Bullythebear T-shirts!

I woke up at 430am with the moon smiling at my face.

I'd this eureka moment where I'm unable to get back to sleep until the thing that bothers me is blogged away. So here I am, typing out an article in the wee hours of Sunday. I like this period of time, because it's extremely quiet and peaceful. If not for the bloody hot weather, I'll say it's quite a good moment to reflect.

Yesterday when I'm at work, I was so bored that I doddled onto the back of my student's worksheet. My camera isn't fantastic, so it looks like this:




(I even have to brighten it up...gosh, I need my camera back)
There's so many things wrong about this picture since it's only a draft, but there's one thing right. It got me thinking how I can make a difference to people.

I've been designing T-shirts for like ages, ever since I was elected as the chairperson in my secondary school in sec 3. Banners, notice board, t-shirts, class flags, publicity materials....you name it, probably I've done it before. Even the ads above the cbox and the header are designed by yours truly. These are some of my works done in university:

This is a publicity material for a camp. Since I'm in civil engineering, I showed a picture of a truss with the caption "It's fun....trusses.". I wonder if people get my joke. Either way, this is the one that is selected for pamphlets to advertise the event.


This one below is the actual T-shirt design. I'm quite surprised to find it actually, after 9 years? My love of cats probably crystallised from there, haha :) Renatus is the theme for the camp.



The point here is that I like to design things. Financial achiever's post on how to make use of talents wisely probably set me thinking how I can do something for others. How about if I design T-shirts for bullythebear and donate the proceeds to charity? It might not be much, but together we can create a ripple that sends lots of good vibes to all :) Besides, here's the advantages of having a t-shirt:


1. We'll be the coolest people in the financial blog segment of Singapore!


2. We can do a bit of charity to help those in need!


3. We can have a common identity during our numerous meet ups!


Worthy goals? I just need a show of hands on who is willing to buy it. I really don't know the price yet. I'm thinking like $30-40 per piece? Of course, if there's more people, it'll can be cheaper and there's more room for negotiation. After covering my costs, I'll just donate the proceeds. I'm not out to make a profit on selling t-shirts.




But let's not worry about the details. Once I see a healthy response of 10-20 people, I'll start designing and you'll see if you like it. We can work out the details on payment, the charity and all the rest once the big picture is settled. I just want to test the response, so even if you say yes under the comments and back out, I'm fine. No obligations really.

Do you want to make a difference? Start the spark within you.

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Daring to dream big

After a night of chatting with AK, who is truly inspirational, thoughts began to come to me until I can formulate a 10 yr plan. This plan occurred to me while I was on my way to work this morning. As a 'big-picture' kind of plan, it must be simple enough for me to be able to work out the sums with just a handphone or mentally, and also simple enough to be able to explain it to someone without that person going 'duh'.

Let me share with you:

The goal of the plan is to be able to stop working when I wish to, that is to reach financial freedom. Since my average monthly expenses is around 2.5k, let's put a good passive income as 3k per month. I thought of 2 plans.

Plan A:

Since I need to get 3k per month, the sum goes like this:

3 k per month x 12 months = 36k per year

If I'm able to invest at 10% yield, I'll need 360k of capital base in order to get 36k of income stream. So the question is how to get that 360k capital base. For simplicity, let's round to 400k. Let's ignore all the complicating compounding and keep it simple. If I'm able to save 50k per year, I'll need 8 yrs of savings to reach that capital base.

10%?? Too much? Let's put it at 8% - which means I need 450k and that will take 9 years. Let's put it as 10 yrs savings at 50k per year.

Summary:

By saving 50k per year for 10 yrs, I'll be able to have a capital base of 500k. Investing this sum at a rate of 7% will get me the required passive income. The good thing about this is that after 10 yrs, I'm 42 years old. This sum of passive income will be a good platform to start building up more passive income. Am I going to stop work at 42? Definitely not - and to hell if I'm going to work as hard as I am now.

However, I was thinking about the feasibility of this plan, knowing how much I worked my ass off to get 50k in 2009. I think moving forward, I should be able to get more by working less. The thought alone makes me rub my hands in glee :) I'm aiming to hit 100k savings in a year, then my 10 yrs plan becomes 5 yrs plan, wahahaha!

The other good thing is that the capital base is not touched at all, so this amount can be used to draw down in case of emergencies, or passed down to future generation.




Plan B:

This is more of a capital drawdown method. I'm 32, and if I stop work at 55, I've another 23 years of working life. If I leave hotel earth at age 85, I've another 30 yrs to live after retirement. Supposing that I need 3k a month after retirement in passive income stream, then I need:

3k/mth x 12 mth/yr x 30 yrs = 1.08 million

Since I've only 23 years of working life, I need to save 47k per year to make up 1.08 million at the end of the period. Let's make it 50k per year. I'm taking the stance of no investment at all, just hard core savings.

Hey, I'm a millionaire (just 23 yrs too early!). Okay, I digress.

