Normality is over-rated

This article here really tugs at my heart.


I found myself always trying to unlearn the things that I've learnt in school, or from others, so that I can take in new information and assimilate them into my consciousness. The new illiterate are not those who cannot read, but those who cannot unlearn what they had learnt and thus adapt to ever changing circumstances.


When I started my job as a tutor, I wasn't taking a normal job. A normal job is a 9 to 5, wearing long sleeves and a tie, with a suitcase and going towards the city area. You get paid every month, with occasional bonus plus benefits. I always say this: my job as a tutor is so 'abnormal' that even my parents didn't recognise that I'm working until quite recently, especially when I was still living with them. I get calls to find a proper job all the time while I was still living with them. The pressure to conform is very very real.


There are plenty of other normal things that normal people normally do, like retiring at 60 or even eating 3 meals a day. During medieval times, people only eat 2 meals a day, or once if they are poorer! A lot of such norms are really social constructs, which is obvious and common sensical when we're trapped in our current society. There are societies out there who treat their children as mini adults, letting them have all the sex they want (interestingly, they contrasted our society and theirs - ours have all our hunger satisfied but there's no warmth in our relationship. Theirs have no warmth in their bellies) and no mothering over dangerous things like knives or fire. In fact, most kids there have scars to remind them about the danger. If you know about such societies, it does make you question over what is considered normal. If you like more of this, go read "The world until yesterday" by Jared Diamond.


And thus the point of travelling is to experience new cultures. If you want to travel with the cultural baggage that you had, then you just did an out of body kind of travelling. Your body flies across great spans of oceans to arrive at the destination, but your mind is still as closed as a clam back in your self imposed confinement. Maybe reading more will help, rather than travelling more.

Now, I'm not saying everyone should go out and break out of the norm. Going against the norm simply because you want to be contrarian is as sheepish as going together with the herd. It's like Kepcorp dropping like flies and because you want to be a contrarian, and be greedy when others are fearful, you just buy it. Seeing the world in dual choices is silly. If people are not buying A, you don't have to buy A - you can buy B, C, D or E. The important part here is not to be reactionary. You see people do this, you react by following them or not following them without much consideration.


I think we need to examine the norms that we are following unconsciously, and examine them critically to see if their values align with ours. Only then will yours decisions be truly yours and not the product of some reactionary decision you've made by looking at what others did or did not do.

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Hacking the routine in my life

If you found me posting lesser and lesser, it's not because I'm discouraged by the bear attack recently. In fact, I'm busy buying away and watching my defense line to see if they need supports. Rather, I'm occupied with hacking my life's routine.


On a whim, I decided to start waking up early one day. It started on a particularly slow Monday, where I felt that I was so unproductive that it pisses me off. Then I wanted to wake up on Tues at 7am and go jog - which is something I've not done for a very long time. The last recorded run I ever had was back in mid 2014, and that is unbecoming of me. I clearly know the health benefits of exercising aerobically 3 times a week, but I just didn't have the discipline to do it. And heck, I've been procrastinating for way too long, always coming up with excuses like having too much work etc etc. Work is never going to get lesser, and I'm never going to be more healthy or younger, so it's just now or nothing. What's the point of being focused on earning some much when I don't have the health to support it? Pointless, I say.


So I did wake up at around 7am for the next couple of days and I did went for a jog. Yesterday was the third time in a very long while, and I can now run continuously for about 13 mins over a distance of 1.8 km. Slow, but well, I had to take baby steps to kickstart the whole thing.


I realised that good habits stack on top of one another. One of the hardest excuse to not jog is that I have no time, so I wake up at 7am to run - excuse eliminated. Then I can't wake up early enough, so I have to sleep early at around 11 to 12 instead of 1 to 2am - excuse eliminated. Then I can't relax at night after work, so I shifted my entire schedule to fit in a running schedule, like having a light dinner really really early (like 530 or 6) to give time to digest to allow an early night sleep - excuse eliminated. My point is that as I try to improve myself, several things all change in tandem to one another. It's like I felt my life improving not just by 1 point or 2 points, it's like 30 to 50 points in one shot, because of this cascade of good habits that support each other.

In summary, to have a healthy lifestyle, here's the following I changed over the span of a year:

1. Meditation every night - helps in my sleep and relieving of stress
2. Fruits for lunch every alternate weekday - keeps me more energetic and less bloated
3. Jogging twice every week - helps my cardiovascular fitness
4. Pullup/pushup every day - helps my upper body and back muscles, also the mental strength to go on when I thought I can't go on anymore.
5. Waking up early and hence going to bed early


Everything works in tandem with each other. I shudder to think what happens if this situation is reversed, as in when one bad habit supports a lot of other bad habits and we have a vicious cycle downwards. How we do one thing is how we do everything.


