Christopher Ng has a piece out that warns people about going for a business degree. His reasons are mainly based on the Department of Statistics Singapore’s (DOS) latest census survey which has a section showing the number of graduates in different fields.

Proportion of each cohort by gender based on field of study at the university (link)

I took the above from the infographics report from DOS but you pretty much get the drift. It’ll probably suck to be a Business & Administration graduate in the near future because there are so many of them. After all, it’s ECON 101 right? Increase supply must equal to a fall in price (which in this case, refers to the wages earned).

Based on these numbers, Christopher then goes on to give his take on why it’s probably not a good idea to go for a business or humanities degree and consider a STEM degree instead.

Driving while looking in the rear-view mirror

Full disclaimer before we go any further. I teach at the Business School in a local polytechnic, graduated with a degree in economics, and obtained the CFA charter.

I don’t necessarily disagree with his conclusions but I certainly disagree with his reasoning for a few reasons. Many of these recent graduates in 2020 will still be the workforce for at least another 30-40 years so it seems to make sense that a young person thinking of what to study next shouldn’t go into a field with so much more experienced competition.

However, I’m not quite sure that young people today need to worry so much about people that would already have been in the workforce for 5-10 years when they graduate. A young person about to select his/her course of study at the university or polytechnic will take roughly 3-4 years to graduate. For those that go to the polytechnic, many eventually also go on to complete a degree which will take another 3-4 years.

Maybe Christopher’s advice may make more sense for those about to go to the university but for the polytechnic student, it’s going to be far too premature to make a call. I speak from experience.

In my time, it was heavily advertised that Life Sciences and the Biomedical field was going to be the next growth sector of the economy. This led many students in my cohort to take up some combination of science subjects at the junior college level. I wasn’t any exception because I didn’t know better and my mother convinced me that it would give me more options at the university.

This same logic led a few people I know to study some form of science (think Life Science and Physics) at the university only to find that a degree in that area was pretty much useful for only operating machinery and washing test tubes because they had to further their studies all the up to the PhD level if it was going to mean anything.

Today, not one of my friends who studied in a science field is working in an industry related to science.

I believe the next area with lots of saturation is going to be computer science and data analytics. The business courses have fallen out of favour because the flavour of the last few (and possibly next few) years has been computer science and data analytics simply because that’s where the money has been.

In case you’re wondering why there are so many business graduates today, the reason is simply because that was where the money was in the mid-2000s and people in general, are always behind the curve.

So rather than avoid a business degree, I would tell young people to avoid a career in technology because by the time they would have graduated, that ship may have already sailed.

Telling a fish to go climb a tree

The second problem I have with arguments like the one Christopher has made is that it assume (just like we do in econ 101) that labour is homogenous. I’m not sure it’s wise to advise people on what course to study based on supply-demand characteristics.

While education has this primary objective to teach someone employable skills, I’m quite sure that not everyone is equally well-suited for every field of study. Telling people to avoid business or humanities courses and take STEM courses assumes that intelligence and skills are transferable in all areas.

This is a fatal assumption to make and it’s one of the reasons why doctors or lawyers, despite their ability to excel academically, can become lousy business people or investors. This is especially true for people that have a natural inclination towards the arts and humanities – they really struggle with subjects such as mathematics or science subjects.

Personally, I’ve had the unfortunate experience of studying sciences (physics, chemistry) in the JC which made me bomb my A levels so bad that I nearly didn’t make it to a local university. I was only saved by the good fortune of someone deciding that in the one or two years after my A levels, they would require the SATs as an additional admission criteria. It was also apparent from my secondary school days that my humanities were much stronger than my sciences. Fortunately, I ended up studying economics which elements of humanities subjects as well as mathematics so I did ok at the university.

Aptitude is the first problem. The second is of course whether you should study something just because that’s where the money is.

Personally, I would find it soul-crushing but even if you don’t find it soul-crushing and which course to study is just a means to an end, then in this day and age, why bother studying in the university at all? Google now provides certification on Machine Learning and Data Analytics through Coursera for $80 a month. It’s much quicker and effective to learn what you need on YouTube, get the certifications and do actual projects than to study at the university.

Industry dynamism

The last point I want to make is that no one can predict how certain industries change. While Christopher makes the point that people should avoid the humanities disciplines unless you’re a scholar due to the “employment and salary outcomes”, my counterpoint to that is that humanities graduates have demand in areas most people don’t realise.

In Singapore, the government sector employs a fair share of humanities graduates. I should know because my first workplace was full of them. And this is Singapore where government jobs actually pay decent coin. Even in the private sector, humanities graduates are employed in many areas that may surprise people.

