Friday, October 31, 2014

Are you Superman or Batman ?

One of the privileges I have in my life is that I get a front seat to experience the struggles of myself and my fellow classmates. This 3-year reboot has allowed me to do some serious thinking about the nature of success. This is not so much an analytic exercise, but I see this as more akin to a religious experience.

One phenomenon I notice in campus is the kind of quality people attribute to their personal conception of what success looks like. For folks who really are into personal development, this is very similar to Carol Dweck's notion of the fixed versus growth mindset.

Let us look at the Superman model.

If you believe in the Superman model, your model of success is effortless in Nature. Legends will always tell of some mysterious senior who can drink, party and not study but still get into the Dean's List every year. One of the more ludicrous stories I hear is of a top Law Student who claims that she can throw her books aside on Friday only to pick up her books when the week begins on Monday.

I am very skeptical of this model.

Yes, there will be superstars at school or at work, but there will always something that debunks the Superman model once you get to know these superstars. Some may sacrifice their personal lives, others have a battery of coaches or may have even found a way to outsource their lives to virtual assistants in India. Some may just have an awesome environment to hit the books since they stay in District 10.

The reason why I am skeptical of Superman model is that people who know how to manipulate power practice sprezzatura. Top students in NUS have this irritating habit to make their success seem effortless to sustain this myth of their abilities. Makes them sexy and superhuman. Some go through horrible lengths to get their peers to drink with them in discos only to spend the whole evening mugging to keep themselves in the Top Honor rolls.

In the world of work, the Superman model is the Super-Manager, the great CEO who rockets to financial independence by clawing their way up the ladder. These guys do exist, but they are one in a million.

The question we really need to ask ourselves is what happens if we really have no talent ?

I propose the Batman model. Or if you have a villainous bent, you can call it the Lex Luthor model.

Success is no accident. Batman can't beat Superman in most engagements because Batman is not an alien from Plant Krypton, he can't fly, does'nt have super strength and x-ray vision. He's just a dude in a black nipple suit with a low voice.

But Batman is awesome because he is a superb strategist. He anticipates the move of his opponents and ensures that every weakness will be exploited to the fullest. He's worked hard to train in martial arts and has an array of gadgets to level the playing field.

The Batman model assumes no talent. If you want an edge over Superman, you have to marshal all your resources and work hard to attain your goals. You need to know Superman's weaknesses and have a suitcase of kryptonite ready if you really need to take the Man of Steel down.

Nowhere else is this found in investments.

The Superman model assumes that a superstar analyst exists who can pick out magical stocks and attain financial independence without any effort. The Batman model assumes ordinary market returns, then conscientiously saves and invests based on tried and tested factor variables.

Of course, just because we have two mental models doesn't mean that we can always strategise and plan our way to victory. Adopting Batman's strategies, I have spent my entire life getting my as handed over to me by the Supermans at study and at work.

Sometimes talent does indeed beat hard work.

That's why after a trouncing, Batman can always console himself in the arms of the Catwoman.









Sunday, October 26, 2014

Why we should press on.

At the end of the semester, some classmates are having doubts about whether they made the right choice in coming to the SMU JD program. I promised that over the weekend, I would write something to cheer them up so that they would press on in their studies.

I think that my class is a small class and the industry is large enough to absorb all of us in spite of all these changes going on to "nerf" the legal profession.

For the rest of the readers, my analysis should also apply if you've worked damn hard to get into a fairly exclusive MBA like the one at INSEAD or the APEX MBA program in NUS.

When I look at my class, especially the younger folks in their early-30s and 20s, they are likely to able to be placed in a career that is going through the tail-end of a Golden Age. I've taken some very conservative estimates to calculate the expected net-worth of my classmates upon graduation.

Here are my assumptions.

a) You get the minimum grades to be admitted into the bar. No need for 2nd Upper grades.
b) You start out at $4,500 a month.
c) 7% increment a year with 3 months bonus every year.
d) You save 50% of your income and your entire bonus every year.
e) You invest your savings at 7% returns.

( Ok... granted not all of you lawyers will know how to invest, but 7% a year is not too ambitious )

Based on the table below, if they can meet conditions (a) to (e), a conservative starting salary will net them their first million within 13 years. So if a graduate at 30 charts his career and finances properly, they are likely to make their first million at 43.

