Monday, June 30, 2014

Buay Kan Buay Tua Han as a methodology for success.

Translated from Hokkien to English "Buay Kan Buay Tua Han" means that you can't grow up unless you get fucked first. It alludes to phenomenon that many of us do not experience growth without going through a period of pain first.

I think that there is a sufficient evidence that this is a very credible success methodology. Most folks simply do not have the willpower or conscientiousness to perform feats like lose weight or to save money. Pain can thus become a useful ally in such endeavours.

Personally, I experienced successful weight loss when I used a blood test to keep me from taking foods with too much sugar. Society is full of similar success stories, the gangster becomes a great cop after the government put in place a career with a proper structure to enforce conscientiousness.

Here's some useful application of this principle :

a) Improve Weight loss using a system of donations to Roy Ngerng.

Make a bet with a friend by giving him $50. If you do not lose weight over the next 3 months, your friend can donate money to a cause you absolutely hate. ( In my case, it will be toward's Roy Ngerng's legal defense fund )

b) Place monthly expenses budget into an envelope. Then freeze your credit and ATM cards.

One brutal approach to forced savings is to place your budgeted expenses into an envelope and keep the credit and ATM card in the drawer ( or freeze it in ice ). If you spend it all before your next pay-check. You have to tough it out for the rest of the month or thaw your cards.

Just some watch-outs - Do not apply this to investment returns. It's not fair to penalize yourself over events that you do not control.

Applying this principle to society in general, it means that governments need to create and maintain a career track for non-conscientious citizens. Traditionally this should be uniformed services where workers will have a stable structure to support them if they do not have the willpower to help themselves. The government should also create an alternative remuneration program which pays less over the short-term but pays a pension after they leave this service.

I bet most of you have heard of many ex-SAF staff who blew their gratuity into some crazy F&B setup.

We need a pension system to preserve a warrior culture which has been eroded by capitalist and scholar virtues.

Friday, June 27, 2014

Some thoughts after today's talk...

I felt that the talk that was given today in Block 71 was great because of the audience who was very interactive and kept me on my toes. Money can sometimes be an emotional subject, so interaction can be very engaging and lively for everyone involved. 

Here are some random points which I thought would be interesting for the regulars here who could not attend my talk at Block 71 just now :

a) Projection of 8% yield can be controversial idea for most audiences.

I think the biggest elephant in the room for my presentation is the idea that it is possible to create a portfolio of stocks which yield 8%. Because I am about to matriculate into Law School, I took some pains to ensure that my talk did not violate the Securities and Futures Act, so I can only claim that this is possible, and I did not actually list out any stocks which I have in my portfolio.

As we speak, only one REIT exceeds 8% in yield. This is risky as it also comes with some income support so may not be sustainable. There are several business trusts which yield more than 8%, all of them have idiosyncrasies of their own. Your best bet is to look for equities in the markets - some manufacturing firms do give 8% yields but they are small cap or mid cap stocks which most Singaporeans have never heard of.

My portfolio consists of 26 stocks which yield between 6.5% to about 13.5%. Average yield is about 8.1%. It is fairly risky and I think it's better for the public that this list is not shared with everyone as some stocks need to be actively monitored.

On hindsight, it may be more conservative to target 6% for ordinary investors, this widens the universe to cover more stocks, many which have fairly good potential for growth. 

b) Channeling the "Field Marshal" with the MBTI personality test.

This was the first time I'm sharing the idea of using personality tests for career success. 

The basic idea is to consider the MBTI personality result of "ENTJ" as the highest financially rewarding personality trait and encouraging other people to temporarily take on the "Field Marshal" personality trait to obtain more success in their day jobs.

This means taking on a new persona which is more outgoing, more visionary, more logical/ruthless with a greater sense of urgency in the workplace. 

I expected this idea to be controversial, there are really no self-help precedence but strangely enough the audience did not resist this suggestion.

c) Non-linearity in income characteristics

This is one of the reasons why I like addressing hackers. They bring a lot of value to the table. One attendee spoke of what I felt about the idea that a person's income is non-linear. 