For example, thanks to increased regulation and compliance requirements, many banks employ people to do lots of checks. The surprising thing is that these departments are mostly staff with people who have humanities background because the nature of a humanities course is to do lots of background research which may require language expertise and to make assessments on evidence that may be less than perfect. While these roles are not the revenue generating side of the bank, they still pay more than decent coin.

Time to retire this argument

This isn’t to say that getting any certain field of study is good. I’m just tired of seeing the same old argument that someone should study X because that’s where the jobs will be in the future or to avoid Y because there’s an oversupply of graduates with a degree/diploma in Y.

The job market is more nuanced than that – humanities graduates could be in strong demand in certain sectors and there is a perpetual shortage of people willing to work in auditing. I’ve also seen my business diploma holders realise that business isn’t for them and then go on to fields as varied as occupational therapy and dance.

Were their three years a waste of time? Maybe, maybe not? Who knows and it’s not for us to judge.

More importantly, people have different interests and strengths. Trying to advice them on which course to study based on where there seems to be a shortage of labour assumes that the world can be engineered to perfection. I’m seen too many students burn out and eventually fall because of this.

When that time comes, I hope that instead of blaming their child, parents will blame themselves for giving lousy advice.

Happy Father’s Day! Some weakness in the markets following the Fed Meeting. Only time will tell if this is the start of a huge move down (which is what some market participants like Michael Burry are expecting) or much ado about nothing.

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Stealth Frugality
(Early Retirement Now)

Another form of the early retirement club – retiring early even while looking middle class.

How ‘Chaos’ In The Shipping Industry Is Choking The Economy
(NPR.org)

It’s strange how these things haven’t really been sorted out yet. However, any bottlenecks in the supply chain leading to inflation is bound to be fairly temporary.

Iron Finance’s Titan Token Falls to Near Zero in DeFi Panic Selling
(Coindesk)

Best part of all this is how Mark Cuban is involved in the whole thing. I read Matt Levine’s explanation on how Titan Token is supposed to work and boy, it sounds like the kind of financial economics voodoo that investment banks come up with.

More than half the year’s gone by and I’m not sure what I’ve actually done for the year.

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Why Misinformation Is About Who You Trust, Not What You Think
(Natilus)

Sounds like the right book for this day and age.

Why Interest Rates Have to Stay Low For a Very Long Time
(A Wealth of Common Sense)

Large budget deficits forever?
(Klement on Investing)

Good commentary on interest rates. I suppose the key will be whether inflation will be persistent once supply shortages pass or whether we see an upward spiral of wages, followed by increased demand for goods and services. Either way, remember that this is for those who care about the economy. For those who care about the markets, inflation is going to be less of a concern than you think it is.

Also, see KOI’s post on the size of budget deficits as he makes good points about budget deficits.

I have Doubts about Straits Times Invest’s Financial Editorial Independence
(Investment Moats)

I didn’t even realise there was someone else in-between Lorna Tan and the current guy. Anyway, I’ve long given up on the Straits Times’ Invest section. I used to look forward to the Money & Me profiles every week until I realised that some of the people profiled are nothing more than shameless self-promoters whose Investing/Business/Finance track records are suspect.

I also thought that Lorna Tan’s articles were pretty drab and run-of-the-mill. It’s still a mystery to me as to how she managed to publish a series of books based on her columns. To be fair to her, the new guy’s articles seem even more drab and run-of-the-mill.

I suspect the Straits times is facing the same problem as most organisations with aging employees – it is staffed and caters to this demographic that is sizable but not going to contribute to future growth. Therefore, any attempts to become current alienates this core and is quickly condemned as a failure. The organisation then reverts back its old ways that it’s sizable core likes but further alienates the younger demographic that should be its future customer base.

Next time SPH laments that it’s life is tough because media is a dying industry, remind them that there are many smaller upstarts out there that beat them to the game (see: Mothership, Rice media, The Woke Salaryman, Seedly, any food-related social media page, etc.)

The Pied Piper of SPACs
(The New Yorker)

Great piece on Chamath, one of the most shameless self-promoters out there today. It wouldn’t be that bad if he were just a self-promoter. What’s worse is his actions have recently started to resemble scam artistes. Imagine raising all that money by promoting nonsense projections for Virgin Galactic and then cashing out even when those projections didn’t get realised. Many people out there don’t realise that this is one way some people play the game.

You don’t hate the player but you must realise that some people are just B.S artistes and steer clear from them.

It’s the end of may! Circuit Breaker (CB)-lite coming to an end soon (hopefully).

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No, Millennials Aren’t Poorer Than Previous Generations
(Of Dollars and Data)

Great piece with lots of charts and well-sourced data.