SalaryBonusAnnual SavingsCumulative SavingsInvestment at 7% returns
$54,000.00$13,500.00$40,500.00$45,000.00$45,000.00
$57,780.00$14,445.00$43,335.00$88,335.00$91,485.00
$61,824.60$15,456.15$46,368.45$134,703.45$144,257.40
$66,152.32$16,538.08$49,614.24$184,317.69$203,969.66
$70,782.98$17,695.75$53,087.24$237,404.93$271,334.77
$75,737.79$18,934.45$56,803.35$294,208.27$347,131.55
$81,039.44$20,259.86$60,779.58$354,987.85$432,210.34
$86,712.20$21,678.05$65,034.15$420,022.00$527,499.22
$92,782.05$23,195.51$69,586.54$489,608.54$634,010.70
$99,276.80$24,819.20$74,457.60$564,066.14$752,849.05
$106,226.17$26,556.54$79,669.63$643,735.77$885,218.11
$113,662.01$28,415.50$85,246.50$728,982.28$1,032,429.88
$121,618.35$30,404.59$91,213.76$820,196.04$1,195,913.73
$130,131.63$32,532.91$97,598.72$917,794.76$1,377,226.42

I will let the real practitioners discuss the feasibility of my financial projection, these numbers can even apply for the top-flight engineers who can get into the banks after their first degree. 

Of course, my table and projections are what happens in theory. 

It's baffling to know legal professionals, who shockingly, are not millionaires before 40. There are many reasons why savings and investments targets cannot be met. I mean no insult to those professionals who are still working hard to met their financial targets but the alcohol at Ice Cold Beer attracts a lot of government taxes so less trips to the bars help. 

But, I think having a seat in SMU is something we should be grateful for, so I think this qualification is worth striving for, even when many of us are currently our ego bruised and getting perhaps our first B- in our entire lives. 

For me, even if no law firm were to take me in due to my age, I think I'd be a pretty formidable outsourcing contract manager if I have to crawl back to the IT industry.





Wednesday, October 22, 2014

Taste and Aesthetics. Being Basic and Normcore.

I think get along fairly well with my JD classmates despite a glaringly large generation gap. I actually said to a classmate that if I had a shotgun wedding when I was in JC, my kid would be her age, Maybe they treat me like a insane cousin or uncle that they can't seem to avoid on a family gathering. I like to ask questions in class like what if two people in a contract hypothetical case are lovers or whether consent can be withdrawn halfway during sexual intercourse just prior to male orgasm.

The generation gap becomes really magnified when I attend a lecture with the LLB kids. In those classes, I feel like a Singaporean Bill Crosby. Subconsciously,  like many older men, I really want to brow-beat the See-Gee-Nahs for the incoherent way they speak and their strange appearance. In the end I restrain myself because some of these kids are my seniors in Law School and may even end up coaching me for Moots. And of course, I should not pass judgment across generations, our struggles are quite different.

I actually feel ashamed to admit that the one thing which cheeses me off is the "SMU Smile". What happened to the angst, anomie and the general lack of confidence of an undergraduate ? Kids in my days have a lot of anxieties, how to get a job, how to get laid in a hostel and how to pay off the study loan, SMU undergraduates have this uncanny ability to project an inner sense of self confidence that I think has become the hallmark of the SMU brand which everyone else would either love or hate.

Today's article is about class anxiety. Buzzfeed has a really awesome article which talks about labelling someone as "basic" as a way to demonstrate their superiority in taste and class. In one lecture with the LLB folks, the lecturer picked on this kid because he wore an Abercrombie T-shirt. This is one brand I would never associate myself with. ( Unless it's to be a sole distributor )

After reading this article, I actually felt funny because I consider myself as having a taste beneath what would be considered basic in Singapore. After analyzing my personal taste and aesthetic, a friend concluded that I actually belong to a category called Normcore. It is a conscious striving to bland in taste and dress.

Being basic in Singapore is as follows :


  1. You shop at NTUC Fairprice.
  2. Eat in a foodcourt.
  3. Buy clothes from Forever 21 or Mango if you are woman. For a guy, maybe G2000 or Giordano.
  4. Drive a Toyota.
  5. One pair of decent does like Rockport maybe.


I propose that investors should try to live a live below that level of "Basic" to reach financial goals.


  1. Shop at Value$ or Sheng Siong.
  2. Eat at Kopitiam or hawker centre whenever possible. 
  3. I wear and love Goldlion shirts although I am slowing wearing some Uniqlo to keep up with the times. A Gen-X uncle brand. Boomers wear CYC or 3 Rifles. ( No SPG will talk to you and no one will ask you whether you are gay if you wear these brands )
  4. A weekend Hyundai which I don't drive because I take public transport.
  5. Bata shoes.