I told the attendee that the most conservative way to look at an engineer's pay is to consider the inverse parabola.

Another words, most of your salary increments will occur in the first 10-15 years of your career. Beyond that time-frame, paradigm shifts in programming and engineering will render your experience worthless and you will spend your 40s being retrenched multiple times, experiencing long period of unemployment and you should expect a decrease in your remuneration. 

The .NET guys in the 1990s will never dream of languages like Ruby on Rails, Platform as a Service and Scala taking the start-up world by storm. They will need to retain themselves, provided that HR departments do not practice ageism. 

d) Never take up a career that is too eagerly pushed by policy makers.

The discussion touched on emerging fields like Data Science. I recommended that the hackers consider the difference between a cluster which has truly emerged from the Singapore private-sector economy like law and finance versus careers which result from Government intervention like Biotech and Data Science. 

Industrial demand for lawyers and investment bankers arose out of the true needs of the private sector. The government did not need to start a campaign to push for more lawyers and investment bankers from NUS. The money was good, and the better students responded to industrial demand. As a consequence, the financial rewards of these professions are very much sustainable, sometimes by economic moats and entry barriers imposed on new entrants.

If a career depends on government support or intervention, you will depend very much on the government sustaining that interest within the economy. Case in point, it may be instructive to look at semiconductor engineers to see how are they really faring these days. In the 1990s, there were many attempts to encourage engineers to join the semiconductor firms. 

Never take up a career that is too eagerly pushed by policy makers. 

I can go on and on, over the  next few days I will talk about each interesting point in further detail. 

In conclusion, talking to Hackers is fun. When I do this I am engaging my own "kind". 

Hackers are certainly not shy people, some asked very mathematically probing questions on my graphs. ( Did you apply a logarithm to your numbers ? )

I will be looking for more speaking engagements over the medium term before entering Law School. This has been a very fruitful engaging of minds. 


Wednesday, June 25, 2014

Back-testing a CNAV-like portfolio using local stocks.

As a continuation to my Value Investing Master Class given to me free of charge by BigFatPurse, I spent some time in the National Library Bloomberg Terminals yesterday to see if a similar strategy may yield superior returns when applied to the local stock-market over the past 10 years.

As I'm a beneficiary of a good deed, I have to find a roundabout way to return the favor to BigFatPurse but would still benefit my readers, so I won't replicate the exact strategy shared as it would affect their business negatively, I think readers who are impressed can invest a price equal to restaurant meal for two by signing up for their course. Instead I took the broad concept to create a filter which employs a strategy similar in spirit to BigFatPurse to see market out-performance takes place.

The back-test was done over the 10 years. ( 2004 - 2014 )
The portfolio is equal-weighted.
Rebalancing of the portfolio takes place annually to reduce the impact of brokerage fees.
All companies are domiciled in Singapore to get rid of S-Chips.

My filters are as follows :

a) P/B ratio < 1
b) P/E ratio < 15
c) FCF yield > 0%
d) Debt to Equity ratio < 100%

The resulting performance was superb. About 40-50 stocks were shortlisted under this criteria.

Mean return = 26.98%
Standard Deviation = 13.53%
Sharpe Ratio = 1.29 ( Above 1 is fairly decent )

If we assume normality of returns, having a bad year with 2 standard deviations down would still return slightly below 0% so it's a pretty defensive combination of stocks.

Relative to this performance, the performance of the STI over the past 10 years was barely 7%.

Suppose when you start instituting this Graham-like strategy and it returns an extra 3% a year, with a portfolio size of $100,000, it's an extra $3,000. The model predicts an out-performance of almost 20%, making the strategy worth $20,000 a year.

This is my objective evidence to conclude that the value of the course pays itself several times over.

