Yes We Can

I will remember the day Barack Obama was elected POTUS. I was in Redwood City, California, at a restaurant, having dinner with my new colleagues at the last company in Sillicon Valley still hiring new employees. I saw his acceptance speech later that night at the bar of the hotel I was staying in.

He was magnificent.

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Many detractors of Obama had told me earlier this year that change, by itself, means nothing. Change can mean the dawn of a new golden age. Change can also be getting run down by a truck.

I now have an answer for them.

You are right. Change -is- a neutral concept, neither good nor bad. However, that is only half an answer. To answer the question this way ignores what has come before and what is going to happen ahead. It ignores the 8 years we have watched the worlds only superpower flush itself down a toilet.

Simply put, no one calls for change when things are going right.

So yes, change is neutral, but a call for change is always positive. It means the first step in solving a problem: it acknowledges that we have a problem in the first place. It is this way and ONLY this that we can grow.

This call has been answered at last.

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I originally went to America in search of a better life, to find a place that I could call my own. It was only when I returned that I realised I already had such a place - Singapore.

The lessons I learnt during my stay in America are, frankly, Hallmark Card moments. Love your parents. Value your friends. Do right by others. There's nothing profound about these lessons, except that I had to travel 8000 miles to learn them.

I was expecting to be choked up with seeing the part of America that I loved so much and missed so badly. Instead I felt...nothing. No tears, no change, no choking up. When I went back to my old stomping grounds, I actually felt a little disappointed. Was this what I worked so hard to return to?

That's when I realised that, over the last two years, I had outgrown California. That is and has always been a symbol of freedom, hope and love for me. Like all symbols, they were not valueable in and of itself, but for the messages they conveyed. Once you grok the message, well, there isn't that much left.

I didn't need California anymore. But I still appreciate it, like an old friend with whom you finally come to terms with, warts and all.

So here it is. My final lesson. Never lose hope. Money lost can be earnt back. Opportunities will come again. Failures will stop stinging. Love can be found again.

Take it from me. All that shit doesn't matter. I was penniless, jobless and torn up over all the opportunites I missed because I needed to nurse my emotional wounds. Today, I have a great job in a company I love. I have friends that I love, and family I learnt to see with new eyes.

Tomorrow they may all be gone, but it won't matter.

Only hope matters. Hope is what will keep you going, because nothing can keep you down forever, so long as you have hope. Hope makes the bad times liveable, and the good times magical. Hope is all. With hope we can do anything, live through anything, achieve anything.

Yes we can.

The Ten Commandments, Redux

This is seriously too funny not to share.

A bunch of Christians have gathered at the famous golden bull statue outside of the NYSE to pray for economic recovery. Except that I am pretty sure the Ten Commandments have something against this exact situation.

No, really. Golden. Bull. Praying. I'm expecting Charlton Heston to walk out of the NYSE Building any minute bearing clay tablets.

Here's the video.



(HT: Zach, who linked me to Wonkette.)

Zinger

"First, all the countries that got access to the Fed’s swap lines are US allies, and all except Singapore are democracies. Russia may be part of the G-8 but it is outside of this club."

- Brat Setser, "At this rate the world's economy will be remade before November 15th".

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The article is not about Singapore of course. I am amused, however, at how off-the-cuff the reference to Singapore not being a democracy is. There is also a remark that Singapore is considered a developing economy.

The article is pretty good though in highlighting that our traditional understanding of the global economy will shift fundamentally. The IMF has already moved in ways that are considered deeply non-traditional, economies like Singapore, Korea and Brazil are getting swaps at terms similar to G-10 countries, etc.

My 0.02 prediction will be that the focus of the world economy will eventually become more mulilateral, which is a good thing by my books. Perhaps it will finally drive home the fact that our global economy is truly global now.

The Minibonds Continued

I've been reading some comments on Tan Kin Lian's blog post, here and here.

Some of the points that I have raised in my post have been addressed by the various commentators on Tan Kin Lian's blog. To summarise, the points are:

1. That the Minibonds were marketed in a way that did not fully disclose their risks; and
2. That the differences in interest rates between fixed deposits and minibonds were so small that no sane person would have taken the risk of credit default just to get that extra returns if the risk had been properly disclosed.

I have two responses: hindsight bias, wilful ignorance and self-serving bias.

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Yes, I agree that there is some level of misselling involved in the Minibonds. However, I also think that there is some level of misselling involved in EVERY structured financial product out there. What makes the Minibonds so special?

I think that the differences in interest rates between fixed deposits and Minibonds is a fair argument, but one that is ultimately tainted by hindsight bias. Essentially, the argument is that investors who sought a safe investment invested in this product because they thought Minibonds were safe. And now that they are proven not to be safe, they want their money back.

