My ez link card

After months of training, fulfilling the relevant accreditation, and a series of presentations that I have to prepare everyday, finally I have the opportunity to share what I have learn by taking positions for my clients and providing advice on the general outlook of the market. It felt like taking public transport on your own for the first time when I was in primary school. The excitement, the adrenaline rush I felt was the exact same feeling I experienced when I was given the liberty to travel on my own.

Equipped with a trading platform that contains archives of analyst reports, charts, constant newsflow I was ready to embark on my 2 fast 2 furious journey together with my team of spartan warriors. A trading representative license(EZ LINK) is like your parents (MAS) giving you the right to take public transport on your own. You can choose which bus to take, when you board the bus and where you want to get off. Ultimately, we all have a destination that we want to go and the way we travel differ amongst individuals.

DAY 1)

I was happily waiting for the bus(stock) to come(bull run) and suddenly from a distance,(market dept) I could see that's the bus I wanted to catch(enter position). I wasn't sure where it was heading(price target) but it seems pretty good(3-5% upside) from a distance. I looked for my bus guide(fundamental analysis) immediately to check where it could be heading (price resistance)and suddenly, i realised my ez link card was no where to be found. I missed the bus!

to be continued.......

Too much is bad for you

Some of us spend close to a quarter of a century acquring knowledge in school. Others spends more than that while another fraction of the population spend merely more than a decade acquiring knowledge in school. Although knowledge is very important for our livelihood, an EXCESS of knowldge might not necessary be in your best interest.

Ever wonder why there are some filthy rich people who refuses to live a lavish life? Ever wonder why they drive normal cars, eat simple food, scrimp, save and do nothing with that shit loads of money? They do that cause they simply know too much.

When you are an educated person, you tend to have a good understanding of how a business works. You start to understand the production costs of products, cost price of services and you start to realize that while you are satisfying your wants, you are making somebody very rich. Take a Nike shoe for example, it actually costs less than $10 when it is produced in China, high cost margin is due to the advertising and other distributing costs. The next moment, you get to know people in the F&B business and they tell you a plate of chicken rice cost only 50 cents when they are selling for $3 a plate. You next visit a garment factory that manufactures all those branded clothing and you start to realize that you once paid $100 for a piece of shirt that costs only $7 from the factory.

Thus with all the money and with all the knowledge you acquire, it becomes, NOT WORTH IT NOT WORTH IT NOT WORTH IT NOT WORTH IT NOT WORTH IT.............................................

Then you start to question, why in the world do I work so hard for money if I don't spend. Well, you are probably happier if you knew nothing.

The Art of Gambling

We all know the odds are against us, we know we can never get rich from gambling, we know the chances of winning is low, we know we are rationale in our thinking, we know there’s no way we can beat the odds in the long term, we know the entertainment value is high, we know it’s fun, we know we can win. No point describing gambling is bad and all that, what we are interested is how do we beat the casino?

Rule No. 1 – Have plenty of sleep before you go gambling

Before gambling requires high level of concentration, it is important to have plenty of sleep before entering the casino. It is imperative to feel fresh before entering the casino and you require all that adrenaline rush before you make a killing. If you feel good about yourself, chances of winning are higher Even the army advocates 7 hour of sleep before any mission or exercise. If you are going at night, take a power nap and ensure you have enough energy to kill a tiger before making your trip there.

Rule No. 2 – Time is not of essence

Time is one major barrier when you gamble. If you keep thinking that you have a assignment due and you need to call your girlfriend/boyfriend at a later time, you reduce your chances of winning. Constant check of time takes a toll on your concentration and it will be better if you are going without regard of the time.

Rule No. 3 – Shift shift shift

Do you ever wonder what the role of the managers around the tables is? Ensuring the right change of chips is only their secondary job. Their primary role is to ensure that the dealers are not losing chips in the table. For instance, if the dealer keeps losing more than 3 times in a row, the manager will ask her to “take a rest” and replace with someone else. That’s how you can turn your winnings to a loss. What goes up will come down and what comes down will go up also. The principle applies not only to the stock market but also in gambling. Thus it is important to walk away or change a table when your luck starts to change. Now you know which dealer brings you luck, stick to him/her.

Rule No. 4 – Change of chips

When you are on a winning streak, let say you have a pile of blue chips ($10 dollars) you can request to change the chips in to green ones ($25)and black ($100) thereafter. The rationale of this tactic is to keep track of your winnings and losses. For instance if you managed to win $260, it is better to hold 2 black chips and 6 blue chips. This is because if you lose 3 blue chips in a row, u will be less prone to use your black chips on the next bet. However, if you have all in blue chips, you will subconsciously use all the blue chips and before you know it, you will lose it all.

