group of 4-6 students. Not yet decided on whether to have a big table where people around it or individual small tables. Got to think it through.

2. Revamping my website.

I've a rather neglected website for tuition purpose. Neglected because I didn't really put in much effort to either promote it or utilise it properly. That's going to change. A few things needed to be revamped:

a. Logo - that can come a bit later. Eventually going to start getting some notes/guidebooks/assessment books on my own, so a logo should be a good place to start on. That's just too many things that needed attention, so this would not be the main priority for me right now. The main focus is to get things started, and I can adjust from there onwards. I simply cannot wait for conditions to be perfect before I begin, otherwise I might never begin.

b. Getting testimonials from parents / students. Since I do my business from word-of-mouth alone, testimonials are important to me. But I haven't been pursuing them! Got to start getting written testimonials from existing and past students. Nothing fanciful, just a short paragraph detailing their experiences (both good and bad) with me. They can write their results if they want, but I'm not going to insist. I don't want to go into showing statistics on how many percentage of my students get A1. You can force a student to get A but they might hate the subject forever. Nah, it's too much of a burden to bear for their lifetime hatred for any particular subjects that I teach.

3. Namecards

In the past, I am rather fearful of getting too many students because I only have limited time to work. I don't like to disappoint people by rejecting them, so I didn't go all out to market myself. In truth, I didn't market myself at all. It's through the much appreciated support of students and parents that I manage to find students every year. Now that I've got the capacity to take in more people, it's time to go aggressive in the marketing of my business. I got to print out some name cards to distribute. A small batch of maybe 200 to begin with might be a great idea. Eventually when I've the time to design a logo or ask someone to do it for me, I'll begin a larger print. Sourcing out some quirky designs from websites online. I found something nice for SGD 100 (inclusive of shipping), so might go along with that. Perhaps I'll check out local shops too. But the problem with local shops are that their designs are pretty sucky (forgive me, I've been to a few and they disappoint). Perhaps someone might recommend me someone trusted?

4. Read up on marketing

I've no background on marketing before. But after reading Adam Khoo's book, "Secrets of Building a multi-million dollar business", I've an inkling. Probably need to read up on some of the marketing strategies and techniques. No point being a good teacher if nobody gets to know about it right?

Many many things to do in the coming few months. Firstly, I've got to settle this batch of students. Their exams are drawing nearer and nearer and the drums of war are already beating hard. After that, I'll take a short break to clear my mind for the new year ahead and begin working on all these. Lots of work to be done.

Appendix

After much research following the various comments, I confirmed the 'maximum 3 students' rule given by URA/HDB. Here's the verdict:

Ok, so be it. 3 students max at any one time. Shouldn't be a problem at all, as I do not intend to make the class size big anyway. For all other people who's following my pathway, there you go - the official statement.

The 50k game

2011-09-23T23:56:00.002+08:00

I've hit my target of 50k for this year 2011, and I'm ahead of schedule by a month. I remembered when I started this 'insane' savings program in 2009, I was struggling each month to hit the required amount. I had to consciously and subconsciously remind myself that I need to put in that bit more effort and to push that bit harder to put in more hours in my work to get that bit more just to hit the savings target for the month, before starting all over again for the following month. I did that until I reached the amount of 50k. It was really a struggle in the first year.

In my second yr 2010, it was much easier. Perhaps it was due to the fact that I had done it before, hence I know the mechanics and means to achieve the same thing. The first year was the hardest because it taught me a few good lessons regarding sustainability of my effort and the importance of planning ahead to restrict the number of graduating students (those taking O'lvls and A'lvls) I had in a year. I realised that I can push myself up to a certain limit before I start to get annoyed because of a lack of proper rest and simply just a lack of off-time from work. In the first year, I geared up to the max because I wasn't certain I could keep to my target (I intend to hit my target, no matter what). The result? Periods of moodiness and mild depression. I learnt from my lessons and applied to year 2 - 2010. I didn't push myself to the limit and it was the year that I first started taking planned breaks from work. There are times that I hit my monthly savings target in that year, so as a reward for myself, I took a day off or cancelled my classes. I realised this little break off work makes me more happy than the amount of money that it can bring me, should I chose to work. The subtle change in how I value my time makes a very important change in my life. This journey is a life long journey, hence I mustn't burn out prematurely.

The second important lesson I learnt in yr 2 - 2010 - is that of having a quota for the number of graduating students I have for any particular year. The main reason is that these days, the exams start in the afternoon, so by the time the students come back home from school, it's nearly evening time. There's simply not enough time for me to go around and help those needed ones (most students I took are not the As students, so most of them needed some last minute psycho-ing and just some general revision before exams to sooth their nerves). I'll feel guilty for not being able to be there when they needed my help and encouragement most, especially when I know I can make a difference. The other reason is that by maximizing the number of graduating students, the following year I'll have less recurring students, hence there could be a drastic drop in income. Remember that towards the end of each year, I'll be 'retrenched' and I'll have to work hard to enjoy the same salary that I had the year before. I'm trying to remove this sort of limitations by having group lessons in the future, which would satisfy both my financial need to earn money and my desire to reach out to as many people as I can handle. That would be a great way to solve this problem.

Going forward, yr 3 - 2011 - is the most relaxing year to save my 50k. Coming from me, 'relaxing' had to be taken with a pinch of salt. I still had to work 7 days a week, I still have to work when I don't want to work and I still have to teach students that I don't want to teach. So what's the difference? The mindset changes everything. It's just plain ol' good savings habits that I developed over the years. I'm so used to saving this amount of money that I don't have to track my savings so conscientiously. Years of tracking my expenses and income made me so aware of my peak income months and peak expense months (usually those months where I had to pay off lump sum items for the year, like insurance) that I don't have to track it so carefully. I know if I do this amount of work, I can 'agar agar' save this amount of money. Hence without caring whether I had hit my savings target for this month and that, it actually relieves the pressure off me, thus making it much more relaxing this year. It's like a dance routine that I had been practicing for 3 yrs. Even blind folded, I can feel the beat of the music internally and my well rehearsed muscle memory moves my body rhythmically with the melody. It's a dance that I can do again and again and again.

But no, this is not how it should be done. I die in peace and become alive in war. It's time to move on to new grounds and break new limits. As such, the new target of 100k couldn't have come at a better timing. Oh I do have a lot of motivation to save that amount. It's like a game to me., a dance if you will. I play my savings game hard and I play it seriously, because I know that if I succeed, the rewards are not the amount of money that I can use, it's the satisfaction and the comfort of knowing that I can do what is seemingly impossible. I might not be able to do it by next year, but who knows until I've tried.

Reduction in interest for banks

2011-09-20T22:48:00.001+08:00

It would seem that the banks to not want our money at all, because they had reduced the interest rates across the board. The majority of my cash is found in posb and standard chartered bank account, hence I only showed these two. For readers with other bank accounts, you might want to check out. I think it's quite uniform across the board.

POSB

Effective date: 14th October 2011

SCB

Effective date: 1st Sep 2011

Does it make a difference to you? It doesn't make much difference to me, since I don't have the bulk of my networth in cash. Used to have a lot more cash of course, but had been paying for my renovation and furnishing. The bulk of my cash used to be in MMF, which at last count, gives an annualised rate of around 0.42% to 0.46% (depending on how you count it). However, with the recent drop in interest across the board for both savings and fixed deposit accounts, I think the returns for MMF will also drop further.

That goes to show that one needs to know about investment these days. You simply CANNOT survive on fixed deposit or worse - savings account. You've got to dirty your hands in the market because the consequence of not doing so can be quite dire.

Credit card management

2011-09-15T12:39:00.000+08:00

Recently, I've been spending big amount of money - swiping here and there, signing here and there. It's all because of the renovation work being done in my resale flat, so there's a lot of one off expenses that I need to settle during this period of time. While the main contract work is paid by cheque (it'll be excellent if they would accept credit, haha), the rest of the fixtures and furnishings are paid for separately by credit or cash. Hence I need to do some background work on which card to utilize in order to maximize the cash rebates or other benefits dished out by the various cards that I have.

It's interesting how not too long ago, I had been complaining that the credit card companies are biased against self employed people like me. But I realised that after you've proved yourself capable of bearing debts, they will be more likely to give you credit. That's the way banks do their business I suppose - giving more credit to people who are already in debt, haha! Anyway, I've the POSB everyday card, SCB's Manhattan card that I've recently received, Citi rewards visa and Citi dividend card and lastly, though not a credit card, SCB's Xtra saver debit card. The main card I'm using is POSB everyday card. I've even tied my ez-link card to it to enjoy the 'cheat code' so that I can save time and get paid for doing automatic ez-reloading feature.

Usually, because of the low frequency of my spending patterns, I don't bother with the rebates. What's 0.3% or 0.5% if I'm spending like $50? It doesn't really add up much. I don't have a home yet and neither do I drive, so the rebates that really matter (those 5% on groceries and 15% on petrol) do not matter to me. However, since I'm going to be spending perhaps 4 digit figure per swipe of the card for furnishings and furniture, I've to do some credit card management.

Here's a list of the major benefits of each card that I own. I didn't put in the Citi rewards visa because I'm primarily concerned with getting cash benefits instead of points. I also didn't include many finer detail that doesn't concern me at present, specifically like groceries and petrol rebates.

Beary ge recommended me the SCB's Manhattan card, which I've applied and received and maxed out my benefits. It used to be much better, but the last change to the benefit structure removed some of the goodness. Nevertheless, still one of the best cash rebate cards around. Since the cashback cap is $200 per quarter, that means a maximum spending of $4,000 will get you there. I've already maxed that out with a recent purchase of some fixtures, so I won't be using that card anytime soon. I think the Manhattan card is excellent for purchase of big ticket items. You can even do some tricks to get $200 per quarter by doing some advanced payment of certain things. There are blogs that teaches you to do that, just search around.

The one that I'm using as my main credit card - POSB everyday card, is good for purchases of items from Watsons and carrefour, both of which I'm not a big fan of. Thus, the only benefit is the 0.3% rebate under the category of 'all else'. 0.3% rebate means for every $1000, you get $3. This is not going to be a big deal if you spend less than $1k, which is why I don't even bother to find out the various rebates offered by the different credit cards initially. But for the everyday card, it doesn't come with a cap for the rebates, neither do you have to wait for 3 month before the rebate money is sent to you. The cash rebate will be credited to you once you spent the money. Whether I get the rebate now or 3 months later is not a big concern to me though.

I think that I'm under utilizing my Citi dividend card. I realised (today) that they offer a 2% rebate on all restaurants. Not sure if I'm reading this wrongly, but 2% rebate is much better than the 0.3% rebate that I use to pay for restaurants bills using the everyday card. A restaurant bill of say $60 for 2 person will get a rebate of $1.20 using the citi dividend card, whereas it's only $0.18 using everyday card. And that's not including the more places where there's a discount using the citi bank credit cards in the first place. Knowing this, I'm definitely going to swipe the dividend card when dining next time. There's a cap of $800 per year for the cash rebates though and a minimum of $50 per quarter before you can cash the money out.

Lastly, the debit card from SCB's xtra savers account. This is really a wonderful cash rebate card. Depending on the amount of money you have inside the account, you'll have different strata for cash rebates. I'm going to top up my money inside the account to go beyond 50k to enjoy the 3% rebates. There's a monthly cashback limit of $300, so if I have 50k or above inside the account, the maximum I can spend inside there is $10,000. That's a tall task in a normal month, but these few months are not normal at all.

So this is the plan for the purchase of the fixtures and furnishings. For the first $4k spending, I will max out the quarterly cashback for the SCB's Manhattan card to $200. Then for the next $10k spending, it'll be using the Xtra saver debit card, subject to a cashback rebate of $300 per month. If I do not have enough cash to pay straight, I'll use Citi dividend card to get a 0.5% rebate on any amount spend (up to a cap of 160k - amount that is way out of my spending budget). Alternatively, as long as there's a 6k and above balance in the xtra savers account, I should use the xtra savers debit card to get 2% rebate on any spending, up to 15k a month because of the monthly cap of $300. Of course, one would have to know exactly how much had been spent on which card - information that is easily available since I tracked my expenses closely on a per transaction basis.

On more normal months where I do not have such huge expenses, I would probably be using more of the citi dividend card for restaurants instead of everyday card now. If I do not require credit and I have more than 50k in my xtra savers account, I'll use the xtra saver debit card. I doubt in a normal month, I can spend enough to hit the monthly cap or the quarterly cap anyway, haha!

Let me go transfer money into my xtra savers account to reach 50k now.

You have nothing to lose but your chains

2011-09-13T22:33:00.000+08:00

I was just chatting with a few others in the cbox yesterday when I was reminded of how important it is to recognise and acknowledge one's self limiting beliefs. Recognising and acknowledging that it's a problem is probably the first step towards doing something (as opposed to just talking) about the problem. After all, if you do not see that there is a problem, you won't spend an iota of brain power to solve it. In other words, after much talking, it's back to square one if you don't think that it's a problem.

I immediately thought of the times when I first started out as a full time private tutor. You cannot believe how many nay-sayers there are that told me I should be getting a proper job. My parents are also saying that I should be getting a full time job until they sort of gave up a few years ago. External factors aside, I think the most important thing about this whole episode is how I handle my self limiting beliefs that hinders my earning power. Here's a list of them and how I managed to break every one of them:

1. I cannot charge more than $22 per hour because some person whom I trusted told me that the going rate is $22/hr. I justified to myself that I'm paid this low because I was a 'newbie' and I wasn't experienced, even though I'm a graduate with a good class honors.

This anchoring effect took me several years to 'correct'. I realised that I was justifying my low pay not because I wasn't experienced or whatever, it's simply because I am not confident enough to charge a high rate. That is stopping me from getting a higher pay even though I was working a lot of hours. I remembered that I was trying to find out how many students I had to take in order to get 5k per month. At 22/hr, I needed 114 students, or 16 two-hour lessons per day, which is impossible. I back calculated to find out what's my maximum income (based on my many self imposed restrictions on working hours) - it's around 2.7k per month. Not exactly a very good amount these days.

This woke me up from the 'dream'. I immediately took action to correct this and never looked back since. With the higher per hour rate, I eliminated a lot of other problems (no payment of fees, disciplinary problems, very low motivation students, low referral rates...) that comes together with the low pay.

2. I cannot work during dinner time because students need to have dinner. I need to have dinner too, so I don't work during normal dinner time. I cannot work late at night because students need to sleep early to prepare for school the next day and I can't get public transport back to my home. Night is also 'rest' time for normal working people, so I don't work after dinner time. I don't work on weekends too because I needed a break.

SO MANY restrictions on myself, all SELF IMPOSED. Because of my need to eat dinner at the proper time and to have a weekend like a proper working adult, I was depriving myself of working hours. Coupled with the low pay, I wasn't basically just part timing this thing instead of doing it full time. What do I do during the non-working hours? Doing lessons plans and preparing for work - things that do not pay me but I deemed important in order to justify my tuition fees, however meager that amount is at that time. As mentioned, it took several years to correct that problem. I simply wasn't out to earn a living. It is like I'm trying to learn how to swim by trying to read a lot about swimming. In fact, I was doing anything BUT teaching. The moment I realised that these is a major problem and that these are just excuses, I leap frogged my earnings multiple times. It isn't that I'm selling my soul or passion for money - no! In a poor man's mind, it's either this or that. You can either have passion or you can have money, but not both. In a rich man's mind, you're always thinking how to be rich and passionate about your job. In fact, the more passionate about your job, the more money you can make AND the more money you get out of your job, the more passionate you are about it (up to a certain limit of course, but I wasn't anywhere near that limit back then).

3. I cannot take too many students because during exams period, when they needed help, I won't be able to spare the time needed to help them.

In civil engineering, I learnt about queuing theory. In a queue, there is always someone waiting. If you're waiting for a bus, that's because the transport authorities think that it's more worthwhile for passengers to wait for a bus, instead of having many more buses waiting for passengers to arrive. If you're waiting in a long queue to buy a product, it's because the company thinks that it's more worthwhile for the consumers to wait to buy their products, rather than having more products in store waiting for consumers to come buy them. There's always someone waiting!

AND I happen to be on the wrong side of the queue back then! I was waiting for students to come to me. I was at their beckon because I was having so much free time and not enough income, so once they gave me their timing for the lessons, I'll just say yes. That gives me low bargaining power. These days, I'm packed to the brim with students, so the tables are turned and the students are waiting for a free slot to meet me instead. Again, I'm surprised how many other seemingly non-related problems I eliminated by switching the queuing party. Once the students realised that I'm more busy, they started not to waste my time - they get more motivated to do whatever stuff and ask me the really important things during lessons (because they might not get to see me as and when they are free). People think that a busy tutor must be a good one (not a bad assumption but not necessarily true) and I get more referrals. Students quality gets better since I not only handle the really unmotivated students but I get highly motivated ones. I get more satisfaction from teaching motivated students and I get paid more. Everybody wins.

It's so surprising how a bottle neck problem, once identified and rectified, can solve several other problems downstream. Likewise, it's important to know that one or two major limiting beliefs are causing ALL your other problems. It can be stopping you from a breakthrough in your career, a happy marriage life, a good income and on and on. So, instead of spending energy coming up with one thousand and one reasons why you CANNOT make something happen, just think of ONE good way HOW to make something happen. This is much more useful and practical since you're the only person who can dig yourself out of the shit hole that you've found yourself in.

Divestment of Cache

2011-09-08T10:00:00.000+08:00

Not too long ago, I divested Cache Logistic. I thought my entry and exit are pretty well done, so I clipped an image of the chart showing the day and price that I got in and out to remind myself of the finer detail of this wonderful trade. An excellent entry should be complemented by an equally excellent exit.

Entry date: 16th March

Bullish divergence on MACD on daily chart with the price breaking the downtrend line. I absolutely love this kind of set up and will most likely trade whenever I see such patterns. I also like the sharp spike in FI, which signifies a capitulation of sorts. This is not true when FI spikes up instead.. Somehow the chartnexus chart incorporated the dividend into the chart, so the lowest point of the chart is 0.882, which is my entry point after taking into the dividends received till to date. Entry on the lowest price of a white candle. Fortune must have looked this way when I bought it.

Exit date: 1st Sept

A big A is generated, perhaps will be followed by a B and eventually a C. It's good to reduce positions when it's in phase B. If not, might have to ride it all the way back down below the price of A. I saw a significant top around 4th Aug, with a price of 0.98, so thought it might be a good idea to sell off at that level. It happens to hit that level and I got out of my position. Exit on the highest point of the day's range. Doubly lucky!

Will look forward to getting back this counter.

My new handphone!

2011-09-05T11:24:00.000+08:00

Avid readers of my blog would have noticed the slower pace of posting in bullythebear. That's because of the hectic seasonal nature of my work, so it's really tiring to sit down and type out a post instead of relaxing by reading a book or stoning in front of the computer watching streaming movies. But let's talk about spending money today, haha!

I just got a new handphone not too long ago. Every two years you'll see a post on me buying a handphone, so do allow me to do a little tech review here. I've been eyeing the Samsung Galaxy S2 for quite some time before really sinking down the money to buy it. For a two year plan, you'll have to fork out 400-500 bucks to get a new one from telco. The good thing is that I waited 1 month between being ineligible to buy and actually buying it to 'think it through', so the price dropped from nearly 500 for a new year plan to $398. All the better for me, of course! I needed some time to think it through because I'm not sure if this is actually worth it. 400-500 can be the price of a tablet or even a laptop. But I figured that I really wanted a handphone that doubles up as a miniature computer so that it's portable.

Rule #1: Give yourself a waiting period before purchasing big items to cool off your impulsive desires. This will give you time to decide if you really want it or it's just a way to fill up some emotional gaps in your life.

With the price tag of around 400-500 for a handphone, it is as good as an iphone. I've mentioned in the cbox that iphone is used by commoners (go ahead and flame me!). Whenever someone whips out a smartphone on trains or buses, it's bound to be an iphone. So that really shows the popularity of apple products and their immense branding. However, I did some asking around and researching around and decided for myself that android is a better operating system for me. It helps also that most of the usable apps in android are free of charge too, even those that needs paying in the apple apps store (stark example: whatsapp $0.99 in apple store vs whatsapp FREE in android market). Nothing beats free right? The samsung phone is cheaper, faster, more spacious and has a bigger screen compared to iphone, but some people still wants an iphone, haha :)

Rule #2: The most popular choice might not be the best choice for you. If you want to follow others like lemmings down the cliff, go ahead.

The deal breaker for me is that I've earned enough money besides my normal income especially for the purpose of replacing my aging handphone. I was doing some trading on iphones earlier this year and earned around 1k for my effort. I've blogged about this in the past - if I want to buy an item for 1k, I'll earn extra 2k besides my usual income so as to 'grow' bigger than my problem and act as an incentive to save even more. It reinforces the 'growing bigger' and 'spending within your means by growing your means' concepts, which I think is another way to look at things for me.

Rule #3: Before you plonk down your cash to buy the latest gadgets for yourself, earn two dollars for every dollar that you're going to spend on that gadget. This will reinforce the concept that you have to grow bigger than your problem and also to live within your means, not by saving more, but by earning more.

I'll write some reviews for the apps that I've downloaded from the android apps store that works for me. Stay tuned for these apps review!

Cash flow management I

2011-08-23T11:58:00.000+08:00

We all heard how important managing cash flow is. In business, if cash flow management is not up to par, it'll lead to bankruptcy even though the company has a strong balance sheet and income statement. Cash flow is the life blood of business, and so it is also the life blood of individuals. It is really just about tracking each drop of cash that comes in and out of your bank account so that you know where the cash flows to at the end of each month or each accounting period that you decide.

How to begin, one may ask. I think the very first thing you need to do is to begin tracking the cash that flows out of your pocket every day for a month. If you can have the discipline to do so for around 4 months, you'll get a good picture of what your baseline expenses are. Baseline expenses are what you have to spend on things that are necessary, like food, housing loans, pocket money for kids and parents, bills and so on. Those are the fixed expenses, as opposed to discretionary spending like the occasional gadgets, a new tv or a holiday trip. Discretionary spending are, well, discretionary, so they are variable by nature. It doesn't occur every month, or at least, they shouldn't.