Disclaimer : One observation from traders is that back-tests can be overly optimistic. The likely performance of a trading strategy in practice would be below back-tested numbers but still above average market returns. If you wish to employ my screen on Bloomberg, I advise starting with a portfolio of at least $100,000 and buying at least 25 stocks to achieve diversification.

Monday, June 23, 2014

Talk this week : Escape the Rat-race - Hacker's edition.

The Hacker and Painter's movement has expressed an interest in my approach towards attaining financial independence, as such, I will be giving a free talk at the following time and venue this coming Friday, 27th June 2014 :

Time : 12pm - 1pm.
Venue : Plugin@Blk71 - Blk 71, Ayer Rajah Crescent, #02-18, S(139951)

It will be a very simple 45-minute talk on attaining financial independence with some discussion on how I figured out a way to retire before age 40.

The IT guys might be in on a special treat as I will be showcasing some of the results of my dabbling into statistical programming.

For the rest, I should be giving out free copies of my third book Sowing the Seeds of Prosperity to the first three folks who ask great questions during the Q&A section.

Sunday, June 22, 2014

Attended my first investment seminar on Value Investing.

Yesterday, I was invited to attend BigFatPurse's Value Investing Mastery Course along with 15WW. It was a great course. 

I would like to encourage readers to give this course a try for the following reasons :

a) It's a great way to learn about investing for beginners.

When I first started out, I really did not know what I was doing with my money. I made myself go through about 3 years of intense study to get a Masters in Applied Finance and pass 3 levels of the CFA. My logic then was that I was'nt allowed to drive without a license, why invest without the requisite knowledge ? 

The tuition was very expensive and I burnt a large part of my youth to learn about money.  

For beginners, you can pick up the basics of value investing in just one day. Alvin of BigFatPurse took great pains to customize a local flavor of the Benjamin Graham style of value investing which can be taught to an investing newbie without nothing but a calculator.

b) The course has substance.

BigFatPurse's magic lies in their ability to make a complicated concepts simple enough for anyone. Attendees are not taught basics and then left to flounder in the markets. They are given a fairly substantial walk-through of a company's accounts so after that course they can go through a financial report and make a judgement call on whether a company is worth a buy. 

A much more difficult variant was shared in Benjamin Graham's Security Analysis which many CFA candidates struggle to understand even today.

c) BigFatPurse even had a 3 year stock simulation game.

The highlight of the class was the investment game where we employed concepts learnt to make bets on anonymous stocks in the stock market. The market returns in this exercise was taken at a specific point of time in the local markets. 

It is this segment which makes the entire day worthwhile and demonstrates the honesty and integrity of Alvin's team. Following the investment rules will not necessary bring in the best returns, a lot of stocks go up for no reason other than luck. Team which followed the methodology did not necessary win the investment game. 

Myself and 15WW, both with substantial personal portfolios, drastically under-performed the class, many full of beginners.  It was humbling experience. 

d) The course complements Dividend investing methodology

A lot of investors like myself are stuck in the dividend yields framework. This class employs classic value investing, buying dollars for pennies. Many of these stocks would not qualify as dividend yield stocks, so having this technique under your belt will allow you to diversify your portfolio. 

e) Value investment course providers are the good guys in the investing world

Throughout the course, I did not experience any nonsense which inflates investment returns to get everyone excited about investing. Alvin only started selling his membership program only after everybody learnt all the basics and completed the investment game, he did not show off his wealth and emphasized that training was provided so that he could earn more capital to build on his portfolio. 

There are some parts of the course which I felt could be improved. One aspect is that dividends would need to be accounted for even during the simulation exercise. Dividends are an important part of an investment process and dividend stocks which are also deep value stocks do exist in the market. If dividends were reported every year, it will change the behavior of course participants.

The other aspect of the course which merit a spirited debate online is that it gives a special emphasis on the value of property over other assets like plant equipment. The question is whether property would be consider a productive asset if property prices become bearish over the long term in the future. Plant equipment sometimes are directly responsible for the generation of free-cash flow so I'm not so certain that the technique should consider it an "inferior" asset to property.  