The problem is, back in 2006 - 2007, Minibonds WERE thought to be safe. No one who bought the Minibonds back in 2006 - 2007 that Lehman Brothers would go under.

My question here is this: Did you really think that the increase in returns for the Minibonds as compared to the FD would come for free? If you didn't, then congrats, you made an error of judgment, and have no one to blame but yourself, but at least you have the moral courage to admit to yourself that you took increased risk for increased returns.

However, if you thought that you essentially got a free lunch, then it would probably be because you thought the credit event would never happen. Except it did. And you cannot possibily be in the wrong because, well, you're not.

Except that you are. Because what you are doing is looking at the investment with the benefit of hindsight, realizing that the investment were not as safe as YOU THOUGHT THEY WERE, and grasping for every bit of wrongdoing available to absolve you from responsibility of your bad decision.

THAT is why I don't think the Minibond investors should have any more compensation than any other sort of investor - because they made the same error of judgment that everyone else made in the market, but they are getting absolved from their responsibility without admitting any errors on their own part.

That makes me sick.

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The second issue here is why I draw a distinction between Uncles and Aunties asking for their money back and every other investor. Uncles and Aunties have no capability of finding out what their risk profile is, while the average investor (presumably fairly well-educated) does.

The question is not whether the investors know about their risk profile. The question is whether they have the means to find out.

In the former case, the Uncles and Aunties don't. They are fully reliant on the banking-sales-persons to tell them what exactly their investment entails. In this case, the misselling involved has an aggravated effect, and it would be just and fair to compensate these people.

In the latter case, what we have is wilful ignorance. They have the option of finding out more about their investment instead of listening to everything their salesman tells them. Had this been a sports car rather than a financial product I suspect that this would exactly have been the case. Except it wasn't.

The sole concession I will make is that prospectuses aren't the most legible of disclosure tools. Still, a basic principle applies - if you don't understand it, why did you invest in it? You wouldn't do that for a car, or a house or any other major purchase in your life.

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Given these two factors, I will bring on my third point - that it is entirely possible that your average investor believes himself to be an innocent victim, even though he is not.

The problem here is that it is very human to intepret an ambigious situation to your advantage. As argued before, the situation is VERY ambigious. The banks are at fault, the individual bankers are at fault, the institution is at fault, and the individual investor is also at fault.

I believe that is what is happening in this situation: everyone is pointing fingers at everyone else EXCEPT themselves, in hopes that in the confusion, someone will relieve them of the burden of their bad decision.

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I do not believe these to be theoratical factors by far - I've argued these points from a very human perspective. I think talking to individual investors for the Minibonds saga is a surefire way of losing objectivity in this exercise - everyone is a victim in their own mind.

IF you want to be objective about this whole exercise, ask the important question - why are Minibond investors getting compensated while the buyers of other structured financial crap is getting diddly squat?

The Minibonds Issue

Warning: This post will contain unkind language and unkind generalisations. I make these generalisations because they are, by-and-large, true. Please do not email me with stories about how Singaporeans / Bloggers / Government / Bankers aren't actually like that. I'm not fucking interested.

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I've been following Singapore Daily for coverage on the Minibonds issue. I'm annoyed as hell because the coverage is basically:

1. The Government must do something!
2. The Government sucks because they are following what everyone else did!
3. Tan Kin Lian rawks!

I have no issue with praise for Tan Kin Lian. He did a good deed in the middle of a crisis, and should be commended.

I have a huge issue with the rest because, as always, it's myopic at best, an outright shirking of responsibility at worst.

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Let me start with this basic principle.

The Government owes you nothing, because they weren't the ones stupid enough to buy the bonds, you were. This basic principle holds unless you can show wrongdoing, which I will get to in a minute. For summary, this is directed not at the Uncles and Aunties that lost their life savings because of mis-selling. I'm directing this to your average greedy, ignorant Singaporean that wants easy riches but doesn't want to do the work to earn it.

Face it: you got screwed over because you were greedy and ignorant. You, the moron who didn't do basic research, who got swayed by snazzy salesmanship and aggressive selling. This information was available on the internet 2 years ago. Caveat fucking emptor.

You're the one that's getting a free ride out of this. You're riding on the coattails on sympathy for Uncle and Auntie to get bailed out of a bad decision. You don't deserve spit, let alone sympathy.

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To the bankers who sold this pile of junk - grow a spine and some balls and face up to the fact that you've rogered the pooch. About the only thing I'm happy about here is that you're now past the lawyer as the most hated profession in the world.

Learn the phrase product-driven sales and what it means. That means answering my mother's question about what happens in a Credit Event. Don't slink away, say "I don't know" and never return my mother's call. It's your job to know. Do your job.

(Full Disclosure: My mother refused to buy minibonds because the banker couldn't answer her question.)

