Yes, I am now in the Million LUNA Round Table or MLRT !

 

Before something goes really wrong for me, there will always be some kind of foreshadowing. 

A week ago, I gathered with my SMU JD classmates in one of their apartments and we updated each other on our career progress ( or lack of progress in my case ). I realised that none of them are really aware of what's happening in the crypto landscape and, just for fun, I decided to pitch the general idea behind the Terra blockchain to see if they will buy it, lawyers being pretty smart people.

The cut the long story short, I totally failed. 

My pals do not buy the 18+% Anchor protocol at all and every effort to explain how a central bank facility and the workings of the LUNA-UST pair was unable to convince them to accept that such an idea is feasible in any way. 

At that time I dismissed their concerns because I thought perhaps I was not convincing enough. After all I got a shit B grade for International Moots. It's not easy to get lawyers to buy into anything, and all of them rely on their salaries as their primary source of income.

The rest is history as my classmate's skepticism was proven right.

My damages were slight, so far I have lost about $16k. If I had conducted more classes on crypto, my Anchor holdings would have been higher and I would have lost more. It was sheer luck that my entry into crypto was less than 1% of my net worth at the moment Terra collapsed. Right now, the biggest source of damage is the effort I put into my course slides which need to be retooled away from the Terra blockchain which means a third of my material needs to be rewritten from scratch.

I just want to say something about Ponzi schemes as a skeptic, and a trainer who did lose money just in one :

So long as women continue to choose men based on his ability to obtain economic resources, guys will always look for the next best way to make money, juts to impress hot women. If you can find some purportedly riskless approach to make 20%, even folks who are aware and document the risks like me will put at least a token position to experience the thrill of winning, if only for a short while. Genting is a company that exists solely to provide this kind of entertainment. 

Prior to Anchor, I've been burnt by shipping trusts and Eagle Hospitality trust, in all these moments, I knew that something was wrong but I like the double-digit yields. I think the solution was never to avoid such schemes which are too good to be true, but to do position sizing so that a loss will not hurt you this much. 

So would I play 0.1% into Do Kwon's next project? I definitely would!

Anyway, I always believed that in great moments of chaos, anything can be a ladder.

At the moment, everyone is pounding on LUNA investors with "I told you so" kind of articles. I thought maybe I do a final "Hail Mary" manoeuvre on the Terra blockchain and mess with critics before it collapses for good.

So when the Terra blockchain was shutdown, FTX was the only exchange that was allowing trades on LUNA. 

I gathered all the referral coins I earned from my students from different platforms. ( I will not even touch my dividends for this Hail Mary attack)

About $150 USD worth, pumped it into FTX and bought for myself 5.45M of LUNA!

My entry price was around 0.000027+. One day earlier, I lost $2,000 buying LUNA at $1. I figure that the infrastructure and engineering talents in the Terra ecosystem cannot be worth so little so the least I can do is to donate to this engineering marvel.

So just like that, I ended my LUNAtic adventures a LUNA multi-millionaire.  

I am now an MLRT! 

Now anything can happen. 

At the moment, I have almost earned x8-10 of my investments, but to recoup my crypto losses it needs to go up another 10 times. 

I probably will not move this asset until it is large enough to offset my home mortgage so paper gains will just give me more bragging rights.

I'm going on a trip, this blog will be back next Friday !

 

A LUNAtic is born !

 

Yesterday morning, the other Dr Wealth Crypto trainer messaged me on FB and told me of the depegging event for UST. I checked Yahoo Finance, and yes indeed, the worst has come to pass in the Cryptocurrency landscape. 

One of the most viral stablecoins UST has lost it's peg to the USD !

This depegging of UST from one USD is possibly the biggest event in crypto as it proves that algorithmic stablecoins are not exactly stable over the long term. I assessed the damage to my holdings. I lost about $5k from the entire depegging process in my $30k cryptocurrency account. It's a drop in the ocean because I was only ready to hit 1% of my assets in Crypto by the end of the year, so I have little skin in the game as of now.  While most of these losses are in UST Anchor protocol, it was my liquidity pools which took most of the damage. 