Anyway, I think that overall, a beginner should attend this class. 

If you are one of those folks who asked me to help manage your money, why not attend this course and seriously consider their membership tier ( which would be quite useful if your portfolio size exceeds $250,000 ). There is some personalized coaching that will help you help yourselves.  

This is a hallmark of a good course provider, I expect anyone who gains insight on value investing would probably want to keep it a secret. BigFatPurse is taking a big gamble on the Singapore consumer that it will be more profitable to share this knowledge. I wish them luck !

( Disclaimer : BigFatPurse invited me to attend the class for free. In return, I gave them two of my books. BigFatPurse was also very kind to share with me their in-house customized database which was created manually using data direct from financial reports - this is hundreds of man-hours of effort ! My motivation right now is to employ this data-set and do some of my magic in R and share them with Alvin. Over the next few weeks I will also proxy their methodology and back-test the results on this blog. )

Tuesday, June 17, 2014

If you want to rich, be a bigger asshole !

Here's a conversation I had with a colleague some time ago :

Me : If are walking along Orchard Road, an insurance agent and a snake approaches you. You have a gun with two bullets, what do you do ?
Friend : I shoot the snake and the insurance agent.
Me : Wrong, you should shoot the insurance agent twice, just to make sure he's dead.
Friend : Actually, I disagree, if you're lucky the snake will bite the agent and kill him for you. So you save two bullets.
Me : Nah, if the snake bites the agent, it will die a slow and horrible death from drinking poison from his blood. No innocent snake should suffer this fate.

A lot of success literature is, in my humble opinion, written by hypocrites.

Almost all popular books on success talk about giving and charity. There's enough bullshit on giving so that it can expand you capability to earn more because of some stupid Law of Attraction. Motivation books talk about giving primarily because of fear - fear that the 99% will just get fed-up with trickle down economics and start waging economic warfare against the 1%.

The scientific evidence is a lot more damning on capitalism and modern society. The richest members of the population almost invariably measured more conscientious and less agreeable than people of normal socio-economic status. In psychological experiments which prime people about money, they become more selfish. This is now an empirical fact.

My article does not intend to turn you into sociopaths. Instead, I think in some cases, becoming an asshole is necessary for survival in Singapore.

Take the case of insurance...

Wilfred Ling is a Financial Adviser I thoroughly respect ( along with other folks like Christopher Tan of Providend ) and he wrote this recently :

His thesis is that basically, insurance agents have little incentive to sell you the insurance plan you need and are instead incentivized to sell you expensive plans like ILPs. ( I think maybe its so that they can reach financial independence much earlier than you ).

I think this is where being agreeable becomes a serious liability in Singapore. The people who are eager to sell you something, probably are interested in their commissions than your protection. You might also want to preserve harmony with your family and friends, so you buy a policy to appease the other party.

This is how most insurance is sold. Buying insurance is almost like giving someone a pity fuck to improve his self-esteem. You don't want to be seen as the asshole in the family who refuses to give support.

Turns out the consequences are horrible :

In Wilfred's sample, his client spends close to $10,000 on insurance premiums a year. If this money were directed into a portfolio of high yield assets at 8%, that's a passive income increase of $800 every year. In twenty years, this portfolio would be yielding at least $16,000 a year even if you had spent the dividends on yourself. That will pay for most  meals and utility expenses.

This is where sometimes, in order to be rich, you should consider the following :

a) Be an asshole

If a "friend" wants to sell you insurance, land banking, timeshare, borrow money or get you into MLM, a loser would give in to preserve harmony. You should happily lose a friend. I think if a relative does the same, lose the relative. I have great relatives who are agents but they don't sell to me - so we remain related to each other.

b) Cultivate a "CB-Face"

I dress shabbily like most unemployed uncles and shave about once a week. I also cultivate what people call a "CB-Face" when I am in town.

The upseide I experience is that now insurance folks avoid me because I look very poor and disagreeable. My wife comments that I am so ugly insurance agents and people selling Singtel Mio plans look away when I walk towards them.