Rule No. 5 – Never play alone in the table

Although you get to deal your cards faster, it also means chances of losing are higher. Because the dealers deal faster, you tend to have lesser time to think and respond. With the odds against you in the first place, it will be better for you to play with more people. This is the reason some tables are left empty and people only join “hot” tables. “You stay because you win” “You go because you lose” Empty table means trouble

Rule No. 6 – Break the fengshui

All casinos are designed in such a way that there are elements from preventing you from winning. This is known as fengshui. The architecture of the casino is like a bird cage and we are the worms that are fed on. In fact, all elements are against us when we take our first step in. What we can do to prevent this negative element is to avoid it. Never walk straight into the casino. We can walk backwards, sideways upside down, but never straight into their “cage”

Rule No. 7 – Double dragon

Ideally speaking, it is impossible to lose money in the casino as long as you have the capital. As long as you keep doubling your bets, chances is you will be able to recoup your losses eventually. For instance, if you lose your first $10 bet, bet $20 the next round.

Rule No. 8 – Bring your lucky charm

You tend to be luckier if you wear your lucky underwear or bring your lucky charm each time you visit the casino. Chances of winning are higher if you wear your lucky shirt or pants.

Until this point if you agree with me that these 8 rules of gambling can help you win, you are probably not rationale anymore. What we fear most about gambling is not about losing about our rationale but the power of temptation. Punters are often classified as the most optimistic people in the world and we are often driven by our greed to gamble. Casinos have one of the best business model in the world and what they are afraid most is not losing money, but you not patronizing them.

There are so sure that you will be tempted with gambling that they are willing to offer you a free $10 dollar rolling chip when you sign up as a member. They are also winning to offer you a free parking ticket as long as you play long enough in the same table. To make you stay longer, they provide you with free drinks entertainment all in all so that you will stay longer. The problem with gambling is that the problem lies not in rationale but the temptation to revisit the casino.

We all know we are gambling with moderation but it is not about how much we win lose or draw, but about thinking when to visit that place again. The average probability of winning each bet is approximately 33.3333333% thus if you win this time round, you are indeed very lucky. But chances of a constant winning streak are low. For instance assuming you play Russian roulette(The game whereby you put a bullet into gun with 6 slots and shoot yourself) Gambling is no different, in this case, it’s merely a gun with 3 slots and 2 bullets. High chances are you will lose.

Often the casinos are not using the odds against us but our individual greed and desire to earn quick money. When we lose, we tend to increase our stakes, when we win, we tend to visit the place again, thus there is no way we can beat the casino. We often feel the pinch when we pay $10 for a meal but when we lose a $10 chip, we smile at the dealer who took our money away. We tend to be very forgetful and graceful on a losing streak. For instance, if you lose $100, you will console yourself by telling you that you won $100 from the stock market the other day. Ultimately, it is the casino that has gained.

Leaving on a Jet plane

After the UNSW Saga, I was given an option to leave for my studies in Sydney or continue to pursue my undergraduate studies in SIM. I was presented with a dangling carrot of $22000 "Scholarship" or opt for a education that costs 2 times cheaper. So which exactly costs more? A commerce undergraduate degree in UNSW cost approximately $38800 annually.

• $24000 tuition fees
• $10080 for a year's rent
• $4800 for food and other MISC expenses

This might seem much higher than a course in Sim. $38k vs $12k. However we have forgotten other costs when you study in a local education. I define this as a FSF. Family Scheme Fund. Under the FSF, it comprises of

• $6000 annually pocket money (Assuming you receive $500 a month)
• $600 annual phone bill (Assuming $50 a month)
• $1200 annual personal utilities (For all the additonal power you use on your computer and shower)
• $1200 annual transport (Includes public transport and fuel for your car)

TOTAL = $9000

This would add up to $12000 + $9000= $21000 if I study in a local private institution.

The FSF is often neglected is our assumptions because we are used to consuming it without knowing how much it exactly costs. The truth is, this can be deducted from an overseas education because this is the savings that your parents benefit when you are studying overseas.

Thus,

FSF = Savings in Singapore when you study overseas

Cost of education an UNSW =

$38800 - FSF - Variable Scholarship received =

$38800 - $9000 - $22000 = $7800

Too good to be true?