Of course, perhaps at the end of the day, in class anxious Singapore we can easily afford to find other areas to be complete snobs at. Done properly, it will not make you a jerk and can protect your self esteem from the consumerist types around you.

My weapon of choice is in the books I read. An expression of superiority coming from appearance is quite shallow and with available credit, anyone can look good. I am delighted by conversation on the works of Lawrence Freedman,  Steven Pinker, Thomas Piketty or perhaps Martin Seligman.

Of course, snobbery being snobbery, some books must be excluded from the club.  I am openly contemptuous of folks who read and wax lyrical about the works by Dr. Phil, Paul Coelho, John Gray or Rhonda Byrnes.

This is stupidity of the highest order.

( In case you are wondering, I did read most of their works to figure out how to make books sell. )













Sunday, October 19, 2014

"Till All Are One !" - The Mechanics of Synergy.

It was a perfect storm for my personal finances this week.

First SMU decides to bring forward payment for my next semester of fees. The the markets had a series of sudden bearish moves while I lacked the funds the exploit this weakness. Then two things happened: My condominium TOP-ed and I have to write a couple of checks and  my weekend car battery failed and we have to get AA to help us out next week.

Still, I spend so little money as a student these days, I've yet to touch my capital yet. Hope this can be sustained for 1 more year, after which all my fees would be settled.

Anyway, my class just had a mid-term exam. The value of the exam was not high but I think almost all of us put in more effort than what the score meant to our final results. I think this mid-term is a true test of our capabilities because it forces a student to consider trade-offs: Already on FB many classmates are complaining that focusing on a subject meant sacrificing others. This is a greater dilemma faced by all citizens : You have one life, do you study or play, start a family or work, invest or travel ?

Which leads me to consider the almost overused concept of synergy.

Synergy is the 6th Habit in Stephen Covey's 7 habits of Highly successful people. It is exemplified in the concept that the whole is greater than the sum of the parts. It has a darker purpose in the business world, after an M&A exercise, to synergize operations between two entities, it is quite normal to make a many employees redundant through a restructuring exercise,

I have two insights I picked up from Law School on the idea of Synergy.

The first insight is that if we see four subjects as four separate subjects, we are likely to be stretched. I think unlike engineering and finance school, legal subjects are a lot more similar to each other and concepts drawn from a topic can be used to reinforce another subject. Somehow I noticed that many contract cases can also be sued in tort.  Our analytic and writing module probably applies to all other content driven modules like Contract and Criminal law. If we can actively apply and re-use some concepts across subjects, we can, in effect, study for multiple subjects while explicitly preparing for one. This can be one possible way out of our predicament.

The second insight concerns my active strategy which I think is working well so far in school.

Synergy requires very active and strategic time allocation. I noticed that students today have not changed for the past 15 years during my NUS days. The main method to cope with a stressful work-load is to live one day at a time. We're eminently human and will use out our time-slot for something which brings pleasure instead of pain. We also do not have a strategic use of our time to actively meet multiple objectives with one action.

My strategy so far might fly in the face of common sense. When an assignment "spawns", I rush it within 48 hours once I am sufficiently confident that all the material has been taught. No excuses, and it applies on individual and group assignments. Between leisure and work, I always choose work.

I realized that there are a couple of benefits, as I'm done with assignments 48 hours after they spawn, sometimes I can lift material from a previous assignment and cut and paste case references into my later assignments, returned assignments are used to remove mistakes from my submitted drafts to ensure that mistakes do note repeat itself, More interestingly, as the assignments cover the same material as the classes, doing the assignments early also prepare me for mid-term, throughout the term break I integrated assignment writing into test preparation. I can safely say that my rote learning load was halved since I was made intimately familiar with cases which I wrote about before.

So in summary, this is an exercise to cut into the root of what Synergy really means. It has confused the heck out of me since I read Steven Covey in the early 90s.

One possible idea is that all subjects are one. Investing is Life and Money is Happiness. Compounding your wealth can bring confidence and can help in school or at work because confidence always makes you a more magnetic personality.

The other approach is that time is the fuel which drives synergy and allows synthesis to take place. I think a person who learns about dividend investing at age 20 is better off than someone who picks up this skill at age 40.

Could it be possible that Time, managed well, also compounds itself like other asset classes ?




















Wednesday, October 08, 2014

The Shallow Search for Happiness.

I'm in the middle of my term 'break' in which I had to do even more work than a normal week at school. Test preparations and written papers took up almost half of it.