One more thing: Don't give me bullshit about your commissions, incentives and pay structure. I know that your job is essentially a sales job, and like all sales jobs, they are primarily commission based. I also know that whenever a commission in on the line, all bets are off, so chances are, I believe that you did missell to Uncles and Aunties, because your commission is on the line.

Don't give me bullshit about industry pressure. You can always find another one. The fact is, you're probably in this line because you thought it would make you the most money. The fact that the banking sales culture is fucked up doesn't mean you have to be. That argument didn't work too well for the Nazi's either. (And a massive HT to Godwin's Law!)

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To the employers of these bankers, guess what? You screwed up too!

Look at that incentive structure of yours. Go on, take a good hard look at it and tell me you didn't design it to maximise sales while paying lip service to whatever corporate governance structure your lawyers / accountants / consultants slapped together to make the absolute minimum requirements required by law and commerce. I dare you.

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Government, you're not off the hook either.

You failed too. You failed in the basic fundamental principle of government, and you failed it because you've lost credibility.

You see, when you decided to unliaterally impose your massive pay raises, you were basically setting yourself up for failure. You can't live up to those expectations you've set for us in justifying those pay packages. No one can. Don't even bother trying because you will fail and look stupid for it.

The fact is, everything that has happened since then, from electricity hikes to Mas Selamat to Melamine is being blamed on you because you have set yourselves up as infallible leaders. It doesn't matter if you can't control these events. The fact is, Singaporeans will take every opportunity to strike out at you because you've set yourself up to be struck at. That is why Singaporeans will never be satisfied with what you do, because you've set yourself up so high that even you can't live up to those expectations.

I understand the fact that these pay packages are more to encourage the next generation of leaders to rise up rather than to benefit yourselves. Just because I understand it tournament theory doesn't mean everyone does.

How does it relate to this situation? Doing nothing and studying the situation may have been the best option, but you don't have that option because you've lost credibility. You've lost the faith of the people that you will do what is in their best interests. EVERYTHING you do now will be interpreted as a callous action designed to take money from their pockets and put it into yours. You have no buffer of good faith left, no emotional bank account to draw on.

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Now that I have ranted enough, I will give you my take on this situation.

On a practical level, Tan Kin Lian is right. The reason why the government will be drawn into any large scale issue like this is because, quite frankly, our access to the justice system sucks. There's no class-action mechanism, nor is there a contingency fee arrangement of any sort. Say what you want, but a combination of these two -is- necessary for large scale dispute resolution of this sort.

On this basis, what I suggest would be the best action for the government to do would be to set up some kind of expedited, collective arbitration process for this. Appoint a couple of independent arbitrators, a couple of counsel on either side, and let this thing play out.

The reason I'm suggesting this is because I don't want to see free-riders in the equation. I'm happy to restore Uncle and Auntie's money IF the sales tactics used on them were reprehensible (and I'm almost sure that at least some of them were). I'm not happy to see a greedy, ignorant Singaporean being relieved of the consequences of his decision.

This also has the added advantage of a possible scouting ground for future leaders. This sort of thing isn't easy to organise. It requires some level of community grassroots experience, or financial know-how, or legal know-how, plus a healthy level of community spirit (or sheer ego) all of which are shoe-ins for future leaders of Singapore.

My 0.02, as usual.

Diversification, Costs and Dollar-Cost Averaging

This is the last instalment of my finance series.

So you want to invest in the stock market. The question is, what sort of stocks should you invest in? I've alluded to the issue of having to keep your investments locked for a fairly long period of time if you want to minimise the volatility of your investments. Unfortunately, companies come and companies go. Who even remembers Broderbund, or American Locomotive, or TSR, just to name a few? At times, even entire industries become defunct. Locomotives, steamships, ice-trawlers, all of these technologies have been surpassed by newer, better inventions. Yet, there was a time where these were considered safe investments.

So how do you know if a company is a good investment for the next couple of decades? You don't. You just need to diversify.

To use a simplistic example, when the price of oil goes up, oil companies do well, transport companies do badly. The reverse is true. Obviously, the solution is not to time your investments according to the price of oil (which is speculation and speculation is bad). The solution would be to invest in both, so that your investment becomes effectively immune to the volatile prices of oil.

Taken to the logical extreme, you would need to invest in a company of every type there is in the world in order to get true diversity. Is that even possible? Fortunately, there are shortcuts around this, and this is where I bring in index-investing and my rant a month ago.

An index is essentially a composite of the biggest movers and shakers in a certain stock market. The much-cited but often-misunderstood S&P 500 is an example. The short version - the S&P 500 is a composite of the stock prices of the 500 biggest companies in the United States, accounting for 80% of all the money that is raised through the NYSE and NASDAQ. It is safe to say that whatever happens to the S&P 500 index is indicative of the entire NYSE and NASDAQ, which is why it is usually cited as an quickie way of indicating a certain country's stock market performance. Other indices include the Nikkei (for Japan), the Hang Seng (for Hong Kong) and the STI (for Singapore). There exist funds out there that allow you to invest in these indices as a whole. The Vanguard S&P 500 is considered the god-king of all index funds, and if you have the means and ability to invest in this, this is definitely an option.