Losing my bachelor degree

In finance we can quantify an investment by predicting the future cash flow of an intended investment. This means that we compare the return of 2 of more investment and choose the one with higher return. I suppose we can do that for marriage!

Let’s take a look at the startup cost of marriage. Based on today’s current market rate, a wedding dinner would cost approximately $40000, assuming 40 tables cost $1000 each. Other costs includes photo taking session $2500, cards and gifts $3000, down payment for a new flat $20000, renovations $30000 honeymoon, $10000, diamond ring ($3000-$30000) if you know what I mean! A simple wedding would cost you up to 100 to 130 grand! So what’s the opportunity cost of $130k?

· A Honda Civic Type R = $100k with enough change to buy 30 LV Bag costing 1k each

· Enough money to travel 2 times round the world with enough change to buy 3 Rolex

· A lifetime supply of haircut with wash

· Lifetime supply of fuel for your car

· Prada, Gucci, LV you name it

According to Cris, Marriage is an agreement in which a man loses his bachelor degree and a woman gains her masters. How true is that! I asked around if it’s okay if couples maintain and manage individual finances after marriage and the answer is an unanimous NO. Do men get married for sex and get broke as a result?

Let’s consider another scenario. What if we decide to retain our bachelor degree (singlehood) and spend it “wisely” with our $130k? Assuming you have the urge to go for “part time course” (intercourse) 3-5 times a week and it costs you $100 per session, it will cost you $300-$500 a week, $1200-$2000 a month and $14k to $20k a year. With notes (condoms) it would cost you another $30 per week, $120 a month and $1.4k a year. This would add up to $15k to $21k annually. How about extra curriculum activities (other vices) such as music class (Lap Sup Bar KTV), additional research (Which LV or Gucci bag your girlfriends fancy), Physical Education (massage parlours)? This would add up close to an estimated additional 10-20k annually. Thus the total cost of maintaining your bachelor degree would cost you close to approximately 30-50k depending on how far you want to score. Assuming you retain your bachelor status for 30 years, it will cost you an approximately 900k to 1.5million!

There appears to be a flaw in the above assumption that losing your bachelor degree (getting married) would cost only $130k. This cost can actually be eliminated from the Hongbaos you received from the wedding dinner. Assuming you have 400 guests from 40 tables and each guests subsidize you $120 (some relatives might give you more) each, this would add up to 48k. For the renovation costs and down payment for your flat, you will probably breakeven after you sell your flat in 10 years. For the diamond ring, that’s probably the last ring you will buy for your wife and if she wears it for 30 years, a 5k ring will only cost you $167! a year. For the honeymoon, you can actually pay off with the surplus from the Ang Bao. It’s clear now which is more feasible. I did my sums; feel free to lose your bachelor degree.

The art of MCP

he Art of MCP.

MCP is an acronym which stands for Male Chauvinist Pig. In order to fit into this category, you must

1. Always insist you are right.

2. Make every decision.

3. Be stubborn

4. Confused on what actually went wrong.

5. And never admit your mistake.

Before I go on to explain how this term came out. Perhaps I can describe the different demographics between a man and a woman using 3 theories. They are

· Accounting Theory

· Terms and Condition subject to changes

· The Gambling theory

The difference between a guy and a girl when it comes to accounting is that a guy will always “close the account” on a daily basis whereas a girl uses accrual basis. This means that if a guy ends of a day without his girlfriend complaining or quarrelling, you would assume that all is fine. Of course that’s a wrong assumption because what girl does is she will “accrue” over a period of time and strikes when the time is right. This means that what she’s unhappy might be donkey years ago but somehow or rather it will be presented in the current “financial statement”.

Terms and condition refers to STRICTLY no provision in any changes. In simple terms, this mean that you are not allowed to make any deviation from the plans that you have promised to do. “For instance, you promised to take her to the beach over the weekend, however due to some unforeseen circumstances, you postponed your plan” Well, this is not acceptable under the 10 commandments of pathology. ( PAT THO means dating in dialet) You might have the best of reasons, but still it is strictly prohibited.

The next theory that I am going to describe is called the gambling theory. In games such as poker or texas hold’em, there are strategies whereby you can either split the cards (CAI PAI) or joint your cards for a advantage in the game. Well you might come across situations whereby you are certain that you are going to win this particular quarrel but the other party can split the cards(means telling you that it is a separate matter and you are in the wrong!) or joint the cards( means telling you that what do you have to repeat your mistake from your previous incident).