Now I'm taking a short break to update this blog as I think I've done enough preparation work and will let fate decide what happens in tomorrow's online test. This is the first time I'm getting a test where I have no idea what is to be tested. I was probably more prepared for my blood test this month which actually went really well. Turns out law school deprives one of unhealthy food such that I actually have a better cholesterol reading than a normal person and managed to control my blood below 8 for my HBA1C.

I'm writing today's article as a response to someone who intimated to me that he is disturbed by all the happy pictures his friends put up on Facebook, this makes him question the meaning of his own life. I consider this person very successful by Singaporean terms, so I was puzzled by his sharing. And if someone who is successful find a struggle in this, this is a problem which might be worthy of some thought.

Like in almost all recent postings, I will take a multi-model approach to this problem to decode this issue.

My first point is that most folks will simply say that they want to be happy. All life decisions are driven from the perspective of happiness. When a boomer or Gen-X say that they just want to be happy to justify a life decision, in my opinion, they are just as naive and shallow as Millenials who will justify any act by their YOLO philosophy, which I actually think is a more refined philosophy than what my generation has.

So first off, happiness on FB is a shallow idea which people use as a Swiss Army Knife to justify any life decision.

I will first refine this theory based on Martin Seligman's idea that Happiness is based on five components :

a) Pleasure - Classic meaning of happiness. Eating a lobster roll gives you pleasure.
b) Engagement - Mihaly's concept of Flow. You get this by doing interesting work.
c) Relationships - Have a great family and friends.
d) Meaning - You can put your work within a context of your existence.
e) Accomplishment - Meeting goals.

Voila ! Once we break happiness down into it's factor variables, the problem is not daunting anymore. Facebook pictures show people eating rich foods and visiting strange places. On the surface of it, people are not demonstrating happiness, they are only showing off one aspect of it, likely pleasure.

So my first solution to my friend's philosophical problem is that he needs to determine if these folks are really happy. Is one variable sufficient to do that ?

Ok, let's go further than Martin Seligman by introducing the concept of an objective or subjective test I learnt in Law School.

Something is subjective if they person claims to be the case. Pleasure, Engagement and Meaning should be held to the subjective test. Whatever makes you happy that makes you wanna post it on FB !

An objective test is independent of your internal state. Legally, judges create an imaginary creature known as a reasonable man to determine if the test passes or fails. Accomplishments and Relationships are judged externally. This is a public victory which does not depend on your subjective evaluation.

Some folks may in their course of lives focus on an internal scale which measures happiness. That may be wiser, but from the point of view of an outsider, this is internal and he cannot judge whether you are really happy or actually a nervous wreck ( Only the person can judge if he derived pleasure from the experience).

Of course, focusing on external/objective measures of happiness can backfire if it it is not accompanied by a private sense of victory.

In any case, we get choose what we want to do with our lives.

Suffering is a choice.

Studying like crazy during a term break is certainly not pleasurable, BUT :

a) The work is engaging.
b) We are struggling together as classmates and slowly building professional relationships.
c) We are rebuilding ourselves to be better.
d) We are getting a pretty prestigious credential.

Yup, for most of us, we don't have nice pictures to put up on Facebook, but look at what was gained when we decided to forego pleasure.

I think that's the consideration we need to make in light of the grander scheme of things.


 













Tuesday, September 30, 2014

What tools in the Arts and Law can be used by an investor ?

After Hell week, my class started getting bombarded by essays and more written work so I am unable to put up more postings for quite a while but today is a good day, I just finished a 2,500 draft of an essay I was supposed to submit in November so it puts me ahead, to, well... do more advanced work for my classes.

One of the ideas I was obsessed with that ideas are "weaponizeable". Ideas from disparate fields can be integrated together to solve tough problems within a domain and even provide insight to practical problems in daily living.

It started during my engineering days when I was doing some object oriented programming. I was sort of into Philosophy then and became acquainted with Plato's Theory of Forms. I always felt that the way software engineers disrupted structured programming by coming with OOP in those days were really inspired by Plato. You need to define what an abstract idea of an object is, and then subsequently you need to write code to instantiate the object to be used in the real world.

Of course, it went on in my finance writings, I felt that frugality always had roots in Calvinism and Stoicism. Breaking away from the hedonic treadmill is very similar to the Buddhist concept of Nirvana. If you really want to delay gratification and save money, you are probably better served by reading Marcus Aurelius and Seneca than Robert Kiyosaki. If you want passive income, reading Jane Austen can help retool you into becoming a Mr. Darcy.

In Law School, I try to push the envelope in my presentations, recently taking a risk assessment model known in IT audit ( Risk = Probability of Loss x Loss amount ) I picked up when I did the CISA exams  and rigorous applying it to resolving some problems with sentencing in crimes of negligence in Singapore.