How to save 50k per year? I just proved that I can do it, so if necessary, I can repeat this for 23 yrs, albeit by working less. If I save 100k per year, I can half the time needed, making it 12 years.

Summary:

Save 50k a year for 23 years, or save 100k a year for 12 years and I'll be a millionaire. After which, I'll draw down the money till it goes to 0. That's silly right? But the thought that savings alone can achieve this is amazing.



Life being the way it is, means that I'll probably have to employ both methods to achieve my aim. Need some passive for retirement and draw down some from capital base. But that's the fun part, which I'm not so worried. Regardless of the plans laid out, the only part for me to do now is to earn more and save more. The ultimate challenge is to save 100k per year, and to do it consistently for at least 10 yrs, regardless of potential milestones like kids, marriage, housing, medical problems and all the curveballs that life throws at you from time to time.

To put it very simply, the goals are as follows:


1. Save 400k first in 10 years time.

2. Make sure I have 1 million by age 55.

The method of achieving that depends on the situation years down the road. A general idea should suffice for now and the plan should become clearer as time passes. Own time own target, carry on!

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Blogging for a living

Adsense sucks big time.

Yes, you heard it from me alright, loud and clear. Adsense ads are just pure nonsense. First of all, I don't even look at it. I mean who will click on it knowing that most of the ads are rubbish, lead generator kind of site. It dilutes the impact of your blog and seriously, I really think the money sucks. How much can you make from it? If someone made big money from adsense, do let me know in the comments.

If you're serious in monetizing your blog, set up a dedicated ad site, design your ad for others and ask for bids. This way, you get to:

1. Select the people you want to work with, not some behind-the-curtains shady people who provide ads by the keywords of your latest post.

2. Spruce up your site with the ads that you designed, with the colour scheme and right wording to match the overall 'feel' of the blog - the satisfaction is immense.

3. Price the ads yourself - it's your blog, your call, your price, your negotiation.

Nuffnang is different though. I always find their ads quite relevant to the local context (being a Singapore/M'sia venture) and it's definitely more attractive. They give me good money for doing something that I like - blogging. I don't blog because I want to make this a passive source of income. Seriously, unless you're a chio bu or a yan dao guy, it's hard to be a star blogger. I didn't say it's impossible, I'm just saying it's improbable.

So, if you're blogging for a living, may I gently ask you to forget about it? It's an uphill battle. It's certainly not as passive as it sounds like, so might as well go and make bigger buck from your active income.

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Contra trading

Recently I told someone that I contra off a position. That person seemed very shock that I do such risky things. Maybe that person had read many newspaper reports of students contra-ing and making big gains and eventually bigger losses.

Contra need not be risky. I put it in my newbie's faq a long long time ago about the topic on contra. Basically contra means doing a round trip of buy and sell before T+3. This means that you can buy a stock without putting in any money, then proceed to sell it off by the settlement date of T+3, thereby profiting from the proceeds.




Sounds good right? It's hard enough to get into a counter before it moves up, let alone restrict it to a time limit of 3 days. This foolish game will be made even more deadly if you buy more than what you can afford. For example, if you own $5000 but you bought $10,000 worth of shares with the hope of contra-ing within the next 3 days, you better be a very sharp trader. Otherwise, you have to sell $5000 worth of shares because you can only afford half of what you bought.

Usually contra players are also breakout traders. The explosive moves associated with breakouts is suitable for the very tight time limit for contra trading. Please don't try this if you're not up to it - it's a quick way to lose your pants. How do I know? I've contra-ed HSI warrants before, to the tune of 20-30 lots each time. I won't do it again, it's too stressful and exciting for me now. But I've NEVER bought something with money that I did not have. If I've 5k in my account, I would buy at most 5k worth of shares, never more.

So is contra risky? Yes of course. But for my recent trade, I happened to buy and sell something within 3 days. I didn't plan to sell it in that short period of time and most importantly, I've the means to hold it longer than the contra period.

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How spending less results in saving less

I noticed a real significant change in me.

Since the start of the year, I'd been having a real shift in how I view money. It's very very stark to me because I realised how much I've shortchanged my life till now. In the past, I was quite focused on the amount of money that I had in my bank. Somehow that meant security to me - so perhaps that's why I kept hoarding money and trying all I could to increase security.

It took me a long long time to change that view. The proverbial straw that broke the camel's back must be the reservist stint that I had recently in Jan this year. After I came out of it, I felt very enlightened. It could be the change of environment that made caused this shift in me, but nevertheless, I came out feeling very happy.

In the past, I used to care more about expenses. I would do all I can to reduce it. These days, I care more about increasing my earnings. I would gladly spend money for the following reasons:


1. It makes me happy

2. It goes towards furthering my goals and purpose

3. It saves me time

4. It fosters relationships and forms new experiences


I starting spending more money and feeling all the more happier because of it. My mindset used to be that I have limited money so every money spent must be scrutinized carefully. If it's not a need, delay it. Wait a few years or a few months then decide again. I missed a few opportunities because of this mindset (the guitar that i wanted is no longer sold; a memorable figurine that I wanted is gone too). I reflected and think about the whole host of opportunities that could have gone if I keep on doing this and realised that this is not the way to go ahead in life. My life must not end with me in regret.

