Author: Taking Care Of My Own Business

Do you know where you are going?

Everyone wants to be wealthy. The problem I see more often than any other is that the majority of normal investors skip the first step in the process of wealth building completely. People want to know what to invest in before thinking through what they’re investing for. Without a deep understanding of the ‘why’ when investing it is utterly difficult to figure out the ‘what’ or ‘where’ to put your money. My experience when talking to friends and colleagues has taught me that most people assume they need help with portfolio management — and many of them do —...

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Survivorship Bias

Was reading the Sunday Times today when several “Unit Trust Providers” and “Actively Managed Funds” peddling their services through ads caught my eye. Whenever I do read those eye-candies, I can’t help but recall the miserable track record of active fund managers. But how is it then possible that their ads, their validated track records and their promises still look so attractive? They are not allowed to “lie”, right? Simply because of the Survivorship Bias. That logical error of concentrating on things that “survived” some process and ignoring those that did not because they are no longer visible. In the financial...

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Are you a victim or do you Tacomob?

Now the profound simplicity of what I want to share today will elicit in some people yawning boredom and in others “Aha!” eureka moments. Yet whether you yawn or go Yippee! it all depends on the meanings you construct. And the “problem” with the meanings we construct is that because our innate powers are so simple, many will discount them. I am convinced of this: If you want to unleash your potential and live a self-actualizing life, if you want to make the most of your possibilities and live life as fully as possible (and who doesn’t?) — then...

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Finally, a less wordy post about our biases

Thank you, dear readers, for reading my blog-posts and for letting me know what you like and dislike about them (for example, too long, too wordy). I hear you; thus, this post is succinct in answering: Why we save so little? Why evolution is to blame for our stock losses? Why we should think more about our limitations? In fact, let me delegate to chirpy Laurie Santos to answer those essential “you-never-dared-to-ask-before-questions”. Ted Talk on Monkeynomics (19.38 mins) Ok, I admit the post isn’t less wordy, since it’s just a substitution of the written word with lots of spoken words. So, for those of you who do not have the time—to sit through the whole talk—you can zoom in to the...

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Do you like your day job?

Five years ago, I was rather unhappy with my day job. Social psychologists would have diagnosed me as being disengaged. My growing disengagement resulted in me quitting. Don’t get me wrong. I am not complaining. Quitting and retiring from my corporate duties at that stage in my life was actually one of the better decisions I made so far. But recently I came across this sobering chart: This made me think.  Why have I been so disengaged and why are so many employees in Singapore disengaged too? While there is so much focus and attention on driving higher productivity...

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Taking care of my own busyness

It happened again. I had lunch with an ex-colleague back from that phase in my life when I served my corporate duties and built up the foundation of my finances. TACOMOB: “How are you?” CORPORATE WARRIOR (CW): “Busy.” TACOMOB: “Busy with what?” CW: “Busy with work, what else?” TACOMOB: “Why are you not busy with life?” CW: “Actually, I am busy all of the time.” TACOMOB: “What are you doing outside of work to keep yourself so busy?” CW: “What do you mean?” TACOMOB: “Well, for example are you keeping yourself ‘busy’ with taking care of your own business?” CW:...

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Have you recently thought about the Recency Bias?

We tend to associate more importance to recent events than we do to less recent ones. The more vivid our memory of something which occurred in the past is, the more “available” that event will be in our mind and the more probable it will seem to happen again. But that’s not the right way to assess risk. An event does not become more likely to recur merely because its last occurrence was recent, memorable, or still on-going—like the current bull market of ’08-’17.  Many people implicitly presume that the market would forever continue its gains (not talking about Singapore here), forgetting...

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Old news that made me go hmmm last week

I am not a very up-to-date kind of guy. Sometimes I stumble across some very old facts that I did not know about before (and that have nothing to do with investing). Like this one: The condor uses the least energy to move a kilometer of all species. So far so good. That sounds reasonable. The source being a study published by Scientific American in March 1973 (= good excuse for not having known about that fact as it was way before I started schooling). So, where on that list of various species does the crown of creation rank...