If you sum up your variable, discretionary expenses with the fixed, baseline expenses, you'll get the total expenses for that particular month. It sounds easy, but it requires a lot of discipline to actually track and record every transactions you make. Try it, and see if you can last a week. I think everyone can have the discipline to do this, it's just whether you are properly motivated or not. If you don't see the point of doing so, then you won't be motivated to do it. As for me, I've been tracking my expenses of 3-4 year now. I started off wanting to do it for 1 month only, but it gets kind of fun knowing exactly where my cash flows to at the end of the month, so I carried on doing so. Now, I can tell you a very good estimate of how much I spend per month.

It's as simple as to begin tracking down your transactions

That figure is one of the aims of tracking your expenses. If you know how much you earn per month, and you know how much you spend per month, you can tell if you have positive or negative cashflow. Positive cashflow occurs when you take in more money than when you spend them i.e. cash inflow is greater than cash outflow. Negative cashflow, on the other hand, occurs when you spend more money than what you take in i.e. cash outflow is greater than cash inflow. It is obviously better to have more months in a year where you have positive cashflow.

The only way in which you can have a positive cashflow is to spend less than what you earn monthly. There are no two ways about this. Assuming that you have positive cashflow, so where do the difference between the cash inflow and cash outflow go to? It becomes your savings! It is only when you are disciplined enough to control your expenses below your earnings that you are able to save up every month from your take home pay. If your expenses is 50% of your earnings, then you will save 50% every month. If you spend 80% of your earnings, then you will save only 20% every month. What you do not spend is yours to keep, so try to keep at least 10% of your monthly take home income. If you manage to do that, for every $1 that you earn, 10 cts will be yours to keep!

It's important to have a healthy saving habit. This cash is important to kick start a lot of programs that are beneficial to you downstream. Without this stream of cash that comes upstream, you will have to work forever just so that you can live each month paycheck to paycheck. The good thing about savings is that you can use this to do 3 important things: Emergency funds, Insurance and Investment. The first, emergency funds, are used to deal with immediate life changes like retrenchment, medical fees (the initial cash component that is not paid immediately by insurance) or a punctured tire. The second, insurance, is meant for protection against the loss of life, limb, health conditions and the ability to carry on making an income that generates the cash inflow in the first place. The last, investment, is meant to grow your savings into a bigger sum so that you can achieve the financial goals of your life.

So try it! Begin a new and financially healthy life by good proper cashflow management!

No eye deer

2011-08-18T10:23:00.000+08:00

The very recent market weakness shows how true your steadiness is, in the face of potential losses. There are many newbie market participants who started this journey after the horrible financial crisis and had never seen the market crashing 5% every other day, plummeting the so called defensive stocks like blue chips and high yield dividend counters into smithereens. Well, if you had never witness your portfolio blown away by perhaps 50% or more, if you've not seen the value of your stocks decreasing day by day until to to the point of giving up, whatever fancy theories about holding long term and buying when ABC counter is at X level (where X is usually way below current price) is just bullshit. Merely untested action plans for a bear market that is planned for in the bull market.

There are also people who seems that they are not prepared for a protracted bear market. Seriously, unless you have the unlimited bullets cheat code, you should never fire until you run dry. A typical correction on an uptrend will last perhaps only 1 day or so, but a protracted bear market (where the normal movement is down and punctuated by short upwards correction in price) can last for many months. You certainly do not want to fire at a horde of enemies, emptying your clip, thinking that the worse is over when the next wave of enemies come rushing at you. Bam bam bam, click... The hardest thing is therefore to decide whether a 'crash' in the prices is really just a correction or the beginning of a bear market. You can look at the charts to tell you, but ultimately, when it comes to action, you'll have to employ smart money management. The oft mentioned rules apply - don't put in too much in one counter, always have some cash at hand (even if it is eroded by inflation), fire sparingly...blah blah blah. I'm sure there are plenty of books / blog articles out there that will expand this topic further for your reading pleasure.

When market is highly volatile, you're start seeing a lot of talking heads coming out to talk about the market. Some will no doubt tell you that the worst is over while others will say that they had sold out all their positions and are waiting for STI to reach XYZ. I remember clearly during the great bear of 2008, there are some people in the cbox that mentioned that he had sold out all his positions and is waiting for STI to reach 2000. Eventually when the level broke, he began waiting for STI to reach 1800...then 1600...then 1400...then 1200. I'm not sure if he succeeded in waiting until it reaches there (I think the lowest is around 1450) and bought while the market clears the pivot point and turns around decisively. The point is that there are always people on both sides of the camp - that's why there is a market in the first place. There'll always be people more bullish and more bearish even if the same facts are presented to both. This is where, you, as the sole manager of your own money, will have to decide what to do. While the market is in the recovery phase currently, do your action plan and know what you would do if the market reaches this and that. Know what stocks you're going to get and at what price. Know how much capital you're going to spend at which junction. If you have a plan, you won't freeze like a deer looking at the headlights of an incoming car. In the market, making no decision is a decision. You're just simply passing the opportunity to make a decision back to the market to decide for you.

Is the worst over for now? We're certainly not doing those 3-4% movement per day now but I'm not that optimistic. I'll defer buying because 'the sale worth waiting for' could be coming. Anyway, I've already bought some counters back at great prices in the last round. If anything, I'm actually looking to sell some positions. But don't believe me, I'm just the talking head that I mentioned earlier on.

Stressed

2011-08-12T10:11:00.000+08:00

Lately I'm not in a very good mood. I think I'm in quite a stressful part of my life as a lot of things are happening at the same time. Stress is when you are caught in a situation where you are not familiar with, yet you have to perform it as perfectly as possible because the consequence matters. So how do I extricate myself out from this stressful position?

1. Familiarize yourself with the situation

Practice will help to familiarize yourself with the new situation. However, it's not that we can practice and practice. Sometimes the important things in life, you can only do it once and once only. There's no second chance or third chances either because the consequences are hard to bear with or simply that there are no more occurrences.

2. Don't aim for perfection

If you do not aim for 100%, the stress level would be reduced but not eliminated. That should help a great deal in certain situation. I think for a perfectionist, anything less than perfect is unacceptable. I would say that I used to be a perfectionist, but it's such a miserable to be one and it's miserable to be near one, and so, I have to change. Try my best and let god do the rest, I always say.

3. Make light of the consequence

Perhaps the consequence isn't that bad, if you think more in depth about it. Okay, maybe not in depth, but philosophically about it. Life has many forks and just because the pathway you chose is blocked doesn't mean you can't get back to the same path through another lane. I think understanding that most decisions are small and insignificant towards the really important things in life would help to alleviate that stress.

I'll try to remember that 'stressed' spelt backwards is 'desserts'.

Kena whacked by bears

2011-08-10T22:38:00.001+08:00

Changed a new header to reflect our current situation now. Don't they say that we have to change according to the times? Haha! Well, the times are so bad, with the market eerily mimicking the great financial crisis in 2008. Perhaps I should change the blog title too haha!

This is called kena whacked by bear

But why am I not unhappy? If you take the circumstances that we are at now, where everyone is losing money because their portfolio is being sold down without care, then I should be very sad indeed. But I'm not. If you look at the things that you have right now - like good health, like a paying job, like your loved ones, like a cup of afternoon tea with kaya toast - the loss in your portfolio might not look so bad. I'll link up this post that I had in the past because I thought it's relevant once again - "How my world came tumbling down".

Home mortgage insurance

2011-08-04T12:47:00.002+08:00

Not a lot of people talk about home mortgage insurance, so maybe I should start the ball rolling. This kind of protection is good if you have a mortgage for a property and you want to insure against the risk that you will strike the big three - critical illness (CI), death, total permanent disability (TPD) - while you are still paying the mortgage loan for the property. If it strikes you, then you don't have to pay for the proportion of the mortgage loan that you are covered by the home mortgage insurance. For example, if you opt to cover 50% of the total mortgage loan only under the insurance plan, then when you are struck by the big three, your part of the payment of the mortgage loan will be paid for by the insurance company. If you opt to cover 100% of the total mortgage loan, then the property will be paid fully. Another thing about home mortgage insurance plan is that it is a decreasing term plan. Decreasing means that the amount covered will decrease yearly, which is good because you paid up the mortgage every month so the amount of loan outstanding will also decrease. This should cause the premiums to be cheaper than say a level term. Term plan means that it will stop coverage by a certain age, usually 65 yrs or until the duration of the loan.

Since I bought a resale flat by HDB, they offered me their own brand of home mortgage insurance called the home protection scheme (HPS) offered by CPF. I ran into some problems during the health checkup phase (they sent me a letter saying that because my sum assured was too large, I'll have to go for health checkup) so I wasn't covered by the HPS eventually, though they told me I can re-apply again after 6 months with a report on my health status. That was when I began to check on private home mortgage insurance plans offered by insurance companies.

I found out some interesting observations by making some comparison between the quotations offered and the standard HPS plan. To make it transparent, I was comparing Prudential's PruMortgage against HPS for a 30 yr loan period, 100% coverage of mortgage loan. Here's what I found out:

1. I found out that HPS is more expensive than that by PruMortage. The premium for HPS is 27.1% more expensive compared to prudential. The absolute amount we're talking about is a few hundred dollars (<$200) per year.

2. To make a fairer comparison, I multiplied the premium of both plans by the number of years that you have to pay the premium i.e HPS is 27 yrs and prudential is 30 yrs. I found out that the total premiums paid for HPS is still more expensive than that offered by prudential. It's more expensive than prudential by 14.4%. The absolute amount works out to be 4 digit figure (in my case, it's less than 3k). I just realised that for prudential, there is no need to pay the premiums for the last three years of coverage. This is similar (but not the same) as HPS, which states that the last 10% of the yrs of coverage, you do not have to pay premiums. This means that for shorter mortgage duration (<30 yrs), the total amount of premiums paid for prudential should be lower than that of HPS. For 30 yrs loan period, there is no need to pay premiums for the last 3 yrs of coverage for both HPS and prudential.

I liberally took this from another blog : I hate to plan - http://www.ihatetoplan.com/

3. Actually, the difference in premiums isn't that much after considering the total premiums paid for both plans (for mine, it's less than 5k difference). But is the coverage similar too? A resolute no. For prudential, you can get a crisis waiver that is somewhat like a CI rider on top of the basic plans. The premiums are waived if the conditions for CI are met. This means that all the big 3 strikes are covered. What about the HPS? They only cover TPD and death.

4. When the conditions for claims are met, the HPS do not give cash at all. It is paid directly to HDB and you will not touch the claim amount at all. For prudential's plan, you are paid in cash if the conditions for claim are met. This means that the options becomes more varied because you can treat the prudential plan like a normal term plan that insures against your health and death risk, besides insuring against the risk that you're unable to pay for the mortgage loan. I might choose to carry on this plan even after I've finished my mortgage and treat this as a normal term plan. Have to find out if this is possible.

5. The premiums for HPS is paid through CPF, so there is no cash outlay at all. However, the premiums for prudential's plan is paid through cash. I've no CPF contribution at all, so it doesn't really matter to me which payment mode is better. But I do suppose that this could be an important consideration, especially to those who have tight cash flow. If you can pay through CPF, that is one less thing to pay out of your pocket. I believe this could be the ultimate deal breaker to choose between HPS and other private home mortgage insurance plans.

Now, who would have thought that CPF's HPS would be more expensive than private home mortgage insurance plans? I certainly didn't think so. Do take note that I'm not a financial advisor nor do I pretend to be so. Without insulting my readers who are all discerning adults, I wish to lay down my disclaimer. The whole of this article are based on my possibly wrong interpretation of facts and analysis, so if you are interested, do find out more from someone certified and qualified.

*This article is contributed to IM$avvy financial portal, which is managed by Central Provident Fund Board and supported by MoneySense. This site has a noble aim of promoting financial literacy to the general population.

Breaking out of my comfort zone

2011-07-28T16:44:00.000+08:00

These days, I haven't been really interested in finding out in detail about my personal financial statements. I mean I do record all my expenses in excel in my hp and track my cash in and out of my account but I do so out of habit and discipline. This is rather different in the past. Instead of feeling the passion and excitement whenever I tallied up the numbers at the end of the month, these days, I'm barely interested in even transferring the information in my hp to my computer. I wonder why there's this sudden disinterest in doing this...okay, maybe it isn't sudden at all. Afterall, I've been tracking it since 2008 - a total of 4 yrs - so it isn't exactly 'sudden'.

I can think of a few reasons why I'm no longer so excited about filling up my personal financial statements. I think the most important reason of all is that things don't move that fast in my life. I track my expenses every month but there isn't much changes from month to month. With the exception of a few months where I've to pay a lump sum (usually insurance payment, or some one-off items), my expenses are nearly the same. What about savings? I used to transfer any excess immediately whenever it drips into my account. However, I realised this is a waste of time, so when I have a bigger sum of money, then I'll transfer them over another account. I still remember me being so anal about meeting that monthly savings target (I broke up my yearly savings goal into monthly targets and since my income varies per month, the savings goal also varies per month) but I no longer do that. I also used to compare my monthly income with past years to see if I've been slacking but again, I no longer do that.

I stop being so obsessive about such things because I've never failed to achieve the monthly saving goals I set for myself. I may struggle over some months but I've never failed to achieve the target. So either my target are too low for me now or I'm getting comfortable with this level of 'tightness' in my belt. Or both. I stop being obsessive about meeting my monthly income targets and bench marking against my past 7 yrs of income (broken up into months) because I've never slacked. The income I get is either the same as the yr before or more. Thus, I think I've reached a level of comfort in my current level of work. Of course, I complain now and then about my harsh work schedule but overall, there's less complains about it now then before because I got used to it.

This is rather scary, even to myself. I know I'm a slavedriver and all, so working hard for extended periods of time can slowly become comfortable for me. I know I can handle that. I remember that when I started working, my hours are like 20+ hrs per week. Now? It's 40+ hrs per week, including sat and sun AND I'm getting comfortable with this?? Something needs to be done to get me out of this 'hardwork cycle'. Yes, I earn more now than before, and that's because I work longer and harder than others. That's nothing to be proud of.

It is possible to work less and earn more. I will have to believe and do it. I want to reduce my working hours to low 40 hrs per week, then 30+ and finally 20+. That would mean breaking out of my comfort zone, even though my comfort zone is actually more work. The big irony is that in order to break out of my comfort zone (which is doing more hours of work - remaining status-quo), I've to put some work now in order to reduce my working hours. Maybe then, I'll have more time to enjoy the excitement of tallying up my personal financial statements again.

I need to be challenged constantly to feel alive.

The 2% / 6% rules

2011-07-19T22:34:00.004+08:00

I was reading my usual diet of blogs when I chanced upon OT's comments on this article, regarding Elder's rules in his sell and sell short book. It mentioned that there are two important rules to follow when trading:

1. Limit your loss on any trade to 2% of the equity in your trading account

2. Whenever the value of your account dips below 6% of the closing value at the end of last month, stop trading for the rest of the month.

The 2% / 6% rules are designed to prevent two kinds of ways that the market can kill you. I've written about piranha bites and shark bites before here, and the idea behind these two rules are based on these two ways too. The first way that the market can kill you is to kill you quickly and taking a big chunk of your capital in a single trade. That is why we have to limit the loss on any trade to 2% of your equity. I was reading the comments in OT's post and realised that there is a misconception regarding the 2% rule. The 2% rule is to limit your losses to 2% of your equity, and that is not the same as cutting loss if the shares drop 2% in price. What's the difference?

Before you begin a trade, you should have an idea of where you need to cut loss. Let's say you have $50,000 cash and you wanted to buy a stock priced at $1.00. Suppose that the cut loss for that stock is at $0.90. The potential loss is $0.10 (1.00 - 0.90). Since 2% of your equity of $50,000 is $1,000, you can at most lose $1,000 on any trade. We can thus calculate backwards to determine the position sizing of this particular trade in order to limit the loss to a maximum of $1,000. We'll take $1,000 divided by the potential loss of $0.10, and we get 10,000 shares, or 10 lots.

So take a look closely - if we buy 10 lots of the stock at $1.00 and if the price drops by 10% (0.1/1.00), the loss is just limited to $1,000, which is just 2% of our total equity. Thus the 2% rule is not a cut loss rule. By following strictly to the 2% rule, you'll prevent any one trade from wiping you out. In fact, you'll need 50 such trades before your whole capital is wiped out, if you un-wisely choose to enter 50 positions in one go.

To make it clearer, suppose that instead of buying the $1.00 stock with a cut loss of $0.90, you decided to make the cut loss level tighter at $0.95. The potential loss is now reduced to $0.05 but the absolute loss is still 2% of equity, which is $1,000. We can calculate the new position sizing for this particular trade - which works out to be 20 lots. You find that this rule allows you to vary the position sizing or the cut loss, but keeping the absolute amount of loss per trade at 2% of your equity. This means that if you're more confident of the trade, you can increase the position sizing but you have to tighten the cut loss. If you're not too confident of the trade, you can reduce your position sizing but you can also slacken your cut loss. The absolute amount is the only constant here.

The 2% rule can be implemented with sector allocation / diversification rules too. Suppose out of the $50,000, you only want 10% to be in this $1.00 stock. Having a cut loss level at $0.90 will allow you to have a position size of 10 lots of shares. However, having 10 lots of shares means that you have 20% of your equity in that position, which may be risky in terms of portfolio diversification. Since using the 2% rule allows me to have 10 lots, I'll reduce the position size to just 5 lots, so that I'm only 10% into this trade. When I reduce my position size, I have the liberty to slacken my cut loss level to $0.80, which would limit my loss for this trade to be $1,000 (2% of my equity of $50,000). Actually, I wouldn't even slacken my cut loss level, which is silly. But this is based on a maximum loss basis - meaning that you can lose up to $1,000 but not more than that. Again, I must also remind readers that the 2% rule does not mean that if the price drops by 2%, you'll cut loss.

After discussing at length about shark bites, there's still a problem about piranha bites, which is the second way that the market can kill you. If you keep limiting each trade's losses by 2%, you won't get killed by any particular trade but you might be wiped out if you made a string of small losses. So to prevent you from bleeding to death by a thousand small piranha bites (instead of a single shark but heavy shark bite), we have the 6% rule. The 6% rule is stop you from trading whenever you make too big a loss accumulated from many small losses. There is something obviously wrong if you keep making losses - either your method doesn't work in the present conditions or you're getting more emotional about your trades. Whatever it is, the 6% rules stops you from continuing to do silly things.

Difficulty of arriving on time

2011-07-16T21:44:00.001+08:00

Recently, I had a class which I arrived earlier than the scheduled time. I was early by 10 mins but the parent questioned me on why I was so early. In the end, the parent told me a whole lot of story about how the child had to rush back from school and had to run back and that it was so worrying and all that. After all that, she reminded me to try my very best to be on time.

Maybe that parent had been too used to driving, because if she had taken public transport (like I do), the frequency that the bus arrives is hardly something that can be controlled by me. If I didn't come before time, I'll most likely arrive later than scheduled. Long ago, I had been late 15 mins before (to the same parent), but she called me and asked me where I was and that the child was waiting for me. Seriously, some people are just hard to please. I think it's easier to be late and easier to be early but it had to take a lot of luck to arrive just on time. A lot of factors had to be just right in order to arrive at the appointed time.

I think the same thing goes for people in the market who wants to get the peak or the trough of a market movement. Aiming for the bottom-est price just before it reverses is a fool's game. You can aim for the region but if you really get the lowest price, it's more a matter of luck than skill. As you narrow down the time frame, the price movement gets more and more random. Likewise, it's a fool's game to aim for the peak before selling. You can sell a little earlier or a little later but to hit the highest price before reversal, you need lady fortune on your side. This doesn't mean that TA fails - it just shows the limitation of what timing the market realistically can be.

Psychologically, I think it's better to sell earlier and buy earlier, since we cannot sell at the peak and buy at the trough consistently. Selling earlier means that you'll always see the price go up higher after you had sold the stock. Selling later means that you'll see the price go downhill after hitting a maximum. Chances are that after you've seen how high the stock had risen, you've already anchored that particular price in your mind. You'll be less reluctant to sell and you'll end up hoping that the price will still rise up to that particular level. I don't like that and I had several experiences of me ending up turning a profitable positions into a neutral or losing position. Likewise, buying earlier means that you'll see the price go down lower after your purchase, but I feel that this beats seeing the price goes up higher after hitting the lowest price, anchoring that particular price in your mind and missing the whole boat altogether while waiting for the price to come down to that level again.

*This article is contributed to IM$avvy financial portal, which is managed by Central Provident Fund Board and supported by MoneySense. This site has a noble aim of promoting financial literacy to the general population.

Charts with potential for reversal

2011-07-12T10:04:00.002+08:00

Listed out some charts that have the potential to reverse. It's okay to buy when it's expensive, just make sure it's reversing when you buy them.

Noble is showing my favourite setup - breaking downtrend line combined with an impending bullish divergence on macd histogram. I'll look at it when the time is ripe.

** Updated on 12-July after market close:

NOL is dropping too fast. Let's see how it finishes its divergence before deciding on what to do with it. The downtrend line is going to make it hard to rise up, even after its reversal. If I enter this, it'll be a quick one.

I'm always looking to get more of this. The charts show that there's a very high chance of it going down. The question is till where? I'm wiling to get a batch near 1.46, regardless of divergence or not.

It's important that in the heat of battle, we do not fire recklessly. Bullets are always always in short supply, so it's better to wait patiently for the enemy to come closer before firing a shot. Even if there are 3 enemies coming my way, likely I'll just choose the one that I'm most confident of sniping. Going by the seasonal nature of STI, August/September might have a wave of enemies swarming over, so it's better to keep my powder dry and high.

First reit

2011-07-07T22:55:00.001+08:00

First reit weekly:

Daily:

First reit had been very good to me, with its high dividend yield and the very low capital cost after the rights exercise. But I had parted ways with it for the time being. The charts both at weekly and daily level doesn't look good. Both weekly and daily show a bearish divergence with today (7th July 2011) showing relatively higher volume plus a doji (you candlestick experts might have a different name for it, pardon me).

