Archives for category: Investing

We’ve made it through another week!

September’s almost over which means we’ll be heading into 4Q soon.

books on bookshelves

Photo by Mikes Photos on


The Housing Bubble Burst All Over Reality TV (The New York Times)

This is interesting because what we see on television reflects what’s going on with the world. This article shows how HGTV’s programmes (which I happened to watch a lot of while it was still on Starhub) changed as the housing bubble inflated and then popped.

The same could be said of how many crypto-related seminars and talks were being promoted last year as compared to this year. Lately, what I’ve been seeing is a lot of ads on Stock Trading which is probably a reflection of the U.S markets doing so well since last year.


Growth and well-being: policy should not be based on GDP alone (Microeconomic Insights)

Very economics-heavy post on the relationship between GDP per capita and ‘Welfare’. ‘Welfare’, in the article, encompasses many factors such as inequality, leisure, and consumption.

Singapore gets a few mentions in the article. From the mentions, it seems that Singapore’s growth model has remained the same since the 90s — lots of growth through investment and this comes at the expenses of leisure and consumption.


Paul Krugman’s latest opinion piece spells out what everyone’s been feeling about the markets — most of us can’t see any particular sector blowing up to the point of crippling the world economy.

Krugman also shows us why it’s important to study history because the recession of the early 90s was one that didn’t have a proximate cause but rather, it had many small causes.

I also like how Krugman cites Minsky as a source for his hypothesis. Minksy was overlooked by almost everyone until the Global Financial Crisis hit. I tend to agree with Krugman’s views. The world today is awash in cash that is flowing towards moonshots and we know that most moonshots don’t work out.

In other words, much of the money going into all the fancy new ventures won’t pay off. Fortunately, it doesn’t seem that people are using borrowed money to bet on moonshots. Much of the moonshots are funded by people who have money to lose. The question right now is whether the money that they can lose is due to a booming stock market and economy? And if so, then what happens when the economy starts to slow down?

Hold on, hand tight, and stay around for the ride.


The Psychology of Playing the Lottery (A Wealth of Common Sense)

An excellent piece by Ben Carlson that explains why poor people make poor choices. From the Bloomberg piece cited in the article, it shows that poor people spend more on the lottery than rich people. Gambling is a big thing in Singapore but I’m not sure if there are statistics that show whether poorer people spend more on the lottery than the rich in Singapore.

The good news, cited in Carlson’s article, is that someone’s set up a lottery to help poor people save more. Saving money in the account leads to a participation in a lottery. Unfortunately, the return on savings in almost zero for those that don’t get the huge payoff but I suppose it’s better than having them spend money on something that is statistically going to return less than zero in the long-run.

Maybe this will be the new model for Singapore Pools?

men s brown top near trees

Photo by Sadaham Yathra on


Mr. 15-Hour-Work-Week (15HWW) has a great post on being a monk versus a warrior or a farmer. His post is in response to a post over at Dr. Wealth on whether people in the FIRE community are reaching financial independence at the expense of a better life.

From the Mr. 15HWW post:

A long long time ago, there was a province named Sophistia.

The majority of the people worked as farmers, toiling from 9am to 6pm on the farms. Some of these farmers were happy. But most were not. These farmers were the subjects of regional lords.

Becoming a farmer was the default path for citizens of Sophistia after they graduated from school at 15. If a citizen did not want to be farmer, there were two alternative paths.

1. Train to be a warrior or

2. Enter a monastery to become a monk

A warrior’s main role was to fight, win and conquer new lands for the province. After a decade, a successful warrior would have conquered enough lands to warrant the title of a lord, enjoying a life of respect and luxury. Titles, lands, farmers and beauties will be bestowed to him and his descendants.