Cheapskate mentality MUST be removed in order to go further in life. I do not want to save a penny to lose a dollar. In fact, I want to spend a penny now so that I can earn many times in the future.

The most interesting thing is this: Even though I spend more money, making myself and the people around me more happy, I actually save more too. It's amazing how the universe works. Freeing myself from the limited money mentality frees me to earn even more. Perhaps it's because I feel happier and that translates into more productive work and on and on. Seriously, I don't care how and why it works.

All this will not happen without valuing your time well. Know the value of your time and you will stop doing a lot of nonsense things and move aggressively into things that you value most. We all come into this world with an unknown expiration date - so make the best use out of it.

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Poetic interpretation of capital allocation

I'm reading a queer book on poems - Christopher Matthew's "Now we are Sixty (And a bit)". This particular one is especially striking to me:

Timothy wakes up at twenty to three-
Nips to the bathroom, has a quick pee.
Coughs, yawn, feels a bit queer-
Goes to the kitchen: thinks 'Why am I here?"

I think it pays to write down the reason for wanting to get a stock, lest you forget. Humans have short term memory. A little encouragement, a little discouragement, a dash of good mood, a pinch of unhappiness makes one forget the reason for wanting to get into a counter. The worst kind of mixed up is when you wanted to do trading but when the price turns against you, you start to adopt an investing mindset.




I think what KK says is right, have an x,y,z mindset. Split up your capital, put some into yield, some into growth and some into speculation. The devil lies in the details - how many % to put into x, y and z? Well, it depends on the type of person you are. Investing is very much an extended self and thus the philosophy of one's investment strategies must fit into how a person behaves and thinks.


PS. My blog article title is cool right? Hahaa! Nassim Taleb really got a hold on me - I folllowed his style so that the article cannot be so easily derived from the title of the post itself :)

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The curse of Sisyphus

After watching the movie Percy Jackson and the Lightning Thief, I was inspired to relate another greek mythology to modern life, specifically with relations to the market. I've blogged about Odysseus and the siren's song previously and had much fun doing so :)

It was said that there was a king named Sisyphus who was cursed in Tartarus (a place darker and worse than Hades) by Zeus. The nature of his crime is immaterial here but suffice to say, it is a punishment for Sisyphus's hubristic beliefs, for this punishment is a grave one. He is tasked to roll a bounder up a hill but always, just before the boulder reaches the top, it will roll back down again and Sisyphus would be forced to repeat the task again and again for eternity. Essentially, it's a task doomed to fail - a punishment meted out for an eternity in frustration.




Have you ever had a stock that you ride up all the way above its 52 week's high and ride it down all the way down below your buy price?

I had plenty of such Sisyphean tasks but one of them stand out strongly. I had swiber back in 2007 at 1.29, 10 lots. Here and there I added and traded some positions. But essentially, I was there when it reached its $3.84 peak in 07. I was there too when it reached its trough at $0.23 in 09. Why didn't I sell when I've a triple bagger? Hubris - I supposed. The arrogance of thinking that I know what I was doing and the greed of wanting more.

I'm sure everyone had this kind of experience before. It's okay to be wrong, but it's not okay to stay wrong. I'm determined not to let this kind of things happen to me again.

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CNY thoughts

** "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."


Some thoughts that are lingering in my mind during the last 72 hours. Why do I think so much? No idea - thoughts just come streaming to me at the weirdest time.

1. I was wondering why do Chinese keep wishing others gong xi fa cai (literally - congratulations on striking rich). The fa cai is the part that is intriguing. Do other nationality and religion celebrate their new year by wishing each other prosperous? Or are Chinese just money minded? I'm very very sure the Chinese of olden years (like Tang dynasty or Ming) do not wish each other gong xi fa cai, so it's very interesting to know when this practice of wishing each other to 'strike it big' began.

Must be another one of those 'invented traditions', like the yu-sheng, or wearing red etc etc.


2. I can't wait to give my first ang bao to people. But as tradition goes, I should only begin after I get married, thus this year will be the last where I'll receive ang bao. Somehow, in my mind, giving ang bao is a sign that I have reached independence. No, not the financial independence type, it's the kind where you pass a certain milestone in life.

Do I care about the money? Nah, all under control. Did a little bit of calculation and it's not much.


3. I read about people talking about gadgets the other day. There seem to be two extremes. On one side, there are people who abhor gadgets. On the other, there exist people who crave for gadgets and spend their hardearned money all on them.

Well, I've my smartphone from HTC that can help me organise my life and surf the internet while I'm waiting for people in shopping malls for $0, because I signed up with a new telco. I do not have fancy watches but instead wore an old casio watch because it had everything I wanted in it - light, date, time and stopwatch. I crave for the latest itouch and its bastard relatives - iriver story e-book and amazon's kindle (the only thing that stopped me is that there are no colours and I don't feel like supporting apple). I still have my old pencil that had served me well for 15 yrs and I'm still using it.