I've been doing partial divestment of first reit since June to reduce my position, but it went up and up. It's ok, I don't have to capture the peak and I'm super happy with the returns. Will get it back at another opportune timing again.

-----------------------

As a sidenote, after weeks of queuing everyday after market hours to sell, the queue finally hit around afternoon today. Why today? Perhaps it was after a lunch treat by CJ at his family's Hainanese curry rice stall at Maxwell food centre, no. 68, that brings the luck to me! After eating it, sure 1-6-8 (say it in Cantonese)! In my line of work, I've eaten all the nonsense curry rice all over the eastern part of Singapore, so trust me when I say that CJ's brand of curry rice is among the best. If you intend to beat the lunch crowd and try, do order the curry chicken wings and especially the pork chop. Especially especially the pork chop. The curry is thick and fragrant, and all the dishes are not very oil at all. I'll go back again one day for sure if I've need to make sure money in the market, haha!

Mentor-student relationship

2011-07-04T22:53:00.000+08:00

I was thinking to myself about my motivation to share with people about my little knowledge in the stock market. It takes time, energy and effort to go back and fro in the cbox after working for a good part of the day. The time spent could be used to do the things that I like - reading, watching drama series, playing games and to basically relax, so the opportunity cost is actually quite substantial considering that after the whole exercise, I ended up not indulging in my own relaxation time and actually feeling more tired and drained. But don't get me wrong, it's utterly satisfying to do so, which is why it puzzles me. I'm left wondering what motivates me to spend time, energy and effort to share with others.

I think that the reward of teaching people comes not from the money, or from the lunch treats but for the satisfaction of enriching an eager, humble and open mind. I can't say the same for others, but that is what I know of myself. I don't think it's altruistic in nature - I'm not lawfully good in alignment (I'm lawfully neutral). Perhaps when the satisfaction that I desire is not 'repaid', then the satisfaction of getting paid for my time, energy and effort will be somewhat used as a replacement reward. Why is sharing such knowledge satisfying? I think I've this phenomenon I call "teacher's complex" that gives me the kick when sharing about things that I am passionately involved. Perhaps in the beginning it's like a mentor-student relationship, but when the student gets equal or better than the mentor, it'll become more of a two like-minded people who share the similar view of the world. I find that idea immensely satisfying, and I would conclude that this is ultimately the reason why I would forsake immediate gratification of spending my own time to hopefully spread what I know to people who do not.

But do notice that my criteria of teaching is towards someone with an eager, humble and open mind. What is meant by an eager mind? It is the willingness to learn and this can be exhibited by how much effort the student puts in with reference to how much effort the mentor puts in. I think an eager student would put in much more effort than the mentor. I suppose a mentor wants their student to at least show a certain standard of effort before he would willingly spend more time on his part. It's really a relationship marked by reciprocity. Nobody is willing to give and give and don't take. Such relationship would never be sustainable. What about humble and open minded? I think if a student's mind is fixated on an idea and he is very sure that he is right about that particular idea, it's not too incredible to deduce that the person do not have an open mind (at least with regards to this aspect of thought...I do realise that people can be open in one aspect but closed in others). I think showing a mentor that you have a open mind and is willing to try out new ideas is one of the main reason why the mentor would even want to share with you in the first place. If you insist that you're right about certain things, I don't think anybody would approach you to share with you what they knew.

Thus in discovering my reasons for sharing with people my knowledge in the stock market, I've also uncovered how to find a mentor in different aspects of life. I've a few mentors whom I model after. They might not even know I'm their student, but I am indeed modelling after their thought process and how they behave in different circumstances. But that is being a silent student, quietly observing his mentor at work. If you want to find a mentor in life, or want mentors to approach you to share what they know, remember the three criteria as a student - eager, humble and an open-mind. Only then - and here I would like to paraphrase bro8888's words - would a master come down from the mountain to impart his skills to you.

Financial freedom tag-team

2011-06-27T12:07:00.002+08:00

It's important to choose a spouse carefully, it seems. According to the book that I'm reading, "The Millionaire Next Door", it mentioned that for a large proportion of the millionaires that they had interviewed, their spouse are more frugal than them. The constant complain about their spouse is that they can't get them to spend money!

The book mentioned about having quality offense and quality defense when playing this game of financial freedom. One of the couple, usually the male, would play good offense. They would go out and earn a lot of income. It's mentioned that most of these millionaires interviewed have higher household income than average too - so that's the offensive side. The spouse, usually the wife, would stay at home and play quality defense. They are the ones who would manage the household, making sure that as a whole family, they not only stay within budget but way below their income. That's the kind of tag team playing that I found it interesting.

It's hard to say who is more frugal - me or my wife. For the little things (those that cost less than $50), I'm the more frugal ones. I always have to remind my wife not to overspend on such things. However, for big ticket items, my wife is the more frugal one. She would have to remind me that even though I have the means to afford, we should still be careful on how we spend it. For the recent resale flat purchase, I have to convince and reassure her that the 40k cov is worth the money. Same thing goes for the renovation. I guess my wife and I are not spendthrifts and each of us are more frugal than the other depending on the amount spent! That makes us a compatible tag team partners because we defend each other weak points, haha!

Nacho Libre - I absolutely love the movie!

On the flip side, it's very hard to be financially free if your spouse do not support the idea. The journey towards it involves making sacrifices now so as to enjoy greater rewards in the future. Not everyone wants to reach the end point, that I understand. If one of the couple wants to climb a mountain, the other has to belay the ropes and egg each other on, supporting and encouraging each other along the way. If there is only one person actively climbing the mountain, the other would drag along and act as a complaining dead-weight behind you as you climb. It's still possible to make it to the top, of course, but it makes the journey unbearably difficult.

Thus for those of you who so desire to reach the top of the mountain, choose your other half wisely. Pick the characteristics of the person that you think would aid you, for I believe that a marriage is like a partnership - it should benefit both parties, and not just to one only (or worse - none). Choose a tag team partner that you can synergise with - if you play quality offense, pick someone who play quality defense for instance. You can't pick both who play good offense (because you might spend all that you earn), nor both who play good defense (because playing defensively all the time might take too slow to reach the end). When all the beautiful face and great body fades away with age, what is it that still endears you to your spouse?

*This article is contributed to IM$avvy financial portal, which is managed by Central Provident Fund Board and supported by MoneySense. This site has a noble aim of promoting financial literacy to the general population.

The little boy and the dollar notes

2011-06-23T22:12:00.000+08:00

A stranger walked towards a small little boy whom he met along the streets. The man told the little boy that it is most fortunate that fate had brought them together, hence he is going to bestow a gift to the little boy. He can have a choice of a $100 note or a $10,000 note, with no strings attached. He can just take the money and go, with the knowledge that on this particular day, a kind stranger had chosen to bestow a great gift to an unknown boy. By the time the man told the little boy about his choices, a crowd grew around them, eagerly trying to find out what was causing the commotion in the streets. Some of the people in the crowd began to advise the boy, telling him that it is stupid not to take the $10,000. It doesn't even require simple maths or quantitative analysis to figure out which choice is the most rational one to take. There's only one solution to this happy problem, and that is, rationally, the boy should take the $10,000. Such an obvious choice do not even require any thinking at all, some of the people in the crowd thought aloud.

The moment of truth arrived for the boy to pick his choice. The boy took the $100 note instead of the more rational $10,000. Those who had advised the boy scolded him profusely. They told him that he is stupid not to take the $10,000 note. How can anyone be so irrational when it comes to making such decisions, they bemoaned. As the smarter and more rational crowd dispersed in disgust, an old lady walked towards the boy, who was holding the $100 note and positively beaming with joy.

The old lady asked the boy gently why he had not taken the $10,000 note, as advised by the other more savvy crowd. The boy smiled brightly and explained that he took the $100 note because he wasn't sure that the man would really give him such such a great sum of $10,000. However, he was sure that the man wouldn't mind giving him a smaller sum, hence he took the smaller $100 note.

The old lady smiled at the little boy's train of thought, surprised by how wise this boy is beyond his years. The boy, among all the crowd that gathered around them, is about the only person who had analysed the problem differently from the rest.

There are often many ways to analyse a problem, and focusing on numbers is just one aspect of the analysis. Why should we be trapped by such quantitative analysis? Is it irrational to place greater emphasis on the psychological aspect of this problem - that is, whether the man is really going to give the $10,000 to the boy? Likewise, is it rational that we focus solely on numbers to analyse a problem? To place emphasis on numbers as the only way to solve a problem seems unrealistic to me. If I'm extreme in advocating moderation, does that make me an extremist too? Sometimes I wonder...

Market warning bells

2011-06-22T11:55:00.002+08:00

Market bells are ringing softly....can you hear it? When will the bells ring louder? You don't need to know how to read charts or value companies to know that the market is overheated. It can be as easy as paying more attention to the surroundings and people around you. These warning signs might not tell you the exact date in which the market will crash, but a rough estimate is better than none, so that you can make preparation in case it happens. Here's a few points that I can think of:

1. When newbies that comes to the market and start to make a lot of money without knowing anything at all, that will be one sure danger sign. In the market, newbies are supposed to lose money. If they earn anything, it's more by luck and only a handful of these newbies will survive because of their skills. Thus, when you see a lot of newbies who don't know how they made money, it's a sure sign that the market is overheating. If even the newbies are in the market, who else is going to buy the shares from you?

2. When the uncles and aunties you meet on the streets are talking about buying this stock and that stock, you'll hear the market bells ring louder. During the peak market, you can see actors and actresses busy buying stocks. People are talking about stocks in the lifts. Taxi drivers are also talking about them when you took the cab. Thus, when people who ordinarily have no interest in the market start to talk about the market, be careful.

3. When the analyst start making more calls to buy, it'll be another sign. The reports will be glowing with optimism and ever increasing target price (the target price are met so they have to upgrade again and again). Another thing I noticed is that they would shift the valuation benchmark to PE based, instead of asset based ratios like PB.

4. When the newspaper start to talk positively about the market and stories about people who made a lot of money from the market, it'll be one of the last warning signs. Newspaper are usually reactive, and they would not make a bold statement about the market unless the trend had been going on for a long time. This last ditch attempt to lure more sailors to the sirens would propel the market to ever greater heights, eventually capitulating and start the bear cycle.

5. When speculative counters (think ass-shares and warrants) chalk up the top volume, be careful. Usually the newbies that enter the market have little capital, so the only way they can participate in the market is to punt on penny stocks. Most of the blue chips have done its part to bring the index to new heights, so the last to run are usually the pennies. Many stocks that are rubbish will have extreme optimism attached to it, because of the belief that a greater fool will buy it from you. Be careful that you are not the last fool holding the hot potato, if you choose to play this game.

Can you think of other signs of market overheating?

*This article is contributed to IM$avvy financial portal, which is managed by Central Provident Fund Board and supported by MoneySense. This site has a noble aim of promoting financial literacy to the general population.

How good are you at accumulating wealth?

2011-06-18T23:18:00.002+08:00

I'm currently reading a book titled "The millionaire next door". From the few chapters that I gathered, the book is about the characteristics of wealthy people. As I read it, I am keenly aware that while wealthy people have certain characteristics that make them wealthy, it's not true that by following such characteristics, I'll be wealthy too. This logical flaw is similar to this: It is found that all cancer patients drink water, so drinking water will cause cancer. Basically, it's a mistake on causation and correlation. Correlation does not imply causation. I think it's important to have this principle in mind so that when I'm reading this book, I won't be unduly swayed by these characteristics and start to follow them, thinking that it'll lead me to wealth.

There is, however, one thing that I found quite interesting as I was reading the book. It's a heading about how to determine if you're wealthy. As described in the book, you can determine this by this rule of thumb:

Multiply your age by your realised pretax annual household income from all sources except inheritance. Divide by ten. This, less any inherited wealth, is what your net worth should be.

Let's say a 30 yr old person earning 50k a year and having an investment return of 10k a year, will have a calculated net worth of 180k. If that person has a networth of less than 180k, he is a UAW (under accumulator of wealth). If he has a networth of 180k, he is a AAW (average accumulator of wealth). If he has a networth of twice the calculated amount, that is 360k, he is a PAW (prodigious accumulator of wealth).

I found this idea rather interesting. Based on the rule of thumb, I'm considered a AAW because my networth is around that value calculated. For computation of networth, I included all my cash, cash equivalent and investments (marked to market), cpf and the cash value of whole life insurance. I did not include my house since I treat the asset value of the house at cost and that will be balanced by the liability of the loan in my balance sheet. I guess the reason why I'm not a PAW is because my investments are not returning a fantastic return to me. That is something that I would have to do about in the future.

You'll realised that you cannot just pluck the numbers and key into the formula straight away. You'll need to find out how much you earn per year (that is usually easy for salaried workers). You'll also need to know your assets and liabilities and calculate your actual net worth so that you can have something to compare with. I think by doing this little rule of thumb exercise, you can get to know more about your own financial status.

So go on, try it and tell me if you're a PAW, AAW or UAW.

*This article is contributed to IM$avvy financial portal, which is managed by Central Provident Fund Board and supported by MoneySense. This site has a noble aim of promoting financial literacy to the general population.

Thoughts on dollar cost averaging

2011-06-16T23:42:00.000+08:00

There's a lot of talk about using the standard chartered bank trading platform to do averaging down. The reason is because the platform offers a very cheap way to buy small lots without the penalizing minimum trading fees, which is usually $25 ++ minimum. What's averaging down actually? It's just a way to reduce the emotional part of investing by buying at suitable time interval using a fixed cost, regardless of the price. By doing that (you can do the math), when the prices are low, you'll end up with more shares and when the prices are high, you'll get lesser. Averaging out, you'll get a lower price, which is the whole point of doing dollar cost averaging.

I assume that those who are doing dollar cost averaging are those that do not have an interest in the market, hence buying a blue chip counter (generally, these people will get index instead of individual counter because index cannot go bust but a million other things can happen to individual counters, no matter what the colour of the chips are) will be safer for the longer run. I also assume that people who does dollar cost averaging do not believe in timing the market, just time in the market. The reason is that if you can time the market, it'll be better to just buy at the right time instead of whacking the counter every suitable interval.

Hence, it puzzles me that in the cbox, there are people who wanted to do dollar cost averaging using the cheap transaction cost offered by scb trading platform, but keeps looking at the market for the latest quote. The point of doing dollar cost averaging is to reduce the emotional part of investing, and also the labor of active investing, by buying at a fixed interval using a fixed cost. If I'm doing that, I'll just be looking at the market once every quarter or so, put in my transaction and carry on living my good life without the market interfering my peaceful existence.

But I'm not doing that, not in the traditional sense of averaging, no. I'm doing a TA-based averaging.

The idea is simple. You buy only when the charts show you that it is okay to buy. If the signal don't work out, I don't cut loss. I'll wait for the next point where the charts say it's okay to get and buy in another bullet. Each counter has a limit of say 2-3 bullets, and the amount for each counter and each bullet follows strict money management rules. For instance, I won't be averaging down non-stop and getting all my money stuck up in a single counter. Oh, and I only do this for fundamentally sound counters too. Averaging down on ass shares is a lesson I hope I will never have to re-learn again. Conversely, I'll do the same when selling. When I see a short signal on the chart, I'll sell a portion.

Are you surviving or living?

2011-06-15T00:40:00.001+08:00

In thinking about our wants and needs, conventional literature always advise us to concentrate on our needs and forgo our wants. Resources are limited, hence we should ration the things that our resources can exchange wisely in case it runs out. We should budget what little we have and try to scrimp and save to make sure it last long and good. Excess and frivolous frills should be trimmed, reduced and eliminated. Get the smallest house that you can afford, do not overspend and buy a huge house. Get the cheapest furniture and get the barest renovation so that the money can be saved up for investment.

That is a way to survive, but is this the way to live?

I understand totally that all of us have different standards of living. I'm not advocating that we should model our standards of living after others, but we should really figure out what we want to achieve in our financial goals. If accumulation is the end by itself, then that goal can never be accomplished. There's simply too much to accumulate and accumulation as an end will never end.

There must be a balance between the two extremes - spending too much and saving too much. I know which side I'm on and which side I should be working towards. Finding that sweet spot that balances the two extremes will be a unique journey for one to discover. What is the right way to live? There isn't a right answer nor a wrong one, though there is a sustainable or an unsustainable way of living. In the face of such open ended possibilities that is inherent in life, what then should we do?

Walk the middle path, for the answer lies somewhere in between the extremes.

*This article is contributed to IM$avvy financial portal, which is managed by Central Provident Fund Board and supported by MoneySense. This site has a noble aim of promoting financial literacy to the general population.

My personal financial goals

2011-06-10T00:03:00.001+08:00

I need some long term plans to have an idea of how I should allocate my resources, and if that proves to be insufficient, to step up my effort to get more income and hence more savings. The biggest financial bomb so far is my resale flat. I got a loan of 501k from HDB, with a monthly installment of 2k over a period of 30 yrs. Let's do some math:

Loan amt: 501k

Total amt paid at the end of 30 yrs: 2k x 12 x 30 = 720k

Interest: 219k

Due to the curse of compounding, even at a low interest rate of 2.6%, over a long period of 30 yrs, the original loan amount of 501k becomes 720k. The total interest paid to them is 219k, which is almost half the original loan amount.

I wanted to reduce my monthly installment to less than 1k per month, and in so doing, it will reduce the total interest paid for my loan amount too. My plan is to do aggressive down payment of the loan in the first 5 yrs and see how it goes after 5 yrs. A lot of things are varying over the next 5 yrs, so there's no point in coming up with a precise plan. Time should clarify my plans further.

Each year, based on the minimum monthly payment, I will have to fork out 24k (2k x 12). I should aim to double that payment per year to 50k. Without touching on the complicated maths and just doing simple calculation, since I'm paying twice the amount of the required yearly payment (I'm paying 50k instead of 24k), I should reduce my loan duration by at least half. That means instead of clearing the loan in 30 yrs, I should be able to clear in 15 yrs and probably shorter than that due to compounding again. Let's take it as 15 yrs to clear the loan.

To clear the loan in 15 yrs (based on the above simple calculation), I will need to pay off 4k per month. Let's add 4k expenses (my average expenditure inclusive of everything is 2.8k monthly). 4k loan payment plus 4k expenses is already 8k, and I don't want to have zero savings at the end of the whole thing, so I've to factor in another 4k of savings per month. 4k of savings per month would roughly translate to 50k per year, which is my usual savings target. This means that my minimum income should be 12k per month.

This would also tie in with my 100k savings challenge per year. 50k of savings would be set aside, another 50k of savings would be used to pay off the housing loan. At the end of 15 yrs, I would have finished paying off the housing loan and end up with a sizable amount for retirement (50k x 15 yrs = 750k). I would be near 50 yrs old too.

This is an overestimation of the figures. But I like to overestimate figures. I rather end up on the wrong but comfortable side of the error at the end of the whole thing. A few things can derail me off:

1. Children - as of now, there isn't any plans to have kids. Should that come in, then retirement have to be pushed back. My wife's savings and income per month, which had not been factored into the entire equation so far, would have to be considered.

2. Inability to work due to illness - I'm covered by suitable insurance coverage for such events. If that happens, I'll have a monthly payment of around 2-3k per month. It's barely enough to cover my own expenses and so it's quite impossible to finish the payment early too. This is actually the worst case scenario, because if I've TPD or just plain ol' death, the home mortgage insurance would kick in and would ensure the house is fully paid up. My whole life insurance and term plans would also kick in so money shouldn't be a concern in that event. I can't increase my disability income benefits without exorbitant cost, so I just have to have enough savings. A backup plan would be to liquidate my stocks, but I'm not sure by then how long it can last. Well, every drop will have to count.

3. Parents - they do not have whole life plan nor term plan at all. At this stage, it'll be too exorbitant anyway. They do, however, have H&S plans, so the problem is thus TPD or critical illness that is not hospitalised. They have some savings, not much, but it can be the first line of defense. I've a elder brother too, that'll be the second line of defense. And I'll be the third line of defense. How much this event will affect me depends on how prolonged the illness will be. My guess is that everything would have to be delayed by an indeterminate period of time.

4. Retrenchment - or simply drastic changes in my career environment that can greatly reduce my income earning capability. This is possible but improbable. I can't be retrenched easily so the problem is about finding more work. This would have to be sorted out in the next 2 years (I give myself 2 years to sort out this). Career backup plans? MOE teacher. I hope that with my academic qualifications, they would at least grant me a teaching position without even considering my experience in teaching. Passive income would have to come from somewhere to offset this risk of loss of income too. This stream of income will progressively be more important as I age. Have to work on this too.

I do not have to finish paying by 15 yrs of course. I would like to have the ability to pay off, or rather take it like this - I want to have an option but not the obligation to pay off my loans early. I can see the possibility of investing the amount saved to have a bigger amount in a shorter period of time instead. In short, my goals are:

1. Monthly income of 12k

2. Savings target of 100k per year, or around 8k per month

3. Option but not the obligation to pay off my housing loans in less than 15 yrs

So there, I've listed out the rough plans for the future. They are related to each other, so most likely hitting one would also be hitting all at the same time. What's my next step? Go ahead and do it.

Old MacGrath and his bucketful of milk

2011-06-03T01:24:00.007+08:00

Old MacGrath owned a farm in a countryside where he kept a few cows for dairy milk. In one particular milking session, the cows gave him a huge bounty of milk. Usually, Old MacGrath will have two full buckets of milk on average, so can you imagine his wrinkled but beaming face when after milking all his cows, he realised that he had not two, not three and six buckets of milk!

Old MacGrath was full of joy, and on the way back to the farm, he was already thinking of what to do with the milk. Oh, how his mouth salivate when he thought of the many milk products that can be made from the six full buckets to feed himself and his family! He can make cheese, butter and all sorts of delicious products from the milk. After making so many products, he couldn't possibly finish all of them by himself, so he can even sell it to the market or barter it for some other goods. How fortune smiles upon him!