On the other hand, the monk’s role in a monastery would be to convert the scriptures, chant them and serve the gods. They would also have to live a life of relative “suffering” and “deprivation” to appease the gods. After a decade or two of service, they could then go back to life as a commoner. They would not have to farm as grains will be offered to them monthly by the lords and farmers for their religious service

Mr. 15HWW’s tale is a take on the path of an entrepreneur/corporate high-flyer versus the conventional FIRE method of accumulating huge chunks of savings in order to retire early. In the story, the idea of a ‘monk’ is to save up enough such that the returns from investment more than compensate for the expenses required to live a decent life.

In a similar vein, the Dr. Wealth article frames the choice of huge savings now as ‘suffering’ which implies that the emphasis on huge savings comes at the detriment of current consumption.

For those who have done the early retirement math, the returns on savings won’t be large enough to net you serious dough until quite a few decades later so, in a sense, the FIRE method or being a ‘monk’ means consuming at a level far below that of a Crazy Rich Asian.


There’s some Truth to it but…

It’s not that Mr. 15HWW and the Dr. Wealth article are wrong. Savings today does come at the expense of consumption. The problem is seeing ALL savings as a drag on consumption. Just like savings, consumption, when taken to the other extreme, can be ‘suffering’ as well.

I know this for a fact because I come from a family that consumed far more than we needed to. For pretty much most of my life, my parents always owned two cars. My dad needed one for work but the other one was pretty much unnecessary because my mom stopped working many years ago and the car was used mainly to ferry my brothers and me from school. It made life more comfortable but once again, it wasn’t necessary. Even today, my parents own two cars that both fall into the luxury category and most of the time, one’s parked at home.

Cars weren’t the only thing. We went on expensive holidays, had expensive toys growing up, and on a regular occasion, ate good food at exclusive places. The lifestyle wasn’t a one-percenter kind of lifestyle but it was easily upper-middle.

The good thing about having been there and done that is that I can safely say that those things are overrated. Once you move from taking public transport to taking a car, there is hardly any difference whether the car is a Mazda (I love my Mazda 3) or a Mercs. In fact, there are some instances where public transport can triumph private transport. I had to go to SGX Centre in the middle of town the other day and it was so much easier to take the MRT than have to worry about parking and traffic.

If you think I’m an oddball, then look at other examples around the world. Warren Buffett stays in a house which he bought many years ago that cost him $35,000. He also famously drives a pretty beat-up car. Buffett isn’t the only one. For the amount of wealth he has, Bill Gates drives a considerably cheap car.

I don’t mean to say that I don’t like fancy cars, nice houses or the material trappings that this world has to offer. What I’m saying is that even among the super rich, they have recognised that these material things aren’t the most important things in life. In certain cases, being too caught up in chasing after material wealth is a form of ‘suffering’ as well.

What The Enlightened Focus On

I rather think of the ‘monk’ in the story as being a wise one. And being a wise one, a monk should be enlightened enough to see that things like cars, fancy watches, and ridiculously-priced food are NOT necessary for a good life.

Instead, what’s necessary are the relationships that one has with friends and family and being engaged in hobbies that nurtures one’s spirit. In short, you have to ask yourself what gives your life meaning.

If you’re like most people, then it’s probably one of the things on this list that Bonnie Ware wrote about. Bonnie Ware was a nurse who worked in palliative care and she compiled a list of what were the ‘Top 5 Regrets’  that people who were dying have. The list doesn’t really mention any attachment to some expensive car or watch.


Final Thoughts

In sum, I can’t deny that I still have a tinge of envy when I see a Porsche or Ferrari on the road but when I think about the things that matter, it’s not the meals I’ve had or the places that I’ve been to that matter. It’s the people that I had the meals with and who was with me when I visited those places that matter.

After all, if it were just the meals or the places then having the same food or visiting those places alone would bring me the same amount of joy as when I was anyone else. In reality, ask anyone what their best memories were and the answer is most likely the experience of being with someone dear that matters.