4 Lessons From the Crypto Crash
(A Wealth of Common Sense)
INSIDE THE RISE AND FALL (AND RISE AND FALL) OF SHIT COINS
(Vanity Fair)

Crypto two-fer. The crypto market is extremely volatile and only time will tell if this is a crash or the start of another bull market.

I have many thoughts on whether crypto is going to be the currency of the future (unlikely). It’s not so much whether it’s technologically possible but more of the willingness of the people in charge (i.e. governments). Can you imagine a government turning off the internet or restricting their citizens’ access to exchanges like Coinbase or Binance? That’ll effectively kill the crypto market in that country.

Plus, if you’re a citizen of a country, would you rather a cryptocurrency backed by a stable government or coins backed by public ledger whose value can be subject to the whims and fancies of internet billionaires (thanks Elon!)? My guess is that eventually, currencies will become some sort of stablecoin but that will make it harder for people to avoid paying taxes (think of those operating cash-based businesses).

As for crypto, unless they have some of utility like Bitcoin (store of value?) or Ethereum (with smart contracts and the network effect of many projects using their blockchain), everything else will languish in obscurity.

The $2,000 a month Lifestyle of a DINK Singaporean Couple
(Investment Moats)

I only linked to this for the link to the YouTube video. It’s pretty amazing that they only spend $2,000 a month as a couple. Even some of the most thrifty people I know say that they probably need $2,500 a month. That’s for ONE person. So effectively, this couple is spending 5x less on a per person basis. Talk about efficiency!

Annddddd….We’re back! Back to a semi-lockdown that is. I’m calling it “Circuit Breaker Lite” or “CB-lite” for short despite what the government says about it being “Phase 2 (Heightened Measures)” or whatever they want to call it. It basically means no going out until mid-June.

The STI was down heavily at one point (~3%) but recovered to close down 2.2%. Whatever it is, it’s not exactly a bargain and I don’t think markets are going to come down further unless we get similar recurring waves of infection in the U.S. where markets actually matter.

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The 60-Year-Old Scientific Screwup That Helped Covid Kill
(Wired)

Fascinating story. How many other problems that we have no solution for today is the result of some ancient legacy? I can think of a few at my own workplace.

Direct your umbrage at the system, not the person
(Growing your tree of prosperity)

Mildly entertaining read. Totally agree that the SAF scholarship and public scholarship system ends up producing too many high level civil and public servants that only know how to keep the machine going. I think it’s a self-preservation mechanism…Much easier for them to continue receiving the high salaries that they have while going in the same direction than looking further to the horizon in the event we need to start rowing in another direction. After all, if you only stay in one place for some time (say, 5-8 years) then why think about what happens 10-20 years down the road?

I am not a fan
(Klement on Investing)

Latest experiments in Russia on price controls.

Two Bets for the Next Decade
(Of dollars and data)

Ooo, take out the popcorn.

Bet 1: Bitcoin or Ethereum (Cuban) vs. S&P 500 (Mallouk), over next decade

Bet 2: 50/50 Netflix/Amazon (Cuban) vs. S&P 500 (Mallouk), over next decade

– Of Dollars and Data

Pursuing Coast FI with $550,000 – 3 Years Later
(Investment Moats)

Lovely spreadsheet that Kyith at Investment Moats created. Quite fun to play around with it and have it tell me whether I’ve reached “Coast FI” or not.

One-third of 2021 is over. Markets have been on an upward march and it almost seems as if no one is talking about any risks to the market. The only risk to markets that people have been talking about seem to revolve around inflation but even the jury is out on whether inflation is something inevitable and/or necessary.

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We don’t “need” inflation
(Klement on Investing)

You may not agree but Klement makes interesting points about whether inflation is necessary. Good read for those arguing that inflation is a necessary evil.

The Golden Age of Fraud is Upon Us
(A Wealth of Common Sense)

As usual, Ben Carlson brings up an interesting point that in boom times such as these, fraudsters abound. It brings to mind the few cases that we’ve seen in the local media as well, the most prominent of which was a guy who promised impossible returns with the use of what sounds like a very niche/specialised strategy in trading nickel. As always, these fraudsters are nothing more than good storytellers.

Presentation: Bull Markets, Valuations & Bubbles
(The Big Picture)

I watched the presentation on YouTube and I must say that Ritholtz makes a good case for whether markets are currently in a bubble or not. Very non-technical and common-sense as all good theories should be.

An In-Depth Look at the Perplexing IVA Saga
(Morningstar)

Another example of why individual stock-picking and active portfolio management is so hard.