So what am I? I think I don't mind spending more on things that can last long and are of value to me.


4. Do not underestimate the power of a satisfying meal. I was forced to eat very crappy stuff because of the chinese new year and all the coffeeshops are closed. Two consecutive meals of crap send my mood dropping down down down. It was only yesterday night after my reunion dinner that I finally have a decent meal.

Told my gf about it and she commented that little things makes me happy. Yes, rule no. 32 - enjoy the little things in life :)

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Think happy thoughts

I am definitely happier these days.

After my reservist stint in January, I came back feeling more refreshed and more zen about life. It's even better than my batam trip because:

1. I get paid for my 'green' holiday, whereas in Batam, I've to foot the bills there myself

2. I can meet up with my old time friends and talk cock, sing song whole day

3. I get to read a lot of books. I think I completed 3 books there, plus small readings (some chapters) of books I borrowed from my friends there

4. I get to meet new people who really broaden up my life. Some of them talk about their visits to ahem, 'red' districts in different countries, while others shared their life as a SQ steward. Very very interesting.

5. There's unimaginable joy in putting your IC near a bar code scanner for every meal you eat. It's free and the quality of food there is like 1000x better than what I eat outside myself. I really like army life. You reduce life to just one variable - what to eat for the next meal.

6. A time-out from my gf. It's important to separate yourself from the important things in life, just so that you remind yourself how important it is.


I became more carefree in my spending (though readers might have to know that even my most spendthrift behaviour can be miserly to others), especially in things that are of value to me. I laughed at the times when I tried to save money by buying cheapskate shoes costing $30 or so, but only lasting 1-2 months and wasting more time and money trying to get a new one again. Now, I just go straight to clarke's (thanks so much to bro8888 for introducing it to me, it's really good and it lasts me 9 mths) and get a pair for $168 (actually, I went to Robinsons - the actual price is $208). Yes, I spend more but can you imagine the money and time I have saved myself from shopping every other month because my cheapskate shoes cannot make it?


Brand----------------price($)-------------how long it lasted-------$/mth
Cheapskate------------30------------------1 month----------------30
Clarke's----------------168------------------9 months---------------19

Time saved? Priceless.



I'm also trying hard not to work so hard this year. But it seems this is quite unlikely to happen. As it is, I'm still thinking how to reject people because I really cannot take in any more people. I really need to expand my business so that I can accommodate them all. It's like a hospital who had to reject patients because there's no more space. I feel bad about it. But I'm only human, though I really push myself to be superhuman. I pushed so hard not only because of the financial gains, it's the satisfaction gained from knowing that you played an important part in helping someone cross an important milestone in their life.


Money earned? Quite ok. Satisfaction from students saved? Priceless.


Once my mindset is changed to value my precious time, a lot of things began to change. I stopped grinding and get to real work. I stopped running on treadmill and started running ahead. I stopped wasting time on things that does not make me happy or does not advance my goals. I think my emotions matured greatly the past year.

I'm so going to have a great year ahead :) Have a merry chinese new year!

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Bully the bear's report card

I'd recently sent my blog - Bully the bear - up for reviews by another blogger who had an eye for designs. I wanted to see what are the things that I have done right and not so right and the areas for improvement. You can click on it - it's found at the bottom right hand corner of this blog. The badge is so big, you can't miss it.

Here's the reviews:

BULLy the BEAR

BULLy the BEAR is “la papillion’s” blog. In it, he shares his experiences and knowledge about the stock market. He is happy to tell all – from his humble beginnings as a newbie to his successful endeavors today.

Visual Aesthetics – 7

BULLy the BEAR makes use of a dark theme – white text on black background. It has a lot of potential in terms of visual stimulation . However, I think that the colors and other visual elements do not exactly blend well for now. For one, the header could be customized for more impact. The blog posts can also be “prettified” a bit more to provide a more pleasant viewing experience. The more recent posts are better in this regard – it’s the older posts that can use some sprucing up. In addition to this, the chat box and other images at the top of the page could be repositioned.

User Friendliness – 9

With regard to browsing, BULLy the BEAR is perfect. All of the necessary links can be found either in the right column or the top of the page. There are no issues with load times.

I suggest larger (or bolder) fonts for easier reading. The small thin font is not really easy on the eyes.

Reading Enjoyment – 10

I am not into finances and the stock market. I am pretty sure, though, that those who are into these topics will find the posts of BULLy the BEAR quite enjoyable to read. One thing that struck me is that the blogger injects his personal experiences and thoughts in a very open manner – a definite plus for the reading experience!

Useful Info – 10

There is definitely a LOT of useful information to be found in BULLy the BEAR. There is even a page dedicated to newbies who might be asking the most basic of questions. Practical information that can be understood with little effort – that’s what this blog has to offer.

Overall Experience - 8

I’d like to think of BULLy the BEAR as money matters presented in a personal way. It looks and feels more authentic than other stock market how-tos out there. If you’re looking for this kind of blog, then BULLy the BEAR comes highly recommended.