As you can see, index investing allows you to diversify quite simply. It does not offer true diversification, because each index usually covers only one country and certain factors can affect entire countries while leaving others intact, but it does make your job a lot simplier. My personal opinion is that economies are now so inter-connected that if you invest in a developed index, the general movements will be about the same. This graph tracking the S&P 500 and the STI sort of makes my point, though I note that the tracking is most true after 1996.

I've alluded to another investment vehicle in my earlier post - the iShares S&P 500 which is pretty much the same thing, though brokerage commissions makes this cost prohibitive for any single investment below 10k.

Which brings me to my next point of investing - cost.

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Every "movement" in your investment incurs cost. Buying and selling shares involve brokerage commissions of 0.28% for discount brokerages in Singapore, or $25, whichever is less. Clearly, then, the cost of investment is prohibitive unless you can accumulate $10k to invest at a time.

Your other options are funds. Funds have their own problems. Usually, funds in Singapore allow you to put in small sums in every month, BUT, they charge you much larger ratios for this privelege. We're talking anywhere from 2 - 5 % upfront, and anywhere from 1 - 1.75% every year you keep the money in the fund. So yes, this is not an optimal solution either.

The cost of investment in Singapore is one of the reasons I wrote about my frustration over investing in Singapore all those months back. Your options are basically (i) invest in a fund, get ripped off (ii) invest in shares yourself, but only once everytime you accumulate 10k worth of cash or (iii) invest in a foreign fund, and get charged for overseas custodial fees (the fees the brokerage charges for keeping foreign shares on your behalf).

It would appear that (ii) is the best option, and in a lot of ways, it is. There is however, one catch to that.

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My final point of investing is dollar-cost averaging. I spoke in my previous post about investing early and often. One reason is the "head-fake" I wrote about. The other is actually average out your costs of shares over the long term to overcome volatile stock prices.

Dollar-cost averaging is a simple concept. Every month you put aside some savings, say $1000. Every month, you sock this money away into a fund, or shares, whichever you prefer, and buy whatever amount of shares you can afford with this sum. This way, you average out the cost of shares over a long period of time, and you will get a roughly smooth progression of the price of shares without the volatility affecting it.

The issue with option (ii) above is that most people will take a long time to accumulate $10k. This tends to screw around with dollar cost averaging a little. The fewer times you invest, the more volatilty will affect you.

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As with all things in life, there is no perfect solution. Each investment is a series of trade-offs you must make. However, if you reach the point where you can consider the trade-offs in your investment strategy, you're probably on the right track, and have avoided most of the major mistakes in investing.

Good luck, Pendragon. I've taught you as much as I can summarise in four posts. There's a lot more to learn, but the basics are mostly here. As with swordsmanship, there are things that definitely don't work, but even among the things that work, you have a choice. Take what you've learnt, make those choices, and turn this knowledge into your own.

Why Invest?

With all my cautionary tales about the stock market, it's a wonder that anyone even bothers to invest, much less in the stock market. Why bother, when a long term savings or FD is practically riskless and gives a steady return?

Here's the reason: you invest because over time, all other things being equal, your money is worth less.

We've all heard about inflation, that 3-5% per annum force of economic nature. Simply put, your money buys 3-5% less every year, year on year. In most situations, you're better off just buying whatever you want now, as opposed to next year, or over 25 years. Unfortunately, if you want to save your money for a future purchase, that money's going to be worth a lot less over time.

Compare. An FD or long term savings account gives you 1.5 - 2% per annum interest. Average inflation is about 3 - 5 %. That means you lose 1% on a good year, 3.5% on a bad year. That's slow death.

So why invest in a stock market? Because it pays the best over the long term.

The key here is to recognise that there is no free lunch. Whenever you choose a vehicle to invest in, you are taking a cost-benefit analysis of risk versus returns.

Think about it this way. FD's and long term savings plans pay low interest precisely because there are so many protections in place to ensure that the savings do not suddenly disappear. For example, banks are required by law to keep a certain sum of money available to support withdrawals from bank accounts. Even if the bank goes belly-up, you will get something back.

Stocks are different. Stocks represent ownership of a small piece of the company. If a company goes belly-up, you can be almost sure that you lose the money you invested, with nothing back. The upside is that when the company makes money, you make money too.

The second thing about stocks are that they are volatile like crazy over the short term. By volatile, I mean their prices generally fluctuate over a large range. Again, compare this to FD's. The returns of an FD general fluctuates between decimal places of a percentage point. The returns of stocks can be large gains OR large losses. Generally, volatility causes more people to lose money than gain it, because people tend to do things to avoid loss rather than consolidate gains. In other words, people tend to panic sell more when stock prices are low, but hold on to shares much longer than necessary to maximise their gains (another argument against short term investing).