Oh, one advice to people hacking their life - roll with the punches. Your system must have allowance for slack days where you totally don't feel like doing anything of the wonderful life-changing things you've set as your goals. You just want to vegetate in front of your tv eating potato chips. Go and do it. Allow for small failures but get back in the next time. Don't aim for perfection, aim for consistency and sustainability.

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Plan for 2016

After utilizing a portion of my warchest, it's time to wait for the kill for the remaining portion of my warchest. It's not easy to look at your portfolio and see it decimated week after week, but I think I took a depression and several years thereafter to get the lesson that the market is trying to teach me when I paid my tuition fees involuntarily. These are lessons that have to be taken eventually. Life has a habit of throwing you obstacles when you think that everything is going smoothly. Learning to take things in stride, especially when you can do nothing about it, is an essential skill.


Let's focus on the things we can do. I'm more worried about my job if the bear market becomes protracted. If we go by the rule of thumb of the market leading the actual economy by 6 months, then we might see a bad situation for SG51. Will my jobs be affected? Since that is my main source of income, that is also my main source of worry.


Here's my worry:

1. Harder to get new students
2. Bad debts for existing students
3. Reduction in fees chargeable


1. Harder to get new students

I think given the often toted resilient nature of the education industry, it might be a while before I can feel this effect. In the past few recessions, I did notice a slowdown in the intake towards the ending phase of the recession, not the start. I guess when people reduce their expenses, their child's educational needs are still considered needs and not wants. It still requires constant effort to keep on marketing and looking for new students year in year out, so I'll continue doing that. I think I'm better trained than most to do this, because every year I have to find new students anyway as my graduating students leave. I should be able to replicate whatever I've done in the past 12 years to do this.


2. Bad debts for existing students

I only have bad debts for the first 2 years of my career. After I implemented some measures to reduce my risk, this had come down to zero. Still, with a possible recession coming, then I will have to step up my measures. For new students, perhaps I will have to start my practice of giving less credit and asking for payments from monthly to bi-weekly. Also I'll collect fees in advance whenever possible, so as to reduce my risk of non-payments. I should be able to handle this aspect from past bad experiences.


3. Reduction in fees chargeable

I suspect that if the demand drops, I might have to reduce the fees somewhat to raise the demand level. That should be the last resort. The better way is to group students together, so that each student pays substantially lesser amount but I get to earn a higher fees per hour. Win-win for everyone. I remembered that a student had to ask for a reduction in fees because the father got retrenched in the last round of recession. I can't remembered whether I took a reduction (knowing myself, I think I did), but now with my own classes conducted at home, I can do a few tricks to protect myself. Grouping is one way. For students whom I am going over for lessons, asking them to come over for a fee reduction is also a great alternative. What I get in lesser fees can be translated to more time and less effort needed to get over there.

Having said all these, I also need to increase the range of services that I 'sell'. I have to upgrade my skillsets to increase the range of modules/subjects that I can teach. This is why I'm very glad to be able to teach new modules/subjects this year. I'm currently handling one IB student with very weird option topics. Usually the option topics will be statistics, which every A'lvl student are taking anyway. But this particular student is taking discrete mathematics, which I've never studied formerly before. Reading up intensely now (and neglecting my 52 books challenge for the time being) so as to prepare myself for possibly wider and more comprehensive range of modules to teach. This is on top of 2 university modules that I could be teaching to 2 students. One is one statistics, matrix algebra and differential equations and the other is math for econs and statistics again. Which means more reading and studying.


What am I doing all these for? To secure my income! I realise that for now, and likely for the next 15 yrs, it's going to have far more reaching consequences that my investments could ever do.


The underlying conditions for all these will be shattered if I do not have the health to support it. We think that health is always a given, until it is lost. If you've ever had a bad case of flu, whatever big plans you have for your career will have to take a backseat while you just really want to lie in bed and sleep. As such, the focus will never ever be off on health. This year, I'm trying to eat cleanly and also continuing my spiritual practice of meditation. Every alternate days on weekdays is going to be fruits for lunch. Halved my portion of rice too. Everyday except Sunday is a rest day for my body, while everyday I have to do some pullups or pushups. I'm trying to kickstart a jogging habit too and I hope to do so by end of this month.


Let's go.

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The Greasy Panda crash of 2016

As I type out this post, STI is down another 47 points to 2650. Everyday you'll see the oil and gas sector, as well as the banks going down and down and down. For every bear, there's always a name attached to it. In my little group, we call this the greasy panda - greasy because it's oil related and panda because the last straw that broke the camel's back seems to start from China.


For those who had the cash to capitalise on this, it's a dream come true. Such events, should we survive, will propel us a few years forward. The key word is that we need to survive through it. I think now we shall see whether you can take the risk that people talk about in the stock market. If you're a Kepcorp investor, seeing your holdings drop 5% everyday is not funny at all. In order not to panic sell and capitulate, I think it's important to sit tightly in your 3 legged chair.