Not bad for a report card, eh? Too bad, I didn't get the 10/10 marks for all the categories to qualify for a gold award, thus I've no badge to display :) Still, I concur with AK71 that the bloggyaward site is doing the whole blogosphere a good service by encouraging people to step up on their aesthetics for blogs :)

I don't think I'll change my blog template any time soon. Firstly, there's a lack of time on my part. Secondly, I'm very happy with this current theme. I'm sorry for all those people who had have trouble reading the fonts (some had mentioned the dark background and the words do not have enough contrast). But my eyes are owl-like and cannot stand the white background and black words because it's simply too straining for me to read and blog.

I do want to take the advice to prettify my header too. Let's see if I can do something nice about it :)

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The siren's song

Recently, I've heard a lot of people wanting to get into the stock market. They really think the market is their mother, who is there to give them milk. These people do not have an emergency funds set aside, do not have adequate insurance, and worse of all, do not have savings. Yet they are all too ready to jump into the market after reading some rags to riches success stories displayed so prominently every sunday in the newspaper.

Alas, they got the sequence all wrong.

First, you need a good job that pays reasonably well, so that you can begin to save up a big amount. Then you need to protect that amount from unexpected circumstances. After which, you can then start thinking on how to best grow your savings. I see many people going straight to the 'growing' part without the first and second foundations laid properly.

But you know, I've been ranting on and off about this, I don't think I should talk more about it. Let them find their own mistakes to learn from. When the musical chairs end, they will realise that there are not enough chairs and someone had to be left standing.

Here, I just want to talk about the idea of having a warchest. A warchest is a special storage of capital used to capitalise on extraordinary conditions. It can happen in the property market, business opportunities and even the stock market. By buying things at maximum danger point, you're reducing your risk to the minimum because the valuation is the lowest. I know I know, it's hard to buy at the danger point because you're the lone ranger walking in opposite direction to a crowd of running people. That's why we need a support group!




Before meeting the enchanting sirens, the greek legend Odysseus had his crews' ears filled with bee wax and had himself tied up, with a firm instruction to his crews never to let him go no matter what happens. I think here, we all have to do a reverse Odysseus. Fill your wax with ears, then encourage each other to get blue chips when the market sirens sing their enchanting voice. No matter how bad, buy some!

Of course you need a steady warchest to get in. How to do that? How else but to save? Instead of spending money on things you don't like and buying clothes to impress people you don't care, try saving them up for special opportunities. Start soon...I can hear the soft whispers of the sirens getting louder.

I better put on my bee wax now.

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

Hey hey, I realised that the siren's song equally lull people into the market when it's at the peak, as it 'lull' people away from the market when it's at the trough. Haha, this sudden realisation prompted me to add in this appendix.

I apologise profusely for this insane way of writing things forward and backward. This is what happens when I blog from the heart. You start off with a plan but the plan starts to come alive and takes control over the direction. Hence, the many digression here and there.

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Endowment plan option for education fund

I was here and there discussing endowment plan, as a viable option to save up for child's education, with a few other bloggers. I had already shared my views in my previous posting here, so I would just like to substantiate with actual benefit illustrations. I would withhold the actual benefit illustrations, but will put up a summary of three companies that my very hardworking girlfriend had put up for me. She did the entire comparison herself, kudos to her!

A few key assumptions:

1. The endowment plan is bought on the life of my hypothetical kid, aged 1 on the next birthday

2. The proposer of the plan is me, aged 33 on my next birthday, non-smoker

3. The plan is bought with a rider, which waives off all future premium in the event that the proposer (aka me) kena death, TPD or CI

4. The plan has a sum assured of 30k over a duration of 20 yrs.

Okay, with the key assumptions laid out, here's the summary of the three plans that my gf had done up for me. I will mosaic the names of the three companies mentioned. If you need their names, liase with me and I'll fix you up with my gf. She's an independent financial advisor, just to sell her koyok here.


Let's just assume another thing - that the cost of university (local) in the next 20 yrs will be 50k. Actually it's more like 70k or above, but let's not debate about this for now. This is how I would plan for my kid:

1. Since I need 50k at the end of 20 yrs, I would want the endowment plan to cover 30k, or just a percentage of the full amount. Why? Because I believe that I can get a better rate than what endowment can give me, YET at the same time, I want to be sure that my child still gets the money for university IN CASE my investment sucks. I cover my downside.

2. Notice that I only look at a projected returns of only 3.75%, not any higher. On paper, you can put 5% or 10%, but if you plan with that higher projected sum in mind, AND you did not manage to get it, the consequence would be too much for me to bear. Thus, I would rather assume that the insurance companies are all sucky at investing my money. I like pleasant surprises, not shock.

3. Since I want to cover 30k of the education money with endowment plans, I only intend to look at the guaranteed part. Thus, I'm implicitly assuming that the insurance are so sucky at their investments that they give 0% projected. Worst case, I get the guaranteed amount of money (which is a losing situation due to the time value of money).