However, I beg to defer. In my opinion, MCP stands for Manly Charismatic and Personality. Anyone that is deemed a MCP should be proud of it. Even the biggest company in the world has a terms and condition that states subject to changes and is incapable of fulfilling their obligations at times, thus its natural to have provisions for the statements that we have made(it’s okay to break a promise due to a valid reason)

Secondly, if you ever give birth to a boy and when he’s old enough to learn spelling, the only time he can score 9/10 is when you forbit to teach him the world “PROMISE”. This would save him from unnecessary if anyone blames him in the future. He can proudly say “Promise? “I never learnt that in school.

Well, as the saying goes, Nan Ren Bu Huai, Nu Ren Bu Ai. (Man not bad, girls don’t like). So the next time you are labeled a MCP, Smile and receive the compliments graciously, you are one step to becoming the next best thing !

Who makes more money

There are a few success stories on people who don’t graduate from University but ended up earning much more than people who graduate with high paying jobs. Bill Gates is an over-used example so I shall refrain from using him as my thesis. How about hawkers? Businessmen ? Entrepreneurs ? Whom manages to carve a niche for themselves and makes good money. We often hear that education is a waste of time and when you go out to work, everything else remains constant. “Ceteris Paribus”

My explanation on the difference between the poor and the rich is based on an economic perspective I learnt in school. On my first macroeconomics lecture I came across these two terms, Induction and Deduction. As the definition implies,

· With the inductive method we begin with an accumulation of facts, which are then arranged systematically and analyzed so as to permit the derivation of a principle or arranged systematically and analyzed so as to permit the derivation of a principle or generalization. Induction moves from facts to theory, from the particular to the general.

· Economists may also go about their task by beginning at the level of theory and proceeding to the verification or rejection of this theory by an appeal to the facts. This is the deductive, or hypothetical, method.

The remaining article will describe why people who are uneducated can earn a higher return compared to the educated.

My assumptions in my thesis are that the educated tend to be deductive, whereas the uneducated tend to have an inductive characteristic. My assumptions are derived based on the fact that the educated tend to read more and hold a regular job, they read more and thus tend to apply whatever they have learnt on books to their job or to their daily lives.

In comparison to the uneducated, as they have no prior or little education compared to the educated, the uneducated have to derive knowledge from either experience or observations, thus when they learn something new, and it works well, they actually induce a theory because they did not refer to any theory to begin with.

So What Has This Got To Do With Who Makes More Money?

Well, in order to gain an abnormal return, you possibly cannot go with the flow but have to go against the flow. Take the stock market for example, if everyone can learn valuation knowledge from books, no one would be able to profit from abnormal returns because everyone is faced with the same identical information and knowledge. This is known as the efficient market hypothesis in portfolio management.

So How Do We Make Lots of Money from the Stock Market?

My thesis on why the uneducated makes an abnormal return is because the information they have learn from induction is not available from any books or published from any source. This “Independent” findings works solely for the user who has induced that particular theory and works well solely for that user. This is shown from many businessmen, who earn more than people who have received higher education compared to them. As they are not educated, they have to rely on their experience to carve out a niche for themselves. Subsequently, they discover a particular method or model that works well for them. However, what they do not realize is that they have actually induced a new theory. Another reason is possibly due to the fact that they are not restricted by theories.

To substantiate my thesis, I shall give an illustration on the business model of a loanshark. Well, in the past, if you were to borrow money, you probably need to bring your identity card, visit a loanshark, and sign an IOU certificate. This “business model” is not very effective because the loanshark are exposed to high risk of defaulting their “loans” and getting caught by the police.

Then the illegal business model was evolved into something that deserves commendation.

If you are in an urgent need of money today, you visit a loanshark, but instead of exchanging cash for an IOU, he takes you to a departmental store that accepts installment payment scheme. In this scenario let’s assume you want to borrow $5000. The loanshark purchases a Plasma television that is worth $7000 and you pay for it under your name. The end result is that you get the $5ooo cash, the loanshark receives a Plasma television which he/she can sell more than $5000, and he avoids default risk as you have to pay the installment in your own discretion. How ingenious can this be? The particular who thought of this model would have gotten a distinction for a business model project if he ever made it to University.

My point is not to conduct in illegal businesses but people who induce theories have a higher chance of gaining a higher return compared to people who deduce theories. No doubt that it is good to read more and receive a higher education, but it is definitely not the way to make it rich. The next time you don’t understand a point made by your lecturer in school, think in another perspective that the lecturer is not doing a good job in explaining well. Well if all else fails, fret not, because you will probably make it bigger on your own!