There's a lot of bargains out there. Singtel and Starhub are around the same price now, battling each other to see who can go down more. Since they are at the same price, which would you buy? All the banks are priced below their book value now, which means they are really at a very good valuation. The problem is whether the book value (Asset minus liabilities) can be trusted upon. The banks hold debts for oil and gas companies, as well as their bonds, so if one topples will it drag the rest down with it? Reits are priced at ridiculously high yields now, but between a blue chips at near reit yield vs a reit at super high yield, which would you rather buy? And then there's the oily stocks like semb corp industries, semb corp marine and kep corp. Do you catch a falling knife and hope for mean reversion to kick in? Or is this time different?


These and many other questions are not easy to answer because nothing is clear. If you wait until it's very clear, you'll likely miss out the initial reversal. But if you don't wait until things are clear, you might risk entering too soon. Again, more questions and no answers. More doubts and not enough cash.


What would I do?

1. Proportion each investment with a fixed %. If things go sour, it won't drag your entire portfolio down with it. Do not average down blindly.

2. Stop staring at the watchlist if it affects you. Life goes on with or without the stock market. If you didn't do point (1) properly, you'll get unduly worried, then perhaps you should reduce your holdings. Sell down your holdings to sleeping point. Don't lose sleep over such things.

3. Work hard and save up more. If stock market is a precursor for the economy at large, it doesn't bode well for sg economy in the next 6 months to a year. If your income stability, one of the legs of your 3 legged chair, is threatened, then things will get even harder for you. So save up for both your emergency funds and also your warchest. Survive first, then we can talk about prospering. Be robust first, then we talk about anti-fragility.

4. Buy something in the stock market. We're at this stage where the odds are that in 5 yrs times, we will wonder why we didn't put in more money in the market.


For the uninitiated, welcome to your first bear.

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Don't get bullied by the bear

I was in Bangkok when the market went crashing through several levels of support to end up where it is right now. Even though I didn't spend a lot in my trip there, my 'online purchase' is of several magnitudes more than my wife's physical shopping. I had queued for several blue chips and the order got fulfilled one by one. We know this is a bear territory because for many counters, we're in unchartered territory. If you are using the free Chartnexus, you'll know what I mean. The prices are way lower than the last 3 yrs, possibly 5. If you zoom out, you'll see most stocks are right at the bottom of the chart. Suddenly we're back in 2011 to 2013.


I'm a lot less bothered than the last bear. I think whether you will panic in a bear market boils down to three main pillars:

1. Income security
2. Portfolio allocation
3. War chest level

Like a three legged chair, if any one or more of these legs are chopped off, the whole chair will topple.

1. Income security

This is simply how safe your income is. If you're still working, like me, then how secure is your job. If you're not working, then how safe is your passive stream of income coming in. I think we still need to pay various things. Some people have to pay more than others because they have more debts or overhead cost to handle. Regardless, if your income stream is threatened, I think you will be a lot more panicky in a bear market.


For me, my main source of income is from tuition. It's been fairly stable for me once I got the hang of it. I think my income security is pretty good. At the back of my mind, I'm always afraid what funny things MOE can do to threaten my livelihood, so I'm prepared for that by building up my passive income stream from investments. Since I'm not beholden to any one company for my income, I think I should be pretty secure, but I'm certainly preparing for major structural changes should something big happen to disrupt the industry in the next 15 to 20 yrs.



2. Portfolio allocation

In the past bear market, I was heavily concentrated in a few s-chips. I kept averaging down as it drops until I capitulated and sell off at a huge loss. I'll never do that again. This time round, each position is capped by a percentage to entire portfolio size. I think the size of one position in any investment should be proportional to the knowledge you have of that investment, capped to an absolute amount. If you're not so certain, you should have less of your portfolio allocated to it. Vice versa. For newbies, this is a real risk, because if you're not sure of what you're doing, and you keep adding in as the price keeps dropping, you're in for a blow up. I know people who are 50 or 60% into a single counter, but I'm not them and I don't ever think I have the balls to do that.



3. War chest level

Simply put, how much investible cash do you have? A bear market is only good if you have the cash to capitalise on it. Otherwise, you're just window shopping in a sale of the decade. I still have about 30% (down from 40% in Dec 2015) cash that is not allocated yet. Based on my personality, I don't think I will ever be 100% invested. The good thing is that as the new year starts, I should be working more towards my peak and my war chest will be shored up again. There never seem to be a time where it's not good to save up more. In bull times, you save up more to prepare for bear market. In bear market, you save up even more to pump into investments.

Everyday is a good day to save, LOL!



If you're worried about your recent investment souring, fret not. When all these are over and done with, and there's an official name for this bear market we're in, coupled with a whole lot of reasons by experts on why we ended up like this, you'll regret why you didn't put in more money now hahaha!

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