There are thus two ratios to look at:

A. Guaranteed portion / total premiums paid

B. Guaranteed portion / total returns at 3.75% projected (inclusive of guaranteed + non-guaranteed part)

The first ratio A gives me a rough guide of whether the deal is good. Screw the time value of money for now...this ratio just tells me at a glance if the amount of guaranteed money I get at maturity is more than the amount of money that I put in. Of course you'll want this ratio to be as above 100% as possible. Anything which is lower than 100%, I'll think twice.

The second ratio B gives me a indication of how safe the endowment is. If the guaranteed part takes up a higher % of the total returns projected at 3.75%, then it's safe. The company can screw up big time without affecting your plans so much.

The ratios for the 3 companies are as follows:

Company----------Ratio A------Ratio B
---A---------------103.89%------80.97%
---B---------------101.65%------76.09%
---C----------------86.61%-------62.40%

I give no shit about projected values. It's about as accurate as projecting what the weather will be like 20 yrs down the road. In my conservative plan, guaranty is king. You can complain until the cows come home that the projected yield is different from actual yield, but if the guaranteed part is 1 ct lesser than stated, you can sue the bugger until he gives you the balance.

I'm actually quite prepared to put 30k of premiums and getting 30k of guaranteed at the end of 20 yrs. Why? There's this very important feature in endowment plan that no other instrument can beat - waiver of future premiums in the event of TPD, CI, death. When shit happens and you're no longer around, how are you going to save for your kid? This waiver of premium ensures that your intention to put the child through university education is fulfilled no matter whether you're alive or not. If insurance company go belly up, then LL.

In life, I try to reduce as many variables as possible. I throw away inflation, I throw away projected yield, I throw away the market's up and down, I throw away everything except how much I want to pay and how much I'm going to get (guaranteed) at the end of 20 yrs. Life is simple when I only look at 2 variables.

I would choose company A. So that settles the 30k out of 50k planned. What about the 20k remaining? I would do it through savings, my own investments, and other sources. I'm not going to stake my entire plan on the survivability of a single company.

So how's my plan? Will work or not?

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Interesting discovery

** "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."



It's funny how after AIG went into trouble, its subsidiary AIA suddenly starts to detach itself away from it. I had plans under AIA, so I went to check the letters/reports sent to me, and I always see this line at the bottom of the page,

"AIG - A member of American International Group, Inc."

Recently, I saw their new brochures and was quite tickled when I saw that they are now stressing their asian origins as opposed to the US parent company.




I was intrigued by this. Unconvinced and thinking that this might be a one off event, I dug out my recent letters from AIA but behold! No mention of AIG at all. Naturally, I went to their website to see their factsheet and realised that there is no mention of their parent company AIG at all too. All I see is the keyword "asian" pasted all over.

This brings to my mind what someone in a forum said about a hokkien saying, "Tree fall, monkeys run". Can't blame them for doing that, can we? We live in a world controlled by impressions and governed by short term memory. Origins can be re-written if there's enough publicity and given enough time.

Lessons to learn? Diversify your insurance portfolio as you would to your stock portfolio. Buying five 200k policy from different companies is better than one 1 million policy from one company.

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Blog It As It Is - BIAS

These days when I blog, there's this nagging self censorship that stops me from finishing my blog article, or from publishing it. It's this new-found sensibility to others that I find it irritating. If this goes on further, I'll have nothing more to write!

To remedy this situation, I will follow dream's blog and do my own "dream's speak", a special feature where I get to say anything I like with scant regards to others. This will keep my mind free from the annoying self censorship that kills off my articles at its infancy.

So here it goes, my very first "Blog It As it iS" or "BIAS"...


** "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."


There are some people, after reading some books on investing, especially books on Buffett, then declare themselves value investors. I would say that books on Buffett do more harm on people than good. Why? Most of them are simplistic one liner like "Hold for the long term". Yea right, in the long term, we're all dead.

I therefore cringe whenever I hear the word 'long-term' being uttered. A shiver of uneasiness will creep up my spine. Here are some thoughts regarding the B man:


1. Buffett is a good investor and businessman. He buys in such a big amount to be able to sit in the board and do some major changes, possibly for his own interests. He did that for Salomon brothers and came out unscathed. Are you able to do the same? When he means ownership of company, he really means it! What are you? Are you able to buy 30% of the floating shares to influence the management?


2. Buffett has some glaring contradictions. First he said derivatives are instruments of mass destruction, but he also bought it. Then he said charts are for ninnies, but his dad is a stock broker and he might have learnt a trick or two from him. I dunno. He said splitting shares has no value add and he had shown great dislike for companies doing that. In the end, he did the same for his B-shares to buy some toy train.

Win liao loh, everything also he said one.


3. Buffett is a man of great influence. When he says buy, people will believe him. That's why whatever company he fancies buying, the stock price will rise up. How can one lose money like that? If I say digiland is good buy, people will just ignore me. Not so for B man. If I can influence people to that level, of course there's no need to read charts. For that matter, there's no need to read the statements too.


