Tuesday, April 28, 2015

A Modern Interpretation of "The Best is Yet To Be"

I am sorry if I'm a little bit late to the game as the fracas on ACS donations took place while I was preparing for my exams.

But first, a little background on myself.

I got fairly average grades for my PSLE but a 255 t-score could have landed me in most schools of my choice along Bukit Timah road so like most kids grew up in upper-middle class landed estates, I had a choice of getting into ACS.

And ACS was a natural choice. I was virtually monolingual, grew up with Ang Moh and Peranakan pals who studied in International schools, and I was a geek who's sole religion involved worshipping Cthulhu, Demogorgon and Asmodeus from my Dungeons and Dragons game manuals.

But two things led me to choose Swiss Cottage, a poorer but humbler school next door, instead.

The first was the ACS donation drive, which I really didn't want to be part of. The second were the church sessions, which was against my religion of Dungeons and Dragons. Between Gary Gygax and Jesus, I can only profess to one faith.

But as I got older, I began to regret some choices I made when I was 13 ( And unlike Gen-Y kids,  we Gen-X kids did choose our schools and professions without consulting our parents ). After all, you only begin to appreciate the accumulated wealth and power of the ACS Alumni as a full working adult.

I do sometimes ask myself how rich and wealthy I would be if I chose the school next door.

In one alternative universe, choosing ACS would have given me different values on spending and consumerism. Depending on which clique I joined, I could have become a materialistic creature of conspicuous comsumption, this blog would have been about luxury watches like Vacheron or Patek Phillipe instead.

In another universe, I could have kept my frugal values and employed the alumni to get into the best jobs in banking and finance. This blog would have articles on my latest frugal purchase using the dividends derived from my dividends - a luxury yacht.

Unlike the Flash in the DC Universe, we cannot create Flash Point moments and ask ourselves how would things turn out if we made a different choice. But we can channel focus our minds to create new insights, like Batman.

My Eureka moment is this :

The founders of ACS are geniuses who are centuries ahead of their time !

"The Best is Yet To Be" encapsulates the wisdom from modern economic thinking which would not even have been contemplated 2 years ago.

It puts everything Singapore elite schools do in the modern context.

Now follow my logic :

a) Everyone who goes to a school like ACS is concerned about how to preserve wealth over the generations. No matter what you seem to do, wealth inevitably fades after 3 generations. This is a primary problem of nepotistic succession.

b) Enter  a school which has a policy of enforcing or at least applying a lot of peer pressure to make students seek donations. The rich families will just write a cheque so would be unfazed by the requirement. The poorer families will do exactly what I did - find a school of similar standards and go somewhere else. Every school is a good school. Some good schools do not ask for donations.

c) The school which enforces donations eventually concentrates the richest scions of the dynastic families which builds close collegiate ties with each other. Bonds are built over rugby games and swimming competitions.

d) Now enter modern economic theory.

e) Thomas Piketty hypothesizes that (r > g). Investment returns trump return on human capital over time. Wealth inequality can only increase over time if Piketty is right. So dynastic families already have accumulated wealth and will use it to gain access to the better schools.

f) ACS becomes unstoppable. Rich families stick to it's brand and alumni, inadvertedly concentrating investment wealth to generate more income inequality between the haves and the have nots.

g) Ministry of Education makes it worse. If every school is a good school, then only the alumni will make a difference and distinguish the good schools from bad.

<< Reality stops here. What follows is my prediction on what will happen next >>

h) Soon, the smartest kids who figured out what I did start enrolling into the schools with the richest Alumni. The advantages of a wealthy alumni outweighs the hassle of donations.

i) Which is exactly what the dynastic families want. Superior intelligence in their descendants to perpetuate their wealth further.

j) Assortative mating will start to take place which has already widened the income gap further in countries like the US and the UK. ACS marries MGS. RI marries RGS.

k) Everything comes full circle. Unification of mind and wealth. Wealth can perpetuate for generations if it is powered by intelligence and conscientiousness. And the most intelligent and conscientious will be smart to enroll in a school with the richest alumni.

This is why "The Best is Yet to Be", the founders foresaw the events which would happen up till today and built a capitalistic superpower on this small island.

And the signs are already there...

Economic indicators with Singapore's wealth gap support this idea of mine.

In other parts of the Internet, some female bloggers would only date ACS boys.

I don't think I lost the game of life because I did not choose ACS. I do have great friends amongst them who are noble, generous and would never support widening income inequality.

But this is a valid concern about future generations of Singaporeans.

I hope my daughter will not be too late for the game. I can't choose my daughter but I can certainly choose my son-in-law.

No prizes for guessing which school gets first choice.

Sunday, April 26, 2015

What can we learn from Albert, Bernard and Cheryl ?

By now, most readers would have heard of the maths problem which went viral two weeks ago.

You can access the information about the original problem here.

This blog article is not about the mathematics behind the problem but about the behaviours of the folks who attempted to tackle the problem on social media which I think can teach us a thing or two about failure and living lives of mediocrity.

I'd like to address two behaviours in this article :

a) The behaviour of blaming the folks who set the question.

