Sorry, there wasn’t a post last week because I was busy over the weekend. Regular programming resumes and my heart goes out to the victims of the terror attack on the mosque in Christchurch, New Zealand.

Photo by Mikes Photos on

Total compliance in financial reporting, but was it misleading? (The Edge Singapore)

Seriously good article on the Hyflux saga. Not one of those that pretends that it could have seen the future but more of a reflection on how accounting principles could have caused blindspots in the analysis of many analysts. Focusing on earnings would have painted a much more rosy picture than how economic reality eventually played out. By focusing on cashflows, one could see that betting on Hyflux was basically a bet that its plans go off without a hitch.

Buy, Hold… Profit? (The Big Picture)

The money shot is the animation that shows how longer timeframes provide positive returns even after accounting for inflation. The problem is: how many people are wired to wait that long? I’m willing to bet ‘not many’.

On Japan Sea coast, small firm shows scars of China’s economic woes (Channel NewsAsia)

A story about how trade woes are affecting a small firm in Japan that makes precision parts for auto-makers. Is it really due to trade wars or is it due to ‘peak car‘? Hmm…warrants more investigation.

Why inflation is good for us (The Undercover Economist)

Many people that worry about the national debt don’t really understand economics. Many people that worry about runaway inflation don’t understand economics either. Do yourself a favour and read this article.

The ‘Hidden Mechanisms’ That Help Those Born Rich to Excel in Elite Jobs (The Atlantic)

Really interesting read for those interested in the issue of inequality and class privilege. No surprises that these things happen but nice to see some academic work that explains how and why these things happen.


I really hate doing posts on politics but there are a few things I needed to share my thoughts on. I’m not particularly for or against the government or for any of these issues (except the cats. I have a cat).

I guess Cynical Investor (CI) may be right when he says “Double confirm, ground not sweet for PAP” and that there may be some truth to the rumours online that the General Elections may not be held this year after all.

However, CI’s point was based on the property market. The points I make here are going to a highlight reel of some of the latest self-inflicted wounds PAP members have made.

Lee Bee Wah losing the cat lovers’ vote

MP for Nee Soon GRC, Lee Bee Wah basically singled out cat feeders as the cause of rat problems in certain HDB estates. This didn’t go down well with cat lovers across the country and it didn’t help that Lee Bee Wah, perhaps because of her background as an engineer or perhaps because she was trying to present the case as if it were to a layperson, explained things as if it were a simple matter of cause-and-effect.

Basically, her explanation came across as:
There are rats in the neighbourhood. Rats are attracted to food left in common areas. Cat feeders leave food in common areas. Therefore, cat feeders are the problem.

To be fair, I agree that there are irresponsible or ignorant cat feeders who leave food out for community cats and that the food may attract insects and rats. However, her narrative means that other probable causes aren’t highlighted.

For example, People who leave offerings on the ground after prayers during certain times of the month; Kids that carelessly drops scraps of their snacks that they buy; People who spills their drinks at the common rest areas at the void decks.

In short, there’s plenty of other people who drop food on the floor in the common areas all the time. So why is it just the fault of the cat feeders?

Lee Bee Wah again

And if losing the cat lovers’ vote wasn’t enough, LBW* helped the PAP lose even more votes by calling out a large proportion of Singaporeans who wished the government did more during the most recent budget announcement.

You can read the details yourself but her little made-up folk tale where she portrayed the government as a thrifty, kind grandfather who gave his grandson (read: citizens) some money for all the important stages of his life is flawed.

For one, I would be grateful to my grandfather for giving me ANY amount of money because it is a gift. In other words, if my grandfather gave me money, it was something that HE earned, saved, didn’t spend on himself, in order to give it to me.

You can’t compare the government to a kind, thrifty grandfather because the money raised by the government comes from taxpayers in the first place. Even the money earned from the investment returns of GIC and Temasek is built on the capital provided by the taxes collected from citizens, other members of the labour force, and corporations.

I guess we could thank the government for giving you back some of what you paid them instead of siphoning it all away but I think they lost that right when they argued that they should be well-paid in order to attract the best and brightest to do the job.