4. Last for now, all the books written about the world's greatest investor are not written by him. It can be his ex-daughter-in-law who adopted the same surname as him, it can be some other unknown people who happened to meet him drinking cherry coke and snapped a picture with him. How did B man do his valuation? Nobody knows...we can only speculate how he did it.


If there's anything to learn from B man, it's how he changes his opinion accordingly to times. He studied under Graham but found that it's a bit outdated, so he mixed with Fisher and combine powers to create his own way. That's unique. If you can't evolve and adapt like Buffett, forget about using his methods. For one thing, that method you're using might not even be his method.

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Begone idealistic youth!

When I was younger, I was quite idealistic. This kind of idealism must have come from a limited world view due to underexposure to reality, or simple a sheltered kind of environment. As I get older, I realised that things don't always go according to what I think. Here are some things that was idealistic about:


1. I wanted to get 10-12% returns from the market per year, because I read from books that the equity returns over the long term is around 8% for average investors. And I'm above the average investors.


2. I thought that the market only have two kinds of stocks - dividends or growth stocks. Dividend stocks means that there is no growth anymore while growth stocks means that there is a huge chance of capital gains. I used to like growth and detest dividend stocks.


3. If you do your due diligence in FA, things will work out fine. Value is determined simply by certain key ratios like NAV. As such, I spend a great deal of time and energy to find out the perfect way to analyse a stock. I go around asking what are the ratios they use to determine value.


4. If you do your due diligence in TA, things will work out fine. Support is a good place to buy stocks and resistance is the good place to sell stocks. The problem is knowing a little bit of TA makes you yaya and cocksure. I can replace the word TA by FA and it's the same thing. I spent a good amount of time energy to find out the perfect setup that people use, the indicators and patterns that people see.




As I get older and wiser from the constant humbling experience from the market, I realise that besides black and white, things are usually grey. In fact, different shades of grey. Even though the examples I used are market specific, the same lessons can be applied to life. Actually, after reading so many books about the market, I really do not find any difference between the market and life in general.

The stock market is a faster tempo, rap version of life.

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Batam photos

Recently I went over to Batam for my yearly pilgrimage. Since I never had the habit of bringing my camera with me, I snapped some nice scene with my handphone. Turns out nicer than I imagine, considering that it's 3 megapixels only.

Here's a flash based site that I created a few days ago, where I show case some of the pictures that I took over at Batam. Click here.

I always wanted to find some flash based sites to design some widgets or sites, and it's just pure luck that I found wix.com. Anyone can do nice sites using that free interface, do try it if you like messing around with this kind of things.

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My noticeboard

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New year resolutions redefined

Seeing everyone doing their new year resolutions, I thought of doing one too. However, it's a serious thing to me because I want to do one which I intend to complete, so a fair amount of thinking and planning is involved. I don't like dreaming of big things and waiting for it to happen to me - it can be quite demoralising if it didn't come true.

I was thinking about the project that I did in 2009 - which is my 50k challenge. For the uninitiated, it's my 12 months long plan to save 50k for various things that will happen this year.

Now, I'm thinking whether this is being short sighted on a long term goal. While the long term picture is of course to save more money, I'm wondering whether breaking the 50k target into monthly target is making me forget the bigger picture. Why save more money? To have a better life! However I don't seem to have a better life while trying to have a better life - thus the irony of ironies.

Here's some of the things that I observed:


1. There are months that I had suffered greatly while trying to achieve my monthly savings target, and I wondered whether it's worth my life to achieve an arbitrary number set by myself at the start of the year. While it provided me the motivation to persevere, my thoughts are always - is it worth it?


2. My temper became worse with occasional mood swings. Lessons can be quite boring and there are times that I snapped at students for sloppy work. I don't like doing this but try hopping from one place to another, walking under the hot sun, working for 12 hours and when you reached the student's place, he/she had forgotten what you had taught them the last lesson. I'm bad tempered and sarcastic - that is so unlike me. I never wanted to do this to my students again.


3. At the pace I'm working at last year, I was constantly tired and sleepy. While I did not sleep during my lessons, I really had to close my eyes for some time while my students do the work that I gave them. Again, this is not what I want to do in my work, but to reach my target, I had to put in classes very early and very late to get in more income.


4. Surprisingly, my income for 2009 is lesser than 2008. I took 1.5-2 month leave after reaching my goal to recover from the ordeal. In summary, I worked more intensely because I worked a shorter period of time.


Is it worth it? Answer is no. It's good enough to know that I can do this again if I want to, but no thanks, I won't do it in 2010. Having zoomed in to see the ugly side, I shall zoom out this year to see the bigger perspective. Having this 50k goal restricts me and confines me and I shall have none of it.

Thus, my goal for 2010 is simple - Re-learn the joy of teaching, have more group classes and have fun doing it. I figured that if I keep to these redefined goals, hitting 50k is part of the reward of that journey, no longer the end. That being said, there is still a number that I had to achieve by end of the year and hey, I'm no longer bounded by it. If I can reach it, 'tis good but if not, so be it.

