Archives for category: Best Things I’ve Read

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Cynical Investor shares an article from The Star which talks about how Malaysians who have withdrawn their EPF ran out of money within 3-5 years.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?

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.

The Biggest Valuation Spread in 40 Years? (Meb Faber)

A spark of hope for those invested outside the U.S.

Shifting Risks in the Bond Market (A Wealth of Common Sense)

Yield curve flattening. ‘Nuff said.

The Rise of Netflix Competitors Has Pushed Consumers Back Toward Piracy (Vice)

Consumer behaviour is strange, isn’t it? Not really if you’ve studied econ 101. Basically, having to subscribe to other services means more cost for the consumer. Naturally, the consumer will turn to a cheaper (free!) option which is piracy. Content providers and creators can bitch all they want about piracy and the intellectual property rights but it’s their competitive behaviour that’s pushing consumers to the free option.

BBRG: Labor Market Is Doing Fine With Higher Minimum Wages (The Big Picture)

Another one for the Econ folk. Time to shut down the people who have only studied econ 101 and keep saying that a minimum wage will definitely cause an increase in unemployment.

It’s not so simple.

Sorry for the light links this week. I haven’t found much worth sharing. Besides, I’ve been too busy binge-watching “Bodyguard” on Netflix.

Delay paying off your Mortgage Early, Build Liquid Assets till Your Debt is Less than All your Liquid Assets (Investment Moats)

Right after I post about how Investment Moats is one of the best Singapore-based financial bloggers to follow, he writes this gem. It’s a topic that many Singaporeans would find useful and I’m sure the broad principles apply to non-Singaporean readers as well.

Dividend Investing Is Bizarre (Fat-Tailed and Happy)

Saw this off Financial Horse’s curated links for the week. US-based reasons so remember that in Singapore, investors don’t pay taxes on dividends since those are taxed at the corporate level.

While the writer is correct in pointing out that investing for dividends means taking on equity risk and that dividends can get cut, the writer fails to point out that dividends can increase over time and the share price can appreciate.

The use of free cashflow to pay dividends instead of reinvesting in the business is also not necessarily a bad thing. There have been many cases of management, flooded with cash, going into areas of business that they otherwise would never venture into.

First “Best Reads” of the year. Hope this year will be another year of working towards your goals.

My 2018 Annual Expenses: $19,665 and Financial Security Musings (Investment Moats)

The OG financial blogger in Singapore’s review of his expenditure in 2018. The details aren’t important. What’s important is the fact that his expenditure only comes up to just under $20,000 in one year.

With that kind of expenditure, it’s very likely that Kyith never has to worry about much about money for the rest of his life. Why? Because he’s playing such good defence that it becomes a part of his habits and in the meantime, his portfolio will continue growing (even more if he continues working and saving) to such a point he will never have to work unless he wants to.

65 million. That’s how many apartments are empty in China. Even as a proportion of the total housing stock (20%), the numbers are staggering. You have to wonder whether the fall in the Chinese stock markets is really due to the Trade War with the U.S. or it’s a sign of a larger problem in the domestic economy.

I’m willing to bet that it’s the latter.

$10 Million Isn’t What it Used to Be (The Wealthy Accountant)

It’s only early days of 2019 but I’ve found another blog to follow.

A musing on how having more money than most people isn’t a life-changing event. It’s a first-hand account of how going from less money to more money doesn’t really change who you are.

And ironically, that’s how people get rich and stay rich.

Final best reads of 2018! Hope 2019’s going to bring us better reads.

How Mark Burnett Resurrected Donald Trump as an Icon of American Success (The New Yorker)

(Very long) Amazing read. Never underestimate the power of sales, marketing and pure bullshit. I love this line from the article:

Fran Lebowitz once remarked that Trump is “a poor person’s idea of a rich person,” and Jackson was struck, when the show aired, by the extent to which Americans fell for the ruse. “Main Street America saw all those glittery things, the helicopter and the gold-plated sinks, and saw the most successful person in the universe,” he recalled. “The people I knew in the world of high finance understood that it was all a joke.”