But there are reasons to celebrate:

• A 30% drop in stablecoin value is no big deal compared to what tech investors are experiencing as of late, as a product of Singapore's education system, I know it's not important how well you fare, but also how badly others do.  No point in choosing to be a millionaire surrounded by billionaires.
• Amazingly, collateral-backed stablecoins like USDT and USDC remained stable these few days, so at least the strategy of diversifying across stablecoins worked to mitigate losses for my students. I even expect some students to miss out on Anchor protocol because setup is so complicated.  
• The third reason is LUNA :

When I backtested LUNA, I did not like what I saw because it was highly volatile, so formally, I don't teach my students to buy LUNA. Even if they do, it will be part of a bespoke index I build using software tools involving the largest non-stable coins. None of the software tools would have supported a buy since my first course was run in April. 

But, at the back of my head, I witnessed LUNA turn pals into multimillionaires because they got in at the right time. LUNAtics are the Insane Clown Posse of the crypto world, the crazies who follow Immortan Joe in Mad Max. Not everyone likes them in the crypto world because they can be quite religious when it comes to investing. 

LUNA is now trading below $15 when it was close to $100 weeks ago, so this morning, I took the plunge to become a LUNAtic myself! Of course I did not hold the LUNA as LUNA per se, I invested it into a bLUNA-LUNA pool for 80+% a year and a even put in spare change for a LUNA-UST pool for 1,060% p.a.

Want to go retard, go full retard all the way!

I bought about $1,000 worth of LUNA. If LUNA drops further to $5, I will buy $5,000 more. Of course, I will only buy LUNA with my dividend payouts from my REITs, and I will not sacrifice earned blood money on this. My trainer revenues will only be put in a diversified stablecoin portfolio.

At the end of the day, the entire algorithmic-based stablecoin regime may end in a few days time. Maybe after this, no one will back an ecosystem like Terra anymore, but there is also a reason to believe that even a salted fish can resurrect itself. I have no idea how the UST peg will restore itself, or whether LUNA will even climb back to $20. 

If it happens, it happens, and I will possibly make a decent amount out of this.

My crypto course will conduct a preview tonight. I hope to have a fun discussion about my latest moves on UST and LUNA. 

Follow this link: 

https://us02web.zoom.us/webinar/register/8016517228733/WN_OJTraGTlSNuFBgVLTXwreA

 

 

  

 

On Benz Hui, greater intelligence, and small intelligence.

 

Most folks in my generation grew up watching HK drama, so many Singaporeans are familiar with Benz Hui who is an accomplished HK actor who has settle down permanently in Singapore. Of late, Benz Hui has said some candid things about Singaporeans which I think deserve a good solid rebuttal. 

That being said, I'm a fan of this great guy, and I think we should be grateful that Benz feels comfortable criticizing us - if anything it means that he has found a new home. 

One of the things I was grateful for growing up was my exposure to HK D&D players which shaped the way I play RPGs today. HK players took me under their wing and presented a new play of playing Dungeons and Dragons. The style was pure mayhem, and channel HK comics like Dragon Tiger Gate rather than Western fantasy canon. 

Singaporeans were stickler for rules, so our gameplay was not inspiring. My paladin would just attack with his Holy Avenger round after round, not really inspiring.  My HK gamer senpais told me never to question what the rules allowed me to do, but to find actions that the rules never explicitly said no to. 

The result was hilarious. 

In one game, a cleric was told that to create an artifact he needed to place on an alter a vessel that can contain his deity's power. He declared that there was no better vessel than himself and turned himself into a living cleric-artifact. The DM allowed this to go on for the lolz. The cleric was able to develop artifact powers after the ritual. He infused his left had with the Heal spell and his right hand with the Harm spell and became almost invincible in combat.

My HK mentors also taught me a bit about life which I internalized to this very day. One lesson when I was in JC  was  to stop daydreaming and never waste time queuing for fast food, if a queue shortens, I should be ready switch queues. I extended it to includes tasks like preparing change before it was my turn to order.

But eventually, we all have to grow up as adults. I have to complete JC, get into the Army and eventually study for my degree. 

In that process, I stopped looking up to the HK mentors I had.

For one thing, D&D as a game improved it's writing and the rules became a lot clearer and the chaos mayhem style of HK players lost its favor. Instead, a close reading of the rules that allowed different rulesets to synergize with each other made our characters more powerful. Reading became more competitive and intense and you can be rewarded by a strong fundamental grounding of the ruleset.

In real life, HK gamers lost their cushy operator roles to IT engineers from India and had to return to HK. Their careers never recovered and some refused to meet my pals when they visited. I know that even those days, their chaotic attitudes to life also prevented them from making investments and I suspect may struggle financially to survive today.