In the story of the monk vs. the warrior, the idea is that farmers should look to becoming either a monk or a warrior. Being a warrior is always tempting because the spotlight is always on the one who, despite what seems like otherworldly odds, overcomes them and triumphs. The parties and spoils from overcoming the odds capture the imagination like a bright flame. Unfortunately, what farmers do not see is that flames are attractive but dangerous. Get too close and you get burned.

Therefore, the parable Mr. 15HWW puts forth may ring true but the other addition to the story is that perhaps the monk is more enlightened than the warrior. He sees the additional risks and burden of being a warrior. He knows that the trappings of great wealth and glory are but an illusion that warriors continually chase after but never seem to be satisfied with.

There is another path to escaping the life of a farmer. One that is more peaceful, more moderate, and ultimately, provides the same sort of satisfaction.

That is the way of the monk.

bet black and white casino chance

The casino may actually provide better odds


Call me a traditionalist but I rather put my money where I can see the money.

When investing in equities, the money can easily be seen from the financial statements that publicly-listed companies have to provide. These records are also subject to an audit and hence, to a large extent, you can trust the numbers.

However, when the world’s filled with easy money, many people can raise money to fund what is essentially an idea. These ideas are typically moonshots and can fail for a variety of reasons. Of course, the payoff from taking these bets are huge.

Imagine being an early investor in Google, Facebook or Amazon. Now that Amazon has hit a US$1 trillion in market cap, I’ve been seeing the headline about how $1,000 invested in Amazon in 1997 would be $1,000,000 today. It’s stories like these that provide the lure of Venture Capital.

Unfortunately, as Ben Carlson highlights, even investing in Venture Capital funds that supposedly have the expertise to seek out the most promising startups can be an expensive affair. Even in the middle-of-the-road scenario, you may have been better off just investing in public equities.

What Billionaires Do Don’t Apply to You (Unless you are one)

This also brings us to the point about taking the advice of people who already have tons of money.

You can’t unless your income and wealth profile is like them.

In a separate post, Carlson also shares how J.P Morgan’s Jamie Dimon is against holding bonds and how personal finance guru Suze Orman holds very little of her wealth in equities.

The point is that what they do may not necessarily be suitable for other people? After all, how many of us can earn the income that Dimon or Orman do from work? In addition to their work, the amount of capital that they can put to work is so huge that the risk-free return from that is something most people would die to have.

It’s like what a friend told me before. If you have a $100 million, just parking that in the bank to earn 2-3% per year is going to net you a cool $2-3 million dollars to spend every year. Unless you plan to be like Johnny Depp, you don’t really need anywhere near that amount to survive each year. Therefore, you can easily take on more bets on moonshots that the average person.

The Role of Financial/Investment Advisors

This is where financial advisors need to really be kept in check so that they don’t recommend funds or products that their clients can ill-afford to invest in. In general, I think the regulators have some basic protection by specifying certain products as Specified Investment Products (SIP) and Excluded Investment Products (EIP) although the whole idea was probably a delayed response to the whole minibonds issue.

However, the list applies quite generally and the example that comes to mind is when the relationship manager from a local bank tried to advise my mother to go into gold mining stocks as a way to take advantage of the potential returns from rising gold prices. This was some years ago but fortunately, my mother checked with me and I basically told her that the guy was an idiot.

Obviously, the guy was just trying to earn his commissions and he probably wouldn’t have given that same advice to any normal retail banking client but still, it’s not like my mother’s account is at a level that would have allowed her to take moonshot bets.

Final Thoughts

At the end of the day, the more money you see being poured into businesses that have no profits or positive cashflow, the more you should be worried. If your account allows you to take bets on these moonshots, then, by all means, go ahead.

However, if you have neither the temperament for frequent losses and the account for it, then please don’t bet the farm on things that may not happen. If anything, the crypto-boom last should serve as a cautionary tale for everyone.

bowl chairs cooking cuisine

Just another lunch conversation


I met with a good friend for lunch and it’s always great to meet with him because the conversations and discussions that we have cut across the economy, investing and general business sentiment.

