Sunday, May 21, 2017

Some insights from Psychology - More loose ends from the previous talk.

There is one loose-end from the last talk.

Apparently, my presentation slides were not the latest version which I sent to the company admin. This turned out to be a good thing because, this way, my talk ended on time and it might turn out out to be more draggy otherwise.

Just thought I'd share information about the missing slides and in the meantime showcase to the more intermediate readers the depth of research we go to prepare our slides. This is not something you can read about even if you combed all the Wiley Finance books or read all the self-help improvement books on Amazon.

The material is from KB Chan's "Work Stress among six professional groups : the Singapore Experience" written in 2000 in the journal Social Science & Medicine.
  • The most stressful profession is Teacher followed by Lawyer followed by Engineer. Maybe after a couple of years you will find me getting a diploma in NIE. ( Just kidding !)
  • Generally speaking,  folks hate a workplace where the boss does not support your work and you have horribly political colleagues. 
  • The year 2000 was 17 years ago and, therefore, ancient by social science research standards. In those days, the general trend faced by working professionals is the de-professionalisation of knowledge. We respect professionals less now because we can google answers prior to consulting them. I've constantly switched doctors for my diabetics treatment until I have an awesome Associate Professor who advises me knowing that I show up prepared for my appointments. ( I think he will have concerns over the Montgomery test for negligent medical advice in our next meeting, haha ! )
  • Doctors and insurance agents remains the happiest professions in Singapore. Yeah, yeah, you guys know how I feel about the latter. 
  • Both professions are happy due to the high locus of control experienced. So if you can't switch professions, find a corporate culture which gives you the highest level of personal autonomy if you want to reduce stress. This may rule out the public sector and some uniformed services.
Ok, that's it !

We're back to regular programming next week and look out for out next talk in July.






Saturday, May 20, 2017

JD Aftermath #6 : LLBs



Interactions with LLBs are the fundamental difference between SMU and NUS's approach towards legal education for mid-career professionals. SMU prefers that mid-career professionals interact with themselves first with limited exposure to LLBs to come later. NUS would thrown their JD-equivalent to swim with the sharks from day one.

JDs will generally begin to have encounters with LLBs when they start picking up elective modules in SMU. Its generally  a great experience.

On the surface, LLBs are the ideal children of Singapore Tiger Moms. Perfect in every way. Straight As for their A levels. Future lawyers and bright shining lights of the legal industry.

The Elite of the Elite.

That's until you get to them better.

The cynical will say that SMU has a dual-track system for LLBs. You know which 'caste' an LLB belongs to after just talking to them for a short while.

a) Tee Kong Kias 

Hokkien for Heaven's Child, the Tee Kong Kia are the true beneficiaries from SMU's brutal legal education system. These guys are excellent in class and also have plenty of options to represent SMU in Moot competitions. They are mature, articulate and intelligent.

Half of the time I think their lives will be wasted in the Law because I imagine how many jobs they can create if they go the way of the Razer's CEO who was also a law undergrad.

Nevertheless I expect their impact on the legal system to be large in the future.

b) Tai Ko Kias

Hokkien for a Leper Child, I was so glad to have buddy LLBs who are  Tai Ko Kias.  ( I use this term in an affectionate manner which shows my appreciation of them. )

They are still brilliant because its still Law School, but they are chill and prefer to use their high general intelligence for things other than beating the shit out of other Universities unfortunate enough to face SMU in competition. ( Recently, we beat the crap out of Oxford. )

It is the Tai Ko Kias who remind of my days in Raffles Hall 20 over years ago and my Toastmasters days when somehow most of my friends were Law Students. The lecture tutorial system in NUS gives more room for slackers who typically pick up tempo only a couple of weeks before the exams.

LLBs are simply better than JDs because, unfortunately, the JD program accepts graduates with no working experience allowing others to cast the JD programme as a 'second chance' for those who do not qualify for the LLB the first time round. This is why in previous posts, I propose provisionally alloting a seat for JDs but insisting that they use their first degree for two years in the work force before admission.

Advice for JDs is to avoid classes with many Tee Kong Kias when you choose an elective.The shift in the grading curve is brutal and two of my modules International Moots and Civil Procedure took a nasty hit because my classmates were too brilliant and can survive on 4 hours of sleep a day.

[ Tip : Tee Kong Kias take the more substantive and litigation driven modules because they are damn zhai and want to kick everyone's ass. You should avoid International Moots, Civil Procedure and super-hard modules like Insolvency.

