Flexibility versus Lock-in

A common complaint by loyal customers of our telcos is that the latest promotions are only eligible for NEW customers only. You signed up for that 2 year 100 Mbps broadband plan with glee thinking how smart you were. Especially if you compare the savings you are getting in relation to the more flexible pay-as-you-go top up plans. You smart; others not stupid. From the "others" … [Read more...]

Efficiency versus Effectiveness

Have you noticed a difference in buying burgers from McDonald's in recent years to 5-6 years ago? Now it takes longer to have your orders filled right? But the burgers are now hotter ;) In the past, can you recall you can physically see pre-made burgers sitting in a queue behind the McDonald's counter? The quicker you move the customer queue, the more $ you make per minute or per hour … [Read more...]

The trouble with long lead-times

Once upon a time, I used to work in Supply Chain (self-taught through learn by doing). And one of the lessons learned is that shorter lead-times are preferred over longer lead-times, all things being equal. In a way, it's true. Take for example a factory for DRAM memory chips or LCD panels. Demand good with high prices, what do you do? Increase capacity by investing in a new plant of … [Read more...]

You mean you can learn from other people’s mistakes?

Maybe it's just me. You mean you really can learn from other people's mistakes? If you are a smoker, what do you see when you buy a pack of cigarettes? Do you learn from the mistakes of others that's pasted in graphic gory details screaming right in your face? If you are trying your luck at the casinos, you mean you never read or heard about stories how careers or families were ruined by … [Read more...]

You are shorting already!

For me, going long or short is no different from betting black or red at the roulette tables in the casinos Whether you call it an "investment" or speculative trade, it's just a directional bet - up or down. Nothing more; nothing less. Most traders don't have a problem with shorting - think about it, does it smell like a "rigged  game" if you are only allowed to bet black at the … [Read more...]

Have you noticed great investors are superb writers too?

Test! Who is your favourite investing guru? How did you get to know this person? (Face to face, books, print media, You-tube videos, documentaries, TV, etc.) Do you quote the famous sayings of this guru? Whether it be newsletters, annual reports to shareholders, articles to print media, or books written, have you noticed these investing greats have one thing in common - they write … [Read more...]

3 bananas in the morning, 4 in the evening

I think most have heard of this story where a group of coconut picking monkeys were not satisfied with their "wages" of 3 bananas in the morning and 4 in the evening. So off they went to confront the farmer and demanded a raise. The farmer though deeply for a while and gave the monkeys a "raise" with a wry smile - 4 bananas in the morning and 3 in the evening. The monkeys walked away … [Read more...]

Ultimate Risk Taking – Your Life

What's the worst that can happen to our trading or investment account? What's the worst consequence if we quit our job and embark on the path of a freelance existence? What's the worst case scenario if we start a business and it fails miserably despite we putting vision, mission statement, and lots of goals into it? Last night, 2 men made the news after a big "trade" they made went … [Read more...]

Queenstown Hawkers – Alternative Financial Independence

When I was in my primary school in the 70s, I had the impression that hawkers work 7 days a week with no rest days one - especially those that I frequent in the coffee shop near my place. The only rest days are the 15 days during Chinese New Year. Now after returning 2 years ago, I noticed quite a few hawkers in Queenstown close for 3 days of the week - work 4 days only!? The stall … [Read more...]

Cultural Revolution and Benchmarking

Anyone remember the story of that taxi-driver who shared he earned $7,000 a month? Then it was discovered the $7,000 were his best months; not the average per month... Hold this thought. It never fails to tickle me pink when I read about self-professed long term "investors" are so enthused into comparing annual performance returns, benchmarking this, benchmarking that. It can become … [Read more...]

Covered Short

Have you tried shorting stocks? If you interested, do be aware that only amateurs will use SGX's securities borrowing and lendiing programme (SBL). How I know? I was that "sotong" (dumb) amateur. If your portfolio is big as in landed class, and you want to borrow shares to short, ask your prime broker. The rates are way much better than SGX's! If your portfolio is more HDB like, do … [Read more...]

How many more years do they have?

I came to know of a group of mainly retired teachers and ex-principals that gathers regularly at one of the food centres in Queenstown for coffee and chit-chat in the mornings. Every alternate month or so, there will be organised "excursions" up north to Hap Chai, or down south to Batam. Wink, wink. Yes, they are all males. Some on reading this may get their blood boil... How could these … [Read more...]

Gurkhas, Riots, and Emergency Funds

Mt Vernon crematorium is the resting place for my maternal grandma. I visit her a few times a year; whenever I feel like saying hello. (I don't wait for Ching Ming; I listen to my heart. Visiting her is not an obligation) This bond started way way back. I remember when grandma went back to China for visiting before I enrolled in primary school, the many days I've stood looking out the … [Read more...]

Mea Culpa (Yes, it’s the freaking Mind part again!)

Mea culpa is a Latin phrase that translates into English as "through my fault". It is repeated three times in the prayer of confession at the Catholic Mass: mea culpa, mea culpa, mea maxima culpa — "through my fault, through my fault, through my most grievous fault". No, it's not me proselytising. It's a nice phrase. The modern equivalent I guess would be - "my bad". By the way, when was … [Read more...]

Sunk Cost Fallacy (The Mind part of 3 Ms)

Of all the psychological mental blocks, this one is one of the hardest to undo even if we are fully aware of it. Sunk cost fallacy Have you ever been in a movie where after the first half-hour you realised the movie is crap. What do we do? We stay till the boring ending when it would make better sense to just walk-out of the cinema. No? We have already paid for the tickets right? How … [Read more...]

Risk Management – A little knowledge is more dangerous than no knowledge

A few years back, there was a posting in the papers by a person who was complaining that his mom was diagnosed with terminal stage cancer when she had gone for regular health screenings at a polyclinic for the past 20 years... There is a common misconception that if I passed a basic health screening test, I am "healthy and fit". Most of the "free" or "cheap" health screenings only check the … [Read more...]

Don’t say “we” when you meant “I”

Have you caught yourself saying "we" when you meant "I"? Why do we do so? I guess it's a natural survival instinct to want to be part a school of fish or a herd of wildebeest. Maybe it's part Asian cultural makeup where we put the group first before the individual, or perhaps at the back of our minds, we knew the nail that sticks out gets hammered down... Another way of hiding behind … [Read more...]

Timing is everything!

As little children, we learn instinctively when to ask daddy and mommy to buy as toys. We don't ask for a Sony Playstation when daddy came home bing bing bang bang cursing and swearing the sorry excuse of a boss he has... Nor do we ask mommy money for sweets when she had just lost at mahjong... A bit older and dating for the first time as teenagers, getting the timing wrong at holding hands and … [Read more...]

Why we lose money in unit trusts

If you ask most retail "investors" on their experience with unit trusts, its quite interesting to find out that most are nursing losses. (We can also add in investment-linked-policies while we are at it) Isn't it interesting that this is so when most major bourses are near their 5 year highs? What gives? Some emotional "investors" are even calling unit trusts "ponzi schemes"!? How … [Read more...]

We need more short sellers to help build up our muscles?

You know what? After watching the short selling saga of both Olam and China Minzhong, I have a thought (I know, I shocked myself too!). Imagine if these 2 short-sellers had stress-tested our SGX stocks a few years earlier? Before the blow-up of the long string of questionable and fraudulent S-chips AND Singapore born and listed companies (ACCS, Citiraya, Informatics...)? Perhaps less … [Read more...]