It's been a really long time since my last post. Life has changed by quite a bit since a year back. I'm now based in Singapore and have moved into a commercial role dealing in physical oil and base metals.
The new role is tough but I'm enjoying it!
However, at the back of my head, all the different ideas on how to build a business and grow passive income has still been bugging me non stop. I realized that this blog is a good way for me to pen down ideas that I had from a certain point in my life and so I might actually re start this again.
Passive Income For now, I'm stuck on property investment. I have bought a BTO years ago before I graduated so I'm now unable to buy any other properties! Might not be a bad thing as I'm currently bearish the property market in the medium term (3-5 years). But I still envy people making hundreds of thousands on their property investments
On equities, I'm also bearish, in the medium term. But there might still be room for some upside in the next 1-2 years. I'm looking into this at the moment but am still thinking twice as I might need the cash for the BTO and possibly a small business.
Business A lot of ideas has been through my head the last 1 year. Below are some of them.
1. Online Specs Shop in Singapore. But you will need a physical base to start this business from. I was thinking of buying into a local spec shop and building from there.
2. Online free lottery. Using ads to fund a lottery. => Any internet marketer/web site expert who is interested in helping me develop this. Do let me know. I'm willing to fund this.
3. Vending machines. Bring this one level higher in terms of product types and advertising
4. Local food franchises.
Anyone who is interested in building any of this together, do drop me an email.
Just some updates. I finished my risk management rotation at the end of Dec 2011. However prior to finishing, I moved from the Naphtha desk to the Gasoline desk (early September), where I became the lead. Life wasn't easy but I learned much and had greater responsibilities.
Now, I am currently based in Geneva, Switzerland, doing my final rotation in Corporate Finance. Essentially this is where all the corporate financing for the company is done. I am involved in bond issuance, launching of revolving credit facilities, selling asset backed securities etc. In this role, I also get to monitor all the availability liquidity in the company and the expected Capex of the company.
This role has also given me great insights on the group level business strategy (bulk & non ferrous metals, oil, industrial and asset management) of not only my own company, but also my competitors in similar industries. I also get to meet really senior bankers from various banks as my company has over 100+ banking relationships worldwide.
One interesting thing is that I get to see all the bankers who are in the investment banking division of the various banks! I am essentially their clients as they often come over to pitch their bank in order to secure the deal. And seriously, it is easy to see a bank trying to smoke their way through a pitch!
Halve way though now and 4 more months to the end!
I have an idea in mind with regards to optionality trading. But besides oil, I can't seem to find similar products that work in the same way.
The criteria are as follows
The physical commodity prices off a transparent exchange on a regular basis (i.e the price of the commodity can fluctuate everyday but there should be a fixed/closing price at regular intervals that is recognised by market players)
There is a paper market that follows this price movement
Preferably, this commodity can be stored
Preferably this commodity's absolute value is low (to make financing the purchase easier)
Thanks in advance. You can comment on this post or drop me an email at firstname.lastname@example.org
I must say that it has been a very long time since I actually looked at my own blog and did a post. So today, I will just like to share a few things that I have gathered over the past 10 months or so.
1. Seems like many of my business ideas that I actually penned down in this blog has materialised. a. Coupon dispensing idea has been implemented, though still at the infancy stage b. Nandos is taking off c. Teaching financial education to students is getting more popular now
Only the last idea of a landlord agency has not been implemented/taken off yet.
2. The current market correction seems to be a good time to start picking up long term stocks. Look for high dividen yielding stocks to invest in! I would think that REITs with low gearing would be a good choice once their dividen yield goes up to 8+ %.
3. My Job.
I am currently working in a rotational program in one of the top few private oil trading companies. My rotations will bring me through shipping/cargo operations, risk management and corporate finance. So far, I have completed my operations rotation and am currently in risk management.
Being in a physical oil trading industry is more like doing a business as compared to what speculative trading that banks do. The part that most resembles a financial institution is where we use derivatives like swaps and futures to hedge our physical underlying position.
Just a brief summary of what I have done/learned over the last 10 months.
Operations: I did shipping and cargo operations for the following products: gasoil/jet/fuel oil. This involves getting vessels to bring the products from one country to another, while watching the quantity and quality of every loading and discharge. Quantity ranges ranging up to a million barrels per vessel. I estimated that the value of products that I personally shipped, is worth more than USD 1 billion during my time as an operator.
I would say that this is really a big responsibility, considering how new I am in the industry. But the responsibility also came due to certain shifts on my desk whereby I became the most senior far east operator on my desk after only a few months. Hence I had to quickly pick up the skills and knowledge on blending, terminal operations on top of the regular cargo and shipping operation.
The main take away that I had from this rotation is that everything in the world is flexible. People are the ones who make things happen. Most often, problems are solved by being creative, flexible and having good relationships with people all over the region.
Risk Management: This is currently where I am at the moment, working on Naphtha risk management. Essentially in a physically trading house, we minimize the speculative positions by hedging almost 100% of our cargoes. Knowledge of the different exposures in the book is crucial to knowing where the PnL (profit and loss) is coming from.
Exposures can come about from a variety of reasons. The different hedging instruments that are used, or simply different pricing terms that are used on the buy and sell side. Some exposures are like the Front-to-Back exposure, crack position, east/east position etc. Hence my job is to find out these exposures and see how they affect the book, though some exposures are almost impossible to hedge fully. The ultimate decision on whether to flatten these positions will be determined by the trader.
To end off: Lastly, physical trading talks about optionality in doing a business. This is the fundamental concept on how to make money in trading and can be applied to any products, any where in the world. The basic concept is simple but it is up to the trader to decide on how to leverage on this and make money. Thus, if any of you out there who are running a simple import/export company and would like to see if this optionality ideal can be used in your business, feel free to drop me an email and we can discuss the possible of applying this concept.
Dear readers, the lack of updates recently is because of my commitment at my work place. Though the hours at my trading house are rather long, but I actually enjoy what I am doing now and am learning lots of stuff with regards to physical oil trading.
Also because of work,I have also turned down an offer from Mr Tan Kin Lian's (ex CEO of NTUC income) offer to help set up and teach a financial course, but I feel honoured to have been approached by him too.
In other news, currently I am not really actively trading the markets for 2 main reasons,
1. Work makes it hard for me to monitor the markets as actively as in the past 2. Just by looking at the charts, I feel that the market is going to correct soon. All the RSIs are above 70!!
However, I do check my watchlists daily..which comprises of commodity stocks and REITS.
Finally, I believe that I will be updating this blog much less frequently in the future and I thank everyone for the support over the years.