However, it's a fairly well-known fact that over a long period of time, stocks outperform almost every other form of investment. We're talking anywhere from 7 - 15 % over the long term, year on year, and depending on your stock investment strategy. If you remember the inflation rates, that's almost 4 - 10% over inflation.

The implications of stock investing are as follows:

1. Don't invest what you can't afford to lose in the stock market.
2. Be honest with yourself about whether you can really afford to lose this sum
3. Build a long term strategy for stock investment and stick to it. This is a "head-fake" to get your panic-sell and over-holding reflexes under control.
4. Make sure it's a LONG TERM strategy. Hold those stocks for at least 15 years. That's the minimum amount of time you'll take to see long term gains on your stocks.
5. Because you need to hold those stocks for such a long time, create an investment strategy that involves companies that will be around for the next 15 years or so.

That's the basic strategy for investing in the stock market. In future weeks I will be writing about my favourite fire-and-forget solution to investing in the stock market as a whole.

Investing vs Gambling

A friend of mine had asked me for basics of how to invest in the stock market. I'm writing some basic fundamentals but they will probably be seen as near-heretical by most financial professionals. Neverthless, here it is.

When people talk about "investing" in stocks, they can mean one of two things (1) short-term, which means they do things like trying to time the market such that they can buy stocks for cheap and sell them for expensive and (2) long-term, where the investor simply takes advantage of the fact that, over 20+ years or more, the stock market will tend to do better than not.

The reason why people like to do short term investing in stocks is precisely the reason why I think it's a terrible idea - because stock prices fluctuate a lot over the short term. The basis to short term investing in stocks is that every company's stock price fluctuates because of factors inherent in the company or in the market as a whole. Know enough of the factors, predict them accurately, and you have a profit on your hands.

I think this is a load of baloney.

What you are trying to do with short-term investing is that you are trying to make an accurate prediction given incomplete information. So is everyone else. The only time someone has a fairly complete picture is when the stock market actually takes everyone's incomplete picture and turns it into a price. Sometimes you win, sometimes you lose.

Oh wait. Does that sound a bit like picking a winning horse at the turf club?

The reason why people like talking about playing the stock market in this way is because it gives them the illusion of being better than everyone else. People love talking about how much money they've made in the stock market, TOTO, 4D etc. It's riches, quick and easy, and socially affirming to boot. What they don't tell you is how much they have lost investing in stocks over the long run. I doubt they know themselves.

So the first question you need to ask yourself when you are investing - are you really doing it to invest in your future? Or are you doing it to be fashionable and make a quick buck? If you are doing it for the latter, I have no advice for you. I don't joke about money. If you're doing it for the latter, I'll write more.

Otherwise, I advise you to find some other person. There's a money manager I can introduce to you. :)

Investments in Singapore

I've been speaking to a money manager over the last week. I will say that I am completely underwhelmed by the investment product offering in Singapore. For one, the product offering shown to me by that money manager (who will remain anonymous) consists largely of managed funds with high front-loads, high rear-loads and high expense ratios.

I have several objections to this.

The first is that I am not paying good money to have people make my financial decisions for me. I will pay some money for being able to get a diversified portfolio with only a few choice picks. I will pay for the convenience of someone administering my money for me. I will even pay for the convenience of not having to remember to get my trade every month, and to make sure my money is locked in for the long term. These are things I will pay for. Not for my decision making process to be taken from me by the same financial engineers yahoos responsible for the current hullabaloo in the markets now.

The second is that my investment on returns, no matter how good the mutual fund is, WILL be eaten away by the outrageous fees charged by the fund managers. An expense ratio of 1% means that the fund needs to perform at least 1% better than average to give me average returns. Excuse me?!

The last is that I get the impression that the money manager wasn't listening. I told her I didn't want managed funds. I told her pretty explicitly. I don't blame her for trying. I just told her that these guys don't seem to be carrying the products I want for my investment.

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For those of you who haven't already figured out, I'm a believer of index fund investing. The problem is FINDING an index fund in Singapore worth investing in. I can hardly believe that some of these funds in Singapore dare call themselves index funds.

Lion Global Investors, I'm looking straight at you when I say this.

Let's take a very simple product offering - the Infinity US 500 Stock Index Fund. It is better than many funds out in the market today. When I say better, I mean "less of a ripoff". Its front load is a lowly 2%, and its expense ratio is 1.17%. Which sounds pretty okay compared to a 5% front load and an expense ratio of 1.75% right?