But on the other hand, he could also sell the extra milk to the market so that he can have some extra money immediately for him to buy some seeds for the summer planting season that is to come in a few weeks time. With the new seeds, he can plant more crops too! Oh decision decision decision...what should Old MacGrath do with his six buckets of milk? It was such a heaven-sent gift, but for hellish reasons, he couldn't make up his mind on which options he could best utilize this 'windfall'.

So, being unsure of himself, he called for a quick meeting among his family to discuss the matter. His wife told him to sell it to the market for some quick cash so that he can buy more seeds for the summer crops. His eldest son told him it's wiser to keep the milk and turn it into dairy products for their own consumption. His daughter told him that he should use 3 buckets of milk for their own consumption and sell 3 buckets of milk to the market. After a whole day of discussion, Old MacGrath was still unsure of what to do with his milk because everyone makes perfect sense.

Tired of all the heated discussion, Old MacGrath thought that he should take some of the milk to quench his thirst. Taking a ladle, he scooped up a cupful of milk from one of the buckets and took a deep sip, wishing the refreshing taste of milk to sooth his throat. He spitted it out immediately! It was so sour! Looking closely under the dimming light, he realised that almost the whole day had passed since he last milked the cows and the buckets of milk had turned bad!

Oh horrid horrid fate, he cried out loud, totally inconsolably by his family who crowded beside him. His indecision had caused nature to take the decision off his own hands! On hindsight, any decision made on his part seems better than the one that nature had forced upon him unwillingly. Oh horrid horrid fate....

----------------------------------

Special thanks to SMOL for teaching me the value of story telling. Stories are wonderful wonderful way to impart values and at the same time, because of their ambiguity, it is also timeless and borderless. Reading the same story at different times of your life will elucidate different aspects of your life. Reading the same story by different people will teach different things to them too. Like the Rorschach ink blot test, the variance in interpretation varies across time and space. That is also the reason why I like reading children's story books.

Good children's books are meant for children to read, but for adults to understand.

---------------------------------------

Lessons learned from cboxers

2011-05-30T22:29:00.000+08:00

Just by looking through the cbox history, one can learn a lot of lessons from the actions (or sometimes the non-action) of people. I'll just list them out objectively, not to ridicule but rather to reinforce the lessons in me again. I must have done it many times in the past, but hopefully not ever again.

1. Buyer's remorse (or seller's remorse)

This is when the queue that you had put in place had been hit, but instead of having feelings of joy and jubilation, you are feeling unhappy because you now really own the shares at the price. This is actually quite similar to seller's remorse, where you sold at a certain price but again instead of feeling happy, you actually regret selling at the price. These are just basic emotions of greed and fear at work. For buyer's remorse, it's the fear that after you key in a (hopefully) cheap price, the price will tank further. For seller's remorse, it's the greed that makes you want to earn more after seeing the stock rise up higher than the price you just sold.

Do I have this kind of remorse? Of course I do. It's hard to eradicate it, so it's better to think of ways to manage it. First of all, you really have to want the shares you want at that price. Only after the intent is clear will I queue for it. I don't queue for 'fun' because if the queue is really hit, it's not very funny. As for seller's remorse, I think setting a specific target price and sticking to it (and really, be content with it) is the key. Of course, selling slowly in batches is also a good way to alleviate that emotion if you have more lots - sometime like averaging up your selling price.

These days, after I sell it, I no longer look at it until perhaps a few weeks later. This is more as a post action review on how I can perfect my exit technique rather than to see if I had lost out on any potential future gains.

2. NATO (no action talk only)

I think to make money in the market, it's better to do more action rather than talking about it. Talking (to the right people) will help you understand certain aspects of your intention but beyond that, when it comes to pulling the trigger, you're all on your own. If you do not exercise your own judgement, it's really hard to pull the trigger. When the market is up, you'll be hesitant to buy because you think you can get a cheaper price. When the market is down, you'll be hesitant to buy because you're afraid it'll go down lower. So pray tell, when is the best time to buy? Perhaps talking about it will dissuade you from really doing something about it.

It might be easier if you have conviction behind your buying/selling thesis. There's a reason why people do fundamental analysis and technical analysis - the reason is to discover the value of the underlying stock. 'Discover' is used with deliberation, because I really think that's the way it is. You go around exploring, finding out a range in which the current valuation of the stock is, and you go and make your decision based on that conviction. For those without proper understanding of FA or TA, or those without strong conviction, I think the chances of NATO-ing is pretty high.

3. Too emotional over noise

I hate being manipulated like a ragdoll toy by market physics. It's something that I felt intensely when I was gambling with HSI warrants in the earlier part of my stock market journey and later on during the index futures phase. As I reflected on these emotional roller coasters, I realised that the only thing that make me emotional over such price fluctuations actually stems from money management, rather the lack of it.

If I've 50k and I put 40k into a counter, making it 80% of my entire portfolio, how can I not be emotional? If I earn 60k in a year and I put 40k into a single counter, how can I not be emotional? On the other hand, if I've 100k and I put 10k into a counter, making it 10% of my entire portfolio, would I be bothered if the price tanked? If I earn 150k in a year and I put 10k into a single counter, would I similarly be bothered by market fluctuations?

Feel free to change the percentages to suit your individual requirements - it's the idea that matters.

4. No exit strategy

Most books that I read about stock market focuses solely on how to buy correctly. Seldom do I find one that talks about exiting. I believe that even if you want to keep a stock for long periods of time, there is still a need to get in and out at opportune times to get the best out of the investment. It's best to look at different scenarios before you buy in so that you have a impartial view of the situation. Just by asking yourself questions starting with 'what if', you can clarify your thought process. It's important to have a clear strategy, be it based on specific target price or a particular value thesis, because it allows you to act when the time comes and not freeze like a animal looking straight at the headlights of an incoming car. Think about the cut loss levels (if you have one) and the % returns that you are after before buying it. If you think it can reach the % returns that you are after, then go for it. No point hoping and waiting for a miracle in a stock that just cannot move so much in the timeframe of investing.

5. Improper money management

I think this can be a post by itself because there are just so many points to talk about. I'll just talk about a few pertinent points.

a. Limit your counter to a certain percentage of your portfolio, even if you think the counter is 'guaranteed' to make money. In the face of unknown probabilities, invest in preparedness.

b. Limit the amount that you can buy in a single transaction according to portfolio size. This means that if you have only 100k of investible cash, you don't whack 50k in one single transaction. This ties in with part (a).

c. Bro8888's advice always ring true - buy and sell slowly

d. If you have a losing streak, stop yourself from buying anymore. Give yourself a time to reflect and gather your thoughts and think about why you are losing money. When starting up again, reduce the amount invested again, only increasing it after you've proven your worth by making a winning trade.

More artwork ...

2011-05-26T13:48:00.000+08:00

Here's a few more sketches coming from my Wacom tablet. I am really beginning to get a feel of how to work around this gadget. Unlike sketching on paper, where you can see exactly where you draw, this tablet works more like a mouse. You move the stylus one the tablet but your eyes are fixed on the cursor on the screen. It takes some practice to get the hand eye coordination perfect, but once it's settled, it's like sketching on paper.

The above sketch is me trying to recreate the innocence of childhood sketches. I used to doodle a lot on crayons and coloured pencils when I was a kid.

This one is a helm from a Greek Corinthian era. I was just trying to test out the effects of recreating the hair like plum on the helm.

This is Brie-boy. It was from the book from my favourite director, Tim Burton, called the melancholy life of oyster boy. The accompanying poem goes like this

Brie Boy had a dream he only had twice,

that his full, round head was only a slice.

The other children never let Brie Boy play....

but at least he went well with a nice Chardonnay

Life in Singapore

2011-05-24T11:34:00.001+08:00

Have you heard about the financial bombs in life? These are the obstacles, the road bumps, along your road to accumulate wealth. It seems unavoidable especially if you want to follow the typical model family in Singapore. Of course you can also choose to lead the estranged and socially divorced life of Diogenes, but his is an extreme life. Let's talk more about these financial bombs.

Firstly there is the extravagant wedding. For Chinese couple, it would entail the customary wedding banquet in some posh hotels that would set you back by a few tens of thousands. For me, I kept it to a respectably 30k by keeping the banquet tables smaller and removing a lot of unnecessary (in my opinion, of course) frills that are just icing on the cake that we can do without. We got back in terms of the ang bao money given by generous guest and relatives, so it was really kept at a pretty low cost. It was a good thing too because on hindsight, the extra cash that we can save is really dumped into the next financial bomb....

...Housing. The second financial bomb that comes along will be one of the biggest purchase anyone in Singapore would have the misfortune or fortune (depending on how you see it) of experiencing. I got a resale HDB in a matured estate and a 5 room one too. Things are all well and kept within plans but the funny thing is that when the plans collides with reality, all your well laid plans might just fly away in the face of reality. I know the ideal home for me when I see it, the perfect location, the ideal setting to set up my family and a good location to set up my work at home plans...the only problem was that the property is a 5 roomer but the 'planned' property is a 4 roomer. Some had said that it was lunacy buying at such a high price with such a high COV to boot, but I think it was a period of rare sanity amidst my usual well organised but ultimately sterilized 'insanity' that is so characteristic of my life. Whatever you call it, it is a done deal now so I'll have to make the best out of it. After settling the downpayment and the necessary fees, the next financial bomb comes ticking in.

Renovation. I was searching around for renovation ideas and went to the recently held fare at Expo to take a look at the packages and quotations offered by the various interior designer firms. I think from the mind draining and sleep inducing talk by the various companies, it would seem that the renovation costs alone for my property might go up to around 50k. There are some serious questions to ask myself and my wife: Will we really enjoy the marbled living room floor instead of the cheaper homogeneous tiles? Are we paying good value for the parquet instead of focusing on, again, cheaper alternatives? Is a feature wall necessary in the living room? What is the focus on the living room - is it a place where different minds meet together in jovial conversation or where different eyes meet in the lively pixels of the latest LED tv? Many more questions bombarded us as we go from company to company, seeking that elusive interior designer to help us discover what we really wanted in our hearts when we have not a clue to what we wanted. I think with furniture thrown in, it might really escalate the entire cost to the range of 60k plus. Oh well... so be it then.

If you've still survived all these three financial bombs, there'll be a fourth one - kids. Since I've not been hit by it, I'll not talk about it now. But seriously, it makes me think what I really wanted in life. It seems like either we have a pretty high standard of living or simply that we are not earning enough money. Money seems to drain out from our coffers like a fully running tap ever since we got married last year. Mind you, the proverbial tap is not dripping water, it's gushing water and for years to come too! I guess I'm just at the wrong place at the wrong time, but such talk do not make me feel better nor does it improve my situation, hence it's ultimately demoralizing and pointless. Let's just bear with it and shoulder on.

Black Swan Theory revisited

2011-05-20T12:07:00.001+08:00

I hear a lot of talk about Black Swans in my cbox these days. It's getting to be pretty cliche because of the constant usage. Just what is a Black Swan? Black Swan theory (capitalized to avoid the reference to actual swans that are black) is a phenomenon, popularized by one of my favourite author, Nassim Nicolas Taleb. Black Swan theory is characterized by 4 things - it's an event that is highly improbable and incalculable probability, highly consequential and finally the event can be rationalized by hindsight after the event.

There's a lot of interesting things about Black Swan theory that I've already talked about when I read the books a few years ago. I thought it's a great idea for readers to read it for themselves. Nassim Nicholas Taleb wrote two books on his pet topic, "Fooled by Randomness" and "The Black Swan". I think that the first book is a better read than the second one, though the second one is laced with more substance. It's the easy readability of his first book that endeared me to his astute observations about the world we lived in.

Here's a few links that I wrote in my past entries:

The black swan

Fooled?

Living life in an uncertain world

There are a few things that I'd always remembered after reading his books. A good book will make always leave some indelible marks after reading, such that you can never see life again in the same light. Here's a few thoughts that still stick to my mind:

Incalculable, improbable, consequential & retrospective

1. Do not confuse absence of evidence for the evidence of absence.

It's hard not to mix up a rare and low probability event by a non-event. Not seeing a swan that is black (absence of evidence) does not mean that there are no black swans (evidence of absence). Well, it could be that there are really no black swans in the entire universe or simply that you haven't come across it yet. Likewise, a 100 yr old man who had never died before (absence of evidence) cannot proudly boast that since he had not lived a day where he had died in the past 100 yrs, he's going to live for another 100 yrs (evidence of absence). Here, a single occurrence of a rare event will render all theories that came before it totally flabbergasted, thus the management of rare events plays a highly important role in everyday life.

In essence, we have to be open minded and embrace possibilities instead of being trapped in the framework of the past.

2. It is impossible to tell in advance whether an event has yet to happen or it can never happen.

This is linked to the first point because it's hard not to get mixed up between a zero probability event and a event that has low probability. As the local posters by the police had mentioned, low crime doesn't mean no crime. If we have a pack of 500 cards, and after drawing 499 cards, we are still drawing to get a queen of hearts, do we say that there isn't a queen of hearts or simply that it has a low probability of occurrence? It's just impossible to tell in advance whether an event has yet to happen or it can never happen.

Again, this calls for one to be open minded and really requires one to have the ability to accept possibilities, even strange ones that nobody had thought about. As Albert Einstein put it so succinctly, a genius is a person who dreams of snow while living in a desert.

3. Black Swan events have positive AND negative connotations

A lot of people attributed a negative connotation to Black Swan events. It can be the financial crisis (bad), it can be a spate of natural disasters in Japan (bad) or it can be a sudden diagnosis of cancer (bad). However, if you go by the definition, highly consequential events can either be good or bad. If you feed a chicken all the way when it's just a little chick, the chicken will learn to trust you. It may learn that you are its provider of food and you will take care of it. However, when the chicken is of age, you slaughter it for food. To the chicken, it's a negative Black Swan event.

(This brings to mind another interesting aspect. A Black Swan event is a relative term. If you're the person who reared the chicken for food, there is no doubt in your mind that once the chicken reaches a certain age, you'll slaughter it for food. However, in the eyes of the chicken, nothing is further from the truth. The many years that the chicken has lived peacefully without you slaughtering it cannot be misconstrued as the evidence of absence of slaughter.)

Similarly, I can give other examples of a person striking it rich with a ticket lottery. Or a chance encounter with someone who loves your singing so much that he's willing to sign you up as a singer.

To prepare for Black Swan events, we must be prepared for both the good ones, as well as the bad ones. The key is to limit exposure to the bad ones while maximizing exposure to the good ones. We should all work hard to expose ourselves to opportunities, even those that looks like opportunities (again, I cannot seem to emphasize this enough - be open minded!). You'll never know if your next break may come from helping an innocent bystander to pick up the book that he dropped on the floor, or to strike up a conversation with the person sitting next to you on the lonely road to the office during peak hour (interestingly, a crowded MRT can be a very lonely journey).

To prove my point, I wish to highlight the fact that many of the world's greatest discoveries or inventions are made when the person involved is not actively searching for it. Penicillin, the wonder antibiotic, was discovered by a very open minded researcher in a very fortunate accident. America was discovered when a trip was made to look for India (trivial: hence Native Americans are called Indians). A way to measure the density of irregular objects was likewise made when a certain someone is relaxing in a bathtub, possibly after trying to solve a problem deliberately.

So there, that's something to digest and think about.

*This article is contributed to IM$avvy financial portal, which is managed by Central Provident Fund Board and supported by MoneySense. This site has a noble aim of promoting financial literacy to the general population.

STI

2011-05-18T11:23:00.000+08:00

For self reference:

I see a few things - a downtrend restricting the upward movement stretching back in Nov 2010, heads and shoulders (though with no volume confirmation), strong support at 3120 level and the significant recent low near 3078 (which is also near the ema 200d).

Sell in May and go away?

Wacom Bamboo Fun pen and touch tablet

2011-05-15T13:18:00.004+08:00

I got a new tech toy recently - it's the Wacom Bamboo fun pen and touch tablet. It's primary function is to serve as an pen and touch input, not unlike a touch screen phone. I've been delaying the purchase for a few months, trying to decipher within myself if this is an impulsive buy or something that I really wanted to have. The cost of this is not exactly cheap (retailing at 329 SGD), and with that cost, I could have gotten one of those wifi enabled tablets or even an ipod touch. But I guess I really wanted this.

The trigger for the purchase came ironically because of ipad2. I was playing around with an app, called zen touch and was immediately impressed by it. I was having so much fun that my wife had to pull me away from the apple store. If I really got an ipad2 there and then, it would have been because I wanted to explore more on the zen touch app. So this lead to that, and I found a pre-owned Bamboo tablet selling for 250 SGD and I grabbed the opportunity. I guess I never looked back since.

I cropped away the edges...okay, I admit, it was a bullshit job. I'm quite inept at photoshoping or gimping. Yet.

It was such a pleasure drawing and painting and sketching and experimenting. There are a few things about drawing digitally that is so vastly different from drawing physically:

1. There is no lack of paints or paper or the right kind of equipment. With a proper software (included in the package), you can form amazing rendition of any sort of painting. You are only restricted by your imagination and skills, not by lack of equipment or constrained by cost. I think in the past, where I'm too pai seh to ask my parents for yet another box of coloured pencils, had doomed me to sketch with just a single 2B pencil. As a result, I'm much more inclined to do monochromatic sketches rather than using the full spectrum of colours that are available.

2. I can undo multiple times digitally, but I can't do that physically. Undo is such a godsend! I can experiment with different techniques without risk of spoiling the overall picture. When drawing physically, there's always the risk of erasing more than I can handle. It's even worse when painting, because the botch-up might not be always recoverable and it'll definitely leave a mark. Not with the magic 'undo' button.

3. The ability to draw on layers is a concept that is pretty new to me. On paper, everything from the form sketches to the colours to the shades of colours are done on a single layer. Digitally, you can break out a project into multiple layers overlaid on each other, so that you can do edition on one layers independently without affecting the others. It makes a other 2D project three dimensional, so to speak.

I'm like a child magically teleported inside a candy store - suddenly I've so many tools to play with and I don't know what to start with. As a result of this endless permutation of tools to play with, I'm addicted to doing some art project daily. Sometimes I just have to wean myself off the screen and take a break, because staring at the screen for extended periods always tire my eyes (another good reason why for serious readers, you should get a kindle instead of the more popular ipad - it's that different).

Here's some of the projects I've done. I've conveniently removed the more amateurish attempts when I first tried playing with the bamboo. I censored the clumsier attempts all for your viewing pleasure of course, not for my ego, haha :)

Wholly inspired by SMOL's latest post, of course

If you don't know who this this, don't ask

This is still work-in-progress...been 3 days already. One of my longest project on Bamboo

-----------------------------------

I've finally completed this after 3 days. The hard work is well worth it because I know the tool so much better than just a few days ago. I'm ready for more challenging projects :)

There is a story behind the picture. It'll set the mood and the feelings for this project:

Urthadar of Clan Hunting Wolf stands alone, in the wretched rain. The storm clouds darken much of the sky, as if foretelling his dire circumstances now. He alone will guard this only bridge to his homeland, if none others would volunteer. No, they have a much more important task at hand - to warn the others of the coming of the impending Plague that comes from the north. The ominous sound of a horn is heard, and is rapidly followed by many others, forming a cacophony that heralds the coming of the cursed orcs. Calling upon Tempus, his god of war, he gripped the handle of his battleaxe with renewed determination and roared defiantly.

Know your limits, then break them

2011-05-10T10:14:00.001+08:00

You know that I've always been saying that saving can be achieved by two means - either through an increase in income or by decreasing one's expenses. But till recently, I've never put a thought to which method is gives the least resistance. In other words, I didn't take into account the mind's resistance to new changes. I think based on your personality, you might find it easier to increase your income, but another person might find it much easier to just reduce expenses. Ultimately, the success of each method depends on how well suited you are to the method and how far you have to stretch out of your comfort zone.

This epiphany came as I analyzed the weight loss equation. There are two ways to lose weight - either to increase your energy through exercising more or by eating less calorific food. I know myself, I'm not a very sporty person so asking me to go out to exercise more is definitely harder than to simply eat less. I know another person who is better suited for losing weight through exercise because food is simply too tempting to avoid. I guess thr method you choose really have to suit your lifestyle to make the journey easier, because you do not have to step too far out of your comfort zone. Isn't this the same as the financial analysis versus technical analysis divide too? Some are better suited for the swashbuckling trading way rather than the more studious and research based investing. It's hard for someone with a personality for trading to switch to investing and vice versa. It's not that it can't be done, it's just that it might not be the easiest path.

Back to savings, I think it's easier for me to save more by reducing expenses. Some people might find it hard but for me, I think it just comes naturally. In fact, to spend more money requires quite an effort from me and that always amazes my wife. I find it quite a curse to be so tightly bound to my money habits (I'm trying to change it and my friends told me I'm much better now). That being said, the easier method might not be the better method in terms of accomplishing your goals. The pursuit of comfort might hinder the pursuit of goals because you tend to do things that doesn't stretch your comfort zone too much, never mind whether it achieves your end point or not. So, since I'm better at reducing expenses, I should not just concentrate on reducing expenses because that's easily done. I should explore options to increase my income because that is truly the limiting factor in the savings equation; You are limited by what you cannot do well, not by what you can do well.

For that somebody who finds it easier to lose weight by exercising more, she can try eating lesser as well as continuing her normal exercise routine. For those who are naturally suited to financial analysis as a way to view the stock market, he can take up a bit of charting. For those who are good in charting, she can pick up fundamental analysis to push her skills to another level. And finally, for those who are good at increasing income to save money, he can try reducing his expenses.

In summary, what do I advocate? Know your strengths and choose the method that suits your personality. Once you start on whatever goals you desired, maybe you should look at the limiting factor that stunts your journey, take a dab at that, try it out. If things don't work out, no problem because the risk of failure is low since you've already have something working. If it works out well, then your limit is expanded. And that is always a good thing, yes?

*This article is contributed to IM$avvy financial portal, which is managed by Central Provident Fund Board and supported by MoneySense. This site has a noble aim of promoting financial literacy to the general population.