Whose Decline is it Anyway?
(Of Dollars and Data)

I think it’s safe to say that the Robinhood day-trader mania has hit a wall. In late 2020, these RH daytraders seemed to be on a one-way trip to the moon. By early 2021, it all came down. In fact, I would say that the landing has been pretty cushy for many of them. I’m pretty sure that most day traders in 2000 had it much worse when the dot-com boom imploded.

Actually, very soon I may have to change it from “things I’ve read” to “stuff I’ve heard” because I’ve been consuming a lot more info via podcasts and YouTube…

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The Craziest Market I’ve Ever Seen
(Of Dollars and Data)

These are pretty wild times. But then again, things like the $100m deli are obviously outright outliers where there is probably some form of market manipulation/fraud going on as Barry Ritholtz has pointed out. The OTC markets in the US are rife with these sort of things.

Matt Levine also makes the point in his newsletter that it’s actually a $2b deli. Fun stuff.

“The simple valuation math is that Hometown is worth $13.01 (yesterday’s closing price) times 7.8 million (the number of shares outstanding), or about $101 million. But ordinarily companies are valued based on their fully diluted equity value, taking into account stock options and warrants. Here, there are 7.8 million shares, but also an absurd 155.9 million warrants. That represents a fully diluted equity value of almost $1.9 billion.[1]”

Latest is of course that the company that owns the deli is now delisted.

Dow 36,000
(Marc Levinson)

Some good points about the levels of an index. Not many people outside the finance industry appreciate this.

Singapore and Switzerland in the crosshairs?
(Klement on Investing)

Singapore really has an absurd amount of FX reserves. Some years back, I spoke to an economist who is from the more anti-establishment camp who is of the view that our reserves is ridiculously large relative to any probable operational need. I think it’s really a byproduct of the extremely conservative nature of our government as far as fiscal spending goes.

Special Mentions

  • Barry Ritholtz’s interview with Rob Arnott (link to episode on Spotify)
  • Odd Lots podcast episode with John Hempton (link to episode on Spotify)

Bugger me….another late “Best Reads”.

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Shifting Balance of Power?
(The Big Picture)

A macroeconomic forecast for the USA? I also like how anecdotes were used as a story for the times. This is really how I think economics should be learned rather than through the heavy use of indicators that laymen find difficult to interpret.

Those reindeer are good
(Klement on Investing)

This is pretty funny. I wonder if the list of stocks that the Dartmouth researchers presented was equally distributed. Or were the momentum names featured more heavily in the list?

S’pore Retailer Naiise Has Ceased Operations – Founder To File For “Personal Bankruptcy”
(Vulcan Post)

Is this guy just a lousy operator or did he pilfer the till for his own gains as some have alleged? Time to take out the popcorn…

Why is there a paucity of political leadership in SG?
(Sudhir TV)

This was the news of last week. Sudhir always gives good commentary on the state of local politics. This is no exception.

Sorry for posting a day late but as they say, “better late than never”.

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Why You Shouldn’t Pick Individual Stocks
(Of Dollars and Data)

Yes, that’s right. If you’re a beginning investor and you think you can beat the odds, then you’re severely mistaken. It takes a LOT of skill and even more humility and wisdom to know whether you actually have skill or you’re just plain lucky.

Furthermore, the skill only comes through a lot of practice and hard work.

Why the “fintech disruption” threat to banks might be overdone
(The Reformed Broker)

For those a little too optimistic on how the crypto space is going to disrupt finance.

Bartlett on Robert Mundell & Supply-Side Economics
(The Big Picture)

Ritholtz Wealth Management three-fer’ this week.

Putting this here because Mundell passed away and I’m always partial to some economic history.

Sorry! No “Best Things” last week because I was busy with something.

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The Dumbest Financial Story of 2021
(Slate)

A commentary on the Archegos blowup which is undoubtedly the Wall Street story of the week. The markets pretty much treated it a non-event and the S&P500 is now at an all-time high above 4000.

Brutal truths about Modern Dating in Singapore
(Growing your tree of prosperity)

Christopher Ng’s hilarious mental model of dating in SG. Worth a read.

Non-compete
(The Reformed Broker)

Really important post. I have a group of colleagues and friends where we occasionally talk about investing and personal finance and the I always tell them that the most important thing I’ve learned is to know which game you’re playing.

Someone made 1000x returns on a stock or crypto by doing a YOLO trade? Good for them. I’m not about to tell them about the virtues of diversification or that the result of their trade is more luck than skill.

Someone in the office trying to work behind the scenes to get somewhere higher up in the world? By all means, go ahead. I’m not in the office because I’m trying to ascend the ranks for fame and glory.

Know the game you’re playing and play your own game.