Wrong. Take a look at this - the fund that the Infinity US 500 Stock Index Fund is supposed to be mirroring. Yes, you saw right. The expense ratio is 0.3%, without a frontload. This flies in the face of every index fund principle I know. Infinity is supposed to be mirroring an index. The whole point of an index fund is to reduce the expenses to a minimum, and bet that the stock market on the whole will do well over time. What is this nonsense about a 2% upfront?! Why are you charging a spread of 0.77% over the US 500 Stock Index Fund for blinding following the S&P 500 index?

I cannot blame people for wanting to earn a living. I can understand earning a living. I cannot understand people wanting to earn a living through exploiting me less than the competition.

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I'm going to take some time to highlight what I think is the only nugget of gold in index-based investing in Singapore - the iShares S&P 500 Index Fund. It's essentially like an index fund that is traded like shares on the Singapore Stock Exchange.

The reason I like the iShares is that it essentially tracks the S&P 500 for about the same expense ratio as a true index fund would, at 0.09% expense ratio. It also doesn't have a front load, which is great. The only catch is that it trades like shares on the stock exchange, so you have to pay brokerage fees, so there is a hidden "front load" of sorts, and there are clearing fees of 0.05% up to $200. However, brokerage fees range from 0.25 to 0.5 % in Singapore (depending on volume traded). That means my front load is 0.25% to 0.5% + 0.05%, and my backload is the same, which makes this FAR less than the Infinity US 500 Stock Index Fund, which is its closest competitor.

Look. I can't do math that well, but even I know that 1 or 2 percentage points compounded over 25 years (which is the timeframe for investment I am looking at) is a massive difference.

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Now all that I am short of is finding a financial institution that will essentially do what I tell them to and STFU about their over-engineered financial products. I am looking for a bank or brokerage that will take a fixed amount every month and buy whatever they can of the product portfolio I tell them to buy, every month, on the month, on the dot.

In short, I'm looking for a system that forces me to be responsible, disciplined and act as my prosthetic memory. The reward for this (which is a pretty simple job if you think about it) is my brokerage fees, on the month, every month for 25 years, longer if I happen not to need the money after that.

Any takers?

Guilty Pleasure

First person that came to mind when I saw this was Ilkka. The man who considers training for three hours three to four times a week the minimum necessary to retain his skill.


Demotivators

Salut!

This Blog

I've been reading Pat Law's and Cowboy Caleb's post on the Singapore blogosphere.

I find it sad that a blog allows us to write about anything in the world, yet so many of us chose to write about ourselves. Is human nature that shallow, and the world that fragmented that we need to literally put ourselves out there for all and sundry to view?

I am not going to take the high road - I'm guilty of some of the sins that Pat Law and Cowboy Caleb have set out. Recently, too, my posts have been irregular and of pretty crappy quality. It is with this in mind that I'm going to try to set out what my blog is.

I write this blog for various, evolving reasons. In the past, this blog was a dumping ground for the dissatisfaction I felt for Singapore, and by extension, my life. This post "The Singapore Condition" I wrote 3 years ago remains one of my favourite, and one of my reader's favourites as well.

But life being life has taken a huge unexpected turn. I never expected to be back in Singapore, under those circumstances to boot. Things have changed. I have changed. My blog has also changed.

I stopped writing about my complaints about Singapore, mostly because I find myself with very few complaints. Singapore has improved. It is a long way from being ideal, but the lesson I paid blood to learn was this: you do what you can, and let God sort the rest out. Being impatient for change changes nothing.

This is my blog now. It is a collection of posts which generally falls into the following niches:

(1) Historical European Swordsmanship. I write about this fairly often of late because it is my interest. My fellow swordsman, Kenneth, maintains a nice blog for the techically inclined. Tome takes cool pictures. I don't want to reinvent the wheel here. My niche of a niche is to write about swordsmanship in a way that is hopefully understandable to the non-swordsman. I don't think there's enough of that around, and I hope that this blog would at least give a non-swordsman a glimpse of what we actually do.

(2) Inner Space Articles. A dear friend once described these posts as my version of Chicken Soup for the Soul. I write a lot about hope and love and renewal. That is because these are things that I've given a lot to understand, and I am beginning to gain a glimmer of wisdom about these things. I write these to firm up my ideas, and to hopefully allow readers some insight into some hard-won lessons of life.

(3) Current Events. I tend to focus more on US based news than Singapore based news these days. I also tend to be a bit more picky about the current events I choose to comment on, mostly because I am sick of the same tired arguments being trotted out by the Singapore blogosphere. So unless I have a fresh spin on things, I'll keep quiet. Assume that I have libertarian-liberal leanings alright?

(4) Interesting events in my life. I promise to write only when something genuinely interesting happens in my life and not write for the sake of writing.

One last thought. I've never written for the sake of traffic. I write for the sake of being read. And I hope that you will continue reading.