He’s not trained in business nor economics but I suspect he has a better sense of the economy than many of the economists sitting in their cubicles at the Ministry of Trade and Industry. After all, how many number-crunching economists go down to the ground to see how different industries are faring?


Simply because he meets with various business people across a wide range of industries and how other’s business is going, to a certain extent, will affect the amount of business that he does as well.

In his work, he also interviews people for positions and from his observation, the employment situation isn’t as rosy as it used to be. Interviewees are asking for less pay which is probably a result of prolonged unemployment. Of course, that could be a feature of the industry he is in but once again, it’s good anecdotal evidence to add to the headlines that we read about.

Higher unemployment rate, more retrenchments in Q2: MOM (full story here)

SINGAPORE: Singapore’s labour market saw higher unemployment and more retrenchments in the second quarter of 2018, although there was also employment growth and more job vacancies available, according to Ministry of Manpower (MOM) figures released on Thursday (Sep 13).

Observations around town

In meeting him, I also had a chance to take the MRT to town and I was surprised that the trains were fairly crowded for a time that wouldn’t be considered peak hour. It was also fairly crowded at the basement level of ION Orchard although the crowds were notably absent at Wisma Atria.

I haven’t been to Wisma for some time and at Wisma, I saw a “That CD Shop”. Last I remember, they used to sell music CDs and had quite a few branches in Singapore. Of course, their focus on more niche areas like jazz music. What’s interesting about their store at Wisma is that they focus on selling vinyl records and it’s housed together with a place called “Wonderland Savour”. From the displays of macarons and cakes that front the store, “Wonderland Savour” appears to be a place for desserts.

I’m not sure how successful the place is but it’s a clear sign that shopping mall tenants are moving away from retail businesses and moving towards businesses that provide a unique experience. Unfortunately, the experience nowadays seems to involve some sort of Food &Beverage.

Also, on the first level of Wisma, what used to be “The Coffee Club” has now become a “Fun Toast” outlet. I thought it was interesting that a place that used to sell high-end coffee has now made way for a place selling local kopi and food.


I remember reading an interview that the local paper did with a prominent local economist where the economist said that he likes to go observe how prices have changed at his local noodle stall when looking at inflation and in that spirit, I think he’s right.

In a recent interview, Minister for Finance, Heng Swee Keat mentioned about how he could easily observe how bad the global economy was doing by looking out the window of his office and observing the activity going on at the port at Keppel Road.

Unfortunately, how many people can translate those signals into giving them more insight into how the economy is doing? I think very few people do that well today and if you’re able to do so, you’ll gain a skill that very people have.


Final Thoughts

If you have any signals that you see in the economy today, do share them in the comments below.


It’s another week! Markets were generally weaker this week and for the STI, we reached a PE10 earnings yield of 8% (intraday, at least) which is making me salivate a little. I managed to pick up Rutger Berman’s “Utopia for Realists” (see the general idea in his TED talk) and Dr Pippa Malmgren’s “Signals”. Both have been fascinating reads.


books on bookshelves

Read, read and read some more.



Soaring bankruptcy rates signal a ‘coming storm of broke elderly,’ study finds (abc News)

This is in the U.S. but we should expect similar economic forces to come our way as the boomer generation starts to retire.

However, PAP is as PAP does. Expect healthcare spending to increase and that no elderly folk will be left behind due to medical bills. It’s not good for politics to appear uncaring, especially to the first post-independence generation of the country.

Of course, the next generation must be prepared to shoulder the burden of greater taxes on healthcare spending. Either that or the folks at Temasek and GIC better work much harder.


GLCs and patronage: Understanding Mahathir’s position on HSR and ECRL  (TODAY)

It should be no secret for those who have been following Malaysian politics but I suspect that for many other people, they fail to see the connection between personas and the intricate links between them and various businesses.