In the grander scheme of things, how can a bunch of stoners Singaporeans, derogatively called "Po Zhai" and "Mm Seng Muk", become an economic powerhouse that can even eat the lunch of possibly the finest entrepreneurs and businessmen of the world ?

Hong Kongers focused on small intelligence, tiny improvements that are wise for that context, just for that moment. The dumber Singaporeans were more obedient and malleable, but we focused on greater intelligence, employing mental models to understand rent-seeking, investing and developing skills in artificial intelligence and blockchain programming. We were slow because we were united and saw multiple steps ahead. 

Plugging the trust ABSD loophole is a deliberate move NOT to become Hong Kong.

I doubt my HK mentors will like me a lot today as I pull rental payments out of thin air, engage in liquidity mining, juggle my three degrees, and only leave for work only when I feel like it. Few of my friends who knew me as a joker and a troll would like my current setup. 

It's not too different from Benz Hui. His best anecdote is that HK doctors fear Singaporean patients because we challenge their decisions all the time and we're too smart for our own good. 

For one thing, Singaporeans doctors are quite used to this. For another, there is actually an economic idea called adverse selection that explains why it's perfectly rational for Singaporeans to be that way.

At the end of the day, doctors may have some kind of oath, but they are also in the business of selling medication. As it turns out, doctors know a lot more about medication than their patients, so an information asymmetry arises. Maybe the doctor is selling a drug that is high margin or an operation was suggested to earn more profits. To understand whether a cheaper alternative exists, it makes sense to study every alternative and challenge the decision of medical practitioner. Bridge the information gap. 

Even our common law supports the idea that doctors should render advice like provide alternatives to each treatment ( Montgomery test ) - we're actually helping our doctors too!  

Even if we do give doctors a break, I strongly urge readers to spend time studying the products sold by insurance agents. If a commissioned salesman makes an aggressive recommendation, you will definitely profit by seeking alternatives. 

Finally, I don't think Singaporeans will stop studying and questioning just because Benz Hui says so, if anything, his grandchildren will be Singaporeans and will as kiasu and kiasi as we are. Similarly Singaporean D&D players will not go back to an older edition of a the game to play something that results in pure chaos like improv theatre.

 

That being said, we should open our doors wider for HKers to come down to teach us a bit about the small intelligence of starting businesses, developing grit and self-sufficiency, it will compliment our existing strengths very well.  

Test trip to JB !

 

It's been two years since I travelled, so after the long public holiday, my brother in law drove me and my mum into JB to settle some banking matters which have been stuck for close to 30 months. We've collected rent for over two years and because of the old bank setup, the money was stuck for a long time and we had to endure the currency depreciation of the ringgit over the past 2 years. 

I just want to highlight some points of my trip so that readers can avoid the mistakes I experience today.  A lot of unpleasantness when resuming travel can be avoided if you read my blog.

a) PR's need to update re-entry permit.

Because I am not a PR and deal with matters for my mum online, I misunderstood how re-entry permits worked, I thought it's something that is based on dates and it just needs to be renewed. Today we had issues with ICA because while we have a recent re-entry permit, but it was keyed to the older passport and I did not transfer it to the new passport. ICA was very patient with us and let us through but I have to resolve that issue online after I came back. 

If you do not valid re-entry permit as a PR, the electronic gateways will not admit you and my mum was ping ponged a couple of times in Singapore customs, so please respect and follow the rules. Best thing is every time you renew your passport, just update the re-entry permit.

b) Touch and Go card.

Our troubles did not end there. Having a Touch and GO card is vital to get into Malaysia but we did not have a card with credits. We got stuck after our passport was cleared in Malaysia customs. Lucky, my plucky BIL managed to seek help from a customs officer and we were able to clear customs, but if you don't rely some some persuasion, I really would not know what would have happened to us.

This is, apparently, a major issue for drivers. 

Of course, my troubles did not end there.

c) Breakfast was good.

The only good thing that happened today was Storia Cafe, their mee siam and Otak is out of this world. Go google for details before your next trip. The boss has a reputation for being a damn nice guy and he rounded down the bill. In the end, I paid $3 SGD per head for a full breakfast !

I'm grateful to my BIL who researched that place thoroughly and it was his first meal there too.

d) ATM card fails after long absence

So all I wanted to do was some banking. We could not withdraw money because the ATM card expired and undoing it would mean an hour of wait. There are two manual forms to fill but lucky the staff we had was super steady. Bank was obviously understaffed even though they should expect hordes of Singaporeans to come down to make withdrawals. 