I am trying to share this new approach of finding gems in the Liberal Arts and Law into looking at investment ideas.

Sociological Imagination

Sociological Imagination was taught to all final year Engineering students in NUS. The idea is simple - You take a simple social observation in your daily life and ask yourself, what are it's implications in the grader scheme of things. Sounds airy fairy enough ?

Not quite. Beyond the financial statements that you read, applying a helicopter view to your finances, can help assess the outcome of a investment scheme.

Say you like SPH as a stock, it's a great yielding instrument and you get to own a publications monopoly. Apply sociological imagination you know that SPH is closely tied to how far the government will go when it comes to freedom of speech. Most of the income is in Singapore dollars and you can expand your scope to include your projection of the Singapore economy.

I think most practitioners of the sociological imagination tool commit a lot of logical fallacies. You run the risk of reading too much into a incident. If one moron heckles a bunch of students with special needs, does it reflect upon the stupidity of society as whole, the failures of our education system, or it's simply a stupid moron with a very dubious personal agenda ?

Which leads to my second tool.

Ratio Decidendi

Lawyers have a way of confounding everyone with Latin terms. When we figure out the ratio of a case, we are just asking ourselves to summarise the judgement into one line which would be the same decision that will be made in future cases.

I think something magical happens when a divergent tool like the sociological imagination encounters a reductionist tool like ratio decidendi.

You get the best of both worlds.

SPH is a stock. It may be grounded by how the government views freedom of press and tied to the Singapore economy. But we are now required to ask ourselves what drives SPH stock, in particular, what drives its dividends for someone like me.

IMHO, my one sentence after all the considerations is that the dividends are driven by property rentals like Paragon Shopping Mall. Absent property in its current portfolio, I would not really like to own a publishing business which is rapidly being disrupted by e-books. If you arrive at the same conclusion as me - you might be better off looking at the cash flows from SPH REIT instead.

I have close to 30 stocks in my portfolio, having a key driver or ratio decidendi for the stocks in my portfolio allows me to balance my school and my finance activities and fine tunes my sixth sense when I read about the current affairs in the newspapers.

In conclusion, I think at this phase in my midlife, I am really trying to approach everything as a fox. Law school is quite foxy in nature as opposed to the hedgehog approach of engineering school.

A typical LLB student can at best approach a legal problem as an LLB student. I like to see myself as a little different, I will not hesitate to attack a legal from an engineer, programmer, project manager, auditor or a finance perspective.

The more models, the merrier.











Sunday, September 21, 2014

Going through hell week !

I'm going through hell week and have nothing much to share with the readers.

Apparently due to fate or some may even argue, good luck, SMU has decided to slam me with three subject presentations over 7 days and a graded legal memo, making this the most intense week in the entire semester. Things got so bad, I had to cancel my Dungeon's and Dragons game and I did not even bother monitoring my portfolio even with the talks of Scottish Independence and the actions of the Fed.

Here are some random thoughts until I can come up with something more interesting :

a) Becoming a student again can save money.

I noticed that my expenses have reached the three digit level this month. There were so many cases to crunch and books to read that it's impossible to spend on other pursuits, I can't even hang out with my friends after school.

b) Scottish Independence referendum turned out to be a non-invent.

I was following this pretty intensely and actually hoping that the Scots will decide to leave the United Kingdom. Singapore left almost 50 years ago and we're doing ok, But I acknowledge that economically it's better to stay together. Damn, I was hoping for a cheaper pound so that I can go shopping for RPG books at the Orcs Nest at Charrings Cross Street.

On the whole, people are rational and voting for the wallet sure beats some nationalistic sentiment.

c) Philip Holden's Critique on University rankings.

http://www.themalaysianinsider.com/sideviews/article/university-rankings-a-need-for-critical-reflection-philip-holden
.
If it is'nt for my punishing schedule, I would be railing at this article full time.

In Singapore, English Literature majors do pretty well and get fairly decent jobs. This needs to be sustained by local universities keeping their good reputations which means that we can't really negotiate with KPIs which rank universities. I rely on the good name of NUS and SMU when I look for jobs in the future, we're in a tough market where many US graduates might settle to work as Baristas in Starbucks.

I think the tirade is too similar with William Deresiewicz's appeal to bohemian authenticity over getting a solid job in the industry.

Hey we can't live on ideals. I say we keep the KPI. That might prevent more academics from holing up in their ivory towers.

Anyway, hope that I can write a better article next week !