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Sadly there might be four more less happy people in Singapore soon

Most of us think that if we win the first prize in a lottery we’ll be happy forever. A few days ago four fellow inhabitants of Singapore won the TOTO Hongbao draw bagging about S$3 Million each.  Soon they will find out first hand whether our forecast is true or not. The research on happiness after striking it big in the lottery suggests that not only is it not true, but if anything, lottery winners become less happy. The main culprit for that?  Their lives are disrupted in any number of ways which makes them unhappy. So, why do...

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The benefits of being a wee bit sceptical in believing others

I am convinced that my brain does a poor job of separating truth from fiction.  This leads to many false beliefs.  Therefore, I want to make at least a minimal effort to understand my brain better and be on guard against its deceptive ways. Part of that minimal effort is to read stuff on and about that approximately 1.4-kilogram lump of electrophysiological goo that I am a proud owner of (most of the time). Read: http://www.meltingasphalt.com/crony-beliefs/  (WARNING: 20 minutes read minimum) In this essay Kevin Simler ponders eloquently on the question “how could we end up believing crony beliefs?”...

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Mere-exposure effect

The time has come again. It’s that time of the year when families gather for reunion dinners, when extended families from far-flung corners of Singapore meet in one central place for the annual “oh-how-have-you-been – when-are-you-getting-married – have-you-gained-some-weight – conversations”. Those events usually never pass without the obligatory gather-everyone-in-one-shot photo taking opportunity (I am speaking from experience here). Once you do spot yourself in the resulting photo, however, your enthusiasm (if any in the first place) plummets. “Eeeiih, why do I look so strange / ugly / thin / bloated / grumpy / cheery?” Take comfort in the fact...

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Luckily I am so lucky

Chatting with one of you the other day over a kopi C (that’s coffee with evaporated milk for my dear non-Singaporean readers) made me realize that you might have gained the wrong perception of me. You might believe that due to my heavy weightage of posts on investing and our biggest flaw in investing (our emotional brain) I might be somehow skilled in finding lucrative investments. Sorry to disappoint you all. My early retirement is not a tale of great investing glories.  It’s merely a story of stumbles and falls (in regards to my stock picking skills).  My nest...

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It is all about the ATTITUDE – yours actually

Yeah, you are so right, I am stating the obvious here and why should you waste your time reading about the obvious. But apparently, it is not as obvious as it should be.  Not to everyone. Just an example. Yesterday morning I had a minor argument with my son (this time my oldest son and not the curious career minded one from my previous post). Me: “Don’t always give up so easily. How well you do in life all depends on your attitude. You have got an attitude problem.” My son: “Attitude. Attitude. ATTITUDE. You always talk about this....

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Economic Forecast Illusion or why “Economist” is one of the worst professions one could choose – Long Version

In my last post I mused over Forecasts and those guys who come up with them.  In my little research I came across so many noteworthy facts and statements on that subject that I decided to collate them in a separate post. Here we go, some 32 randomly listed observations on why Economists have a tough stand: 1) No Economist has ever convincingly explained why a normal economy has to go through booms and busts with recessions and occasional depressions, causing great harm to its people. 2) Economists’ failure to embrace the new science of complexity goes some way towards explaining...

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Economic Forecast Illusion or why “Economist” is one of the worst professions one could choose

Two recent events triggered me to do a bit of research. My son – having started Secondary Level 4 a few days back – asked me which job would be the best and whether he should target the Junior College or Polytechnic as his next step on the educational ladder. I saw multiple headlines in print and online media about Economic Forecasts for 2017 and sometimes even beyond. So, have you ever wondered why Economists work so hard—to analyze data and to churn out forecast after forecast—on future economic developments? Why then, assuming they believe their own forecast, don’t they get some funds (cheap...

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