In order words, we can thank the government for doing their job but we shouldn’t compare any handouts from the budget as a ‘gift’. You can’t really take something from me, then give some part of it back and call that a gift.

The Watain farce

And if LBW’s gaffes weren’t enough, the anchor minister in her GRC** who is also the Minister for Home Affairs decided to weigh in after some conservative Christians complained about a Death Metal band being allowed to play a concert in Singapore. Their complaint was that the band’s song had satanic and anti-christian elements and influences and were therefore, offensive to Christians.

The concert was only supposed to be attended by some 200 people and funnily enough, had been given prior approval by the appropriate licensing bodies. Then somehow, hours before the concert, they were told they couldn’t perform.

The official explanation is that the Ministry of Home Affairs (MHA) asked IMDA (the licensing body) to consider cancelling the performance due to “new and serious concerns about public order, and ground reactions relating to social and religious harmony”.

If I read that right, it basically means that just because a select group of people made some noise which somehow got the attention of the powers that be, MHA was asked to advise IMDA to overturn a decision that was based on the execution of prior rules and regulations.

Now, I’m not sure about you but that’s worrying to me. It means that if I somehow had access to the powers that be, and that if I could justify how offended I might feel about certain people or groups of people on the grounds of public order, then what was once permissible could suddenly become not permissible.

Anyway, the irony is that easily-offended Christians lost this one because now almost everyone in Singapore knows who or what Watain is and for a moment in history, more people in Singapore were listening to their music on Spotify than anywhere else in the world.

The Minister might have been legally right (after all, he’s law trained) on all counts for this one but I think it’s a worrying sign for those concerned about potential abuses of the system.

Final Thoughts

It’s not just an Yishun thing***. There are lots of other things to say about some of the other PAP MPs but the saving grace for the PAP is that the majority of the opposition isn’t much more impressive.

*Abbreviating her name because I don’t really want to keep typing it out.

**Voting for MPs in Singapore can be quite funny in some constituencies because you have to vote for a whole team of them rather than just one of them.

***Inside joke for Singaporeans. LBW and the MHA minister are from the GRC that oversees Yishun.

The Greatest Investor You’ve Never Heard Of: An Optometrist Who Beat The Odds To Become A Billionaire (Forbes)

Up till this point, I had never heard of Herb Wertheim either. Anyway, his is a fascinating story – clearly, a brilliant guy doing what he loves and accumulating money is just a byproduct of all that he’s sown. Just as amazing, he’s also pledged to give away almost all his money.

Setting the Record Straight on Asset Allocation (Enterprising Investor)

I’ve known about the “90% of investment returns come from asset allocation” story for a while now and was trying to restructure my portfolio based on that. Turns out there’s more than meets the eye when it comes to simple rules like that. In short, asset allocation is as important as strategic asset allocation.

The Easiest Retirement Choice (Of Dollars and Data)

Highly instructive post. You can quibble about how realistic the assumptions are (e.g. a 25-year retirement period) but it’s reasonably true for the median in the U.S.

As for how this applies to our sunny shores, those that like to bash the CPF should note that our savings rate thanks to forced contributions to CPF are something like 37% (including the employer contributions).

That’s a ridiculously high percentage for any retirement plan. Of course, the CPF (being a kiasee government body) only pays us bond-like rates so you’ll never get rich by relying on CPF alone. But at least, going by similar arguments made in the post, you won’t starve.

But of course, CPF fucked it up by letting people use so much of it for housing and for certain groups like homemakers who don’t work, they have to count on their spouses to remain loyal and faithful. The other group that doesn’t benefit from this are the low-income earners since they have fewer contributions to their CPF.

Let me start by saying that I have no insight or expertise on this. What I’m about to share are thoughts from more learned people and I suspect these guys are on the right track as opposed to the noise we hear from politicians and lobbyists.

And oh, the title is a nod to Hanauer’s article to his fellow billionaires.

The jury’s probably still out on who’s right or wrong but the following reads should provide some context and understanding to the matter.