Of course, it also helps Mahathir to have Singapore be a distraction for his own political purposes. To those that see Mahathir leading Pakatan to victory over BN as a good thing, I’m afraid they may have counted their chickens before they’ve hatched.

To the Singaporeans that wish for the same…lmao. It’s practically like how a big enough majority in the U.S. voted Trump in because they felt Hilary Clinton was more of the old order. The problem is that Trump’s not necessarily going to do a good job.

In some ways, I fear the opposition in Singapore is fairly inadequate to operate on the bigger stage. Despite what Low Thia Kiang said in 2017, my opinion is that there is currently no alternative to the PAP.


How to retire in your 30s with S$1.37 million in the bank (TODAY)

Ok, enough of the political links. I’m pretty surprised that a local paper chose to publish an article like this. It’s a U.S. story but it looks like the local FIRE movement may gain some more traction with this.

I’m pretty excited to see if more and more stories of Singaporeans retiring early will start surfacing. After all, Singapore is one of the most expensive places in the world to live in so we have that handicap against us.

However, if retiring rich and early is doable in a place like Singapore, then it can be anywhere else in the world. The math behind this is simple and well-documented so it’s a matter of picking your target and executing well.

The biggest thing I’m looking forward to when I quit my job is doing the things that matter most to one’s well-being. I would bake more bread, cook more, maybe try growing my own food, work out more and sharing the message that there’s more to life than doing mundane things.

Don’t get me wrong. At least my job isn’t a bullshit job but more than a few aspects of it is definitely bullshit which is done in order to satisfy auditors and to help senior management cover their asses when things go wrong. And you can’t blame them because all it takes is one person to make a mistake (real or perceived) and senior management gets questioned about their processes. And senior management, like the rest of us, have (bigger?) mortgages to pay and mouths to feed. It’s much simpler to make everyone do some bullshit work than risk their five-figure pay.

We’re into September! We don’t have seasons here in Singapore but September is always a special month for personal reasons.

Hope your week’s been good!

books on bookshelves

Read! Read! And read some more!


Why 35 to 50 Year Old Singaporeans Should Value Financial Peace More (Plus 6 Tips to Achieve More Financial Peace) (Investment Moats)

Fresh from the oven, Kyith over at Investment Moats has a piece that I think will resonate with many Singaporeans. It talks about how Singaporeans in their late 30s to 40s tend to find themselves in a precarious position if they get laid off in the private sector.

To be honest, it’s difficult for me to imagine the kind of uncertainty about job security that people in the private sector face. Job security in the public sector is such that I have colleagues who have stay with the organisation for 30-odd years. Those that choose to leave normally do so because greener pastures lie elsewhere.

With that sort of job security in the public sector, it’s very easy to plan for investments and the growth in net worth tends to be fairly predictable over time. Any of my colleagues that fail to retire wealthier than the average Singaporean must have either had some sort of huge burden due to medical costs or due to profligate spending*. Once again, this is the beauty of accounting for human capital in your investment plan.


Nose breathing in yoga may calm the mind by slowing brainwaves (NewScientist)

Full article hidden behind a paywall but first two paras provides the gist of it:

Take a deep breath. In some forms of yoga and meditation, people are supposed to breathe in slowly through their nose. Now we may know why it’s helpful: nerves inside the nose start firing in a similar slow rhythm, prompting parts of the brain to do the same.

And in a test, people who did yoga with slow nasal breathing seemed to enter a deeper meditative state than when they did so breathing at the same rate through their mouths.

No secret here but breathing through your nose supposedly has many other benefits. A book that’s been cited quite often on the supposed benefits of this is “The Oxygen Advantage” by Patrick McKeown. I haven’t read the book but I’ve been trying to consciously breathe in through my nose whenever I can.

What’s Your Type? The Myers-Briggs Test and the Rise of the Personality Quiz (The Ringer)

A review of the book that looks at the history of the Myers-Briggs test and how the test is mostly useless in terms of determining one’s personality.