Go read the whole thing.

Complete Guide to Supplementary Retirement Scheme for Singaporeans (Financial Horse)

Great read for those who haven’t set up and/or contributed to their SRS accounts. FH makes some good points about the pros and cons of the SRS.

Is Breakfast Really the Most Important Meal of the Day? (BBC)

A good, balanced view as how all scientific studies or articles on scientific studies should be. I’ve been experimenting with intermittent fasting and found that it works for me. However, that doesn’t mean it’s going to work for everyone. Self-awareness is more important than anything else.

It’s been a crazy week for the U.S. markets this week. I keep expecting Asia to follow suit but each morning after a bloodbath on Wall Street, Asia remains subdued. I guess that’s what happens when everyone’s away for the holidays.

It’s the weekend before X’mas but somehow I feel like X’mas has already passed. I’m not a X’mas person anyway and I’m really looking forward to next year. This one has been nothing short of bad for the markets but I’ll leave it more for a “end of year” post.

Happy week ahead!

How Cheap Is The Singapore Stock Market Currently? (Motley Fool Singapore)

Regular readers will know that I usually use the PE10 but there are many ways to skin a cat. I’m not usually the Motley Fool Singapore’s biggest fan but this is interesting because I’ve seen James Montier do a similar study on international markets and it is a feature that when markets are beaten down, “Net-Nets” must appear.

“Net-Nets” were popularised/invented(?) by Benjamin Graham to find stocks that are trading for less than Net Current Assets. In theory, buying these companies and immediately liquidating them will earn you a positive return. The nub of course is that the value of their current assets may not be realised in reality. However, the theory is still valid and therefore, is an indication of how pessimistic investors are about a company.

In any given market, you tend to find companies that aren’t doing well and so you would expect a certain number of “Net-Nets” to exist at any given point in time. However. the number of “Net-Nets” in a bear market would be exceptionally high as pessimism of general prospects are dim.

In short, an exceptionally high number of “Net-Nets” in a market would be a fantastic indicator of when investors are too pessimistic about the future and hence, would be useful as an indicator of how cheap a market is.

Right not, the Motley Fool data seem to indicate that we’re cheap but not dirt-cheap.

Nov 2018 – Monthly Updates (Minimalist in the City)

Putting this one here because of the interesting statistic cited in the post:

Interestingly so, a study also mentioned that a child typically only plays an average of 12 toys out of 238 toys they own. This is about 5% of the toys which is quite an astonishing figure that should bring attention to the adults that a child does not really need that much toys at all.

5% is a ridiculously low number but I’m not surprised. The funny thing is that I think it’s not confined to kids. I’m pretty sure it applies to clothing, shoes, bags etc. Heck, it might even apply to our cat because he doesn’t play with most of the toys that were bought for him.

It’s sobering and a timely reminder that we should really think hard about what we need before we spend money on things that’s just going to take up space and gather dust.

Don’t Be Your Worst Enemy: Self-Inflicted Wounds Are Terribly Unnecessary (Financial Samurai)

A fantastic post listing some of the ways we sabotage ourselves.

I’ve done it many times in my life as well.

When I was younger, I drank way too much. That was a complete waste of time and money. I should have spent my time picking up some more practical skill.

There are many more examples I can give you and while each of them seems like a waste of either time or money or both, I learned important lessons from each case. It’s as if each misstep increased my self-awareness – the things that I’m good at, how to play to my personality, the areas that I’m not so good at that I could and should increase my competence in.

There’s nothing I can do to get the time that has passed so what matters most is how I spend my time, money and energy on from here on out.

Just over a week left to Christmas! Happy holidays everyone.

