Relationships that drain your life

Most relationships are a waste of time. Some friends like to exaggerate, lie and show off. Others are negative and dull. These friends occupy your time and they affect your mental health.

Do not form relationships out of convenience. Do not fear rejecting friends or loved ones. Keep relationships light. Keep friends who share wisdom and can offer alternative views.

This does not mean you cannot be friendly and smile at co-workers. It just means being superficial and guarding your heart. Some older relationships are no longer useful. Let them go.

All relationships drain us. Cut off those who plays victim. They are a pain to be with. They keep us from feeling fulfilled. Keep sceptical people, they help to diversify your views.

You should simplify relationships at all costs and minimize burdensome relationships. Shallow relationships lasts longer because they are not draining.

Singapore Elections Experience

It all starts with filling in the nomination form correctly. You will need to find a commissioner of oaths and a couple of ascentors. Ascentors must live in the estate you are competing in.

Once the administrative matters are done, you should start campaigning. You will need to print your manifesto for the estate and voting cards that help nudge voters the right way. Be mindful that the messages must be written in 4 national languages. Tamil is really tough.

You will also need posters on wooden boards. You must be able to find volunteers to distribute the brochures and voting cards. Some volunteers should also help you put up the flags. Your election agent must make sure all these collateral are licensed and approved by the elections department.

You will also need help to put up at least 500 posters for one SMC or part of a GRC. Getting volunteers is a tough exercise because you may not be able to afford to pay them. As a candidate, you probably have used up most of your money on the deposit (more than 10k SGD) and on the collateral.

If you belong to a small party, your party may not be featured on the political broadcast. You will also have less opportunity to speak at rallies. You will also have to pay for the stage during your rally. The sound system will not come cheap too. Beyond payment, you will also have to find good and credible speakers to help you win votes.

Before the polling day, you will need to find dozen of polling agents who will station themselves at the polling centre. You will need to appoint an EA (this happens right at the start) to help brief them on relevant procedures. You will need some counting agents to help monitor the counting process. Both polling and counting agents need to be sworn in by a commissioner of oaths. This can cost up to $20 per person.

Things get messy on the polling day. You and your election agent should make sure your polling agents and counting agents have sufficient food. The polling hours can be very long.

No matter the outcome, you will need to speak to the media that day, to concede or to thank supporters for the victory.

Strategy: summary of Michael Porter’s work

Constant improvement is necessary but not sufficient. Best practices diffuses quickly. Competitors can quickly imitate management techniques, new technologies etc

Strategic position is not sustainable unless there are trade-offs with other positions. Trade-offs occur when activities are incompatible.

Positioning trade-offs are pervasive in competition and essential to strategy. They create the need for choice and purposefully limit what a company offers.

While operational effectiveness is about achieving excellence in individual activities, or functions, strategy is about combining activities.

Strategic fit among many activities is fundamental not only to competitive advantage but also to the sustainability of that advantage. It is harder for a rival to match an array of interlocked activities than it is merely to imitate a particular sales-force approach, match a process technology, or replicate a set of product features. Positions built on systems of activities are far more sustainable than those built on individual activities.

I prefer simplicity for my social media tools

Sometime ago, I left Facebook. My Facebook friends were posting rubbish and I was, unfortunately, addicted to consuming rubbish. I no longer saw the need to connect to acquaintances through Facebook.

I focused on Twitter and reduced my followers from more than 2000 to less than 100 active users. I also started posting my thoughts in a concise manner. Twitter forces everyone to produce short content. There are many users who simply tweet useless sentences, so I actively unfollow them. I see Twitter as a way to broadcast my thoughts. Sadly, it is true that content on Twitter is seldom curated and the number of users seem to be falling.

I also questioned the use of social media. Social media is like a weak network of relationships that is used for gossip and showing off. To catch up with my friends in real life, I go back to simple tools like sms and Whatsapp. I love Whatsapp for its simplicity. It does nothing except facilitate exchange of information. Where anonymity is important, I use Telegram because I can initiate secured conversation: messages are deleted automatically.

I also love to read the views of strangers. Medium serves as the perfect platform where writers take blogging more seriously compared to their counterparts on Tumblr and Blogger. Most blogs are rather inactive. Some still swear by Wordpress. But Wordpress is too complicated. Ownership of your own URL is no longer necessary. We live in a world of systems within systems. Rather than owning their URL, grow your presence in Medium.

The need for curated content

Everyday, we read content from social media platforms. The quality on social media content is low because there are no editors to check for the accuracy of the content and for the correctness of the language. This is akin to consuming junk food. Junk food keeps us happy and we get addicted to junk food.