A Note from Future Self to Past Self

Tor,

I know the blog title is a bit dramatic. Nevertheless, that's how I feel when I speak to you, even intermintently, even if it is through this clumsy medium of my blog.

I've been putting off writing this message for a long time, not because I didn't want to say anything, but because I didn't know what to say. It's the sense of having a feeling but not knowing how to express it well.

You've commented often that you see me as what you could possibly become. I feel the same way - I see you as a younger self if things had gone the way I wanted them to. It is no secret that I regret my inability to read law in England, or journalism in the US. In you, I get to live a vicarious life of how I would have lived if I had my way.

Or perhaps not.

You see, in spite of everything that I feel I have done wrong, every event I regret the necessity of, and every missed chance I cursed at, I never regretted the chances I did take, and the life I did lead. In you, I see the person I would have become even if my choices were different, the same essential person. To use your words, pompous, opinionated, hopelessly anal-retentive, paranoid, genuine, interesting and self-aware. In that sense, you offer me some hope, that these are parts of me that stick with me regardless of the occassionally fucked-up life choices I make.

You are right, of course, that self-absorption is alright only if it becomes self-awareness. No, it wasn't to cushion the impact on a fragile teenage ego that I didn't tell you. Some things you just have to find out for yourself. You wouldn't have believed me if I told you. I know I wouldn't.

Six years on, I offer you, perhaps, a modicum of hope that you may become less anal-retentive, pompous and opinionated. Life and age have their way of polishing away your rough edges. These days, I daresay I've become not only self-aware, but self-reflective, and I hope that you will eventually become the same.

Your Friend,
Anthony

Dagger Training

I'm going to spend a bit of time writing about dagger duels in the context of the martial art I practice. For those of you not interested, there's a nice video of Jon Stewart taking a piss out of the GOP here.

We spent most of yesterday training with daggers. The daggers we use are wooden, about a foot long and look like glorified icepicks. For those who know what i am talking about, we train with rondels.

Because we primarily train with a piercing weapon, we do train for some things I would not even imagine using on modern knives, i.e grabbing or slapping the blade. Nevertheless, some of the stuff we do IS applicable to a modern knife fight, which brings me to my thoughts, which are

1. Speed kills
2. The default for a knife fight is a mutual kill
3. Let the other guy see what you are doing (HT: Chris Blakey)
   

Let me explain each.

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Speed Kills

This adage is generally true to varying degrees. Acting and reacting faster than your opponent generally gives you an edge. This is especially true in dagger fights because of several reasons.

The first is that a dagger, as compared to unarmed, IS a situation where the first good strike will kill or disable, and your target area is almost the entire body, even if you are wearing armour. Contrast this with unarmed. A fist generally doesn't kill or disable with the first strike unless you are hitting somewhere pretty specific. If you want to disable someone while you are unarmed, you generally have to break their structure first before you throw/lock/break/disarm, which involves working your way into a position where you can do that.

The second is that, compared to a longer weapon, like a sword or poleax, the dagger has a much shorter tempo. It's almost as fast as moving your hand around unarmed. Contrast with a sword or a poleax, which trades some speed for a lot more power and measure.

In short, because (1) getting the first strike CAN lead to victory and (2) dagger use lends itself well to quick strikes, speed especially kills with dagger strikes.

(Note. Speed gives you an edge. It doesn't win you the entire fight. I've won dagger and sword bouts with someone I judge about half again as fast as I am. I've lost dagger and sword bouts to people half as slow as I am. It's more important to do things right than to do things fast. Doing things right AND fast generally kills though.)

*******************

The default for a dagger duel is a mutual kill

What happens in a dagger duel is that both sides will be wanting to strike first with the dagger, for the reasons I mentioned above. The first good dagger strike ends the combat, so there's plenty of incentive to move in for the kill fast. Because both people are thinking like that, it's likely both people will try to attack first. Baring massive disparities in speed, both are likely to inflict a killing or disabling wound. Both die.

Hence, the default for a dagger duel is a mutual kill.

Having that in mind, what we train for isn't maximising the speed of the first strike. That leaves a lot to chance, i.e it depends on having an opponent that is slower than you. What we do train for is to strive for control over the weapon, then launching a counterstrike.

That is to say, the key to winning a dagger duel is controlling the opponent's weapon.

*******************

Let the other guy see what you are doing

This is something brought up by Chris on Sunday's training, and I agree with him. There's no point attacking if the opponent cannot see what is happening. I know this sounds counterintuitive, but hear me out.

Recall that the most reliable method of winning a dagger duel is to control the opponent's weapon?

By controlling your initial attack and making it visible, you have (1) limited your opponent's options for defence down to the most appropriate response and can therefore (2) predict the counter-remedy ahead of time. What's more (3) if your opponent commits to his defense too early, you can change your line of attack fairly quickly and get him where he's not defending.