I found this interesting not because of the test itself but that the education system is paying lots of money to hire consultants that base their training on some version of this personality test.

If it’s all so bogus, then what the hell are we paying them good money for?


Show me the incentives and I will show you the outcome (The Reformed Broker)

Josh Brown has a post that builds on how perverse incentives leads to perverse outcomes. There’s an example buried in the post about how a financial advisor in the U.S. ‘churned’ a client’s account to generate commissions (presumably also under the pressure to meet the sales quota) but the post is mostly about how Mao led a country towards the largest man-made famine in modern history. I have “Mao’s Great Famine” on my reading list after I’m done with “Utopia for Realists”.

I have more to say about financial advisors here in Singapore but that’s something for another time.



*Profligate spending doesn’t just mean buying bigger houses or cars than they can afford. It could also mean the unnecessary spending on things kids’ tuitions, enrichment classes and so on. IMHO, those things are really unnecessary.

airport bank board business

LOL. I didn’t mean to choose a pic of such an exotic exchange.


We’re heading deep into the 3rd quarter of the year. The STI’s been largely directionless while U.S. markets have continued to hit new highs. Nothing surprising here as markets outside of the U.S have been weak since the start of the year. It also reminds me of a post by Ben Carlson on how U.S. markets and World Markets don’t exactly have a one-to-one correlation. In fact, the correlation can sometimes be negative. A good reminder of why we need to be diversified beyond our home markets.

Having said that, it does mean that other markets are cheap relative to the U.S. If that’s the case, then where should you put your money?

I think the answer’s fairly obvious.

Check out the PE10 stats here.



Everyone’s favourite piece of paper

Francis Tay feels cheated.

The former Singapore civil servant says he’s lost almost S$50,000 in the implosion of Noble Group Ltd, the commodity trading giant. He also says shareholders like him have been let down by regulators whose job it is to protect them from the sort of crisis that’s brought the company to the brink.

‘I was cheated’: Tales from the collapse of commodity giant Noble – The Business Times

When I read the above, I immediately thought of the whole Minibonds saga that emerged during the Global Financial Crisis. Of course, the difference is that many of the investors who bought Minibonds thought (or they wanted to think?) they were buying something safe and that even in the worst case scenario, they would get their capital back.

In this case, investors in Noble are crying foul that the regulators didn’t do enough to ensure that Noble’s financial reports reflected economic reality. There were probably things that SGX could have done as the regulator but ultimately, based on the accounting rules at the time, it doesn’t appear that Noble did anything illegal.

What Matters Most

I was pretty wary of the commodity trading firms not because I suspected they were up to some financial shenanigans but because of the economics of the commodity trading business. It’s econ 101 that the commodity business is a low margin business. Net profit margin is typically in the single-digit range.

This means that the company’s survival depends heavily on cashflow and if the company wanted to boost returns, then they would probably use a fair amount of leverage to do so.

Obviously, if you live on the edge, the chance of falling off the edge should a strong gust of wind blow in the wrong direction becomes much higher. This is exactly what happened to the commodity houses such as Olam and Noble when short-sellers started to accuse them of accounting trickery. Add to that the downswing in the commodity cycle and you have a recipe for disaster.

Of course, in hindsight, we know that Olam has emerged relatively unscathed while Noble seems stuck in an eternal downward spiral which may eventually result in bankruptcy or some form of major dilution for existing shareholders.

Francis Tay really shouldn’t be moaning about his $50,000. If you plan to invest in a company, you need to be prepared to lose the entire sum should non-systemic risks like this come to pass. This is exactly the reason why people have a diversified portfolio. You diversify across asset classes and within the asset class, you diversify across holdings. Of course, there is danger in going overboard with diversification. As with everything, moderation is best.

Human Nature

By the way, Francis Tay should take comfort in the fact that he’s probably not alone. Few people curse themselves when investment decisions go bad and many pat themselves on the back when the decision goes right.