It’s time to use your time wisely. Focus on highly rated essays on Medium as a start. Subscribe to a good news service provider like Financial Times or the Economist. You can be surer about the content and the information is more trustworthy. Enhance your productivity this way.

Your life, the Toyota Way

Minimalism is trending. But the concepts are embedded in the Toyota system.

First, avoid overproduction. Do not overwork. Do not do or speak more than necessary.

Second, do not accumulate waste at home. Throw what you don’t need away and clean up your workspace.

Third, do not procrastinate. Take rest as often as you need. Lie in bed, clear your mind or meditate as you wish. But do not procrastinate.

Fourth, place everything in the right order. If you need to exercise, place your treadmill in the most visible area.

Fifth, think before you move. Where would you like to go? What would you like to accomplish? Plan ahead.

Sixth, do everything perfect the first time. Rework is waste.

Seventh, meet standards. Meet requirements. If you need a 30sqm home, do not buy something larger. If your client requested for a 5 course meal, deliver the perfect 5 course meal.

We can also use the 3M model. Muri: avoid overburdening your machines, workers and yourself. Muda: reduce waste as we have explained above. Mura: prefer consistency to uneven operations.

If we apply these principles to our lives, we would have achieved minimalism.

7 simple rules to de-clutter your life

1.Avoid owning a car: Car ownership is expensive in cities. Think about the parking fees, cost of petrol and the interest on loan

2.Aggressively getting rid of things: You only use 20% of the things in your room in any one time. So it is important to get rid of them to free up distractions in your life.

3.Reduce the number of hobbies: Hobbies take up time and increase the likelihood of expenditure. Do a few things exceedingly well.

4.Read from curated news sources: Avoid using social media as news feeds. You might prefer insights from Financial Times or the Economist

5.Do one time at a time. No one can effectively multitask

6.Adopt a minimalist mentality at home and keep less furniture. Avoid distraction. Keep spaces clean and open so you get to focus quickly on important things

7.Have as few electronic devices as possible. These days, the process of updating and upkeeping devices can get complex

Singapore’s innovation policy

While I believe there are occasions justifying government’s role in innovation policy, Singapore government’s intervention is not always as successful as their counterparts in the United States.

The US government rewards those who deliver results. But Singapore funds those who generically address societal challenges and often, well packaged promises.

In Singapore’s case, if we still want to believe in the effectiveness of research agencies like A*Star, we need to find a group of civil servants who are able to take risk and to be accountable for results and to be technology experts. As I understand, most civil servants in charge of innovation policies are neither technology experts nor risk takers.

Perhaps it is time for an alternative innovation policy.

Investment wisdom

Costs are the best single predictor of the future performance of an investment. Keep costs lower — by tracking an index rather than investing in attempts to beat it — and for any given level of risk your returns should be a little higher.

Why investors need to know about indices.

Research by London’s Cass Business School shows that randomly chosen portfolios — that might as well have been picked by monkeys — are overwhelmingly likely to beat market-cap-weighted indices. But most monkeys failed to match equal-weighted indices, or indices based on most sophisticated measures to limit risk.

So the hierarchy is that simple equal weighting indices beat monkeys, who beat value-weighted indices like the S&P, which beats the average active manager (who nonetheless complains that the S&P benchmark is unfair).

Yet our money is still mostly run by active managers, while none that I am aware of is run by monkeys. For these reasons, and many more, we need to know more about indices.

Mr Markowitz’s comment on this: “One lesson from 2008 is that if it’s very complicated and you don’t understand it, maybe you shouldn’t buy it.”

Anyone with a simple rule that required them to keep 40 per cent in bonds and 60 per cent in stocks would have “rebalanced” — bought stocks — near the market’s nadir five years ago, he points out. 

Innovation from scientific research

Often, we see amazingly successful products emerging from research. The original research purpose can be entirely different from the eventual commercialized product. You would recall that Post-it notes emerged from a project to discover adhesive. Viagra emerged from heart disease research. Many claim that these innovation were random outcomes. This is an easy assumption because it does not require further discussion.

But we can breakdown the innovation path into two: Demand led or Supply led. We are familiar with demand led innovation because that is what marketers believe in. They think that it is always possible to discover what consumers value and create a product that meets that value. Yet, it is arguable that consumers may not be aware of their future demands. In many instances, disruptive technologies emerge from such supply led innovation.

We must allow scientists to follow their intuition in developing something that may not have clear commercial value. Because of their curiosity, they just might discover something that an entrepreneur can bring to the market years later. Scientific discovery is not always a straight path. In many cases, a seemingly useless discovery can spark off a bunch of ideas.