Tai Ko Kias take the modules which my friends claim are more relaxed and gentle like anything related to Mediation and Arbitration. Subjects with low legal content like Project Finance also attract Tai Ko Kias. ]

Do enjoy working with your Tai Ko Kia buddies because they are possibly the only students who don't mind giving JDs a chance to work with them as they are friendlier and less grade optimised. Take into account that they have just completed JC or NS so may not be as conscientious as full working adults.

Due to the generation gap, you can really benefit from trying to understand how they interact and use their apps. It's not what we 40s do, even if we are tech savvy.

That being said, I really benefitted from studying alongside young people : Yesterday in my office, I schooled the 20-something associate on the latest album by Harry Styles.















Friday, May 19, 2017

Personal thoughts after last night's talk on Stress-free investing

Ok, I've finally recovered from last night's talk. Let's talk about what happened last night from my perspective.

Last night, Lionel gave passionate speech about automating one's investments using ETFs and Alvin Chow spoke about implementing the permanent portfolio.

As for me, I was barely sticking to the original intent of the company directors when they set out the topic for the event. I really wanted every single talk I give to feature unique material that cannot be found in financial blogs and popular books on personal finance so I tried to craft a talk which attempts to link a person's financial capabilities to psychological well-being, fortunately there was a study made in the UK which allowed me to conclude that raising one's financial capabilities will also improve a person's psychological health.

The second component of my talk was about insurance. I reminded the audience that risk is almost synonymous with stress and can be active managed by either tolerating, avoiding or transferring it to someone else. Then I shared my minimalist framework on how I manage my personal insurance.

The third component is about dividends investing.

What was really amusing during the talk for me was Alvin asking the audience whether they thought my approach to investing was stressful and about 80% of the audience raised their hands.

I don't really have a defence if someone thinks that my approach to money management is complicated. If you are a regular reader of my blog, my approach to Life is complicated. The important thing, however, is that the audience acknowledges that dividends investing is the reason why I can be financially independent today. I have been feeding my family without a day job for almost 4 years while paying a full home mortgage and my net worth has even gone up since the day I entered law school.

The only thing I might add is that life sometimes demands that a certain amount of attention need to be paid to managing money. This is a cerebral exercise and can be very stressful.  If you do this earlier, it can give you a much more comfortable life in your 40s. If you choose an alternative which is less stressful during your 20s, you might have to pay more attention to money when you get older. The problem is that for Gen X, by the time they really start to think about managing their money, their main income stream becomes threatened by economic disruption. It gets even worse when you are sandwiched between two generations and have to support your parents and kids at the same time.

One final point.

I think we did not address a good question last night.

The question is whether are there are simple ratios that can be used for bond valuation that resemble the P/E and P/B ratios. The short answer is no.

This is a complex technical question which we could not answer last night.

To get an idea of how this is done at the professional level. You may click on this link here.

Bonds are valued relative to each other by looking at different spread values relative to a fixed benchmark.

I would be surprised if any financial blogger were to employ one of these approaches to determine whether a particular bond is over or under-valued.







Sunday, May 14, 2017

Personal Update - Turned down monthly 5-figure job to pursue my legal ambitions.



If you google the word "decision" and you will know that the roots came from an old Latin word which literally means "to cut off". This is the central theme of my personal update today.

a) Just crossed the Rubicon - a legal career it is !

Two days after my final exams, a headhunter contacted me to look at some fairly attractive IT roles in a large MNC. I was willing to look into it because I have yet to begin work on my internship. I thought it may be interesting because I have been out of touch for 3 years and do not expect an attractive offer. I tried to prepare for the interview and just for fun, tried to enrich my previous IT audit experience with some of the stuff I learnt in school about MAS regulatory practices. From a compliance perspective, I walked the interviewee through areas of a MAS compliance which would benefit from legal analysis.

I did not expect the interview to turn out so well. The job which was originally being put on offer was set aside for a larger regional role with a full team to manage.

At the same time, things started out rather well in the law firm I interned in. I troubleshot financial spreadsheets to assess a divorcee's assets, resolved IT problems and researched on fairly cutting edge areas of a law and was actually listened to when strategising litigation with my boss ( All within 2 weeks ! ). It was hugely positive experience and the opposite from the horror stories from many of my peers.  

So I have a dilemma in my hands. I can take on a 5-figure job and would be able to hold out for 3-4 years to resolve my condo mortgage decades ahead of time. Or I might be able to build a legal career and be able to solve complex multi-disciplinary problems every day but at a fraction of my IT salary.

So I crossed the Rubicon and submitted my application for Part B. Having consulted a few friends, I realised that no matter how things turned out, there will be regret either way but my family's wisdom makes sense. An MNC can let me go anytime, but a legal practising certificate belongs to me and follows me wherever I go.