One poor Singaporean uncle I met actually could only complete his work on his second visit. It was just a long line of sad looking Singaporeans at the bank today because they can't withdraw their cash.

e) Bank probably cut into a new database, so may not have your records.

Oh it did not end there. My mum has been banking with the same branch for 30 over years and they claimed not to have my mother's PR status, so we had to fill more forms to update the database.

f) Strange questions asked during TT of cash to Singapore. 

The thing about TT to Singapore is that AML measures need to be taken, but this was not the first time we did this. We had our Singapore bank books, but staff wanted to confirm whether the joint account can be acted upon independently and this confused my mum and I could not recall what the right answer should be. I had to be there to answer some questions for the paperwork to clear.

For noob, make sure you copy down the SWIFT codes for the local bank and account number manually before you go and bring an account statement or bank book with you. I panicked because I had no data plan in Malaysia and had to use Wifi until I realized my mum had the Singapore bank book along. 

Naturally we did the paperwork successfully but it will take a few days to figure out whether we succeeded. 

I think there are probably a lot of savvier guys who can think of better ways to go about doing what I did. I'm largely constrained by the systems setup by my parents 3 decades ago and most of the paperwork is not under my name. This is not sustainable, so starting tomorrow, I will be actively trying to decouple my mum's current bank from our family's financial operations and building a better one that works online.  

Overall, the trip was worth it because it solved a lot of ongoing issues with family finances. Otherwise, it was really sad to see the devastation of City Square, MPH Bookstore is gone but fortunately, I got some really good Malaysian finance books in Popular bookstore. 

It's one thing to feel powerful because your dollar is worth more than three of your neighbors currency, but if there are only a few shops to buy stuff from, what is the point ?

City Square will probably heal in six months. I will take few more surgical trips to Malaysia on weekdays to visit other areas like Midvalley Southkey, but I think a bus trip to KL is in order.

Being aware of the latest FA tricks of the trade.

 

Ever since I completed my last batch of students, I've been trying to expand my social circle through outings meeting with collaborators and students so that I can remain updated with whatever young folks do. Along the way, I've picked up new tricks that FAs are pulling to get more sales prospects so that can warn folks what these latest techniques are :

a) Selling insurance by matching folks in dating apps

So one trick in the book is to get into a dating app like Tinder, or Coffee Meets Bagels and choose to date any guy with the aim to sell insurance and financial products to them. This is actually quite frustrating for single guys who struggle to get a date and who may be anticipating the outing for a while, only to be sold ILPs in that meetup.

I think these apps actively discourage such behaviour from FAs but I'm also seeing a variant strategy where the date proceeds as per normal the first time around but selling only starts on the second date. Maybe this way, it's not a violation of the T&Cs of the dating apps because the second outing is arranged through a different medium.

The only way to prevent this from happening is to really have a clear idea of your self-worth. If you are a 5 and some girl who is an 8 or 9 accepts your date, maybe you want to find out what industry they are in before you get too excited.

( Not pertinent to this discussion is that I heard that there are a bunch of muscular guys selling gym memberships on dating apps, so women are not spared. )

b) Holding a second part-time job as a sneaky disguise to pounce on leads

It gets worse. I learnt from a student that more sophisticated techniques exist, and FAs are popping up in places you'd least expect. 

I heard that a FA actually picked up some Sommelier certificate and actually found part-time work in some wine place that organises singles events. She will ask single men out to sell them insurance. 

This is a very high-level play because the last thing you'd expect is someone with a formal job is actually an FA as well. 

When executed well, I can't think of any defence to prevent the date from becoming a waste of time. 

Fortunately, I've only seen single men fall prey to this, but if FAs can take on any part-time role, any business meeting can be weaponised for sales. I can imagine an influencer wanting to collaborate with me on a video may try to sell me stuff in that meeting - but I will ensure their reputation will not survive if they waste my time this way.

c) Hiding in "finance mastermind" groups. 

This comes from my personal experience.

A couple of ERM students and a collaborator of mine are mutual friends and we arranged to meet each other last night at Keong Saik Road. When we are arranging for the meetup, a student asked me whether I can allow an FA to show up. I was puzzled how the meeting details got leaked, apparently, my students tried to organise the meetup in a telegram group that focuses on finance discussions. It's a small group but has at least two FAs.