The past and simpler world

2011-05-07T10:10:00.001+08:00

"How many people long for that past, 'simpler, and better world', I wonder, without ever recognizing the truth that perhaps it was they who were simpler and better, and not the world around them?"

~ Drizzt Do-Urden

How true that simple statement is. People, me included, often thought of the good old times, reminiscing how good the older and simpler times are compared to the more unpleasant present. How well it'll be if all the flats are cheaper and bigger, how well it'll be if the cost of food is cheaper compared to my salary and how carefree students are in school compared to the present. While no doubt that there are truth in such statements, perhaps it is also clouded by the nostalgic sentiments of the past, so that you only see the past with bias recollection of the more pleasant times, while blatantly ignoring the more unpleasant times.

Perhaps Drizzt Do-Urden is right, the world changes no doubt, but it is the person who changed even more. If I am somehow, magically transported to my distant past, would I have found the world a better and simpler place to live in? Maybe not, because I no longer look at the past with the eyes of someone browsing through a new book for the very first time, soaking in the smell of the new-ness of the book and absorbing all the sights of a tourist arriving in a beautiful town for the very first time. Memories are to be re-lived in the mind, not to be visited physically, otherwise the magic of the sweet nostalgia would be broken by harsh reality.

Let's relive some memories mentally then. People of my generation would have experienced these little pockets of memories as lively as my own recollection:

1. In primary school, we are have to chew on some tablets that gives a red colouration to our teeth so that the plaque are highlighted in order for us to brush it off.

2. After recess in primary school, the whole class can be seen squatting besides the drain in the school compound, gurgling water from a cup and brushing their teeth.

3. Buses are paid in coins, with a conductor stamping the ticket. Then the paying system becomes transit link card where you have to press your own fare. Finally it becomes ez link card where the fare are automatically calculated for you.

4. In primary school, I witness the explosion of plastic usage in everyday life. Tuppleware parties are held. The wood and metal tables and chairs are slowly replaced by plastic ones. Metal containers used to hold food are replaced by plastic containers. Metal water bottles are changed to plastic ones.

5. There's no such thing as calling someone you're meeting at 1pm that you're late, using a handphone. Handphone only became popular towards my army days and perhaps into my university period. Before that, if you make an appointment, you bloody hell make sure you're there on time. If not, there's no way to contact the person en route since neither of us carries handphone...

6. ...unless that person carries a pager. In which case, you have to call his pager, leave a voice message, and hope that he received the page and CALL his voice mail to retrieve the message. Really, it's just easy to be punctual.

7. I remembered dialling up to connect to internet...it was a frustrating exercise when a call comes in, then all your internet connection gets cut off. Not that there's anything much to do on the internet anyway.

8. Before google, alta vista was my favorite search engine. Lycos, yahoo are a close second. But once google appears, everything else is changed. Search engine can never be the same again.

9. I saw the advent of coloured television. When I was little, I remembered watching television in black and white. Then it became coloured, now it became 3D.

10. I saw the building of the MRT lines. I remembered fondly in primary school that a worker was waving at us (or rather, because we're waving at him) from the half constructed mrt lines. I remembered my first ride on the east-west line and how scared I was by the roar of the train when it's underground.

11. When I was in secondary school, punggol/sengkang was a swamp. I have great memories of canoeing and camping there. I remembered serangoon shopping centre was a hangout for ah-bengs and gangsters too.

12. In the past, buses are not air-conditioned. There are little windows that you have to shut it when it's raining. On the top of the buses, there's also a air vent that you have to close it physically when it's raining. Have you seen the sight of rain splattering inside a bus? A journey inside such a bus is warm but sleep inducing. I can even say that I can sweat comfortably and be lulled into a nice nap.

Is there more of such memories that you can think of? What was it like for life in the 50s, 60s, 70s, 80s that you remembered fondly? Do share it in the comment box below. I would love to have a oral history of how life was like in the past, compared to now :)

Outgrow your problems

2011-05-03T10:10:00.000+08:00

Everyone knows that to save more money, you need to reduce your expenditure. However, not many talked about saving money by earning more money. The equation is this: Savings = Earnings - Expenditure. From here, we know that to increase savings, you can either decrease your expenditure or increase your earnings. Nobody is going to stop you if you do both too.

If you've read T.Harv's book titled "Secret of the Millionaire mind", you'll read about growing bigger than your problems. He mentioned that "Rich men grows bigger than their problems. Poor men tries to solve their problems". Now, of course that is a general sweeping statement, but if you would just stop and think through it, it is actually quite a good paradigm shift in thinking about personal finance. No longer do we have to cut on our wants in order to reduce expenditure, but we can have both our wants and save more at the same time. But how do we do so?

Simply increase your earnings!

If you are so much bigger than your problems, then you can not only solve them, you actually outgrow them.

That is easier said than done, or simply impossible to some. Impossible is something that people try to reason to themselves in order for the status quo to remain the same. If you're always feeling comfortable and secure, then you are not growing. Most jobs do not require you to work over the weekends, so that's your best shot at monetising your private time. If you enjoy teaching, you can take some students for tuition. If you enjoy swimming, you can teach children how to swim. There's bound to be certain things that you enjoy doing over the weekends but can earn you an extra bit over and above your main salary. Most of the mid-career switch to being self-employed actually begins like this. A stressed up lawyer might do some baking over the weekends, but is so good at his craft that people will pay for them, so he quits his job and starts a bakery shop, thus earning way above his lawyer's pay but working in something that he likes very much. Not everyone will have this fairy tale ending, but if you don't try, you'll definitely not have it!

To grow bigger than your problems is to increase your earnings to such an extent that the problems shrink to something insignificant. I remembered fondly of the times that me and my classmates would pool money to buy MacDonalds in our JC days. In those times, having a decent meal for an outing is a trip to the golden arches. Even coming up with the few dollars needed to share a meal at MacDonalds is a strain on my financial resources, because the only 'earnings' that I have is the pocket money that is given to me by my parents. After I started working and my salary increases many fold, the few dollars seem insignificant now. That is the magic of growing bigger than your problems - the problems that plagued you in the past suddenly doesn't seem so daunting anymore because you've outgrown it. I'm sure there are people who can buy Mercedes without batting their eyes at all because their income is so high that the price of a Mercedes is just a Happy Meal to them. Price is a relative thing.

Here's a suggestion on how to both increase your savings and to satisfy the wants. This method works for me, so it might also work for you. If you want to get something that cost $500, try to earn $1000 above what you normally earn. The reason for this is that I try to keep my savings ratio above 50% of what I take home per month, so if I earn $1000, I have the 'right' to spend $500 without affecting my savings ratio. If you can earn that $1000, that you will get rewarded for getting that unnecessary but ultimately fulfilling want. In the event that you can't earn that extra $1000, you carry on as long as necessary, until the desire to get that want is just diminished (it's just too much work) or you've worked extra hard over the next few months to earn it (so you are rewarded).

You can tweak the percentage as you deem fit, but the basic underlying concept still applies. You always spend less than what you earn. If you want something that is not a need, you earn your right to buy it by earning more than the cost of that want. In this way, you can save more and get your craving satisfied. Don't always talk about fulfilling your needs and suppressing your wants. Needs sustain you but it's the wants that colours your life. You don't merely want to survive life right? You want to live life with as rich an experience as you could ever have.

*This article is contributed to IM$avvy financial portal, which is managed by Central Provident Fund Board and supported by MoneySense. This site has a noble aim of promoting financial literacy to the general population.

NOL / Cache / Indoagri charts

2011-04-28T10:06:00.000+08:00

Personal reference only.

NOL:

I think I mentioned in the cbox not too long ago about the possibility of seeing a triple bullish divergence. We're seeing it now. I still don't like the persistent downtrend line that the price seems so reluctant to break. I think 1.88 seems like a good entry point, exit at 1.96 thereabouts? Undecided whether to trade this or not.

Cache

I got in at 0.915, which I think is an excellent entry point. I see a bullish wedge formation with the neckline at 0.955/0.960. Not sure if the higher than average volume seen on Wed means anything. Will have to see if there's a followup on Thurs. With so many trenches dug in at 0.96, it might take a great effort to go pass that resistance. If it does, 0.98 and eventually 1.00 would be the way to go. I really like this one, both weekly and daily.

Indoagri

This looks good too. Entry 2.12 with tp of 2.22-2.25. This certainly looks better than NOL. Should I? Hmm...

Addicted to burgers :D

2011-04-26T00:02:00.000+08:00

** "BIAS" is a special feature in my blog where I get to say whatever I want with scant regards for your feelings. I'm not politically correct in this feature, so go ahead, judge me."

Quite recently, I've been addicted to this new burger by Burger King. Actually I'm not sure if this is a new burger or not, but there's this promotion that had been going on for some time. Basically, you order a standard meal that comes with a burger, medium fries and a drink, but you get two pieces of black pepper basil drumlets for free! This costs only $6.95, and I'm sure it'll fill you up because there's really a lot of things to eat.

Anyway, I digress. The burger that I was so addicted was the BK Doubles Crispy Onion burger. The sauce is a tangy BBQ-like sauce that is put in between two the beef patty and with a crispy onion. Just the thought of it makes my mouth water, haha :) A picture will replace a thousand words:

I think the picture above is for the single crispy onion burger. But I'm quite sure that I'm addicted to the doubles crispy onion one, haha! It was truly the best burger I've even eaten, and I was back at it again and again. That's this time that I got so hooked by it I was eating it thrice a week! But I have to take care of my health, so I scaled down on it already :)

There's now a promotion for Burger King again. This time round, you can get a free sundae with every burger purchased, whether it's a meal or not. I've never tried sundae before but from what I've gathered, it seems that it would be a good choice. But there's just so many things to eat, haha, so likely I'll have to share the meal with my wife. You can click the link here to get the coupon to enjoy the special giveaway. From what I've heard, it's good enough to save it in your handphone, so you don't really have to physically print it out.

My political inclination

2011-04-23T20:22:00.000+08:00

Vault dweller showed me a very interesting test on my political inclination. Since the hottest topic these days is about election, and I've no idea which side I'm on, I took a test that he linked to me. You can try the test here and do write it in the comments so that we can compare notes :) The test is quite long, around 6 pages worth of short questions in which you have to answer 4 choices : strong disagree, disagree, agree and strongly agree. After that, they will show you an analysis of your political inclination together with snapshots of the results that famous politicians will show with this test.

Here's my result:

This is the typical quadrant:

These are the famous politicans:

And this is my result:

Looks like my political inclination belong to the libertarian leftist :) I'm more alike politically to Gandhi and Dalai Lama and most unlike George Bush and Margaret Thatcher, haha! You should really try out the test :)

Leveraging for passive income

2011-04-21T21:10:00.000+08:00

Recently a person named newbie shared some of his insights into leveraging for passive income. It's not a new concept to me, but he did kindly shared some of the details on how he did it. Many thanks and appreciation for his generous sharing in my infamous cbox. Before I proceed, do take note that I've never done it before and this is at best an interpretation of what I had gathered from his sharing. It may not be exactly what he had in mind because some of the information might be lost in translation, but I believe the gist of it is captured here. Any mistakes posted is solely my own and please do read the disclaimer at the bottom of the site if you decide to act on this information.

The idea can be summarized in a line: Borrowing at a cheap interest rate and using the money to buy a stable financial instrument that is paying a higher interest rate, thereby earning the difference between the two.

As in all decisions regarding financial investment, the devil lies in the details. Several questions comes to mind. I don't profess to have the answers to all but this is what I've gathered from our conversations.

1. How cheap is the borrowing? Where to get such cheap money?

He mentioned that cheap financing is available from margin facilities in certain brokerage. From my understanding, if you're a private banking client, you can have access to cheap financing too. These will lend you different currencies at different rates, say USD at 2% pa or SGD at 1.5% pa (the figures are for illustration purpose only). Of course, not everyone is a private banking client (you need to satisfy a minimum asset requirement), but you and me can get cheap financing too. Newbie offered a suggestion of the possibility of getting a lower than 2% pa balance transfer for 6 months, thereafter it's a matter of rotating between different banks after every 6 months to enjoy the preferential borrowing rates.

The thing is, after you had reached a certain amount of assets, you start to have more options available to you that is not available before.

2. What is stable financial instrument? How much higher interest rate can you get from it?

Stability here means that the price do not move much. It is risk defined in the academic sense, and the lower the price volatility, the more stable the instrument is said to be. At the same time, there is a second criteria to fulfill. The instrument must also have high yield. What fits into this then? There are broadly three asset classes - stocks, bonds and preferred shares. Not all stocks satisfy this criteria of stability. But some examples like singpost and perhaps SPH might fit this well. Bonds are preferable because of the call back function upon maturity, so the price movement in between listing and the callable date is immaterial, which thus places the focus solely on the yield. Preferred share (or perps) is an equally good option because of the possibility of getting back the capital upon maturity, and thus removing totally the price volatility factor from the equation to consider.

I think high yielding perps by banks (ranging from 6-8%) are good for such purposes. Newbie did mention something important too - he do not wish to dabble in forex risk, hence the currency he borrowed and the financial instrument must be in the same currency denomination. For example, if you borrow SGD at 1.5% pa, you will buy a bond denominated in SGD at say 6% pa, and not another instrument denominated in USD at 6% pa. This eliminates forex risk and reduces the number of factors to consider.

3. What about the payment of interest and the principal borrowed?

For this type of leveraging, the securities that is bought with the borrowed money is pledged as the collateral, hence there is no need for downpayment or even monthly payment of interest/principal, IF you so wish. I think you'll have to work out the sums yourself if you choose to roll over the interest payments and see if it's worthwhile to even begin doing such things. Of course, you can always make principal payments month to month, using the net interest generated, and eventually get the collateral pledged as free. That is not unlike the pillow strategy used by bro8888 but with a twist - that is the use of leverage.

There is also the very real risk of a margin call, which happens when the value of the collateral goes below a certain percentage of the borrowed amount. If that happens, there will be a margin call to top up cash to lower down the ratio to the acceptable level. The way to mitigate this is to cut loss at a determined level, or simply to use the net interest generated to redeem the principal from time to time, hence raising the limit before a margin call comes in. Besides the risk of the value of the collateral dropping, there is also the matter of increment in interest for the money borrowed. However, this is not going to come overnight so there will be time to react. For example, if you borrowed USD at 2% pa to buy a bond at 6% pa, it might take a few years before the interest of the borrowed amount of 2% will reach 6%, thereby reducing the net interest earned.

Newbie reminded me that at the end of each day, each collateral is marked to market price, so there's a real need to be meticulous in the record keeping to ensure that there will not be a margin call at all. Not for the tardy person.

4. What are the risks involved? Too good to be true it seems...

First there is the risk of interest rate increasing. That will cause the interest that you can borrow to increase, hence reducing the net interest that you get. Secondly, there is the risk of the securities dipping in value, thus causing a margin call or a forced sale of the securities in order to maintain the margin ratio. Thirdly, there is the risk of the underlying company of the securities (for example, the underlying company of the much talked about Hyflux preference shares is Hyflux) going belly-up, rendering the securities un-tradable for unspecified period of time.

I think the third risk is the hardest to mitigate, because from history, even the most stable company can cave in. Even if you buy the most stable banking institutions, the one that is 'too big to fail', black swans event can happen most unexpectedly despite the most scrutinizing study of its financial statements.

That being said, will I get involved in this kind of leveraging? I might, but certainly not now. I'll keep my options open and concentrate on getting my main income going up, because my risk for my main income is the lowest, since I know exactly what I'm getting into. I think if you know what you're doing when leveraging, it can be a powerful weapon to advance your financial goals. Just be aware of the risks and mitigate them as well as you can. Thanks again for newbie for this eye-opener way of getting passive income.

Spendthrift youth?

2011-04-19T09:22:00.000+08:00

I came to know of a story regarding a female private university student who had spent 11k of her parent's money from the start of the semester to now. The semester should be about 4 months, starting from the beginning of the year. It's really incredible because at 11k for 4 months, it's about $2,750 per month of expenses. And she hasn't even started earning her keep yet! This is not the first time I've heard of spendthrift students, but this must be one of the highest maintenance kid that I've heard of.

According to a friend of hers, I came to know that it's because she had taken taxi to and fro everyday. Since she had lived a fair distance from the university, she had to spend around $60 per day on cabs on average. This means that in a span of 4 months, she'll have chalked up 7.2k worth of transportation fees alone. With this amount, it'll be better getting a car rather than taking public transport. I guess the rest of the 3.8k must have been spent on other stuff. It's really amazing to me that a young lady can really spend so much money in 1 month. 2.7k per month can be the typical salary of a worker in Singapore.

This is not the end. There's another story of a student from an elite school in Singapore overhearing that his friend is asking for 3k pocket money from his parents so that he won't have to keep pestering from them again and again. To ask for 3k per month for a student is really something, especially compared to my own pocket money. My pocket money in secondary school per month (estimated, because it had been a really long time) is around $80, rising to around $120 in junior college and finally $200 in university. That sum of money includes everything that I need to buy for that month, like transportation, food/drinks, books, misc fees for school etc. It is all inclusive. It had been roughly 10 to 15 years since I had left school, so had the pocket money rose up by almost 100 times? Had the price of food and entertainment and books rose up by 100 times too? I doubt so.

Perhaps this is the kind of parenthood that a double income household can give to their kids. Instead of giving time to their kids, they had to work and perhaps money is used as a compensation to their kids for that lost time spent together. This is so wrong.

It doesn't really matter if the parents can afford to give these extravagant sum of money to their kids. This is really about sending the wrong signal to their children about money. I wonder how many of these kids will be able to sustain the lifestyle that they must be enjoying right now during their schooling years. Once a high maintenance lifestyle is established, it's going to be very hard to live a more frugal kind of living. What if they can't earn that kind of money to sustain this kind of standard of living? It's just a ticking time bomb for these impressionable youths.

If this is the kind of behaviour that the youths are doing even before they start work, I want no part in this. I hope that they do not wake up one day in a rude shock that they are deeply in debts for their excessive wants. In the end, I also hope that their parents would not be the ultimate ones to suffer because of the actions of their kids. Seems like we're living in a very different world now, so may this be a wake up call for all parents!

*This article is contributed to IM$avvy financial portal, which is managed by Central Provident Fund Board and supported by MoneySense. This site has a noble aim of promoting financial literacy to the general population.

Hyflux preference shares Part 3

2011-04-16T20:49:00.000+08:00

It seems like hyflux preference shares issue is getting a lot of attention lately. Besides splashing nearly a whole page on the local newspaper, it is also widely commented in internet forums and blogs. To see how immense the interest in the hyflux preference share is, one only have to look at the explosive increase in viewership after I've posted the two articles on my opinion regarding this fund raising exercise.

This is not the only indicator of the immense interest in the preference shares. Here's a few more:

1. The owner of finance.sg had his site banned by adsense (the appeal is still pending), likely because of the huge spike in traffic after AK and me posted our opinions on the preference shares.

2. The placement for the preference shares is so hot that the bookrunner, DBS, had received orders almost seven times the planned number of shares (i.e. S$200 million offer size). As a result, the offer is prematurely closed since the maximum number of allotment for placement cannot exceed $200 million.

3. Since the placement is oversubscribed by 7 times, the allotment for the placement is roughly 14% (1/7 = 14.28%). This is in line with what I've read in the forum for those who had been allocated their placement shares. It range from 10% to 15% roughly, based on a small sample of people who had mentioned their allotment percentages.

I was quite shocked by the strong demand for the preference shares, frankly. It goes to show that there are a lot of money floating around waiting to be deployed. Is that another indication that the bull run will carry on? But one thing for sure, the offer for the retail tranche of the preference shares would be pretty hot. Perhaps you can only get the minimum of 1 lot unless you really put in a lot of capital. Most likely it will be more oversubscribed than the placement shares, because those who did not get enough from the placement would likely try their luck in balloting for the retail tranche. Of course, you have to add in a huge number of those who would stag this preference share to get a quick buck.

If it's oversubscribed by 7 times, you probably need to put in 70k to get 10k (100 shares) of the preference shares. If it's oversubscribed by 10 times, you probably need 100k to get 10k worth of it. You can do the math yourself. But know that there is only 2 million shares to go around for everyone, so maybe some might not get any at all. Judging by the huge response of the placement, it seems like many would likely try their hands on the balloting to sell on the first day.

It'll definitely be interesting to see how the opening of the Hyflux preference shares be like on 26th April. Would hyflux bring big bucks for the holders? haha :)

Hyflux preference shares Part 2

2011-04-15T09:48:00.002+08:00

Here's part 2 of the Hyflux preference shares commentary. In part 1, I've talked about the technical details of the offer, so now we can concentrate on whether it is a good buy, which is the ultimate question. Let's take a look at the preference shares offered by the banks here:

Most of them are ranged between 4 to 6% pa. Hyflux is issuing theirs at 6% and subsequently stepped up to 8% pa if they did not redeem by April 2018. But the company issuing these preference shares are banks, which are ranked above normal companies in my opinion, so naturally Hyflux will have to offer a higher yield to account for their more risky circumstances. Banks are financial institutions that are integral to a country and they must not be allowed to fail, especially in Singapore's case, lest the public's confidence in the financial system be wavered. Can the same be said for Hyflux? No matter how good the terms of the preference shares are, if the underlying company that issued it sinks, all the high yield offered are moot. I can't tell what I'm going to eat for lunch later, so I don't have the predictive powers to determine if Hyflux is still going to be around in a few years time to give me my dividend.

I would have thought that people who preferred preference shares are those who do not want to worry so much about the ups and downs of the market, since if they had bought it at par value, the shares would also be redeemed back at par value too, so the fluctuations of the price in between does not matter to them. In the meantime, they just have to collect the dividends and live their own life. Would they care to look closely at how the underlying company is doing from time to time? I would think not, because such investors should want a fuss free kind of passive income. Would hyflux offer such a safe, fuss-free haven, being the underlying company issuing the preference shares? I do not know, but I would bet my money on the banks anytime if I truly want a fuss-free kind of investment instrument. Besides, I do have a preference share by HSBC bought below par value, at a rate of 6.4% pa (but denominated in USD). I do not even care about what the price of the shares, which is exactly what I like about preference shares. If any preference shares that I bought do not give me this kind of feeling, I would avoid.