Paul Krugman

Nobel Laureate, Paul Krugman wrote about Alexandria Ocasio-Cortez’s (AOC) proposed top tax rates of 70-80% in early January. I can’t believe I missed this until now but he seems to be a strong proponent of her argument. Also, AOC’s proposal isn’t based on fluff but studies by Emmanuel Saez and Peter Diamond who are two giants in the field of Economics.

Krugman’s take is both in terms of theory and historical precedence. The theory is that since humans exhibit diminishing marginal returns to utility, an additional dollar (or $1,000, in Krugman’s argument) provides more utility to a low-income person as compared to a high-income person.

By way of thought experiment, it means that an extra $1,000 to a low-income person would result in extra food, shelter and overall feeling of security (high additional utility) while a high-income person will probably just spend it on something frivolous, like an extra bottle of champagne (low additional utility).

Furthermore, Krugman points out that the high marginal income tax rate has historical precedence. The top rate through the 60s and 70s was in the range that AOC is proposing and GDP growth during that period was solid.

It may be a correlation but at least it shows that Republicans shouldn’t be dismissing the idea outright.

Tim Harford

While Harford may be no academic, he is an economist by training who clearly knows the literature well and while he doesn’t advocate for anything, he does point out what variables/assumptions must be necessary if you do advocate for a top marginal tax rate. He also points out where the details in the studies differ from what politicians are advocating for so I think he raises good points to note when advocating for/against what politicians are proposing.

His is a short post but nonetheless, instructive.

And finally, The Financial Times

I’m not really sure about the background of the author but he makes a good point that is summed up in the first sentence of the article:

Is Ben Bernanke the father of Alexandria Ocasio-Cortez?

The basic gist of the author’s argument is that the era of quantitative easing under Ben Bernake saved the economy and the banks, and bailed out the boomers (who happen to hold more assets) at the expense of the millennials (who happen to be wage-earners). This created an asset boom which then dashed all hopes of millennials ever owning homes of their own or attaining security over their finances.

What we’re seeing now is just the result of increasing wealth and income inequality play out in the political realm.

I’m not sure what’s right or how things will turn out but I believe that we need to keep all these things in mind as things play out.

Edges That Won’t Go Away (A Wealth of Common Sense)

Great piece. The best edges are the ones that depend on human emotion and behaviour. The exchange between Bezos and Buffett explains it all.

Hyflux is warning of investing in high dividend yield stocks ( Thoughts of a Cynical Investor )

High dividend yields have always been a flag. Plenty of other great ratios to use when determining if the yields are likely to hold. I probably should do a whole post one day for my own sake.

Great read of the geopolitics of the world and why the Yuan or Euro is unlikely to dethrone the USD any time soon.

Once hailed as unhackable, blockchains are now getting hacked (MIT Technology Review)

Oh no.

In a moment of metacognition, I realised that the events that happened yesterday demonstrate that meditation may be helping me deal with stress better than I thought.

It’s going to be a personal and reflective post so forgive me if this post doesn’t bring anything of value to you.

Why was yesterday stressful?

Well, firstly, it’s the exam marking period for us. Exam marking and the subsequent processing of results is a stressful affair because the school makes such a big deal of it and any errors that may get picked up during this period.

Second, we’re given this unnaturally short period to mark (think hundreds of scripts within 4-5 days) which cannot be extended when your exam paper comes in at the end of the examination schedule. That’s exactly the scenario I’m faced with this semester.

On top of that, I have administrative duties as the coordinator for Year One modules. This means that I am the recipient of the exam documents of all these modules. No thanks to the lateness of my paper, all these documents are being submitted to me right when I have to start marking.

Throw in the fact that I’m the class advisor for a student who missed all her exams due to medical reasons and I have the school asking me if she’ll be able to take the make-up papers.

On top of that, the cheap ballpoint pen that my school provides leaked and stained my shirt pocket and my subsequent attempts to remove the ink left a stain on my bedroom door. At this point, I felt like a loser.

How I dealt with it

Amazingly, between dealing with all of the above, I found the time to have a delicious phad thai at a neighbourhood hawker centre and buy some hope in the form of two lottery tickets (In case you’re wondering, I didn’t win a thing or even if I did, I wouldn’t be stating it publicly, would I?).