Photo by Mikes Photos on

Despite Salik’s success, concerns remain for welfare of Cambodian children working in tourism (Channel NewsAsia)

Salik, in case you haven’t seen the video, is a Cambodian boy who sells trinkets to tourists around the grounds of the Angkor Wat. He shot to fame when a tourist recorded a video of him being able to speak something like 16 different languages.

No doubt that fame brought him and his family some needed cash but as the article highlights, the whole situation is also going to entice more children to stop schooling and try to earn money from tourists instead.

This is a classic problem of a spillover as a result of innocent or good intentions. I have no problems with people with good intentions but those with good intentions also need to be aware of the impact their actions will/may have on society at large.

Homelessness Rises More Quickly Where Rent Exceeds a Third of Income (Zillow)

Interesting article from the U.S. It appears that spending more than 30% of your income on housing is the threshold for affordability. In Singapore, we probably won’t have the issue of rents exceeding 30% of income since home ownership rates are so high. However, will the same threshold apply for mortgage rates? Is that why in 2013, MAS implemented a Mortgage Servicing Ratio of 30%?

Scientists accidentally create mutant enzyme that eats plastic bottles (The Guardian)

This is so cool. Hopefully, this leads to practical, mass implementation so that we can reduce plastic waste. Wonder if big oil will block this technology though since it breaks the plastic components down to its original raw material.

It’s been a terrible week for me. I was pretty much in bed for the first two days of the week and I couldn’t eat much until Thursday. Thankfully, I’m feeling close to a 100% now.

Hope your week ahead won’t be anywhere near as bad as mine was this week.

Photo by Mikes Photos on

The Big Read: Cryptocurrency crash offers industry the reality check it needs (TODAY Online)

Great read on the aftermath (yes, you’ve read it first. I’m calling it an aftermath) of investing in Cryptos with accounts from those who had substantial (relative to probably their own net worth) skin in the game.

Good lessons abound and I wish I had kept better records or accounts of what was happening in ’07, ’08 and ’09. I was only in university then and beginning to start learning about the markets but I remember how some guys were trading warrants and making/losing 5-figure sums in the room that us Honours year students were given to use.

That was in ’07 and of course, we know what came after. I would have liked to remember a little better how I felt about the markets in ’08 and ’09 because the sentiment now in 2018 certainly fits those times better.

Of course, in recent times, we haven’t seen the participation of the masses in any widespread, crazy speculation (apart from a tiny group in crypto) so my question now is: What is the next shoe to fall?

As Singapore’s population ages, I suspect we’ll see this sort of thing start to pop up as well. I mean, we hear of elderly folks being conned of their CPF savings through various means (appealing to their vices, taking advantage of their less-than-once-stellar mental faculties etc.) but I’m waiting to see if it happens at the financial institutions level.

I suspect it’ll come from the financial institutions offering a product that isn’t actually designed to give returns much better than the risk-free rate but with all the “protection” of a bond. That sounds like Structured Products which kind of gave banks a bad rep but if you know of anything new, do let me know. It’s fascinating stuff really.

Russell Napier: Equity Markets and Structural Change (Enterprising Investor)

A plausible sounding narrative for where U.S. markets are headed in the longer term. Not optimistic but if it does happen, it would provide a good buying opportunity.

Could we Model Our Retirement Spending like Endowment Funds? (Investment Moats)

Sharing this not because it’s a new idea to me but I think it could be a paradigm shift for many people.

Most people aim to accumulate a certain sum before they retire and upon retirement, spend down the sum and upon their deathbed, leave the rest for their beneficiaries.

It’s not that I think that’s wrong but I think the pros of acting as if your money should last forever outweigh the idea behind spending it down.

For starters, aiming to have the accumulated sum grow/last forever means greater prudence in spending. It also means greater prudence in investing as it requires a proper plan for investing the money instead of sticking to investments that guarantee the principal at the expense of purchasing power.

The biggest downside is what the growing sum of money is meant to do. If the beneficiaries are too few, you end up with a generation of spoiled heirs who will eventually squander it all.