That's a feature, not a bug.

c) Go online to buy insurance.

This is probably the biggest game changer in the insurance industry.

This website will educate you on buying an insurance, so no more pesky commissioned salesman. This will cut commissions by 30%. It is also a place where you cna pick up some term life without being dissuaded from doing so.

Hope that in time to come, that irritating salesman will wish that he remained an engineer !

d) Take personal responsibility

From an insurance agent's perspective, they want to protect you from everything possible because it is just so profitable to do so. Their job is to create fear by telling you horrible stories of the uninsured.

Of course, if you  refuse to listen to them, you need to start taking personal responsibility for your own life.

This can be quite a tall order...

You need to learn to invest your own portfolio. You need to know your family history of illnesses and figure out how much to put aside. You need to have regular medical checkups, eat a healthy diet and maintain a healthy exercise regime. Most importantly, some risks like eating cockles and bungee jumping should be avoided. Any residual risk, you can buy a term life and transfer it to an insurance company for less than $150 a month.

One of societies biggest problems today is that we expect so much protection, that we will lose out on the upside ( insurance earns all the commissions which could have been invested ) and we start taking on more risks because we know something that will kick in to protect us from harm ( moral hazard ).

The sad thing, of course, is that most people cannot take that amount of personal responsibility and so cannot afford to be assholes to financial advisers, which is why the insurance industry will always have its share of success stories.

Saturday, June 14, 2014

Some random updates.

I do not have a major insight to share this week as I have been hard at work writing programming code in R and also preparing to be Emcee for a friend's wedding tomorrow.

Here's what's been happening in my life :

a) A nice book review from BigFatPurse.

You can find a review of my book here :

The reviewers have been very kind to provide quite a favorable review of my first book.which was the only piece of work which broke even financially after accounting for my costs. It is also a book which I was very self-conscious about because I did not hire an editor to review my work which is still riddled with grammatical mistakes.

Nevertheless, Growing Your Tree of Prosperity was a bestseller in Singapore for a week and I still get orders for it today on this website. Maybe it's because the book contains my original voice which was not altered by any proof-reader.

Although I make it a point to distribute my third book Sowing the Seed of Prosperity as I felt that it was work which was truly aimed at beginners and had much better editing, people were just more interested in my first piece of work.

b) Completed the Data Science Specialization in Coursera

It's been a very rewarding journey with Coursera for the past 3 months. I count Coursera as the best thing which happened to me after I retired from the work force. I was able to continue to pursue my interest in Software Engineering beyond my previous career.

Within the past three months, I was able to :

i) Perform regression on scientific data.
ii) Use machine learning ( random forests ) to predict someone's movement given his fitbit data set at a 95% accuracy.
iii) Start creating web apps that work on financial data from Yahoo. You can see a simple prototype here which uses local ETFs to simulate the behavior of a portfolio of ETFs. ( The Permanent Portfolio )

This was created using R and deployed on a Shiny server.

I think this is the beginning of my data science journey, I expect to keep coding even as a law student, there are too many things I want to investigate, like how much correlation exists between local stocks and ETFs and how we can use R to generate an asset allocation which maximizes the information ratio ( Markowitz Efficient Frontier  in actual practice).

c) Preparation for Law School

Preparation for Law School will likely go full steam ahead in the coming weeks. I have almost completed a fairly long reading list on how to survive Law School. As an adult learner, I will be employing some of the latest findings in Psychology to plan my approach to study and retain the relevant materials.

Expect this blog to take on a bigger role which will discuss strategies and tactics on how to study so investors who are also life-long learners will find some interesting ideas on how to tackle their next upgrade.

Friday, June 06, 2014

To succeed - Do more of this, do less of that.

To accumulate wealth and attain financial independence, the most important thing you need to do is to earn more and spend less. This will increase your savings so that your portfolio can grow as large as possible. A lot of people make the mistake of thinking that it all boils down into investment ability, but squeezing 1% out of a small $10,000 portfolio can only take you this far.

