Author: Growing your tree of prosperity

Cutting through the bullshit when assessing investing stories.

I certainly did not like Narrative and Numbers : The Value of Stories in Business by Aswath Damodaran because it takes a while for his framework to sink in and become monetizable for local investors. In fact, upon closer reading,  the book is actually solid evidence that narratives can be quite dangerous for investors as even experts don’t have a clue and have to run with multiple assumptions. Nevertheless, Damodaran is open-minded to criticism and a master of his art and possibly the best guy to ask when assessing companies with no credible cash-flow. Ok…About narratives… why do we...

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The Electric Toothbrush and the Vibrator

Imagine an electric toothbrush. It is a stick-like object. It contains a motor. You stick into a sensitive part of your body. What other device can you think of that has the same general features ? A vibrator. It is also a stick-like object with a motor like component. You also stick it into a sensitive part of your body. From an engineering perspective, it is possible to invent a device that is both an electric toothbrush and a vibrator at the same time. Components and form factor are very similar. But we don’t think generally about an electric...

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Efficient inefficient #13 : Managed Futures

Today’s article is about managed futures but this strategy is really about trend following. The result of this strategy is very credible, with Sharpe ratios going as high as 1.8. Bershire Hathaway’s supposed ratio is about 0.76 and my usual backtests struggle to hit 0.6. According to the textbook, a diversified trend following trading strategy can return 19.4% with only a volatility of 10.8%. My primary interest in this strategy is figuring how I can apply these learnings to the build-up of my momentum-based portfolio which would proceed sometime next year. As it turns out, looking at long term...

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A Third Class Honours, by any other name…

In today’s new NTU has made a decision to re-label the Third Class Honours designation to something more politically correct. The question is whether this will really make a difference to their students or how the industry would view local graduates. I was in a bad situation myself sometime last year. I was teetering on the brink of losing a cum laude  and started make plans to graduate without a cum laude designation. This was because I was scored bottom in my Civil Procedure and International Moots class. The options do not look good because the industry is going...

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Openness to new experiences and regaining cultural capital.

I wanted to write something less hardcore for the blog today. One of the side effects about reading about entrepreneurship is that you begin to start understanding that some personality traits make much better entrepreneurs. Successful entrepreneurs tend to be more conscientious, open to new experiences, non-neurotic, and extroverted with research actually taking into account actual business results. Perhaps being open minded to new experiences may have monetary consequences. For folks like myself who is knee deep into our 40s, we’re mostly stuck in the past. Married folks and parents have musical tastes which are stuck in the 1990s...

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Should you rubbish your business diploma from a private institution ?

My last post on private education has received many eyeballs. Unfortunately, it had zero engagement or comments. One possibility is that it’s relatively well argued and so hard-hitting that readers probably spent more time contemplating their personal life choices rather than pick a fight with me to disagree on details. For today’s bombshell, you can relax…. As of now, I have YET to be able to conclude that a business diploma from a private institution deserves a better place in the rubbish bin. But I think I’m objectively closer to that goal this week.Remember in my article on private...

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Efficiently Inefficient #12 : Global Macro Investing, the Rojak of Investing.

I find Global Macro Investing super confusing because you can’t really distinguish the good investors from the bad ones. The Warren Buffett-level guru for Global Macro is none other than George Soros himself. I attempted to understand his theory reflexivity a third time and have no idea how it can be used for trading my portfolio. It still appears to me that George Soros trades on his own gut-feel but had the time and luxury to create a philosophical framework around it so it seems more intellectual. Global Macro investors strike me as being very intuitive in their approach...

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Efficiently Inefficient #11 : Quantitative Equity Investing.

This is the chapter that I have to read really carefully because I am in the process of semi-professionalizing my own portfolio. As it stands, everything is going fine with my 200% leveraged portfolio, I basically collected every single REIT that yields between 6%-8% that is not in my main portfolio and built a leveraged portfolio out of it. I have about 13 counter as of now (it would have been 14 has the Cromwell IPO not been cancelled). The portfolio size is expected to reach over $200k next week and it yields around $11,000 a year. That’s not...

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Agency, Structure and Financial Independence.

This post was inspired when I read a Masters thesis from a fellow D&D player called Shao Han. The central idea of his thesis is as follows : Some of us might feel constrained and alienated in some way in a modern meritocratic technocracy and table-top role-playing games can inculcate a sense of Agency in gamers. Given that a large part of my life ended up this way probably because I started playing D&D since I was 10 years old, I think I should a blog about how theories of Structure and Agency might be able to explain the...

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Hard Truths about Private Degrees and Second Chances in Singapore

Sam Choon-Yin’s book entitled Private Education Singapore : Contemporary Issues and Challenges is a very enlightening read not just for stakeholders in the Private Education Industry but also parents who have serious concerns about their child’s education. This book is not completely unbiased, the author is after all a Dean of PSB Academy. But it is generally speaking the most objective piece of work so far on this industry. One small bugbear of mine is that the author painstakingly alleges discrimination from the industry as well as poor management practices of the Private Education Institutions (PEIs) for the pay and...

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Fun with other financial bloggers : Debtzilla play-through.

Hanging out with other financial bloggers has always been fun. Some events we had in the past, like a cosy karaoke session we had a week ago, allowed me the privilege to catch a glimpse of financial bloggers having fun. Seeing these folks in action is always rewarding because sometimes you get to see how highly optimized individuals design their lives and their approach towards leisure and problem solving. So, the word has gone out that the Debtzilla Kickstarter has gone live : a) Dr Wealth has a detailed description of the game here. b) If you wish to...

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Efficiently Inefficient #10 : Dedicated Short Bias

Reading the section on dedicated short bias made me want to join a hedge fund that does only short-only positions. The personality of a typical short-seller is also rather interesting : It is usually someone who is antisocial, with a chip on his shoulder, and twisted sense of humour. Short sellers also don’t agree with each other. Short sellers are also notorious frugal and successful traders do not adopt the trappings of a successful financial professional. I have written other articles on short selling, so I will only illustrate in a novel way why short-sellers are often right about...

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The most important thing in Capitalism is Capital !

I wanted to do this article because of a spirited discussion with a highly respected VC in Singapore. In this discussion, I argued that capital is the most important thing in Capitalism. He reasoned that value creation is more important. It’s not easy to carry out this debate because value and capital are not fully distinct from each other. There are ways to support and refute the statement depending on our definitions as to what value and capital is. So instead, I propose an auxiliary argument which may have a more satisfying resolution : Which is better, engineering to...

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Dealing with the hypocrisy surrounding academic achievement in Singapore.

The inspiration for the post came about because I am currently reading Private Education Singapore : Contemporary Issues and Challenges by Sam Choon-Yin, the Dean of PSB Academy. I picked this book up out of personal curiosity and, given my career plans, I really have no business sticking my nose into Private Education industry in Singapore but the information contained within the tome is too interesting for me to miss out on it. More details will follow once I finish the book but I just want to share some ideas surrounding Singapore’s inherent hypocrisy around academic achievements and how...

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Efficiently Inefficient #9 : The notion of Quality in Discretionary Equity Investing

As a follow to our previous article, we will delve deeper into discretionary equity investing. Remember that discretionary equity investing can be challenging task as the field is highly competitive and there are a lot of brains chasing the same few investments in the market. It largely boils down to what investors perceive as the quality of a company: a) Growth It’s easy to just reduce growth to one metric like compound annual growth rate of revenue, but I can hardly see it work when I back-test portfolios which use this criteria. Good sustainable growth can result in bigger...

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