The dividend yield for Hyflux is around 2.5-3% pa. Do you wonder why it is low? Hyflux is a growth company, hence the need for cash necessarily reduces the amount given as dividend. They must obviously think that they can give you a better returns for the cash than you could. The good thing about putting your money into the ordinary shares of Hyflux is that you can participate in the upside of the company's growth. If the earnings of the company grew, the price will also rise (eventually). The bad thing is that if all these scenario didn't come to fruition, you'll end up with a possible loss. On the other hand, buying the preference shares limit the upside in terms of price appreciation. Preference shares do not move too much upwards, though it can certainly plunge downwards. Just take a look at the preference shares of the various banks during the financial crisis. The downside for preference shares is limited though, unless the underlying company fails catastrophically, because the lower the share price, the higher the yield will be. There will come a point in time where the yield is so attractive that buyers will step in to stop the downslide. If you buy at par value and hold it until redemption, there will be no capital loss at all.

My point 4 in this post on preference shares still sums up my decision on this one. I would look at it only when the price goes below the par value. I think you can still make money out of this (in fact, I think it might be a good stag). Given that you can even use up to 35% of your investible savings in CPF (the balance in CPF ordinary account plus the net amount withdrawn for education and investment) to apply for this and get a yield higher than what the CPF rates can give you, it might be worthwhile to invest some money into it.

So there, the odds are laid out in front of you. Go ahead and decide what to do with your money.

*This article is contributed to IM$avvy financial portal, which is managed by Central Provident Fund Board and supported by MoneySense. This site has a noble aim of promoting financial literacy to the general population.

Hyflux preference shares Part 1

2011-04-14T12:03:00.002+08:00

Hyflux recently announced plans to offer a 6% cumulative, non-convertible, non-voting, perpetual preference shares to raise funds. The purpose of this fund raising exercise is not known (or I've not read closely enough in the prospectus here). Regardless, let's see if this is worth looking into. First of all, let's take a look at the terms of the offer.

Preference shares is a type of hybrid between bond and equity (in fact, closer to bond than equity). The holder of this instrument will be entitled to dividend at 6% pa, payable semi-annually on 25th April and 25th October every year. Since this preference share is also perpetual, which means that unlike a bond, there is no maturity period for which the issuer will redeem back the bond. However, there is an option for the issuer to redeem back the preference shares on or after 25th April 2018. Take note that this is a right solely to be considered by Hyflux, not an obligation. If they chose not to redeem it back on or after 2018, then they will step up the dividend rate from 6% pa to 8% pa. If they chose to redeem it back, they will buy it back from you at par value. I will explain what's par value shortly.

Interestingly, this is one of the few cumulative preference shares I've seen. The bulk of the ones I've seen are non-cumulative. Cumulative means that in the event that dividend is not given for 25th April and/or 25th October, the payments are accumulated and paid on the next payment date. In other words, the payment are cumulative. However, dividends are not guaranteed. From what I understand from preference shares of banks, if dividends are given to ordinary share holders, preference shares must also be given theirs. This makes it almost as good as guaranteeing the dividend if the track record of dividend given by the company is anything to go by.

What's par value? In this case, it is the issue price of the preference share at S$100 per share. This preference share will be listed and traded on the main board of SGX from 26th April 2011 onwards. Since you bought it at $100 per share and it is traded thereafter, the price of the share will go up and down according to factors like interest rates, macro-societal factors and just basically, market sentiments. This means that the price can go above $100 or below $100. But on 25th April 2018, should Hyflux choose to redeem back the preference share (again, it's a right, not an obligation to do so), they will buy it back from you at $100 per share, regardless of what the share price of the preference share is at that point in time.

Those who had bought the share at $100 and held it till Hyflux redeemed it back in 2018 will realise no capital gain at all, since it is redeemed back at par value (which is $100) too. However, they get to keep the 6% pa for the period they are holding the share till 2018. For those who bought at a price of more than $100 after listing, they will make a capital loss (hopefully the dividends collected will more than cover up that loss). Finally, those who had bought at a price below the par value of $100, they will make both a capital gain as well as all the dividend collected till redemption. Should Hyflux chose not to redeem back in 2018, they will step up the dividend rate to 8% pa, instead of the usual 6% pa. You can treat this as their 'punishment' for not buying back the shares from you.

The offer for the preference share is up to S$200 million in total value (i.e. 2 million shares are offered) to the public, with an option to upsize the offer to $400 million if there is unsatisfied demand under the reserve and/or placement offer. You can expect it to be quite illiquid and characterised by huge gaps between buy and sell bids after listing, judging from the daily quotes of preference shares offered by other companies. After listing, the shares are traded in board lots of 10 shares, so buying or selling 1 lot of preference shares will be around the range of $1000 in value. As a sidenote, there is no voting rights attached to the preference shares, so holders are not entitled to attend or vote at AGM.

If you choose to buy it,you have to act fast. The public offer will open at 9 am on 14th April 2011 and close at 12 noon on 20th April 2011. The process is through ATM like all other IPOs, so you will have to pay a small fee of a few dollars for the application. Other than that, there is no brokerage charge if you apply through ATM. For the balloting through ATM, you need to put in a minimum of 100 preference shares (i.e. S$10,000 in total at $100 per share) and subsequent integral multiples of 10. In other words, the minimum you can apply for is 100 shares, followed by 110 shares, 120 and so on. You cannot apply 101 shares or 102 shares.

For those who like a surer bet, you can try calling your DBS Vicks online broker (since the sole book runner is DBS) to ask for a placement, but will be subjected to brokerage charges at a percentage of the total value. The difference between balloting using ATM and placement through your broker is that in the former, you do not pay any brokerage fees and thus are not guaranteed to get the shares, while the latter you'll have to pay a fee and will be guaranteed an amount given to you by the broker.

I'll discuss about the ultimate question - whether it is a good buy or not - in the next post. This is getting very lengthy as it is now. In the meantime, you can read about other posts I've blogged in the past regarding preference shares:

Preference shares part 1

Preference shares part 2

Preference shares part 3

Preference shares part 4

*This article is contributed to IM$avvy financial portal, which is managed by Central Provident Fund Board and supported by MoneySense. This site has a noble aim of promoting financial literacy to the general population.

The difficulties of investing

2011-04-11T23:14:00.000+08:00

The most difficult part of investing is the fact that repeating the same thing in different times will end up with different results. That is both frustrating and difficulty to correct. Imagine you are trying to learn how to ride a bicycle. You do an action and immediately you can see the results, hence the learning cycle is reduced. You practically learn how to cycle by trial and error alone. But in investing, the duration that transpired between the action and the results could be a few years apart. If you invest in this company, it's only after a period of time, ranging from a few months to a few years, before you can see the fruits of the action that you sowed. This makes correcting for error in methodology extremely difficult and makes the learning curve steep and treacherous. Do you really want to invest in a company and realizing that it is a dud after a few years, thinking throughout the entire holding period that you need time for the fruits to mature?

The learning curve to ride a bicycle is shorter because of the immediate feedback

This reminds me of an example. Some of the schools that my students are studying in do not have the habit of giving back the test results back to the students. In doing so, the students are deprived of a chance to learn from their mistakes. In other words, they can be doing a thousand tests and still not learn what is right or wrong since they have no feedback mechanism that can enlighten them otherwise. Likewise, investing now and knowing the results after a prolonged period of time can make the learning curve in investing necessarily steep and long. In investing, it helps to be a good student of history, because while circumstances vary, the human emotions that interplay between buyer and seller stays constant. All the panicky market crashes and euphoric bubbles are there for all of us to see, but not all will look at it to learn.

Throughout the whole market cycle, there are times when its profitable to trade, time to invest and a time to gun for yield. I think the key question is when to do which method, in order to get the best out of the current market conditions. In this aspect, I think Anthony Bolton's approach of doing different things at different times is very enlightening. I find his approach well balanced and not siding with either extremes of doing only trading or only investing. You can read more about him in his book "Investing against the tide". That being said, to really learn this, it'll take several market cycles of bull and bear before one can confidently say that one can do it well. To do this well, you have to learn different methods of playing the market and to know the right time to do each method. Difficult?

I quite like this book - it gives a very balanced view of investing vs trading

I offer an alternative that may prove tempting instead of learning how to juggle so many things in one market cycle. You can be a specialist, focusing all your attention to one single trick. You read up, you research, you practice all the time for that one single trick. If the conditions are not right, you wait as patiently as a fisherman with your calm facade suppressing the eagerness to hook a fish. Once the right conditions appear, you strike out using all the training that you've been prepared for. The hardest part of this alternative is to sit on the sideline waiting to do your single powerful trick and waiting patiently in the meantime. It is not easy doing nothing and believing that it will help you get more out of the market.

Then know this, it is even harder doing nothing when people all around you are shouting for action and making profits from the market, while you are doing nothing and believing that the right conditions for your trick is not here yet. Who ever says investing is easy?

*This article is contributed to IM$avvy financial portal, which is managed by Central Provident Fund Board and supported by MoneySense. This site has a noble aim of promoting financial literacy to the general population.

I'm a big girl now, mummy

2011-04-08T12:48:00.000+08:00

I came across this wonderful poem while reading this book by Virginia Ironside, titled "The Virginia Monologues", which I'll share in this post. I picked the book up in the library yesterday when my class got cancelled in the evening. I love moments like this - a sudden god-send gift to relax. Since it's too late to arrange a dinner with my wife, I just went to the library to see if any books can find me (I realised that we never find books. Books find their readers). The book just screams out to me when I was ambling through the shelves without any particular aim in mind. This book is about growing old and why it's great to grow old. When is the last time you've seen a book like this, extolling the virtues of getting old?

The old age theme seems to catch up on me recently. Just over the last weekend, I was at Suntec city when they had a convention suitably named "Active aging". In that convention, you see all sorts of interesting stuff, from will writings, general insurance, cooking classes, HDB's studio apartment with a twist for greying population, line dancing, games (including kinec) and many more. There's even a section where you can try on this very fun thing called kangaroo jumps. Imagine a roller blade with the wheels, mounted onto two crescent shaped arcs, forming a spring of some sort. You just wear it and start jumping! I saw a lot of seniors wearing it and start bouncing around. Since I was there for some time (I tried it and wifey even bought a pair), I've never seen one who failed to balance. Coupled with the huge 25% discount, I think the product flew off the shelves.

You wear, you jump - the aptly named "Kangaroo Jumps"

Have you ever felt this way too? Suddenly, it seems that everywhere you turn, things or events of similar theme just happens to you. For me this time, it seems to be the elderly theme. I went to the convention without intending to do so, and I borrowed a book on aging without planning to do so.

Here's the poems I am talking about. It's from the book and I find it very meaningful. Enjoy.

I'm a big girl now, mummy,

I can walk, holding on to a chair.

and I can feed myself with a spoon

and I can say 'Moo'.

I'm a big girl now, mummy,

I can go to school

and I can cross the road all by myself.

I'm a big girl now, mummy,

And I can come back home at whatever time I like,

You're bloody lucky I come home at all!

I'm a big girl now, mummy,

I sit on committees

and boss other people around

and lay down the rules about what you give my

children to eat if I let them

stay with you.

I'm a big girl now, mummy,

And I can face death calmly.

And then we will meet again.

Mummy.

The posts that never made it

2011-04-07T10:46:00.001+08:00

The title is a little misleading. In this blog post, I will put in some posts that I canned away before it is even published. The reasons will be stated besides each canned blog posts too, so that you can agree or disagree with them, haha! As mentioned in previous postings, it's hard to keep up with new posts every now and then, so the only approach I found viable is to have ideas jotted down, as they come along. So, when I'm walking along the streets and an idea hit me, I'll whip out my handphone and type in the rough idea of what I'm going to blog in a notepad application found in my handphone. This way, I'll keep track of the new ideas and if I can flesh it out, I'll blog about it.

Anyway, here goes:

1. The 5 most expensive things I've bought

I almost immediately brushed off this blog post after I've keyed into my handphone. It doesn't excite me nor do I want to dig out my records to see what I've got and the costs of each of them. The initial idea of this post is to veer towards the direction of having a lifestyle that do not require high maintenance or surrounded by branded goods. I think the comments that follows will be quite interesting to see though.

Killed ideas

2. Relative tragedy

This is right after the Japan earthquake/tsunami in March 2011. I've wanted to blog about how our personal troubles can be diminished (or enlarged) by comparing how others fare. I had this inspiration because as I was travelling, I've heard people complaining about all sorts of things. It could be that the bus is late, their school work is mounting up, tests are coming and so on. In light of the disaster happening in Japan, somehow I feel that their personal tragedies seem minute. I wanted to talk about this comical contrasts but decided against it. I do not have enough worthy examples and do not want to gloat over others' problems like that, hence I canned this post.

3. How do you know you've been converted as a soldier after ICT

This post is inspired by a chatting session with my bunk mates during my very recent in camp training (aka reservist). I've been away for around one month, so it's enough to convert the civilian in me to a soldier. Some of the things I've brainstormed include using IC to scan for food in restaurants, wearing a cap when under the sun, the ability to sleep anyway, the ability to sit anyway and so on. It'll be a light hearted post but the lameness of it deterred me. Not everyone is as enthusiastic about ICT as me, haha!

Mid action review - Cache Logistic Trust

2011-04-04T11:35:00.001+08:00

I've blogged about the charts on Cache a few weeks ago. Here's a mid action review.

Weekly

I bought it at 0.915 many weeks ago. Since then, the weekly bullish divergence has come to fruition. I'll be mapping out the exit strategy now. 0.955 - 0.960 is quite a resistance to clear. After that, 0.98 and eventually 1.00 is the level to go. Since it's a weekly divergence, maybe I'll wait till 0.98 and see how it proceeds. 0.955-0.60 gives me a ROC of 3% there abouts only...nothing fantastic but well, if there's money to be taken off the table before it slides out of my reach, I'll take it first.

Daily

The daily still looks pretty good. I love this kind of setup to enter any position. A clear cut bullish divergence on both weekly and daily, and the chart breaking the downtrend, retested downtrend line and bounce off. Now, after breaking downtrend, it might go trendless and trade sideways to consolidate first before moving up (or down), or it can move up from here. I don't know which, but it seems like the latter, judging from the series of higher highs and higher lows. Not sure if the 200ema will pose a resistance to the upward movement (there's not enough history to tell).

I guess from daily, the big fat resistance cloud is from 0.955 to 0.965. Clear that, we're off to 0.98 and eventually to the end Jan peak of 1.00. As a sidenote, there's a lot of reports on Cache, citing target price around the region of 1.30 if I remember correctly. So bullish? haha

A giant living in a small world

2011-04-01T09:00:00.002+08:00

In this horrid times, I feel like a giant roaming around in Singapore. When I go to a typical food court to have my meals, I just cannot be filled by one portion size anymore. More frequently, I'll have to order double portions or eat a light snack immediately after my main meal to ward off those growling hunger pangs. Even the drinks that I ordered seem to conspire against me, because the cups are so filled with ice that I can probably finish the entire drink in one single gulp.

When I'm at home, I'm likewise reminded of my gigantic size too. The rooms seem so much smaller than the ones I had lived in my parent's home. I remembered that we can put a round dining table right in the kitchen of my 4 room flat, and still have plenty of room to put a bar counter. There's also space for a few people to help out in the kitchen. I must had grown so much bigger now, because the kitchen these days can barely hold a proper dining table. From what I estimated, I can probably squeeze in two stools and a tiny table if I wish to sacrifice the walking space leading to the kitchen. Dwarfish properties seem to be accompanied by gigantic prices these fell times.

Big body, small seats... familiar situation?

I'm sure some of these things are just part of the effects of inflation. While the price of the goods sold might remain the same, the quantity will have to be reduced so that the profit margin can remain as before. What can be worse is the situation I encountered when I ate a certain famous curry puff. The price of the curry puffs had not only gone up, the amount of filling inside the puffs had been reduced too, so the effects of inflation cuts you twice as much. You've to buy more at a dearer price because getting one doesn't fill you as much as before. No wonder I feel like a giant these days!

Big appetite, small portion....familiar?

However, part of my giant-ness is also due to the fact that progressively more things are packed into a smaller packaging. Capitalism? Efficiency? Consider the sardine-packed crowd in the MRT train. I feel like a giant squeezing into a tin can, hurling me at great speed to dump me to my destination. What about the buses? The seats are having lesser leg room until it is decided that perhaps they'll do with less seats and more standing room instead. Clothes? Thankfully I'm not a lady, but it seems that more women have to fit into progressively smaller sizes. Perhaps there's no more L size sold in departmental shops anymore, except during sales where all the odd sizes make their rare appearance. Men are also wearing tighter bottoms, literally named 'skinny jeans', as a fashion statement (I remembered fondly the times where baggy clothes are in...I really believe that if you stay with the same style, eventually fashion will catch up with you once again). Hand phones are getting smaller, music playing devices are getting smaller, laptops are getting smaller, your office cubicle is getting smaller, cars are getting smaller....

Is it any wonder that your money is getting smaller too?

*This article is contributed to IM$avvy financial portal, which is managed by Central Provident Fund Board and supported by MoneySense. This site has a noble aim of promoting financial literacy to the general population.

The unequal race

2011-03-30T23:44:00.001+08:00

I saw this picture that just strikes out at me, urging me insistently that I put it up on my blog. Here it is:

In the picture, it clearly shows the difference between those from a wealthy family background and those from a poorer background. Even though the physical starting line is the same, the race can never be fair simply because the financial starting line will never be the same. Considering the two person running the race. They had started work at the same age and time, so their physical start line is the same. But the person in the foreground had to run the race carrying the burdens of their parents while the one in the background is 'pushed' ahead effortlessly by their Mercedes driving parents.

Unlike a photograph, everything in a hand drawn cartoon strip is done with deliberation and purpose. Every little detail bespeaks something that the cartoonist is trying to portray, from the fact that the two person have different body weight (one is more massive than the other) to the graduate hard-top hat and the harness that is strapped to the guy in the foreground.

Perhaps this is where meritocracy fails us all. Success is so often portrayed as the result of meritocracy, where the standing of one's position in society is based on one's individual efforts or merits. But how can this be fair if all of us begin with different starting lines in the first place? The flip side of meritocracy is also the sad perception that if you've done your best but you still didn't make it in life, it's your own fault because in a meritocratic society, this is what we're saying - individual efforts produce individual success. If you don't succeed, you're either dumb or stupid, so shut-up and accept your lowly lot in life.

This is totally unacceptable. Totally. I really hope that the elites do not have this kind of condescending view point on those who did not quite make it in life, especially in comparison to them. My knuckles whitened in anger when I think of this.

Have you done your taxes?

2011-03-28T17:58:00.000+08:00

As I was doing my e-filing of tax (the deadline is on the 2nd week of April), I was pleasantly surprised by two changes. A picture, or in this case a table, represents a thousand words:

You can see that the % for each tier had been reduced for tax assessment year 2012. I noticed that there's more breakdown of the tax bracket between 40k to 160k too. The result would be less tax for everyone, but more so for the lower income bracket percentage-wise. This year, I paid lower taxes than the year before. Firstly, I earned less than the previous year. This is most likely due to the many interruptions that the wedding had forced upon me. The wedding I had last year coincided with my peak season, so the drop in income is understandable. The second reason is that there's this 20% 'ah-gong' discount to the tax returns. I'm not complaining, haha :)

The other pleasant addition is that at the end of the filing exercise, they actually gave me a estimated sum of how much my tax returns will be. I had always wondered about the amount since I had started paying tax, so this new addition is very welcomed by me. No more guessing and making my own spreadsheet to guesstimate the amount of tax due anymore.

I've no problems paying taxes. I think the more taxes I pay, the better. Singapore already had one of the lowest tax rates in the world. The tax is used for 'nation building', as the tax assessment form that they sent you yearly reminds you everytime, so I think it is for a good cause. Anyway, the more I earn, the more they tax, but the tax amount will never be more than the amount that I earn. I think it's fair as I'm enjoying the good stuff about being in Singapore. Tax away then :)

Just do it

2011-03-27T09:00:00.000+08:00

What is it with humans? We crave for the comforts and security of routine but get frustrated and bored by the very same things that we do again and again. We want to experience adventure yet fear the road that lies ahead. We want to be do the same thing that we did yesterday yet we get bored by them in the end. I've talked to people who complained about their lot in life. For every suggestion that I offered, but they shot me back with 10 reasons why it can't be done. It left me thinking that perhaps they do not want to solve their problems at all, but is contented to have bragging rights to others about their pitiful and sad circumstances.

I am guilty of such negativity too. But I fight against it. In fact, I fight against the very nature of complaining to others about my own problems. I believe that everyone has their own problems to solve, and probably they only have enough energy to just bear it through. A good friend might want to share your problems by hearing you out, but to what end? At the end of the day, and all that is to be said is vented out, you are still the person to clear up the mess. The person who unties the bell still has to be the same person who tied it in the first place, to translate from a chinese saying.

I will also not wallow in self pity. In my deepest depression a few years ago, I know the spiritual harm that this does to me. Every thing in the universe seems to conspire against you when you indulge in self pity. I use the word 'indulge' because like wine, you get intoxicated in the inebriety of it all. Work, surprisingly, is the one that compels me to leave my sorrow self out of my home. From my deepest depression, I learnt a few things about my character. I wish I didn't had to go through it but having experienced it, I am quite certain I would not be in it again. I remember vividly how difficult it is to cold-turkey myself against all the pessimism that my mind constructed and how hard it is to dig myself out of the hole of self pity. I am all the stronger because of it.

With your shield in hand and your sword ready, brace yourself for the good fight ahead!

I believe that in order to succeed, a person must overcome your own limiting characteristics. If I have to change my quiet nature in order to succeed, I would do that. Likewise, if the ability to take hardship and be disciplined is limiting my path towards success, I would have to train myself to be disciplined and to endure hardships. Many many would complain about their own specific set of circumstances that leaves them unable to compete on an equal basis with those who, because of their birthright and family relationships, are more well to do. Life is never fair, and the sooner you come to terms with it, the faster you can get past the different starting line of this race and try to catch up with those who had already started running. Be-Do-Have instead of Have-Do-Be.

