Friday, November 25, 2016

Financial Bloggers meet-up with SGX.

On Wednesday evening, financial bloggers were invited to meet up with SGX over and informal dinner session. This event was coordinated by Timothy Ho of Dollars and Sense, so I am grateful to him for giving me the opportunity to meet up with SGX.

As this is an informal session, I was speaking to the SGX representative as to what she intends to achieve with this session and came away with the impression that they really just want to get to know financial bloggers better and have no desire to really find out where we stand on key issues.

I thought, perhaps collectively, it would be beneficial for SGX to know the following things about us :

a) Financial bloggers are diverse and seldom have achieve consensus on many key issues.

I thought the most important view is that we seldom agree, but we get along really well with each other in spite of that.

Investment Moats have views on which dramatically differ from mine when it comes to transferring CPF-OS to CPF-SA. I think what's more important is to figure out why we have a different points of view and let the public be the judge of that. At the expert level, personal finance is highly contextual and a financial plan is generally bespoke and tailor made for the individual.

I expect a lot of healthy disagreement with my friends in the future.

b) Financial bloggers are often wrong individually, but collectively we can be really smart.

The mark of a great investor to me is how great his investment mistakes are. I scoff at some folks I meet in law school who make bold claims that they would not rookie investment mistakes. A real investor will punch himself quite hard and turn his mistakes into war stories to be shared with others. I certainly still make rookie mistakes.

Individually we can be quite stupid with our investments, but collectively I think we are smarter than any individual CFA-endowed hedge fund managers. Opposing views are shared and the better argument can often win the day.

And I do happily change my mind if some blogger writes a convincing counter argument to my investment idea. The trick is to read as far as possible the volume of articles we product everyday to get an idea of what we are thinking about as a collective hive-mind.

c) Financial bloggers have the ability to say that the Emperor is not wearing any clothes

As more of us gain financial independence, we will become bolder. And,  If I ever get a practicing certificate, I will start helping my bloggers stay out of trouble from lawsuits, that's something I want to do as they made me so much money in the past.

We've always been very candid with the insurance industry, clashing with them with ideas like "Buy term and invest the rest", pointing out the folly of buying Integrated Health Shields and warning buyers away from picking up ILPs.

Over time, this boldness will find itself in our ability to point out the faults in a particular investment without fear or favour. Fund managers and journalists face a lot of career risk when they say negative things about an investment product.  We do face much lower risks when we write our articles.

d) We have no idea on how to help with poor trading volumes.

Unfortunately, due to my exam preparations, I did not think too deeply as to how we can carry this relationship further beyond dinner. But I doubt anyone of us can help SGX with their big elephant in the room which is their problem of low volumes in the stock-market.

To a great extent, financial bloggers love dividends investing is one of the  major reasons why volume was so low in the first place. When I showed my dad how to just invest passively and collect rent every three months with his portfolio, he just stopped listening to his broker and trades no more than 2-3 times every month.

In the dinner session, I have tried to propose that the government increase the amount of leeway some of us can use our CPF to invest in the markets, or loosen up with policing the markets but that is not ultimately within SGX's control.

Readers are encouraged to share their views on how to improve trade volumes in SGX here. I will find a way to consolidate it and share it with SGX.

Looking towards the future, my personal wish is that some of us get to be invited to sessions such as those sessions which discuss dual classed shares, we might be able to contribute positively to the discussion.

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