I also met my quota for marking. Marking 300+ scripts distributed across 14 stacks is like eating an elephant; You don’t do it all at once. You set a target, say 4-5 stacks a day and when you hit it, you don’t do any more even if you could.

Rest is as important as doing the task.

The other things beyond my control were things like people looking for me at all the times I was planning to do something else. A colleague wanted to submit her documents just when I was preparing to leave. And she had queries that eventually made me fire up my computer just to send an email.

I could have gotten angry. I could have gotten frustrated. But I didn’t. I felt irritation building up but I didn’t get irritated. I think this is what it means to recognise that yes, external circumstances or people can be irritating or annoying but whether we get irritated or annoyed eventually comes down to a choice that we can make.

I cannot control the actions of others but I certainly can control mine. And if I can control myself, then I’m in charge and if I’m in charge, I can change direction so that things go the right way.

Intractable Problems

That’s exactly what I did with the ink stain. I wasn’t going to get it out without a whole bottle of rubbing alcohol. Furthermore, the ink stain wasn’t so obvious since my shirt was dark-coloured.

Was it worth it to get annoyed with an ink-stained shirt or door?

So I left it alone.

And after leaving it alone, I could focus my attention on the things that mattered – my wife, my cat, the latest chapters of manga.

After all, my wife has been deliberating over very important matters for some days now. I’m not sure if she’s arrived at an answer but I hope my inputs have made sense.


I’m beginning to think why meditation helps is because the practice is helping to make deep, slow breathing second nature. When external stressors hit us, the body’s typical response is to make our breathing quicker and our field of vision more narrow.

That made sense millennia ago when the external stressor was a threat to your life but in this day and age, the external stressor isn’t usually life-threatening.

In fact, the body’s natural response is probably counter-productive when you might need to assess things calmly and take a view of the big picture. You don’t want to win the battle but lose the war.

I think meditation’s helping to make me less reactive to external stressors. I should caution though. It’s not a miracle cure for everything. It’s not a magic pill. It takes practice and very conscious mental effort to make it work.

On hindsight, I think yesterday went fairly well.

How to Wreck a Pension Plan in 3 Easy Steps (A Wealth of Common Sense)

No, not about CPF. This is about how the Omaha Public Schools’ (OPS) pension fund screwed up badly by going into “diversifying” into alternative investments.

The irony is that, rather than being diversified, they concentrated their assets into alternative assets in order not to be subject to the fluctuations that come with the stock markets.

If I were them, I might have just asked their Omaha native, Warren Buffett what to do with the money. But speaking about CPF…

CPFLife: PAP govt cares for u, really they do (Thoughts of a Cynical Investor)

Cynical Investor shares an article from The Star which talks about how Malaysians who have withdrawn their EPF ran out of money within 3-5 years. A fair amount who withdrew 70% of their monies spent it all within 30 days.

People just suck at managing their finances.

One Big Thing (Of Dollars and Data)

Various stories about how being able to identify the one variable that matters will get you most of the results you need. Nothing new in terms of insight but a good reminder that if you want to meet your goals, you have to identify the one thing that will help you get most of the way there. Once you have that, the rest of the journey is merely a series of tweaks to optimise the journey.

The Proper Geoarbitrage Strategy: First Your City, Then Your Country, Then The World (Financial Samurai)

The idea isn’t something new. I must have heard of this at least 2-3 years ago from those people who call themselves “Digital Nomads”. Basically, the idea is to take advantage of the fact that some jobs can be done remotely and that some places are far cheaper to live in than others.

What many of these people end up doing is living in a place like Chiang Mai while doing remote, freelance digital skills-based jobs that allow them to charge US dollars for.

In short, arbitrage by earning USD and having expenses in THB. I like Financial Samurai, Sam Dogen’s idea of doing the same arbitrage in your own city.

I certainly think this is doable in Singapore, certain neighbourhoods are much cheaper to live in than others. Housing is much cheaper in estates like Woodlands and food costs tend to be cheaper in older estates with a large proportion of older folks.