I credit my financial independence for allowing me to make this decision. Every single financial blogger I consulted would have taken the job rather than stay on with legal work.

b) Inflicted with buyer's remorse.

Talking about decisions, I was hit with buyer's remorse lately.

The Onyx Boox Magna Carta reader is a large 13.3" e-reader that is loaded with an Android 4.4 operating system. When a ready set was available on Carousell, I plonked two months of internship salary to buy the device up and was almost immediately disappointed by its performance.

Moral of the story - You can't really graft an Android OS onto an e-reader becare e-ink screens have a lower refresh rate. The system feels very slow and key android apps like Adobe reader and Dropbox are not compatible with the system.

Still I am in the process of getting it to work better. I managed to put Kindle on the system and can now read my Feedly RSS news on it.

c) Prepping for the talk this Thursday 

I'm really hyped up for the talk this Thursday.

We have novel material that just can't be found even if you pay $5k plus to other financial gurus. I bet you cant even find a book on the information I will share on Thursday because they came from social science research papers.

Hint : Once and for all, I will tie up all the scientific evidence which shows that improving your financial capabilities will reduce the psychological strain in your life.

Of course, I also will be talking about getting more dividends.






Saturday, May 13, 2017

JD Aftermath #5 : On Foreign Students

And I am not done ! 

Today I will do an article on foreign students and tomorrow I will talk about LLBs.

My JD experience would not have been such a positive experience without foreign students. Older candidates tend to be minority and tends to get sidelined due to the generation gap. This makes them excellent partners with foreign students who can also be marginalised but for different reasons.

a) Group work grading makes it hard for a foreign JD student to fit in.

The problems faced by foreign students are institutionalised into the SMU education system. Singapore students who get into law school are straight-A students (in both Universities) who have high expectations on themselves and others. 

Coming from a different culture and university, foreign students are unlikely to be used to the dedication and fervour that locals are used to so over the years have developed a reputation for being slackers. Foreigners from particular countries might also be prejudiced for not having English as their first language.

It does not help if some seniors advise juniors in any program to stick to locals because the locals still have a better reputation for getting shit done. The Russian hacking scandal in SMU which affected my exam scripts does not help because locals might just lump all foreign students into the same 'slacker' category.

b) Foreign JD students do buck up after a semester or two. 

The problem is that locals are too quick to condemn and a bad reputation sticks for foreign students. It's actually quite hard for a foreign student to qualify for the JD and every batch has only around 4-5 of them. 

They do catch up after a while and do so in fairly remarkable ways because they are quite smart and streetwise to begin with. 

Most group collaborations I have with foreign students are successful because we are able to come up with novel solutions to unconventional problems. The dividends paid by having group diversity will pay off if someone is patient enough to tap them.

c) Fortunately, the foreign JD students will get the last laugh in the legal industry

Life is unfair and will continue to be so regardless of the wishes of the rigid, neurotic Generation Y local. 

The economic downturn for lawyers does not affect foreign students. They are prized for their language skills, rarity and possibly the ability to attract more business for their companies. Many are able to join the more prestigious law firms with moderate grades. 

Before I end, I'd like to give out some not-so-nice comments on Foreign Exchange students which can be a nightmare for our LLBs to deal with. Not all of these students come from reputable universities and many are here to party in Bali and Phuket. I have never heard of a happy or successful collaboration from my LLB friends and University administration really needs to look into the academic disadvantages of being paired with a foreign exchange student in campus. Perhaps those who who only need to pass a module should be segregated for marking purposes so that local students would not be so terrified of them.

NUS was the same 20 years ago. A bunch of foreign students were unable to take their final exams because they lost their passports in Thailand, got a failing grade and were sent home in disgrace.

 




Wednesday, May 10, 2017

Equity Management #12 : Enhanced Active Equity Strategies 130-30 Portfolio.

If you can imagine a long-short market neutral portfolio, it would be quite easy to imagine a 130-30 portfolio.

The first step is to find some sort of a prime broker.

[ Some helpful folks pointed me to foreign brokers Ameritrade to see if it is possible to construct such portfolios which facilitate the shorting of stocks. Based on I have been told,  prime brokerage services are not available to local retail investors but coming with something similar might be possible with some leverage and using CFDs. ]

1. The first step is to put in say $100 with the prime broker.
2. You then sell $30 of stocks short, creating $30 from the proceeds of the short sale.
3. You can then buy $130 of stocks.

You have net exposure to the market and will tend to do well when the market does well but some extra earnings can come from selecting the right stocks to buy and sell.

This form of enhanced active equity strategies relies heavily on the ability to pick stocks and value can come from ignoring, underweighting or even shorting stocks which are expected to do badly over the medium term.