Also, I’ve heard of people who are trained in accounting and finance who buy into stocks with bad economics or products like the minibonds.* Aside, buying stocks with good economics at the wrong price may hurt as well.

Smart people can make stupid decisions too. It’s pretty common when you let fear and greed convince you of the narrative that you want to hear. That’s why I prefer to make a plan and stick to it. I know I’m going to do something dumb at some point. It could be thinking that I can time the market or that I’ve made some superior insight into a company. That might lead to bad behaviour like trading too much by going in and out of the market and in the process, incurring lots of trading costs. Or it could be that I bet the farm on my superior insight, only to lose everything.

Final Thoughts

Please don’t be Francis Tay. Unless you were coerced or misled by an advisor** into making a financial decision, moaning about your losses won’t make you a better investor. Throwing good money after bad is also going to make you poorer. And lastly, don’t buy on myths like “blue-chips are forever” or “Temasek will always save the day”. Please think of your plan and stick to it. If you can’t invest, then maybe it’s better that you buy a low-cost index fund or ETF. In fact, that’s probably the right choice for most people.



* I know a guy who used to be an audit partner who was telling me to buy tigerair and Singpost many years ago. Last I checked, prices never went above the price that he was telling me to buy at. I also know of a finance lecturer who bought the minibonds. Not sure if she thought they were capital guaranteed or she knew how it worked and she was just taking a bet.

** I have some things to say about so-called financial advisors too. More on this some other time.

It’s the weekend! There was a public holiday, mid-week, in Singapore so this feels like déjà vu. Anyhow, here are my picks for the week.


coffee magazine

Some great reads to start your Sunday

After the Bitcoin Boom: Hard Lessons for Cryptocurrency Investors (New York Times)

I hate to say I told you so but…I told you so. (here, here and here for example. For a complete list, see here.)

It’s not surprise that some people have been burnt quite badly by the Crypto boom last year. Also not surprisingly, the ones hurt bad (i.e. relative to their income or net worth) are the ones who can least afford it. These are usually the least informed people in investing and when these people come onto the bandwagon, please get off.

That aside, I’ve noticed how many people are writing about their portfolios these days. It’s a trend that Financial Horse (whom I’ve never actually heard of until a few months ago but is pretty famous) has written this. I’ve been investing and writing about these things for almost 11 years now so I don’t think I qualify as new blood.

Of course, most of them write more about Financial Independence rather than investing per se so I don’t think that qualifies as a sign that we’re at the top. Valuation-wise, the STI is nowhere near exuberant levels.



While the subject of the article is about food, the idea of craftsmanship applies to all professions. I’m probably the worse person to tell you about craftsmanship because I’m impatient and lazy.

However, craftsmanship is probably going to be more and more important in the future. Why? Because machines are getting much better at doing the tasks that are routine and mundane. This isn’t a new phenomenon. Mechanization started with the industrial revolution and now, with A.I, I suspect it’s going to move into the realm of white collar jobs.

All the routine and mundane administrative jobs can (and should) go. I love the people in the admin department in my school but seriously, most of their job revolve around filing paper and “copying and pasting” stuff in emails.

The good education Minister actually has a point about emphasizing skills over paper qualifications. The problem is that most parents still have this mindset that qualifications matter. I suspect that that will change quite soon because we now have more and more people who are graduates (thanks SUTD, SIT, SUSS, and all the other private education providers!) but will not be able to find jobs that (1) pay well and/or (2) are interesting to do over a long period of time. It’s not really the fault of anyone but that’s what the world’s going to be like.

If I were a graduate today, I would make sure that I’m also a craftsperson of some sort. I might make good food, good beer, woodworking, an artist, photographer etc. Just make sure you’re really, really good at something that few people are good at. Just like this guy — The Secret Instagram Account Selling Black Metal–Inspired Biryani.

That said, damn…I need to make a trip to Hokkaido.