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Bored old man on a new year's eve

New year's eve, I'm back home at 9 pm already. Let all the hot gals and hunks cheong their heads off while I'm back home, nice and comfy typing an article. Haha, getting old I suppose, but I never really like the crowds and the cacophony that follows in such a countdown event. If you spot me in such events, most likely you've got the wrong person.

As I was walking home, I was thinking about the problems related to using dividend yielding stocks as a passive stream of income.

These are the things I think are worth thinking about:


1. Longevity of the passive income stream.

I think this is the most important thing when buying divy stocks like the one I had, CIT. It can give you 10% or 15% per annum, but how long can it last? Don't give me the bull about defensive stocks either because in a bear market, nothing is defensive and in an accounting fraud, nothing is immune. I'm just thinking that if I have to bank my passive income on a bunch of diversified stocks yielding good dividends, I'm not going to sleep soundly at night. I mean really really soundly.


2. Massively, unforeseeable losses

As you can see, I'm a kiasu and kiasee person. The point of having a passive income is that one day I can stop work when I want to. Hence, the security of my capital and the passive income stream is very important to me. Hey, I have to rely on this to offset my expenses, of course I'm worried! I'm just thinking that what if in one bad investment, years of dividend accrued over the years are destroyed in one shot? I mean I can collect 60+ per lot of CIT for years then suddenly CIT is gone ... I might be just lucky enough to recoup my capital and breakeven, but so long for my passive income. Ya, I know diversification can reduce the risk...still..


3. Account size issue

I've an expense of around $2000, which includes all everything from insurance to pocketmoney for parents and the occasional gadget budget. To cover that every month from dividends, I need to have nearly 500k if I get a yield of 5% per annum. I know if I project at 10% per annum, I can just use a capital of 250k, but guess what, I'm no investment guru.

I think that firstly the capital amount is really a lot. Secondly, I think that if you can save 500k to put into stock, perhaps whatever ways you take to get that initial 500k might be a better shot than to buy divy yielding stocks.


4. Short-terminism on a long term goal

It's an irony that while having passive income stream is to have a long term goal of being financially free, being too concentrated on acquiring passive income through divy yielding stocks might actually hinder that goal. Let me explain.

Let us say that I wanted to increase my passive income this coming year by $2400. In the process of streamlining this goal into achievable monthly targets, I set myself to increase my passive income per month by $200. So I buy enough stocks to get that extra $200 dividends per month. What if the economy is not doing well, what if the stock market is toppish? Do I still average up/down?

The goal of having passive income is worthy enough, but I'm worried about being too fixated on that that it defeats the bigger picture.


Talk talk talk, so what's the solution?


Don't stone me, I've no solutions. I want to concentrate on building capital first before talking about building secure passive income streams. You know what, I'll just bloody hell love the job that I'm doing, which I don't mind doing for the rest of my life (but at a different pace, an important distinction here), save hard, invest the proceeds and watch it like a hawk. Most importantly, don't forget to reward yourself here and then because ultimately, you only have one life.

Have yourself a happy new year :)

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Christmas day's reflections

The more I stay in the market, the more I realised that being calm and steady is the only way to win consistently. I've dealt with higher volatile instruments before and the conclusion is that you don't want to be too happy when you win and too sad when you lose. In the short run, what you see is the variability of your system, not the returns. A short run of good wins will be interrupted by a short run of bad losses.

Since today is Hohoho day, I use the opportunity to hammer in some reminders for myself with regards to my love-hate-relationship with the market. Not in any particular order of importance,


1. Be zen. Treat both your wins and your losses with equanimity.

For the boh tak chek, equanimity describes the unattached awareness of one's experience as a result of perceiving the impermanence of momentary reality. It is a peace of mind and abiding calmness that cannot be shaken by any grade of both fortunate circumstance and unfortunate one.


2. Spend some of your winnings.

I think it's important to buy yourself something nice, to close in the winning. Money is just a means, not the end, so I think it's important not to accumulate money but to do something worthwhile with the money. In your death bed, I don't think that you'll worry about not making more money. Converting money into nice memories is what I'll do.


3. Enjoy the little things in life

Hey, market is not everything. Spend time with your friends and loved ones. Take time off the market, enjoy reading a book and playing some games. You'll be surprised how getting away from the market for a week or so can let you see things from a different perspective. I learnt this from the movie, zombieland-> Rule no. 32


4. Don't be too harsh on yourself

I missed DBS in March when it's 6++ and now it's 14++. I missed selling swiber at 3++ and now it's 0.9++. Ya, I suck in this game, but I'm learning along. I missed some good moves and ride on a couple of bad ones but look, I'm still here chatting with superfriends in the cbox and having great power lunches with them. While everyone should treat the stock market seriously like it's a side business, but take it easy on yourself if you missed the good moves and somehow caught all the bad ones.

Bad luck don't go on forever - so does good luck.


Have yourself a merry christmas :)

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