Prime brokers generally do not provide stock lending services for free, but in the US, there are tax and regulatory  advantage to this arrangement.

Personally, I think it would be nice if Singapore can find ways to facilitate such trades in the local stock markets. Professional investors should have the ability to find new sources of outperformance given that we retail investors are really leveraging on what we read of the blogosphere to make our own investment decisions. It's also a great way for the better retail investors to start pushing their portfolio management to new levels.

Over the next decade or so, I'm not even sure if fund managers would have a place in the investment ecosystem once robo-advisors start to be adopted by a new generation of investors.

First investment knowledge has become de-professionalised of late.Second, retail investors might soon be armed with pseudo-Bloomberg like capabilities to build up their wealth their own way.

If you are an investment expert who found a way to establish a 130-30, do share your wisdom here. I am thinking of ways to up my game as well.









Sunday, May 07, 2017

JD Aftermath #4 : Generation Y Lower Division ( 20-something year olds )

A lot of what I'm going to say about 20-something year olds might be coloured because of the ridiculous generation gap between myself and them.

And this often leads to hilarious interactions when I work with them in a team :

In one instance, when a classmate's boyfriend showed up to pick her up, I told her that her "BAE" is here. She told me to stop using that term because it's very mushy and she feels like vomiting when hearing that term. In response to that, much to her irritation, the other Gen-Ys in the team started using the term Bae to describe her boyfriend.

[ Much later, I found out that BAE is not a Korean term but an acronym "Before Anyone Else" ]

a) Gen-Y lower division are the best performers in the cohort.

Academically the Gen-Y lower division folks gets the best academic results because they did not lose any momentum from completing their previous degrees. Those from SMU are also very seasoned with SMU's class participation scoring system.

b) Gen-Y lower division are, unfortunately,  the most unnecessary part of the JD Program

I am not saying this because I want to show disrespect for my classmates - Many of them deserve to be in the course more than I do.

I say this because I feel very strongly that JDs are not meant to compete against LLBs but to complement the legal industry with a separate set of skills. Having working experience prior to the JD programme should have been made compulsory for the good of the industry.

While I certainly admire and respect my younger classmates, I would have derived so much more from the program if the administration were to require two years into the corporate world before letting them start the course. Alternatively, those without working experience should be allowed to pay lower fees and take up a legal education as LLBs.

c) Gen-Y lower division is an uptight,  neurotic and anxious mess.

I really blame the Singapore education system for making our youths so uptight. These poor guys gotta survive PSLE and the A level system before getting their first degree. If they mess up any of paper qualifications, the work place can be very unforgiving and they can lose access to the best jobs in the market. ( That being said, I also blame myself for occasionally being swept into this fervour, but those were not my proudest moments in SMU. )

The lack of experience in the real world creates the most neurotic and uptight bunch of classmates you can possibly have. For example, it is ok to start building a study group early but to do it the previous semester prior to the exams is clearly insane. Some working experience might  be able to teach some students the value of "chill" and remove that piece of mahogany wood which is shoved up their asses.

This generation is also very quick to condemn others with foreign students being generally at the receiving end largely because of cultural differences which on hindsight, should have been celebrated rather than something which polarised and plagued my entire class.

d) Gen Y lower division will regret not changing their ways.

I sound like a really bitter uncle when I say this but I have backing in the form of the book The Complacent Class by Tyler Cowen.

If you think about it, my generation was the one which started out creating this mess. We were ultra-competitive and we knew that examination results have an implication on our career and life outcomes.

Youngsters today are different.

The proliferation of search tools and web apps now allow the younger folks a chance for more curation and customisation which unlocks different and more varied lifestyle choices. So a 20-something year old is not constrained by societal expectations as much as Gen X.

For example, in my generation,  as an alpha-male, you want bag hottest chick in campus because that is what winners do. Most capable guy gets hottest chick. Today, you don't aim to bag the hottest chick, you use Tinder or any dating app to get something which suits your fancies. If want a chick that digs Overwatch and cosplays Zarya ( if you have actually a weird thing for Zarya *wink* *wink* ), there is an app to find chicks that look like Zarya.

The ability to live your life as a niche is a feature and not a bug of Gen-Y living. A customised career can be found with the right search portal.

One conclusion from Tyler Cowen is that a lifestyle of competing to be the best would eventually be supplanted by finding an ideal niche that suits your personal inclinations.

This is my final beef with my youngest classmates.

If my generation can be out of touch, it can be forgiven because we are in our 40s.

If folks in their 20s were to still act like the old fogies of my generation and be competitive as shit over getting the "best" jobs in a sunset industry where they might end up using their 3.7+ GPA to do electronic discovery, audio translation or end up photocopying documents.

The final joke is on them.