Existing demands can change. Consumers may decide to weigh product attributes differently over time. Firms have to make incremental changes to meet these incremental or changing demand. But meeting existing demand does not stimulate innovative activities. In an industry where every firm attempts to read demand more accurately, it leads to a commercial bloodbath and unsustainable operations.

Radical technologies create new markets. New markets are less defined but it gives a firm more parameters to grow

The case against large immigration flow

The economic effect of positive net immigration to Singapore is negative relative to older people working longer. When the population base remains stable and retirees extend working life, we have a higher GDP per capital.

If we continue to bring in more immigrations without an end, there will be more stresses on our infrastructure. Comparatively, except for healthcare infrastructure, old people demands lesser for road usage, transport services and natural resources.

Intuitively, it makes more sense to retrain our aged population and to encourage them to work longer than to expand our population without end. This is perhaps why Japan rather deal with an aging population than tolerant aggressive immigration.

(I understand the need for a critical mass of population. Perhaps 6.9m or 10m is the defined figure, but there must be an eventual limit to our planning parameters)

Want to invest in Commodities? — Must Read

Commodities usually involves high costs of storage and procurement. For this reason, investors have relied on futures or commodities firms to obtain commodities exposure. With the introduction of commodities ETF, there is renewed interests. ETFs provide cheap and transparent way to invest in commodities futures.

Factors affecting commodities comprise weather, geopolitical developments, supply constraints in physical production, unanticipated increases in demand as a result of prosperity in emerging markets, and incidents that create political or economic turmoil.

Recent crisis have shaken investor’s confidence in equities. This motivate investors to explore alternative investments in commodities. What are some ways an investor can invest in commodities?

Exchange Traded Funds provide the cheapest way to buy commodities exposure. These ETF track major commodities index
Exchange Traded Notes track non interest paying debt and the credit risks of commodities contracts. Payoff to the ETN depends on the counterparty risk of the futures issuer.

Unit trusts have higher fees than ETFs as they typically employ discretionary management methods to invest in commodities or companies in the businesses related to commodities.

An investor can also trade derivative contracts such as futures and swaps directly. The most direct way of investing in commodities is to buy the physical commodities incurring storage costs. One of the most indirect ways to gain exposure to commodities is to buy equities of related businesses.

Commodities have unique characteristics. Metals are seen as safe haven for investors and demand can be driven by the stability of the value of money. Soft commodities such as grain, crops and coffee generally react well to extraordinary detrimental events.

Agriculture sector is less dependent on economic conditions and more dependent on factors such as global weather. The low correlation (even lower than bonds) is an important tool for portfolio allocation. Commodity prices can also hedge inflation.

For long term investors, commodities will be a strategic allocation tool for the portfolio due to the low correlation with equities. For short term tactical allocations, commodities rise when inflationary pressures increase.

HDB is not your retirement plan

Depending on your HDB asset for long term retirement?

This is not an attack of the policy. I believe the HDB system of providing for housing is cool. But it is not a sufficient retirement asset provider. This article seeks to urge Singaporeans to prepare for adequately for their retirement.

Your HDB is a lease

When your house has a maximum lease of 99 years, you may be really just renting the space for 99 years. It is unlike the traditional freehold structure. In other words, the amount of money you are paying is considered advance rent. The financial implications are clear. The value of the lease decrease as your time runs out. A 40 year old HDB flat will be worth much lesser than a 99 year old HDB unit. This may not behave like a real asset.

You don’t sell, you just transfer your lease

When you decide to sell your HDB flat, you are actually transferring your lease to another family. HDB as your ultimate land lord needs to approve your unit’s assignment. If someone pays a premium to take over your unit, he believes that he is willing to pay a monthly rent more than you do. Perhaps this is due to the proximity to the MRT or a famous school.

Your CPF pays prepaid rental expense and it is not being invested!

Remember what you are using to pay for the HDB — CPF. Yes, in fact, you are using your retirement fund to pay for rent. How is this preparing for your future? If your HDB price does not increase or if you decide to live in the unit for 99 years, your unit will surely, without any possibility, be an asset. In fact, you are not well utilizing your CPF for investments and there is an opportunity cost.

What’s worst? You are prepaying 99 years of lease but you are borrowing to prepay the lease. HDB grants you a loan, makes interest off you and wants you to pay them the entire rent upfront. Do you ever want to pass your asset to the 2nd or 3rd generation? This is not possible in Singapore. Your lease ends in 99 years and the value of the house drops quickly after 50 years. Ask yourself, would you buy a flat with less than 50 years lease?

Simply put, you will still need to invest wisely. Do consider the lowest cost and broadest index funds!