The whole point of this article is to psych myself up for the trials and challenges that lie so clearly ahead of me. The chess pieces are almost in place. If I can also motivate you in the process, then this article would have done it's job for the two of us.

The 4 priorities

2011-03-25T09:00:00.002+08:00

I believe that when we start working and start having a decent income stream, we shouldn't start investing straight away with that money. I think that certain foundation needs to be built first before we should think about growing our wealth. These following points, in my opinion, are listed in order of priority. I'll start with the first point with the greatest priority, followed by the last with the least priority:

1. Savings

This is the start of everything. Unless your family provides you with a huge sum of money to begin with, you'll have to work your way up. The savings is needed to build up a cash coffer for the many milestone events (like marriage, housing etc) that will likely occur in the near future. For those salaried worker, I think it's easy to set aside a portion of your monthly salary into another account, and then spend the remaining. This 'pay-yourself-first' strategy is reputed to be the best strategy rather than to spend and save whatever is remaining. For self employed tutors like me, I normally set aside cash as and when they come. My cash flow is not predictable, hence I work on a yearly savings target which is further broken down in monthly target. I'll continue transferring money (as it comes along) to a separate account until it hits that monthly savings target.

This brings about the next question: how much to save? I guess the answer to save as much as you can do it without feeling shortchanged in life. I think minimally, if you're earning 3k and above, you should be able to save at least 20% of your take home. If you can't hit 20%, you either have to find more ways to reduce your expenditure or to find more ways to earn more. As a guideline, I keep a savings percentage of around 60-80% of my cash intake.

2. Insurance

Insurance is to protect your savings. I'm not going to dive into the thorny whole life vs term fight here, but the first and most minimum protection should be a hospitalisation and surgery plan. Some might recommend using the cheap medisave plan and not a private shield plan. I leave it to interested parties to find out the advantages and disadvantages of each. Personally, I have a private shield plan covering me to the the best ward available, complete with rider to cover the co-insurance / deductible portion. I think a disability income plan is the next important one to have, followed by the standard bread and butter life coverage with critical illness component. The permutations for the same coverage is infinite, so there's a lot of room for customisation according to everyone's needs and wishes.

I believe that it's good advice to think a few years ahead before you commit to any long term plan. I've heard stories of people committing to a very expensive plan but because it takes such a hefty toll on one's cashflow, the plan is surrendered often with a loss. I think if in doubt, do not buy first. Just seek professional advice.

I think unless you're super interested in the industry, insurance coverage is something that you want to have
without having too many headaches. Sort this out as soon as possible so that you can have a peace of mind.

3. Set aside money for emergencies

Life is often unpredictable and most of these events that popped up usually requires money. I think the standard recommendation is to have 6 months of your average monthly expenditure (including the cash component of housing loans) in the form of cash or cash equivalent (meaning the cash is put into assets that can be easily converted back into cash) ready for such emergencies. I think that the 6 months guideline is based on the premise that if you lose your job, you might need to look for 6 months before you can find one and starting earning the money to pay the bills. By having a buffer, you can sleep a little more soundly at night. Actually, I would put in 6 months of salary to have an even greater buffer, but that's just me.

This money is not to be used for investment purposes that is hard to liquefy when in need. I think the ideal place to put such a sum is in savings account, fixed deposit or money market funds (MMF). Personally, I had mine split into my investment of stocks and another portion in savings account and MMF. I don't mean that as an advice for everyone. I guess my job is slightly different because I am not in the mercy of just a single employer so my emergency coffer can be a little less liquid than the typical salaried worker.

4. Investment

I think everyone must be able to invest in some way or another. It's really very very hard to reach financial freedom by just working for someone because that is basically exchanging your time with money. To reach financial freedom by just savings alone isn't going to be easy and I think probably you'll run out of time. There willcome a time when you are older and less energetic and can no longer fetch such a good price for your time. This is where your passive income comes in. Ideally, the passive income should grow to such an extend that it can rival your active income. But where does the capital from your passive income comes from? Active work of course.

Everyone must dabble in some investing instruments, be it bonds, stocks or property. This is akin to taking a quick ride on a car along one's financial freedom route. If not, the slow march along the road would probably be too slow and you'll run out of time before you can reach your destination.

I think in investing, the capital idea is not to lose your capital. You may make less returns but as long as you don't lose catastrophically, you'll be alright as time would weave its compounding magic for you. This doesn't mean that because you have a lot of time on your side, you can take more risk. I think it's good advice that as long as you don't lose money, making any returns is a bonus. Remember, this is the extra boost that will propel you faster towards your destination. The main workhorse for that journey is still your active income, which will provide you with the first tranche of capital needed to grow more capital.

*This article is contributed to IM$avvy financial portal, which is managed by Central Provident Fund Board and supported by MoneySense. This site has a noble aim of promoting financial literacy to the general population.

Clearing the clutter in your life

2011-03-18T21:18:00.000+08:00

I hate clutter in my life. It can exist physically or emotionally. Physical clutter includes the mountain of nonsense gathered over the past months (some are years) and stacks of paid and unpaid bills on the desktop. Even my computer desktop is cluttered with pdf and word document files that are archived off to read in the future. Games shortcut that I'll never have time to complete, movies link that I'm supposed to follow up in the near future. As personal experience had shown, I never read stuff that are to be archived for the future. There are just too much information clutter present in this digital world to halt at a mere piece of information right now. Emotional clutter are just people or events that just sit there and drain your energy. You might find working for this particular person very distasteful but for whatever reasons, you still persevere. This kind of things just saps your energy and emotional reserves that at the end of the week, you feel physically and mentally drained. Emotional vampires, I call them.

After enduring these clutter for one year (I looked at the oldest set of bills - it's dated April 2010), I knew I had to clear them before I can 'free' myself. Hence, I spent the whole afternoon clearing up all the clutter that had accumulated in the past year. Bills that had been paid are thrown away. Slips of bank statements are archived neatly in a file and notices of insurance updates are slotted in the correct place. My whole desktop looks much neater now. I realised that there the tidiness of my desktop can never be perfect - it exists between a balance of chaotic and neat order. Whether it's neat or messy doesn't affect the ease in which I can find my stuff. However, if it's messy, I'll feel flustered and caged, as if I'm working and living in a heap of rubbish. I hate that feeling.

Like the Daywalker, I'll strive to cut up all my emotional vampires and physical clutter

I always clear my clutter before I embark on something big in my life. In this case, I need to clear up my life to prepare myself for the more hectic work life ahead. In the next few months until the wintry months, I doubt I'll have the time or the energy to clear my my desk. It can only be messier. I guess that indicates that I'm actually working on my desk, haha!

As for emotional clutter, I try to stay clear of people who do not value my time. It can be students (really, some of them are real emotional vampires) or just people whom I do not want to meet. I'm glad this year, I do not have a lot of emotional vampires sucking off my energy. It's most fortunate that my job allows me certain flexibility to select the people I want to work with. I'm really getting more selective these days because I realise the dangers of dragging yourself to work just to face off with these vampires.

Hmm, come to think of it, perhaps there's a third kind of clutter - financial clutter. These are financial stuff that sits there and drain your money, while cluttering up your financial life with things that you can't understand. I've a few clutter in my stock portfolio, perhaps it's time to cut up all these and lead a renewed life. Is your life full of clutter that needs to be cleared up too?

Nikkei crashing

2011-03-16T00:55:00.000+08:00

Japan had the greatest earthquake in its history, of magnitude 8.9. This triggered a tsunami that devastated the eastern and mostly northern part of Japan island. Due to the specter of possible nuclear meltdown over the nuclear power stations situated in Japan and consequently damaged during the natural calamity, Nikkei crashed very badly. The first day it crashed around 6% and today it crashed another 10%. That's a very bad crash, bringing Nikkei below 10k mark to around 8.6k.

This is a historical moment in the financial world, so I'll snap a shot of the crash of Nikkei. Horrific really.

Stock market do not take kindly to uncertainty. Due to the tsunami and earthquake combo causing widespread damage, which is immediately followed by the overhanging of the possible nuclear meltdown, there is panic selling in Japan that spreads globally too.

Makes me wonder whether the time to buy and hold for long term is truly over, given the more and more frequent black swan events happening around the globe in recent years. However, it is not my place to comment on this. I just know what I have to do. Sell some and buy some. There's nothing to be emotional about your losses. Just take it stoically and be thankful that what we lost is just money. There are others out there who might have lost their entire home and even the lives of their loved ones.

Somebody by Depeche Mode

2011-03-14T10:59:00.001+08:00

The Japan earthquake cum tsunami is very heartwrenching. Is it only when disaster strikes that we think more deeply on what is more important in our lives? I guess so, because all I want to do right now is to hug my wife and say that I love her.

I was listening to our march in song a moment ago. It's called Somebody by Depeche Mode. A very old song but one that speaks volume of our relationship. I didn't mention this in my wedding but this means more than the official wedding vows that we exchanged. This is our wedding vows, presented in the melancholic melody of that song, sung in the meaningful lyrics by Martin Gore.

Here's the lyrics:

I want somebody to share
Share the rest of my life
Share my innermost thoughts
Know my intimate details

Someone who'll stand by my side
And give me support
And in return
She'll get my support

She will listen to me
When I want to speak
About the world we live in
And life in general

Though my views may be wrong
They may even be perverted
She'll hear me out
And won't easily be converted

To my way of thinking
In fact she'll often disagree
But at the end of it all
She will understand me

I want somebody who cares
For me passionately
With every thought and
With every breath

Someone who'll help me see things
In a different light
All the things I detest
I will almost like

I don't want to be tied
To anyone's strings
I'm carefully trying to steer clear of
Those things

But when I'm asleep
I want somebody
Who will put their arms around me
And kiss me tenderly

Though things like this
Make me sick
In a case like this
I'll get away with it

Cache Logistic trust

2011-03-13T00:14:00.003+08:00

Cache logistic trust

Weekly

Daily

Company pays dividend per quarterly, with annualized DPU at 0.077. At price of 0.925, dividend yield is 8.3 % pa. Gearing is 23.7% based on last FY results. Sounds like a good trade...perhaps within the week. But the profit margin isn't that fantastic. Selling near 0.95 to 0.96 yields only around 3% ROC...not that fantastic. Even if the weekly divergence plays out and I sell at 0.97, it'll be around 5% - that might be worth something. As such, I'll not pay too much attention to the daily...I'll wait for the weekly to show some signs before I commit.

Interesting to see how it'll play out though. If conditions are right, this could be one of my favourite set up for a mid term trade. The yield is seductive though...

Collected thoughts

2011-03-06T12:05:00.000+08:00

I was quite out of touch of the whole world, having spent most of my week out in the jungle having no access to internet and newspaper. Even my starhub reception out there is intermittent at best, so I can't even call out or sms if I want to. Anyway, nothing much changes with or without me - the world revolves on its own in my presence or not.

Some random thoughts:

1. I noticed that I had many pens in my pencil case. I was trying to clear out some non-working pens and was testing out the ink of the pens, so I was scribbling on a rough paper and writing some random stuff. I didn't really think about what to write and was really letting my thoughts flow out without inhibitions. Was pleasantly surprised by what I wrote, so thought that I'll share it here:

"There are only so many things you can do in your life before your flame dies off and leaves a trail of smoke marking your existence. But fear not, and be sad not - it's the journey and the quality that counts, not the quantity and the length of the journey. A mayfly living for a day might have more purpose than someone who lives through 100 yrs of purposeless and driven less existence."

"There are so many things I wish to accomplish in my life but do I have the time to do so? Nay. I can only prioritize and choose the one that gives me the most satisfaction according to my goals and my needs. Who is to say that my wishes and aspirations, though not lofty and almighty, are any less significant than yours?"

I seem to have written about mayfly before. Doing a little search on my blog confirmed my suspicions. There is something interesting about mayfly to me. Somehow their 30 mins to 1 day of life (depending on their exact species) makes me think what the mayfly are thinking about. Is their life fruitful? Is their life too short? Would they wish to have a longer life? Interesting thing to ponder.

2. I was reading the newspaper today and saw that people are complaining about a certain Kelly Ong - a commentator for starcraft battles - and her incomprehensible accent. I listened to it here and found that it was alright. I listened to her comments for 2-3 clips to have a broad view of her accent. It didn't sound fake nor was it too fast, as the comments mentioned. Those who commented on her accent are mainly from the west. Perhaps it's time for them to accommodate to other country's accent instead of always assuming that other people have to follow theirs. The world is bigger than the country you're living in, so grow up please.

3. I realised that I didn't miss the stock market. The market goes up and down and I might have missed the opportunity to get some cheap buys but am I worried about it? No...the opportunity will come again. If it's mine, it'll be so, so that's no point fretting about it. Perhaps not looking at the stock market so often will do wonders to my mental well being and probably nothing much will change in my portfolio, even if I watch it like a hawk. So why do I still insist on watching it so closely? Habit? Obsession? Boredom?

4. My broker asked me if I wanted to do a placement for Hutch's IPO. It's denominated in USD and pays dividend in HKD, around 4-6% (I really can't remember). I am left wondering why such a hot IPO will have placements for me, a retail investor. I don't like it to be denominated in USD and paid in HKD. The fact that I was asked about the placement makes me think twice about it. Am I going to subscribe? IPO is a funny business - if you can subscribe to it easily, it's not going to be a good one; if you can't subscribe enough of it, it's going to be a good one. Screwed if you do and screwed if you don't.

5. A spunky newbie in the market asked my wife if she does Forex trading. The student, a guy, said that his friend is going to teach him how to trade it profitably with just $500. Can it be done? I suppose so, but it's not going to be easy. Let's hope that person don't lose more than the $500 that he intends to put in. Somethings in life, you can only learn from mistakes that you commit on your own even though preferably it's better to learn from other people's mistakes. Let him be aware of the risk and rewards of doing forex trading, and let him be the one who smiles at his profits and grimace at his losses.

Comfort items

2011-02-28T10:00:00.001+08:00

I am going outfield next week, so this week I'm going to do some shopping to bring some comfort items to make my life in the jungle for the next few days more bearably. For those who are not in the know, going outfield means that you can't bath for around 3 to 4 days. You can't brush your teeth. You can't shave. You can't shampoo your hair. You can't change your clothes. And you freaking wear your socks that are soaked in sweat and dried up and soaked in sweat again and again for the whole duration of the exercise.

Disgusting cannot even begin to describe that feeling. It's like you know you're going to do something painful and the pain of waiting for it to come makes the thing even more painful. I'm sure when it actually starts, it'll pass on quickly. SO, I am going to do some shopping during the weekends to make my life much more bearable.

I listed out the items that I needed in order to make it easier for me to do the shopping:

1. Baby wipes - those alcohol laden tissue which can clean you up and make you feel extremely refreshed. This is ultra important.

2. Insect repellent - self explanatory. It's going to be hot and stinky and if there's insect bites, especially mosquito bites, I'll be very very pissed off.

I tried to come up with something else that can make my life even more comfortable and realised that there isn't anything else. Life can be very very simple. Just two items can make my life so much more bearable. I'm actually hard pressed to find anything else, which is very interesting to me. I wonder how I'll feel when I'm finally finished with my in camp stint. What other observation would I make of myself?

Life in green

2011-02-23T10:00:00.001+08:00

If I've said this before, I'm sorry, but this is really what I feel. I like going to reservist. Some say it's a waste of time, others lament the amount of work waiting for them when they return back to their office. For me, it's precisely because in the army, I do not have to be responsible for my time that I find it so refreshing. How does that make sense? I'm usually a very time conscious person who fills my time to the brim with not much not much wastage. Time is accountable to me, because I have precious little to waste it. I know my exact per hour rate (due to the nature of my work), hence I always end up with a tinge of guilt whenever I'm not working as hard as I could be.

That's very stressful, isn't it? Pushing yourself to limits all the time. That's why I go for my batam trips. There's essentially nothing to do but to sleep, watch tv and read books. It's a leisurely pace in life that I so crave for. Because my usual life is so full of responsibilities and discipline, I find that reservist is a very refreshing and a desperately needed change in pace. When someone orders me to do this, I'll just do it. There's no thinking involved in my part because it is supposed to be done by those superior in rank to me. In fact, I'll do it very happily because there's a bunch of good ol' army buddies whom I've known since I was 18, 19 years old, all doing it together with me. It's a mix of nostalgia combined with a heady mix of brotherhood that I find comforting. We can all bitch about our life (or army life) and perhaps the most serious decision of the day is whether the lunch is good or bad. Reservist not only gives me a chance to rest my body but more importantly, it gives me an opportunity to rest mentally and to reflect and indulge in some soul searching.

I always come out feeling more ready to go and more refreshed than any holidays after reservist. Maybe during holidays, I still have to be with my spouse. Don't get me wrong, I'm not saying I don't enjoy her company, but separation makes the heart grow fonder. I think a healthy separation from the company of each other can do wonders for our relationship. During my reservist term, she'll be going out and spending time with her friends, or even herself. I think it's the 'me' time that is important. With so many distractions in the civilian world, it's hardly justifiable to have 'me' time anymore. I'll end up spending time with myself in the night when everyone else is asleep. This keeps pushing my sleep time later and later and making me more tired and tired until the whole sleep cycle is restarted with a bout of reservist in every year. This is important to me.

In my experience, this picture shows two extremes reaction. One of utmost disgust, another of thoughtful reminiscence

No doubt I'll be earning less in my reservist period compared to working, I think it's still very worth it. It's compulsory anyway, so I don't really have a choice, which is good. Sometimes I think having little choice is better than a lot of choices, because the former makes you think really hard about each choice available to you, rather than making snap decisions and move on to the next one with the latter. In army, this lack of choice is even more stark, because you're simply ordered to do things. I know how this sounds - it's a pitiful attempt at justifying mental laziness and rejecting any semblance of responsibilities to one's own life. But hear me out, a life where one has to make decisions on your own is a very tiring life (satisfying no doubt but still tiring). I feel no shame in wanting a period of time where I do not have to be responsible at all. Those who are happily employed might not be able to understand what I'm saying here, because you've no idea how much initiative I've to take just to have the same pay back every year.

But I digress...I'm not bitching about my work life here and enjoying the much needed break during my reservist term. I'll be gone for a month (since last Fri) and there might not be any new posts. You certainly won't see me in the cbox. This is a delayed post made on a fine Sunday afternoon, and by the time you read this, I'm already well inside my army camp, possibly doing some mindless task or bitching about the sluggish pace of life while wearing green without really meaning it.

The youth and the stock market

2011-02-20T10:44:00.000+08:00

Quite a lot of people are joining the stock market at a younger and younger age. While it's important to know about such things eventually, I wonder about the wisdom of joining it at such an early age. Isn't there something else to focus on, like socializing and indulging in pointless but memorable pursuits? I started doing this stock thingy when I'm 26 or 27. I've the bulk of my earlier years doing plenty of pointless but memorable stuff. I remembered playing lots of RPG games, reading extensively on all sorts of topics (except finance) and simply just day dreaming.

Would I exchange all these stuff for an earlier retirement? I doubt so. It's just part of growing up, I suppose. I fear that the younger the youths are joining such financial pursuits, the faster they would lose their youthfulness and idealism. The financial arena is not for idealistic individuals because they would be washed out in no time. Will today's youths be losing their idealism at an earlier age too? Who else could be idealistic if not for the youths?

The youth are greatly limited by the lack of capital. I don't know about them, but when I'm in my early twenties, even if I've the interest in the stock market, I would perhaps have less than 10k in my bank account. And what could I possibly do with 10k in my bank account? Buy s-shares? Buy those pennies and hope that my skills in picking out a gem would ensure that my 10k would multiply? It's not impossible, it's just terribly hard and the odds are against you since without the necessary capital, every shot counts even more so and the tolerance of mistakes are significantly reduced. Or perhaps driven by the lack of buying power, one would be driven to use leverage to enhance the gains (and the losses)?

I think like a kitten, the youth should spend time on playing.

So, what's the point of dabbling in the stock market when one is so severely limited? I believe that without a minimum capital, it is better not to start investing/trading. That minimum should be around the range of 50k. Why 50k? With that amount, a position of 10k can be placed each time, so one would have 5 bullets in total. With 10k, one can buy most of the blue chips, which are a lot safer than pennies, though the gains are not as substantial. With 5 bullets, perhaps 3 would be average, 1 would be spectacular in profits and 1 would be in the loss, so one would come out of it alright. But what happens if you don't have 50k to begin with? Then stop kidding yourself that the positions are for long term investment and stop deluding yourself that the amount of dividends would contribute towards your passive income for attainment of financial freedom. Even if you struck gold, the amount gained would be insignificant.

A lot of youths start to believe in their own investing/trading powers after reading up on a few books by their gurus. That is the problem isn't it? Clouded by youthful optimism and confidence, they march straight into the jaws of a shark, still thinking that they can escape unharmed. I think it takes life experience to sieve out skills from luck, because a skilled person would have the same outcome as a lucky person. It also takes life experience to sieve out the market truths and the myths. Literature cited time in the market is better than timing the market. I'll say it depends on which stock you're holding. The wisdom it takes to determine when an advice is appropriate to a situation will take time to develop. I'm just not sure whether when I'm in my twenties, I would want to learn about such things. I feel that a part of something in me would be lost and gone forever. You can get all cynical and skeptical after being 'tainted' by the market, especially if you've lost a lot of money.

Seriously, I would recommend most youths to simply concentrate on their studies or get a part time job and in the meantime, just read extensively about finances in general and not to focus so much attention on the stock market. There is a time to do everything and once that time has passed, you'll be wondering how your youthhood is like. Would it be full of adventure and memories or would it be that you've made a ROC of 10% but an absolute amount of $1000? What is $1000 to a youth with no proper earning power yet and what is $1000 to a working adult?