In a similar vein, if your objective is to lose weight and lower your blood sugar, you would have to eat less and exercise more. My friends have a lot of theories about weight loss, many involve either exercising more or eating less, but the guarantee of success is to do a little bit of both at the same time so that your body sheds off some of that weight to reach a new equilibrium.

A third example is if you want better grades in school and attain a better Honours degree, you will need to study more and play a lot less. The folks who talk about studying smart so not get the point, it's very often about employing focused time to ensure that you can retain and apply the subject matter.

These three examples shed light on why success is so difficult for everyone.

The first point is that we normally have to do more of stuff which we may not like and give up the stuff that we enjoy doing. For many people, life loses it's meaning once a sacrifice is made. My philosophy is that you have to learn to enjoy the stuff which you may not like at first. For example, exercise releases endorphin which can result in a runner's high, mastering a subject matter can provide a sense of satisfaction and having a larger bank account, well, puts you in a position of better security.

The second point is that your control of the variable is still subject to a curve. You need to master the subject better than your peers to get a better grade. Competition ensures that you need to sacrifice more than your peers to attain success in a field.

This leads to a final point is focus. As every endeavor requires a degree of control, you should not have too many goals. Your willpower is finite. Focus on being a mother/career woman/acrobat/social worker/artist is something only amazing people can do well in, most of the time, you end up sucking at being all of that.

It's useful to ask yourselves if you have an audacious goal the following :

a) What unpleasant task do I need to do more of to succeed ?
b) What pleasantness do I need to give up ?
c) How can I enjoy doing more of (a) and less of (b) ?
d) Is this the most important thing which I should be focused on right now ?
e) Am I doing too many things because I am afraid of commitment I have to give for that one goal.

The last point is an important one. A common method of self-sabotage is to do something with lukewarm effort so that you will not have to confront your lack of talent or ability.

This is what I observe with folks who do a lot of things so that they can seem magical, multitalented or cool.

Doing a lot forms the excuse that you can suck at the most important thing that matters to most people.

Don't fall for that trap.

Sunday, June 01, 2014

Thoughts after 5 months of retirement.

Time really flies.

It's been 5 months since my mini-retirement and now given that I've got a seat in the SMU JD program, there is at least some finality to my life plans. There is now some hope for an interesting career beyond financial independence.

Here are some of my current thoughts :

a) Portfolio financial performance has been very strong for the past 5 months.

Most investors will no doubt have enjoyed the upturn in the markets lately. The market for yield counters have been really spectacular. Capital gains and income gains, even after my living expenses exceeded 15 months of my previous earned income - pretty amazing given that this was done in 5 months.

Of course, I was not as passive with my investments as I was when I was working full-time. These days, I have written some spreadsheets which can inform me when a yield stock is being mispriced by Mr. Market, and I can just sell the over-priced ones and buy the under-priced ones. This way I am able to push my annual forward yields to a nice 8.2%.

As with all good times, investors see bad times in the horizon. Every World Cup I experienced in the past has resulted in a nasty downturn in the local stock-market as punters sell equities to bet on soccer teams. I also expect nasty surprises next week from CFA candidates who close their positions to prepare for the exams.

For every perturbation in the markets, I get to move money slowly out of real estate into high-yield equity counters to have a balanced portfolio and raise my yields at the same time. So my portfolio is no longer passive, some active trading takes place now about once every 2 weeks.

Remember this as a dividend investor : It's not enough for some counters to go up, some counters need to be cheaper so that you can adjust your portfolio to ratchet up your income gains. You also need to know to what extent to do this because, ultimately,  there is no free lunch - your risk will almost always increase.

b) Really working hard on my health

Law school means competing with younger, smarter and faster opponents. There are only so many Second Uppers which will be given out for my cohort, I was told that any grade below this would mean issues with getting a decent pupillage. My status as a diabetic concerns me as I will have problems concentrating in my cases  if I lose control of my blood sugar. My latest results have been unpleasant with a HBA1c of 9. I have since bought myself glucometer.