Unfortunately, Singaporeans are a snobbish bunch. They sneer when they hear you live in Yishun. Also, some think the sky of going to brand-name primary schools and therefore try to live within 1km of those schools to gain priority for entry.

If Self-Discipline Feels Difficult, Then You’re Doing It Wrong (Mark Manson)

Totally agree with this. I used to think that people who achieved great feats must have great self-discipline to put in the practice. Then I read James Clears’ Atomic Habits and I learned that it’s far easier to go on auto-pilot.

Simple vs. Complex (A Wealth of Common Sense)

Not posting this for the gist of the post but because of some points made in the post. One, money managers also fall for the Fallacy of Composition and Two, yeah, I totally agree that some portfolios ought to be 90/10 (equity/bond). Having an infinitely long time horizon means that you should not have to worry about drawdowns so much.

The Idea that EC Condo Sure Makes Money. We Explore a Case Study (Investment Moats)

I saw the original rant too and wanted to give my take on it but I think Kyith’s post suffices. Just wanted to add that the property market also moves in cycles and this fella (even though he was buying an EC) was buying at the top of a particularly exuberant cycle.

So, what did he expect?

Her World, a local women’s magazine, ran a story about a couple that earns $30,000 per month and yet, is in debt. You can go and read the story (here) but the gist of it is that the writer and her husband works in sales. More specifically, they sell services and products to high net-worth clients and therefore, in the course of their work, end up spending tons of money to entertain clients as well as keep up an appearance of success. In doing so, the couple has taken on debt and have no savings to speak of.

I’m highly skeptical of the stories that appear in women’s magazines but I’m pretty sure that there’s some truth to this one or at least, it’s not an impossible scenario and there are some lessons to be learned from this.

Why I (kind of) believe that this story is true

I believe this story because, in the course of my life, I’ve seen how jealousy can get the better of people. I’ve witnessed relatives buy bigger houses because they believe that a bigger house represents success when the truth is that the house was not (solely) paid for by their own efforts or results. It was a product of sponging off the hard work of others.

The other category of people who buy houses that they can’t afford is a little more sinister. They only manage to do so thanks to a mortgage that runs for 25-30 years as well as the ability to draw down from their forced retirement savings (i.e. their CPF Ordinary Accounts). Of course, this is at the expense of their future selves.

I’ve also seen friends buy bigger (read, more luxurious) cars because they can afford to. I’ve actually had a friend trade up to a Merc because a potential client once remarked that he went to see the client in a car of Korean make.

Car prices in Singapore are the most expensive in the world thanks to our tax policies on private transportation but yet it’s not unusual to spot a Mercedes, BMW, or Porsche on the road. The reason, particularly for the salaried class that owns a Merc or BMW, is that taking a loan to buy cars is fairly common in Singapore. Therefore, a $150,000 Merc can be bought by someone who can afford the downpayment (which is probably between $15,000-20,000) and the servicing of the loan.

Once again, the issue for those who take on loans to buy cars they can’t afford is that they do so at the expense of their future selves.

You have a choice

I sincerely believe that for all those complaining about the high cost of living in Singapore, maybe half of them have a genuine case of not being able to afford the basics.

The other half is bitching about how it’s expensive to live the high life in Singapore. Which is most interesting to me because if you cannot afford to live like a millionaire, then it’s perhaps because you need to be one first before you start living like one.

Make your choice.

Selectively Cheap (A Wealth of Common Sense)

A great read on how to budget for lazy people and also, in my opinion, how one should think about spending money. I’m still in the camp that believes that money is important and useful but only up to a certain extent. After all, ask someone who lacks money for the basic stuff like food, shelter, medicine, water, electricity and they’ll let you know how important money is. On the other hand, beyond a certain level of comfort, money doesn’t bring much more utility. If you need a good example of diminishing marginal utility, money is it.

Looking back at our 2018 finances (Minimalist in the City)

Always nice to look at how much other people spend on different areas of life. I’m rooting for this family to hit their FI goals.

Return of the Ever-Wrongs (The Big Picture)

It’s amazing how some people can be so wrong and yet so blind to being wrong. I know all about the Dunning-Kruger effect but still, for some people to be so blatantly wrong and yet not realise it, boggles me.