Once this FA heard about this, he tried to shift the meeting venue to his office!

When I heard about this incident, I got so mad, I said I would not show up if the FA comes. I can take a drug addict, a pimp, or someone that's been to jail, but no way I will allow a commissioned FA to gatecrash a drinking session with my ERM students.

It's not to protect me and my friends, it's to protect the FA! 

I explained that I probably would not be able to remain civil and I will openly rub the fact that I am a multimillionaire without ever accepting financial advice from an FA. I will brag about my cheap SAF Group insurance. I will make him question his very own existence in this universe.

I know that in the age of Telegram and Whatsapp, it's very common for folks to build discussion groups. I'm in several myself, but I also am aware that salespeople tend to hijack the discussion for their own purposes. One group I am in has real estate agents and every day it's just airy-fairy talk about condominium launches.

Sometimes I blame Napolean Hill for coming up with the idea of a mastermind group. Set a standard for your friends, if they see you as a source of revenue, you may wish to think twice before committing time and effort to a network. 

 

 

Back to the Grind

 

As I've spent the last weekend busy running my course, I spent the first few days of this week recuperating. I don't know why it's been such a tiring weekend. This week has been spent trying to get as many social engagements I can because I'm still stuck in Singapore running course previews so I can't take a trip to JB. I'm highly likely to go in by bus in May, but I intend to go when few are attempting the trip. 

I'm still dead tired but I started updating my Cryptocurrency notes this morning. I think things have changed so much I am overhauling 20% of my material :

a) Crypto.com now accepts FAST transfers from local banks, rendering my notes on a centralized exchange obsolete. Significant portions of material became optional overnight, but this should make it easier for older investors to get started in crypto. 

b) I'm now more open-minded about liquidity mining and think 1% allocation is ok, so I need to ramp up my notes in this area. Mouth watering yields over 100% is possible but so is losing your pants.

c) I suspect one of my students installed a hacked Terra Station wallet and it siphoned off his funds. The amount is small but I have to incorporate some troubleshooting notes. How do we the software we are installing is the right one? If we cannot answer these questions definitively, investing crypto will continue to be a bad idea. 

I'm slowly beginning to realize that my course material is several magnitudes more dynamic than my notes on traditional dividends investing so creating an online webinar may not be feasible and I need to continue to run my classes live and adjust the fees accordingly. 

As a business, we have go with our gut feel and learn new stuff along the way. I think there is blue ocean for trainers who can combine traditional and crypto investing in a coherent way that respects the fundamentals of finance. 

How to really get there is the problem.

 

Letter to Batch 25 of the Early Retirement Masterclass

Dear Students of Batch 25,

It’s been a great honour and privilege to conduct a 5-Day Early Retirement Workshop for you.

The current economic situation is a precarious balance between the optimism of recovery from the Omicron strain. I expect the following week to be bullish for Singapore markets as we move from DORSCON Orange to DORSCON Yellow. This will be primarily for REIT counters related to office and retail spaces.

However, there are dark clouds on the horizon. 

America is looking at PE ratios above 35 and an inverted yield curve. Interest rates are expected to rise and while this will benefit local banks, it would be detrimental to growth sectors like Tech. We are also in the middle of a conflict in Eastern Europe, and any form of escalation will not bode well for our investment portfolios. As China grapples with COVID-19 without an mRNA vaccine to call their own, we cannot rule out a technical recession in Singapore as China stubbornly adheres to the zero COVID policy. However, I would like to think that, if this happens, this should be a bargain-hunting opportunity.

Nevertheless, Batch 25 has taken a slightly higher risk in-stock selections, likely directed by the factor models we’ve built. We’ve accepted 15 counters and rejected 8 of them with a strong bias towards higher dividend yields, and the final portfolio is projected to yield 6.2%, which is not too bad for the current climate.  

I’m cautiously optimistic about the performance of this batch of students as we’re coming in at a point when the equity risk premium of the Singapore stock market has been rising for three consecutive courses I have run, but no investment strategy is fool-proof. I wish that students can take the lesson to heart that a 2-standard deviation drop from the mean can still mean a hefty 15-20% capital loss.

Lastly, I hope that Batch 25 will participate actively in the FB group. Sometime in Q2 2022, we should be meeting up for an online community webinar. At the time of writing, I have yet to determine the subject matter of this discussion, so suggestions are welcome.

Hope to see you then!

Christopher Ng Wai Chung