Which brings me to my latest lifestyle design strategy : Compliance through pain.

I have only about a few safe foods : Fish soup, Yong Tao Fu and wholemeal pasta. I can eat anything I want - the only price I have to pay for that is to test my blood sugar after 2 hours. A score of 10 or below after 2 hours means that I have a new safe food to eat. Otherwise, I stick to the safe foods.

This strategy is showing some promise. I continue to lose weight as I have added night swims into my weekly exercise routine.

Some people on FB remark that my appearance has changed. Of course, given that my low GI foods keep me hungry all the time !

c) Seven courses down on Coursera !

This month I complete courses on Statistical Inference, Reproducible Research and Exploratory Data Analysis. By tomorrow I should have completed 7 courses with 5 distinction grades. This month, I will take on three data science courses to complete the entire specialization track.

This continues my unique strategy to take on law school as a candidate with strong technical and financial know-how.

d) Books I am reading

Beyond all the preparatory texts for law school, I am currently still on this epic book called Strategy : A History by Lawrence Freedman. It's a huge volume on strategy which covers war tactics, political stratagems and management theory. A thorough piece of work.

This book is so huge that I have to read books in between sections to keep my interest in it. I have completed Think like a Freak  by Levitt and Dubner of the Freakonomics fame.

I have also read Benjamin Graham on Value Investing : Lessons from the Dean of Wallstreet by Janet Lowe. It's not so much a book on investing but a biography on Benjamin Graham's life. It's shockingly sad that the father of the CFA program can have such a dramatically horrible personal life. 

For leisure, I bought the latest edition of the miniatures war-game Warhammer 40k. It's a good time to get acquainted with the Dark World of Space Marines.

For the Emperor !!!

e) Figuring out your life without a day job is a good problem to have

All in all, even before moving on to resurrect my career, designing a life around not having a day job is a good problem to have.

Otherwise, there's always enough friends and activities to keep yourself occupied - I spent a day at the Arts Museum and learnt that I have no patience for art. You start to work around your friend's schedules during the day and retreat for a good read whenever you can.

The funny thing about all this is the absence of travel. I have to raise $18k for school fees every 6 months starting in August and I felt that it would not be prudent to travel unless a friend were to invite me to do this and I can cut some costs by slugging it out in a hostel. but otherwise, exploring my inner world can be equally rewarding since I no longer need to relieve myself from burn out.

Here's hoping for the chance for one semester overseas in the future.

The April Fool's Portfolio : The End.

I'm stopping the April's Fool portfolio. All stocks were liquidated last Friday.

There are two issues with a Current Net Assets Value portfolio :

a) It has a "J-curve" characteristic.

The experience from folks who employ this strategy often experience a slight dip before it starts rocketing ahead. I felt that the wait will be substantial and have to prepare my funds for law school, so it does not make sense to continue with this portfolio.

b) You need more stocks for this to work.

I would expect a 20 stock portfolio to be more successful. This strategy is actually waiting game and we're waiting for investors to start being interested in these counters again. More stocks would increase the probability of hitting a jack-pot.

c) There's something to be said about investing purely in a quantitative manner.

I thought I should add this point. When i started working on the Bloomberg terminal on back-testing this portfolio, I made a decision not to consider the narrative for these stocks. This is probably a mistake. Investing is a science and an art. After considering a portfolio of stocks, it may be useful to some qualitative research. Perhaps these stocks are bargains because somehow value was being destroyed.

ISIN CODENAMEPRICESHARESTotal ValuePrice PaidOriginal Value
E18ECS Holdings0.64200012800.651300
KI3Hu An Cable0.08100008000.1021020

Fortunately, this is not the end of the CNAV strategy. Other financial bloggers do experience success with this investment startegy.

I recommend that you visit BigFatPurse if you would like to watch a similar portfolio in action :