Steve Einhorn’s Bear Market Checklist (The Big Picture)

Recently, I wrote about having an investment plan. Part of the plan is having criteria to know when you should buy or sell. Howard Marks has also written about this before and I can’t wait for his new book to drop in October. Steve Einhorn, an investor and hedge fund manager, has this version which looks nice and simple to follow.

Long story short, it doesn’t look like we’re anywhere near a recession in the U.S. And I guess by now, we all know what that means for Singapore.


Is your housing expenditure detriment to your retirement?


Alternatively, this could have been titled, “An Ode to my CPF”.

I know I’ve given lots of shit to CPF (for example, “CPF monies: to depend on it for retirement is a pipe-dream“, the footnote in “Early retirement: some math“, or more recently, “What’s the economic logic behind CPF’s accrued interest policy?“) but think about it:

What if you had regular contributions to your CPF and you let it compound?

There is a group of people in Singapore that has spent so much on housing that they have barely any contributions to their CPF each month. Those that even have to fork cash out of their pockets to pay the mortgage are in truly dire straits. If you happen to find yourself in this situation, read on below.

A Very Personal Example

I happen to belong to the camp that has regular CPF contributions because my housing loan is so low that my monthly CPF contributions more than covers the monthly mortgage. Also, I will finish paying off my loan in another 4 years or so (background here).

So I decided to run the numbers on the following scenarios to see how much I would have when I turn 55 (the age that we can finally take some of the money out of our CPF accounts):

A: If I work for another 20 years
B: If I work for another 10 years
C: If I work for another 5 years

The assumptions I’ve made are as follows:

#1: Current contributions increase by $10,000 per year after our housing loan is paid off.

#2: Contributions remain constant over time. i.e. No increases in salary.

This is for easy math and anyway, I don’t expect my salary to increase drastically beyond the inflation rate so the contributions can be viewed in ‘real’ terms.

#3: CPF returns 3% across all accounts.

I’m assuming this despite having more monies in my Special Account (SA) at this point in time. I know the SA earns a higher rate of interest and combined sums (subject to a cap of $60,000) in your accounts earn an extra 1% but once again, this is for easy math and to set a floor.

#4: I’m starting with roughly $130,000 in both my OA and SA.


Thanks to the magic of Excel:

Scenario        Final Amt at 55 ($)

    A                  $1,180,000

B                  $772,000

C                  $495,000

Final Thoughts

Obviously, the numbers above are not going to be representative of what another Singaporean might end up with. I’m making above the median salary although NOT much more than the Median Household Income. Of course, a major factor is that my wife also works and our household size is smaller than the average*.

I still believe that the CPF system needs a revamp. Way too many people are spending what should be their retirement savings on a property, either as an investment (which is still somewhat excusable) or on housing (gasp!). That’s probably one of the main reasons why only about half of CPF members can meet the retirement sum despite pledging their property.**

Also, one big sore point for many people is the Retirement Sum*** going up. There’s a good article on what the retirement sum may be like for younger people today when they reach 55 later on. Just eyeballing the table, it seems that based on my calculations above, meeting the retirement sum shouldn’t be a problem.

Very often, people forget that compounding needs time to work its magic but for compounding to work, there’s needs to be something to compound in the first place. If you spending all your money on housing, there won’t be anything left to compound. And if you want to turbo-charge compounding then you need both time and regular contributions.



*I believe the average household size is 2.1 in Singapore. No, us having a cat doesn’t count.

**There are also other factors at play. I suspect that the labour force participation rate should explain quite a bit. Some (especially mothers) may have only worked very few years of their lives and hence have little in their CPF accounts. For example, my own mother practically stopped working full-time after she had me and my brother. By the time my youngest brother came along, she had already stopped working for some years.

***The Retirement Sum is the minimum you need to have in your CPF accounts so that the CPF can slow-drip the money back to you in old age so that you have enough money to meet your basic spending needs.