Author: Growing your tree of prosperity

What does the Finance Industry and the Social Development Unit have in common ?

Until the Millenials developed Tinder, dating was not a straight-forward process for guys in my generation. An entire generation of men were emotionally scarred by the Social Development Unit or SDU. I was, fortunately, not a victim of this government initiative. Instead, after being burnt by a match-making attempt by my parents, I developed my own quantitative approach towards meeting women. ( This is why I have a family today in spite of being D&D otaku and troll. That story is something I will tell another day. ) Some of my friends were not so lucky as to escape...

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How to take a crap on quantitative backtesting.

With the efforts I have been gaining to show up some misconceptions about investing in local stocks, I would have thought that I should be become by now public enemy number 1 from value investors. Sadly, I have read some attempts to discredit quantitative backtesting and I find that they are either holding back key information, or generally lack intellectual sophistication. As such, I will take on the burden of criticising quantitative backtesting myself. This is because, of all people, I cannot afford to drink my own Kool-aid. Not only could I stand to lose money if my methodology...

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The Model Thinker #2 : Seven uses of models

In this second installation of The Model Thinker, I will talk about seven uses of models. The author uses the REDCAPE acronym to illustrate these seven uses which I will illustrate here for folks interested in their personal finances : a) Reason – To identify conditions and deduce logical implications One of the best illustrations of this usage is Ray Dalio’s Big Debt Crises he showcases one way to look at how accumulating foreign debt can lead to a depression later on. A detailed discussion of this model, unfortunately, cannot be done on a blog. We do know that...

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Your CPF is like a Schizophrenic Prostitute.

The inspiration for this article started when I suggested to another financial blogger to write a CPF article and pepper it with sexual references to push readership figures. He then said that his brain is too tired, so I challenged myself to write the most pornographic CPF article ever written in the financial blogosphere. If you get triggered too easily, you can always tune out of this blog and go watch a Hallmark Christmas movie instead. a) Investing in CPF can be like visiting a special kind of prostitute. If investors were Johns, I expect buying stocks is like...

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The Model Thinker #1 : The Wisdom Hierarchy

As we enter 2019, I will also be beginning a new series covering one really good book that I would like to digest very slowly. After some deliberation, I have decided to cover Scott Page’s The Model Thinker  as it suits the level of an intermediate to advanced reader. Naturally throughout the series, I will be personally trying to show-horn to adapt the ideas in this book to my personal style of investing. I hope that readers will find this new column useful and information. Today I will be covering the Hierarchy of Wisdom. It is a great way for...

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Watch-outs and predictions in 2019

One advantage of being a Christmas baby is that I get to reflect on the year on Christmas Day so it is possible for me to talk exclusively about the future on New Year’s Day. Instead of resolutions and goals, here are some cautionary statements entering the new year. a) Don’t talk about setting goals until you reviewed the ones you set last year This insight came to me in a group chat with friends last week. One guy was asking about what goals would we set for 2019 to which I then asked him what about the goals...

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Failing to spend is DEFINITELY NOT spending to fail.

The holiday season is a time to spend more money, but this holiday season my spending was a little impaired. I was supposed to spend money on some gadgets but was somehow thwarted. a) Creative Air SFXI The Creative Air was supposed to be released before before 2019, but it never did. Creative instead released a non-bluetooth version called Create SFXI Air C for gamers that failed to excite me. In fact, I got buyer’s remorse and cancelled my order forfeiting $20 my trouble. Instead of buying the headphones, I went to the Popular Bookfest to test drive the...

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The Problem of Financial Knowledge

Here’s a better depiction of the Financial Knowledge stack I proposed last week after reading an article on Psychology today. Based on this diagram, I think I am better able to appreciate how much a person needs to know in order to put his financial house in order. Let’s first talk about the problem at each part : a) We are not adequately trained at the theoretical level to address financial problems. At the top-most layer of the FK stack, we have to deal with theoretical knowledge that comes from different disciplines. This can be diverse as the use...

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Expectations for my 44th year.

Ok, with my birthday celebrations with my family over and the presents all opened, the next step would be to start thinking about what I hope to achieve next year. There are some complications with goal setting this time round, but these might be good problems to have : a) Learning Goals. My learning goals are complicated by the fact that next resolutions were met before 2018 ended. Flush with some earned income, I was able to attend one Improv class and a 2 hour primer on looking after my voice. The Improv class was fun and possibly more...

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My 43rd year in retrospect.

Since I will be celebrating my 44th birthday tomorrow, it is about the time to check-out what I have set out to do in 2018 and see whether I succeeded in 2018. a) It turns out that predicting the market is a Fool’s Game. Although 2018 has been quite a good year for me, it was quite humbling to see how badly my predictions went. I thought the markets would go up by around 0-5% in 2018 but it dropped by over 10% much to the consternation of everyone in the blogosphere. Even worse, my prediction for crypto-currencies to...

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On BDSM, SG Gov Bonus and Bursa Malaysia.

Do you know what financial bloggers talk about when invited to a casual meal by a broker ? BDSM, of course ! BDSM is not too different from investing. In investing there are TA investors, FA investors, Quants and crazy folks who buy anything based on what their broker say. We found out that BDSM is equally diverse – you can be a Dominant, Submissive, Switch or Curious. Financial bloggers also teased me about my affinity for Malaysia. This holiday, everyone is sharing about their wonderful holidays in Hokkaido, New Zealand or Prague. Unlike all the beautiful people on...

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The Financial Knowledge Stack

I came across a very interesting article on financial knowledge from Psychology Today which made me think deeper about the financial knowledge that is required to make good financial decisions. For those who might be curious, you can access the article here. The author created an epistemology for financial knowledge and created six categories of financial know-how. The moment I read this article I had this eureka moment about about the kinds of the financial knowledge that is out there. To me the closest analogy to financial knowledge is the TCP/IP stack that underlies all Internet-working traffic. Financial knowledge...

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Should you buy REITs based on a "Good" Sponsor ?

This started because a student felt uncomfortable with the portfolio of REITs selected by one of my better REIT screeners. He examined the list of REITs proposed by the stock screener and said that my portfolio contained REITs with “weak” sponsors. Separately I’ve been told on other occasions that investors should simply invest in REITs with good sponsors. Of course, these conversations seldom delve into how to actually determine what a good REIT sponsor is. I’ve always felt uneasy about investment strategies like this – an intellectually dishonest investor can simply define a REIT sponsor as a good one...

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The Art of the Good Life #52 : Inner success

You can achieve inner success by concentrating on what you can control and influence and ignoring anything that we can’t. Essentially it means controlling our inputs and not our outputs. If you can do this consistently, you can attain ataraxia – tranquility of the soul. External events that are out of control cannot really affect your inner state of being. This I can accept. The entire basis of FIRE and FU Money is to employ an unnaturally high savings rate at the present so that one can be inured to events like illness and retrenchment in the future. Dividends...

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The Art of the Good Life #51 : In Praise of Modesty

To have a good life, you need to be modest. This chapter provides three reasons to do so. The first reason is that Self-Importance is very tiring because you need to broadcast to the world how awesome you are 24×7. Influencers have to do it. Over the years, the successful financial bloggers we see today ar those who can attract as many eye-balls as they can. The second reason is self-serving bias. I don’t really like the example in the book because it says that self-importance causes some investors to buy sexy companies that improve their self image. I...

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