Author: Growing your tree of prosperity

Why finance bloggers are not the prophesied heroes that you are looking for.

This post started out with Whatsapp discussion between friends who examined the difference between paper generals and entrepreneurs. The impression I got from a large part of the discussion is that entrepreneurs are heroes in Singapore society because they dare to take on business risks and very often take a personal stake in their enterprises. On the other hand, paper generals can broadly be used to reflect Singaporeans who were overladen paper qualifications and attain a degree of comfort without risking too much of their skin. This discussion reflects the dreams and desires of the common Singaporean. Everybody wants...

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It is time to harbour some doubts about the STI ETF.

It is now about the right time to start casting doubt on the STI ETF. At this time, a lot of my fellow bloggers have started to integrate the STI ETF into their primary strategies and it would be useful to consider counter-arguments against using the STI ETF as a primary tool to extract market returns from the SGX counters. Before I start, active managers have waged a media campaign against ETFs for quite a while now and you can easily find such articles all over the web. When I criticise ETF strategies, I am not suggesting that we...

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Efficiently Inefficient #5 : General principles of portfolio construction.

This books is really shaping up to be something that is good for novices and the experts. Today I will talk about six very basic principles of portfolio construction. It is actually quite humbling that my own portfolio does not make the cut for all of these principles. a) Diversification The first principle is to diversify your portfolio. This is the only known free lunch in finance. This is best done across asset classes and industries. For folks like me who focus on dividend yields, it is much harder to conform to these principles. I normally look at REITs,...

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New insights from Ramesh s/o Krishnan v AXA Life Insurance SingaporePte Ltd

Sometimes, a lawsuit sheds such interesting insights on the world of financial planning, it becomes impossible to resist making a small mention of it on this blog.   I will not write about the legal issues raised by this case as I expect a lot of more qualified folks to discuss this negligence case in the next few months.   Just two points before my classes start :   A) Persistency ratios.   The insurance industry tracks this very interesting ratio which tracks the percentage of policies sold by an advisor that are still in force after a certain...

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Efficiently Inefficient #4 : Backtest Noob musings.

There are some murmurings that I am emerging as some sort of back-test guru but that cannot be further from the truth. I am still very much of a noob and have a whole lot more to learn. Today I will take about some aspects of backtesting that I will need to straighten out to improve some of my own investing strategies. a) Understanding superior returns The book explains that there are just two sources of superior returns. First, acceptance of liquidity risk. And second, superior information. Back-testing may refers to obtaining of superior information that compares strategies against...

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National Day Middle Finger Meditations

It is amazing that a day before National Day, I made an obscure reference to Henry Park and the Law of Attraction responded by giving all of us this courageous kid from Henry Park who took the chance and gave the middle finger to all Singaporeans during National Day. I am sure the poor kid must have been given a hard time by his parents or teachers for what he did. Before I share with everyone my version of the moral of the story, let me share with everyone a small snippet of my life. SMU Law Faculty is...

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How Singaporeans can be their worse enemy !

Every National Day, I will try to write something to get readers thinking about some important issue they are likely to experience in the future. Of late, I have been trying to get my daughter into the primary school that is the located closest to our HDB EC. Westspring Primary School has recently been in the news in a good way lately so it is highly sought after by residents in my area. To keep the long story short, we got extremely worried when we had to ballot under Phase 2C but in the end we managed to get...

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Deep REIT investing insights from Investors Exchange 2017

Sometimes, the good stuff needs to wait until after a seminar is over. As speakers in BIGSCribe events are also investors, we are also part of the audience when someone else is speaking. Kenny Loh or Marubozu gave a fantastic presentation on REITs investing and runs a course here. Here are the results of my back-testing to refine my own REIT investing strategy using the insights I learned from Kenny Loh’s Three Musketters approach to REIT investing. Paying customers would already have some sort of quick tutorial on what semivariance is from my presentation. a) Baseline – buying all...

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Efficiently Inefficient #3 : Alpha shenanigans from Investor Exchange 2017

In today’s segment, I’m going to talk about how to incorporate some concepts from hedge fund investing into the talk we just had last week, but first you need to remember what I reported on REIT returns last Saturday. If you buy all the REITS in the stock market and rebalance your purchases annually for the past 10 years, you would expect to earn about 8.3%. Generous returns by any standard as the STI could barely stretch 5% during that same period of time. Suppose you then buy 50% of the REIT universe which gives higher yields, you would...

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Aftermath : Investor Exchange 2017

Yesterday, BIGScribe had our biggest event for the year and we sold out all 250 tickets for the event. Although I did speak for 20min yesterday, I attend these events as a fan boy myself and would generally try to follow-up on them on this blog. Here are the comments I have on the event. a) Optimal search for Real Estate properties This is just my personal opinion on Vina Ip’s talk. While I know very little about the actual purchase of real estate, I am quite sure that only a small minority of real estate investors can review...

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The disruptive potential of Amazon Prime.

I was really lucky because on Thursday morning, I was able to slip an order for some groceries from Amazon and was able to experience the Prime service on my own. As it was Amazon Prime’s first day in operation, the order obviously came late and the delivery person was very confused. Thereafter, the service actually went down and even at this time, the delivery service is still currently marked as being sold out. Regardless of how badly they performed this week, Amazon will get its act right within the next few months if not weeks. The price point...

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Efficiently Inefficient #2 : How to be your own Hedge Fund manager.

At this stage of my personal finances, I am edging ever closer to to becoming an accredited investor. But as of now, I am not there yet. Accreditation can allow a person to qualify for hedge funds but evidence of hedge funds outperforming the market are hard to find because many hedge fund managers simply do not wish to report their results to a central database. It is probably easier to expect that investors of hedge funds would generally underperform the market because the fees are so high. Hedge funds can charge a management fee of 2% and 20%...

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A Prostitute’s Ikigai

    One of the points raised by the cruel commenters of Reddit when my article on why Singaporeans do not matter became a top read on this blog was that I have a a very narrow circle of friends who are gamers. I wanted to use this opportunity to show that my choice of social circle can lead to better insights compared to just hanging out with Singaporeans who want to take Instagrams of food or talk about their children’s PSLE preparations. Consider this scenario : Someone wants to hire a Singaporean prostitute for a night of fun....

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Efficiently Inefficient #1 : How to think about market efficiency.

I am writing this article in Raffles City Food Court after a second day of lectures for the Part B Bar preparation exams. Two uncles sitting next to me are talking to each other about MLM and bragging about their recent trading successes via cryptocurrency trades. The conversation is quite fascinating but I have a blog article to write. The book Efficiently Inefficient by Lasse Heje Pedersen was written as a textbook for folks who want an introduction into various hedge fund strategies. I thought the concepts may be be useful for retail investors who want to craft a...

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Equity Management ( Last Episode ) : Time to move on and how to think about GLP.

I’m closing this segment in favour of something more reader-friendly next week based on more interesting hedge fund strategies. I thought perhaps I’d like to show how the stuff I wrote on this column would be applied to the latest news on GLP. Based on what can figure out on the news, GLP is being bought out at $3.38 and dividends declared in May will not reduce it’s value which means that potentially whoever owns GLP will get to exit at $3.44 by latest April 2018. Looking at the current price, GLP is also trading at $3.29 which provides...

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