Seasons of life

2011-02-16T09:00:00.002+08:00

I seem to be going to a lot of baby showers recently. Either that, or I'll be visiting people who had just given birth in hospitals. It seems that this is the season where a lot of my friends are having children. Not too long ago, I'll be invited to a lot of wedding dinners. Seems like there's a season for everything. If we divide a person's life into 4 seasons - spring, summer, autumn and winter and place milestone events of one's life accordingly, we can see a closer relationship to what kind of seasons our lifestage is currently at.

Spring - In this phase, people are getting married. I was invited to a lot of wedding dinners a few years ago, so that must be the peak of the spring season. Interestingly, as I was married last year, I'm the last few people among my friends who are married; most had already been married a few year earlier than me. I doubt I'll be getting a lot more wedding invitation now. Maybe just the occasional once or twice a year, as the bulk of my friends had already tied the knot. Spring is filled with hope and anticipation, full of wonder as to what the new year might bring.

Summer - This is the phase that I'm currently at. Recently, I've been going in and out of KK hospital and buying gold bracelets / anklets for babies to celebrate their 1st month into the world. Some are already having their 2nd kid. Again, since I had a late spring, I'll likely have a late summer as well. I kind of expect more and more of such occasions until maybe 5 years later, where the reproduction system and the desire to have kids die of with the passage of time. Summer is filled with fun activities but also equally filled with sweat from the higher temperature. Everything is still sunny and bright.

Autumn - This is the phase where the children of my friends are getting married. It can also be the marriage of my own children. I'll extend the season to include the birth of grandchild. Obviously I'm not at that kind of age yet, so I've not attended a single such events at all. But I can see that my parents and my in-laws are already into the autumn season. Some just entered the autumn (children getting married) while others are deep into the season (birth of grandchild). Autumn has a tinge of melancholy amidst happiness, as the encroaching coldness and bitterness of winter draws near.

Winter - This is the phase where one is attending the funeral of your friends/spouse. I wonder how that will feel, with the pool of friends slowly diminished by the encroaching touch of death. Will it be scary, will it be lonely and will it be gloomy? Winter is cold and lonely, always wishing for the warmth of people around you.

But if there's no despairing winter, there won't be hopeful spring. Life is a cycle filled with seasons, isn't it? I think seasons can equally be applied to investing. I leave it to readers to draw a parallel between the two.

Money management skills

2011-02-15T09:00:00.006+08:00

These days, I tend to focus on the planning part of executing a trade. I'm no longer the trigger happy person I was when I first started in the market. I guess it's no longer exciting to me, and I don't have such a high expectations of it, so the stress is no longer there. I used to think of wanting to get a few hundreds every week from trading. I think all these targets are making it hard to think properly and you always want to do some action instead of patiently waiting out. I removed all such targets from hence on.

Besides learning about the technicalities of a trading system, I think the more important part is learning how to manage your money. You must have heard a lot of people saying about money management and all, but what does it really mean? To me, these are the key elements:

1. The amount of capital allocated to each position

2. The risk/reward, the cut loss and take profit point for each position

I find that over time, there's nothing new I want to add to my trading system. It works fine for me, both financially and psychologically, so I know that is the correct trading system for me. The only thing I want to keep on improving would be on my money management skills. Money management is really about allocating a limited resource (money) to where it's treated best.

It's interesting that only after the bulk of my free cash is spent on my highly expensive flat, and that I've really limited resources to trade, that I actually spent a lot more effort looking for the best bang for my buck. You can even call me a reluctant trader, in the sense that if certain conditions are not right, I would not even look at it. If it hits the right conditions, I'll reluctantly put in a small position to test it out. If it hits another lower point and the conditions are right again, I'll enter reluctantly again. This mindset of sieving out what's wrong about a trading position is new to me. I think in the past, I'm looking for what's right about the trade, and there are lots of reasons to enter something. You see what your mind wants to see.

So in the middle of a trade, I might want to free up my resources tied up in a position to have cash, not because the trade has run its course, but rather I saw a more attractive potential position coming up. I'm arguing with myself whether the extra bids I can get from waiting out the full potential of the position I'm already in is worth the wait and therefore the risk. It's the opportunity cost of holding a position and locking up your capital, especially so if the position is profitable. That is, again, new to me because I used to have the resources to do up to a few trades at one time, but now I'm reduced to maybe 2? So, in a good way, I'm being forced to evaluate all my positions to get the best out of my portfolio, instead of an individual trade.

That, I think, is the epiphany that struck me when I was browsing through my charts late at night.

CMA post action report

2011-02-12T10:00:00.001+08:00

I entered a trading position on capmallsasia a few days ago. I'm surprised that I closed it in 3 trading days since it hit my target price. These days, I really can't be bothered with that few extra bids that I can get by staring at the screen constantly. I just leave it with a queue order, if it hit, I'll be happy with it. If not, I'll queue again. Lazy way to trade, really.

I've been eyeing this counter since CJ mentioned buying it months ago. It had been interesting academically then but it only became interesting to me when a buy signal is triggered recently. I got in a 1.84 when it hit my overnight queue order and had been rising for the last couple of days before the party stopped. I cashed it out when it hit my tp of 1.96 3 trading days later. Since I had covered the full MA channel for this trade, I'll say it's a pretty good one.

Of course, on hindsight, it could have been better if I waited 2 days later because the price went up to a high of 2.05 before coming back down to 1.91/1.92 at last close. It's really important to leave when the party is still on. I do not want to leave when everyone is leaving. And so because of this, I would always have to leave some run behind for others, which is perfectly fine with me. If I had 2 batches, I would have cashed out a batch at 1.96 and another one at 2.00, near the value zone of the weekly. But since I had only 1 batch, I don't want to change my tp on the go and adjust while I'm still in the trade. That happens so many times before - I changed my tp in the middle of the trade, and it came crashing down on me. No more of such things in the future.

Is it a good time to re-enter? That's the thing, I'm unsure now. The weekly says there's more room to run (though I don't like the last candle on weekly), the daily says hold it first. I'm hesitant because if you take the movement from 1.83 to 2.05, the pullback that we see the last couple of days can hardly be called a 'retracement'. It could be the more macro environment pulling its weight on this stock, who knows? I'll be watching 1.88/1.89. If that happens and there isn't something better that comes along, I might just return for second round.

Recognizing short signals

2011-02-11T09:00:00.000+08:00

I think it's important to learn how to short, even though you may not wish to do it. Most stock exchange would frown upon shorting and measures had been set up to prevent people from doing naked shorting. That's all well and understandable. However, I think for those who are always on the 'long' side, it's equally important to learn how to recognize short signals.

In the past, I'm more interested in looking out for buy signals because that's essentially what I do. I buy first and sell later. I don't sell first and buy later, which is essentially the meaning of shorting. That makes me very good at buying and finding the right entry. But to fully complete a trade, you must learn how to buy and to sell. I would say that there are so many books on teaching people how to get into a good entry but not many on how to sell properly. Of course, getting a good entry is half way there, but getting a good exit is the more important half. It's the half that determines whether you turn a profit into a loss. It's the half that makes a losing trade a winner too.

Anyone knows the link between this picture and this post?

But understanding when to short need not mean that you have to actually short it. In recognizing a short signal, you can either choose to short it, stay on the sides, sell your position or choose not to buy. I think choosing not to buy is the most important use of recognizing a short signal, especially for those who only do long trades. If you choose not to short upon seeing a short signal, the very least you can do is not to initiate a buy position. That is both sensible and financially rewarding, isn't it? Alternatively, you can choose to sell or trim your holdings knowing that the price will come down again. That's taking partial profits.

So, do not just concentrate on one side of the equation. Find out more about on shorting so that you can recognize a short signal when you see one. In that way, you can smell a change in the wind direction when it happens. Remember, just like seeing a buy signal doesn't mean that you have to buy it, seeing a short signal doesn't mean that you have to short it either. The more important use of recognizing such signals is to choose not to act 'oppositely' to it. If you see a buy signal, you do not short. If you see a short signal, you do not buy.

Knowing when to commit yourself to a trade can often be the lifesaver, rather than stop/cut loss. Prevention is better than cure yea?

About micro financiers

2011-02-04T08:13:00.000+08:00

Recently, there are news about the dearth of micro-financiers locally. These micro-financiers are the stop gap, the safety net so to speak, for those who requires short term loans but do not quite satisfy the strict income requirement needed by banks. In short, banks only want to lend to people who do not need the money and refuse to lend to those who needed the money most. It's an interesting development in the finance world, isn't it? For those low income clients or those with shady credit history, perhaps the only choice they have would be to seek legalized and licensed micro-financiers who provide quick cash for their urgent needs, albeit at a higher interest rate. The higher interest rate is the necessary evil they would have to endure because traditional banks usually do not want their business at all.

I've seen a number of companies offering quick cash to people in need of a loan. They usually involve a tremendous amount of paper work to submit and takes a few days before approval and subsequently another period of time before you can receive the amount that you need. So, for those who are in urgent need of cash to tide things over, they will be in a fix. What's worse is that some of these companies have hidden charges and fees in the form of administrative charges slapped on top of their purportedly low promotional rates. It's like dangling a carrot with a big stick hidden behind your back.

Recently, I've been introduced to this company called QuickQuid in UK that offers something remarkably different. Unlike most companies, QuickQuid offers one of the fastest funding I've seen. Imagine submitting an application for a loan by just clicking at the comfort of your own home, and getting approval and funding all within one hour of application. You'll be able to get funding for up to £1500 with absolutely no administrative charges, no application fees and no account management fees. This offers customers a very quick and convenient way to get the online cash advances they need immediately, without the fuss and hassle that usually comes with it. The fees are transparent and clear. Even if customers pay late, they incur the lowest industry default fee of only £12. These and other charges are clearly defined and presented to every customer prior to signing the loan agreement. There's even a customer service team that runs 24 hours a day, seven days a week to answer all your queries.

If you're looking for easy cash advance without the hassle of submitting extra paper work, this is the answer you've been looking for. Check out the website for more details.

Chinese new year

2011-02-02T10:54:00.000+08:00

I never really like Chinese new year. I know I sound like the proverbial beast 'nian' that roams ancient China during this time of the year. The way to frighten off this beast is the excessive use of red everywhere and the setting off of firecrackers to create loud noises. I must say it certainly 'frightens' me off as well. That is not the most irritating thing to me, since there isn't any firecrackers setting off anyway here (it's illegal to have it). Oh, there's also nothing to eat too except for fast food. Town area is practically zombified. But the worst thing about Chinese new year is the incessant playing of Chinese new year songs. It's like having to listen to someone scratching the blackboard with his nails, except that it's never ending and omnipresent! Imagine you're in a heady daze squeezing through the crowd of people feeling stressed up and frustrated, and in the background, you hear the ever chirpy Chinese new year songs....horrible.

Maybe it's just me. A chinese new year humbug, so to speak. My family doesn't really celebrate it either. There's no sign of any decorations nor even the buying of chinese new year goodies placed at home. It's really just another normal day, except for the reunion dinner where we'll always eat steamboat at home. It's about the only time of the year where I'll be watching more tv than usual (my usual is not watching it). After enduring the fake happiness and fake chirpiness of the actor and actresses singing their usual routine of songs, I'll watch out for the annual chinese horoscope reading of the 12 signs by some master. Not that I really believe in it actually. It's just a ritual, a tradition and as rituals and traditions goes, you don't really want to question why you do certain things, otherwise you'll spoil that magical moment.

This year, however, promises to be different from all the other new years I've lived. Firstly, I've got two reunion dinner to attend to. Thankfully, it's not going to be a pig-out event on Chinese new year eve because I've already 'completed' my side of the reunion dinner on last Sunday. The schedule of different families, each with their own commitments, make it hard to find a suitable time where everyone can be present to have dinner. Hence, to facilitate everyone, it's just held earlier. So, I'll be spending today waiting for the reunion dinner at my wife's home. That's the highlight of the day actually.

Secondly, I've to give ang pao instead of receiving them. I think this is going to be an experience. I certainly don't mind giving them. Hmm, maybe all that would change after this 'honey-moon' period. I never really bother changing the new crisp notes from the bank with the serial number all running consecutively. Money is just money right. (anyway, don't they say it's just for goodluck?) As long as the notes are presentable, I think that should do it. Besides, I drew it out from the atm machine, so these are pretty new. If you drew it from atm near big branches, the notes might even be in running serial number, so you can save yourself the long queue.

Enough ramblings, have yourself a merry chinese new year!

Singtel post-action report

2011-01-27T09:00:00.000+08:00

After posting the chart on singtel a couple of weeks back on 10th Jan, I was pleasantly surprised that it 'popped' on 26th Jan, with the price rising 2.3%. I had decided when I've posted the chart earlier on that I would not trade this counter. The reason is that the counter is too heavy, and I do not have a lot of spare cash. At most, I can only do 2 lots, but if I'm stuck with it, I do not have enough to average down nor do I want to lock up my capital there. Then, I've put up a entry price of 3.04 to 3.05 with expected tp of 3.19.

Even though I did not trade this, I thought it'll be useful for me to analyse what is right about the trade. Here's the chart on 10th Jan:

Here's the chart on 26th Jan:

Here's what I think about it:

1. The bullish descending triangle works out very well, with the price popping out of the upper trendline of the triangle with increased volume. It however didn't rose immediately after that. Instead it continued to consolidate before rising up . This might fake people out of the breakout.

2. There is not only a bullish divergence, there's a triple bullish divergence, with the price continually forming lower troughs and the macd histogram forming continually higher troughs.

3. Long term FI divergence.

My initial target price of 3.19 thereabout still holds, though I'll be careful about the resistance cloud of 3.15 to 3.17. If anything is not right, it's really alright to take your profit and live another day.

Another reason why I didn't trade singtel is because at the time when I was tight with cash, I was trading singpost. Even though my singpost trade has lesser ROC than the singtel trade, I can hold more lots because of the price per share, hence my absolute amount for my singpost trade is still higher than if I had committed my capital on singtel. Sometimes, getting the winning trade in terms of the highest percentage might not result in the best outcome in terms of absolute amount. In light of money management and the risk of the possibility of getting my capital stuck in a heavy counter like singtel, I gave up the trade. Come on, singpost, make me proud!

Finding a style that suits me

2011-01-26T10:47:00.003+08:00

After being in the market for quite some time, I realized the style that is most suitable for me. The style that one adopts is important, because it caters to the different needs that one craves for and yet able to make a decent return. Due to the nature of my work, I cannot have access to internet all the time (nor do I wish to), hence intraday trading which I used to do when I first started is out of the question. That includes things like warrant trading, which occupies most of my time when I first started in the market circa 2006-2007 period. I've not dealt with warrant trading since, because it's just too excited and too distracting to me, to the extent that it takes concentration off my work. So, intraday trading (and warrants trading) is out of the question.

What about value investing? I took to that after recommendation by a few people, read the necessary accounting books (I have no prior background at all in accountings) and the mandatory books in value investing. Tried my hands on plowing through the many research materials available publicly in the form of annual reports and through the internet. The results isn't spectacular. Most likely it's the time period when I'm doing value investing - I didn't give it enough time to see the results come to fruition. Given more time and less work, I think I might have enjoyed researching in depth on any particular companies. There's a certain joy in carrying out detective work on company - I realised that when I tried it out on several companies (hongguo, most notably). However, I find that this is an uphill battle for me as I struggle with difficulty in analysing both the company's business (I don't have practical business knowledge) and the numbers that quantify the financial health of a company (I'm not good at accountings). I can be okay with it but I'll never be good in it - that I realised. For basic accounting, everybody with a mind set to do it can read it up, but without real practical knowledge and years of immersion in working on it, the knowledge is at best superficial. I'm not quite prepared to spend my time on it, hence I realised that this route is not for me. There just isn't enough time at hands to deal with so many things in life, and I can do with one less on my hands. I figured that as one grows older, the commitments that take away one's time will only get heavier and heavier, never lighter. Time being a precious commodity that I have requires me to allocate it to places where I can get the maximum result with minimum effort.

I think I'm a ranger - one who does long range sniping (long time frame trading)
and a touch of ranger spells (FA). The spells cast are used to aid in sniping.

What about trading using TA? Oh, this I can do. The system that I'm trading (it's counter trend trading, for those who are curious) with doesn't require much time to pick up (though it requires a lot of time to master, and I'm not a master) and most importantly, it doesn't generate signal all the time. Funny right? People would have thought that a system that generates signals frequently is a good system. I think that a system that fits into one's routine and is also robust is a good system. I don't have the time to check out the prices every time and I might not be there at THE moment when the timing is at the best, hence it's important that any system that works for me doesn't generate a signal frequently. My ideal trading period is anything from a week to a few months and what's really comforting is that there'll be more signals when the market is down, which fits into my psychology of buying cheap, rather than chasing after high (e.g. breakout). I'm definitely going to do this as and when the signals generate as it had provided me with the occasional 'ang pao' to settle the necessities in life.

Knowing that I have to concentrate on my career where I can get the maximum returns (though not necessary min effort), I'll have to put more money into getting passive streams of income. So far, this is in the form of reits where in this low interest environment and their leverage form of business model, they are thriving pretty well and giving a returns of anything from 5% to nearly 10%. This will not go on forever so there's a time I'll have to give up the passive streams and get my capital out again. The ideal case would be the most inspiring case blogged recently by bro8888 regarding his kepcorp - a blue chip bought cheaply at high double digit yield. Those are the kind of passive income that would be more resilient through the inevitable ups and downs of the market. Still, there is a time and tide to do everything. With the bull market raging on, it's foolish to get blue chip now and I only hope that I'm strong enough to buy it when the bear market comes.

That's it for me - a bulk of capital into dividend yielding counters (Saizen, Aims, SP ausnet, FCT, First Reit, HSBC pref shares A), a dash of trading (ah hock, singpost, sabana) and another bulk of capital at a international blue chip (HSBC). There's a few dud counters that I'm still holding and it's not taking a lot of capital, so I'll just see what surprises it can throw at me (sitraH, sunning tech).

Try beating my high score!

2011-01-25T00:00:00.002+08:00

I don't know what the fuzz is about the infocomm thingy, but it sounds like a great buzz is generating on the social media. I'm rather attracted by their graphic designs so I clicked in and went around to check it out.

You can go in and take a look around at what's on offer..I think there's a scholarship for those who are interested in pursuing a career in it. What's interesting is that you can also get a chance to win the coveted xbox 360 and the newest Kinect by playing some games! Trust me, Kinect is really fun, haha!

The game is actually a series of 4 mini-games where you are tested on different skills. The first one tests your maths skills, the second on analytical skills, the third tests how good you are at connecting things and lastly, the fourth test is about...erm...it's kind of hard to describe, haha :) Well, if you've played those nintendo brain games, these mini games are quite similar to them. If you win the highest score, you get a chance to win the console! You can try as many times as you like and at the end of the game, you'll get a sort of a verdict on what sort of job you're most suited for. Kinda fun :)

I played it once and got a score of 5640. My second try is 7350 (50%, 30%, 40%, 27%). Not too bad lah, try beating my score, haha!

Food for thought

2011-01-23T00:11:00.000+08:00

I came across this wonderful quote by Mae West. I thought I should share it with everyone. It captures the spirit of not shortchanging yourself and living a life to the highest potential. What is considered 'right' is different for everyone, but I think the best way to find out if something is 'right' is to consider whether you'll regret how you live your life and the decisions that you've made. If you find that you are regretting less and less, you're probably going towards the right path.

Interestingly, if I replace the word 'right' by 'wrongly', it'll stick make perfect sense, though the meaning is changed entirely. "You only live once, if you do it wrongly, once is enough". That line has a quality more akin to a warning, rather than the original one which is more encouraging and uplifting.

I was reading up on typography recently and I wanted to try out some ideas on some arrangements of words, so I designed up this picture and selected the colours and all. Something doesn't feel quite right with it, but I'm not sure why too. Oh well, hopefully when I did more of such work, I'll be able to say what's wrong with it. I do like the colours though :)

Regarding the quotes, that's food for thought for Sunday :)

EZ-reload with POSB everyday card

2011-01-22T00:41:00.002+08:00

I'm very happy with my POSB everyday card. After using it since May 2010, I realised that I've chalked up more than 60 SGD worth of daily cash rebates that can be used to offset anything from watson's purchases to credit card bills. Not too long ago, I became aware that POSB is offering 2% cash rebates on ez -reload. I think this is a new feature because I remembered working out some sums and concluding that it's not worth the effort.

EZ-reload is the feature where you can link up your ez link card to automatically top up a pre-determined amount. This feature used to be free for the older ez link card, but it is currently chargeable for a fee of 25 cts for every automatic reload. This pisses off quite a lot of people, as far as I remembered. A service that is rendered free suddenly becomes chargeable, so the response is thus understandable, especially to the lower income household where 25 cts can be a part of the cost of a trip.

However, with this 2% cash rebate, things will be different. I worked out the maths of the whole deal. No matter how much you pre-set for the auto top up to occur, there will always be a charge of 25 cts. I think it's more worthwhile to put a higher pre set amount (I think you can do $20, $30, $40 or $50) to reduce the percentage of the charges. Here's a table to show you the summary:

As you can see, by getting the ez-reload using POSB everyday card, you can not only offset the admin cost of 25 cts but also earn a tiny sum ranging from 16 cts to 76 cts, depending on the top up amount that you pre-set. Seems like a good deal. The advantages of such a deal is obvious - besides the cost savings (in fact, it's earning you some cents), there's also the time savings feature. In the past, before I used this ez-reload feature, I've to keep in mind the value in my ez link card. If it's nearing $5, I'll top up because if it runs out, I'll be in trouble. Now, it's going to be one less thing off my mind. The final advantage is that you can carry less cards, since a credit card and the ez link card is merged into one.

The disadvantages are as follows:

1. Precisely because there are so many features packed into one card, the card becomes immensely important. It better don't get lost because you'll have to cancel both the ez-link reload feature as well as the credit card. Not for people who are careless and have a history of losing such things.

2. The feature is good while it lasts. Not sure if there's any time duration for such cash rebates. It could be a permanent feature of the card. Citi smrt card is also joining the band wagon to offer 2% cash rebates for ez-link reload.

Anyone who wants to apply can go to this link here and follow the instructions. It's really quite simple.