The first behaviour is that some folks get bitter when they fail to get the correct answer to the problem. The question has been set by the folks who run the Math's Olympiad and its original purpose is to test the logic of a 16 year old competition participant. Although the question was designed with an answer in mind, some folks came up with a fairly credible second answer and then proceeded to start a campaign blaming the question setter for introducing ambiguities into the question.

b) The behaviour of rallying others to be indifferent to questions of logic as they have no significance in practical life. 

The other group of folks are those who needed to get into a discussion just to highlight how pointless the question is in daily life. This behaviour is baffling to me as it would be a lot more economical to simply ignore the entire discussion thread, but no, these crusaders of practical living are proud of their failure to provide the answer to the problem. They want more people to do the same because this question does not reflect the daily challenges of real living.

Both groups of people miss the point behind Mathematics.

I think the Spirit of Mathematics is about curiosity and the willingness to confront complicated problems. You might not get a problem right the first time round, but if you examine how answer is arrived at, you get access to a heuristic, a procedure for solving all similar problems. Knowing the heuristic allows you to crack the problem in seconds instead of hours. This heuristic can be then be applied to other problems you face at work or in your relationships.

Complex numbers which involves the mathematics of imaginary numbers is almost worthless when you study it at your 'A' levels. But in engineering school, it is used in the modelling of alternating currents which powers all our homes.

Regression mathematics does not amount to very much, until you realise that psychologists have found a strong correlation between conscientiousness, health and stable marriages so you might want to look out for a conscientious person to be your life partner.

And don't even get me started on retirement planning. Logic and mathematics is the first step to financial planning.

What do you need to cut out of your budget so that you can you can invest it in a portfolio which would maximise the probability of you becoming a millionaire before you reach your 40s ? These problems are way more complex than just finding out when Cheryl's birthday is.

I'm going to go out on a limb and present a hypothesis to the readers.

The folks who blame the question setters are the same kind of folks who cannot take ownership for their own problems. When they fail, a lot of folks are going to be blamed for their own personal disasters.

As for the 'practical' folks who think that the problem is irrelevant will fall prey easily to get rich quick schemes. Expect them to use a TA when positioning their portfolios.


Saturday, April 25, 2015

Survived another round of exams...

Yipppeeeee ! I just finished my last paper yesterday...

The sad thing is that my summer term starts next Monday so I have about 4 days to take it easy and then the intensive reading assignments start all over again. I have signed up for two summer terms, which mean about 9 hours of seminars for 8 consecutive weeks.

There is some perverse logic to spending as much time having active lessons every week during the holiday season. The most important reason is that I save more money when am actively engaged in school, I just have to pay for bus rides and eat at the cheap hipster cafe that gives SMU students a discount.  School then throws legal problems at me to solve which I thoroughly enjoy so I will not find have to pay for any other distraction to keep my mind occupied.

Anyway, I have many things to talk about over the next few days so here's a quick update.

a) Markets seem too good to be true.

I have no idea why the STI index has punched through the 3500 mark. There seems to be no resolution to the Russia-Ukraine war. There is a fair chance of a Greek default and China is facing slower growth. Even more illogical to me is that my REITs are doing well when supply is inching up for industrial properties. Maybe it's the low oil prices behind the optimism.

I have not been buying any more counters and have been carefully socking my dividends away to pay for my final instalment of my school fees, with some luck, I would be able to sock away all my planned 2015 expenses in a separate account before end-June. This means that I can start accumulating wealth again in September. I just hope that the market will not be above 3600 by then.

Finance-wise, so far so good, I'm still in a better financial position today than my last day of paid employment. This is my insurance against workplace agism when I finally graduate from SMU.

b) Not reading very much. Reading The Economist just takes up all my reading time. 

I finally took the plunge to take up a long-term subscription on the Economist and it is replacing the usual non-fiction readings I normally have for the holiday season.

The Economist is now a fairly credible source of ideas for me these days. My legal training now allows me to absorb the material with a new pair of cognitive lenses. My finance training has always made reading the Schumpeter and Free Exchange section with ease and my engineering background makes the Science sections a breeze to digest.

My readings have, thus,  slowed down dramatically.

I am only reading one book right now, The Rich by John Kampfner, a history book which documents how rich folks accumulate their wealth across the centuries. After this, I'm going to read The Grace of Kings by Ken Liu, kinda like a Game of Thrones in fantasy China.

c) Not gaming much either

Summer term is not a good time to game as my schedule is packed. Instead, I'm just taking it slow and indulging in a bit of nostalgia. I am slowly getting into vintage games and managed to get myself a copy of Up Front, an Avalon Hill wargame of squad level combat.

I also managed to order a battered copy of Squad Leader from the same company.

These games are not playable because you can easily write a piece of software incorporating game rules these days.

On the RPG I am getting pretty hyped up on the Fantasy AGE system by Green Ronin games. I am also fairly excited by the work to reinvent the Pathfinder RPG through the Pathfinder Unchained book. While I do not play these systems, they will influence I am doing to create some house rules for D&D5E campaigns.

d) My community service work

I have been working with my girls on their maths for close to two months. I think this deserves it's own blog article at a later time.

Anyway, this is what's been happening to me.

There'll be more articles over the weekend.