Moreover, making your attack committed and visible is it's own defense. You stop yourself from leading before your dagger covers you, which is the worst mistake you can make in a dagger duel, and often ends with you walking into the point of your opponent's dagger.

Chris demonstrated this for us during one of the bouts, and I believe him. I also tried this in one of my bouts against Robin, which lead to a very nice feint.

*******************

The one complaint I have about myself for dagger is that I've not been able to get into my head and muscles the proper counter-remedy measures. Because it's a fraction of a second (during the interrupted attack) of a fraction of a second (during the defense and remedy) I just kind of go into a spastic spasm when I'm supposed to execute a counter-remedy.

The only way to remedy this is more training I suspect. Anyone else encounter this?

Bandwagon Jumping

My biggest objection to Sarah Palin isn't the fact that she's a neo-con, or that she wishes to impose her views on Creationism or reproduction rights by way of political machinery (HT: Tym). No, it's the fact that her appointment represents the worst political practice of all: bandwagon jumping.

If you are in political office, or have political aspirations, please take note. Don't insult the intelligence of your consituency. Someone will pick up on your bullshit. Have some conviction please.

Thank god the US has Jon Stewart. (HT: Zach)

Employment Day 1

I know it's a bit of a shock to go from "Unemployment Day 1" to "Employment Day 1" but there you have it.

I generally don't write too much about my work, seeing as most of the stuff I work on tends to be confidential (professional hazard) and even the stuff I -can- write about, the context is confidential. Hence, I'll stick to writing about incredibly shallow things about my new job.

1. My new workplace is incredibly close to my home. It's about as close as one can get from my home, given the way Singapore's residential areas are zoned. That means I can get up at 8 in the morning, change, drive, park, walk to my office and still be in time for work at 9 with time to spare.
2. I have an office. This is the second time in my career I've had an office, the first was when I was a lowly peon-associate at my old law firm. This office is set up much more nicely than my old office too, with nice shelving and a big ass table I can actually hold meetings with.
   
3. My new office laptop is literally twice the size of my old office laptop with 3 times as much RAM. The only problem with it is that it has an European keyboard. No biggie, since I had some practice in Finland typing with it, but it gets annoying at times.
4. My new office is tiny. There's about 10 people located in Singapore, as compared to the hundreds at my old workplace. I enjoy the solitude, to some extent, but I do miss the hustle and bustle of the old workplace.

That's all for now.

And for those who are on my Facebook, yes I did actually get attacked by a one-armed, one-legged, one-eyed monkey in Tioman.

Off on Holiday

Response may be patchy. Will be back next week.

Unemployment Day 1

7 am - got up, ran some errands.

8.30 am - parked car at Tanglin Mall, hoofed it to American Embassy.

9.30 am - took my attorney's oath, headed for breakfast at McDonalds while mucking a bit on the PSP.

10.30 am - headed home to change to gym clothes.

11.20 am - met friends at Jurong East Sports Council gym, was disappointed aerobics studio was not covered by gym admittance fee, worked out on treadmill, weights and incline board instead.

1 pm - headed out for lunch, yakked with friends over tea. Noted that today was like we were 13 again.

2.30 pm - headed for mom's home with friends in tow for an impromptu game of Dark Heresy.

5.30 pm - friends headed home, played with PSP some more.

8 pm - had dinner, watched Prime Minister's Rally, laughed my arse off.

9.30 pm - headed home, blogged, chatted online.

12 midnight - sleepzzzz

***********

I could get used to this, except I know I won't.

I've always been somewhat envious of people who know what their direction is. The best I can say about my life is that it is a series of unanswered or half-answered questions, like a infinitely divergent fractal pattern.

Part of the issue with me is that I do many things sort-of-well, but nothing truly exceptionally well. I love singing, except my voice is okay but not fantastic. I love acting, but I'm not tall, nor exceptionally pleasant-looking. I love debating but my mind moves faster than my mouth. I love writing but I've got more ideas than words to express them with. I love reading but each page I read just gives me more questions.

If you are clearly good at one thing, it's pretty darned obvious what you should be doing. If you do a million things sort of okay, then how do you decide what to do?

If you have only one burning question that you want answered, it's pretty darned obvious that the answer should set you in the right path. If you have a million questions to ask, which one do you ask first?

What should you do, if you can do anything? Is one choice really better than the other?

Google Interview Questions

Found this on the net.

Since it's my last day at work, I thought it'd be fun for me to answer as many interview questions from Google as possible, in hopes that someone from Google might see this and whisk me away to the Googleplex.

1. How many golf balls can fit in a school bus?

By sheer guesstimation, a golf ball is a roughly spherical object an inch in diameter. A schoolbus will be assumed to be a 10 foot by 5 foot by 5 foot box (which I'm guesstimating as rough dimensions of a bus). Assuming I get perfect control over the way I stack spheres in a schoolbus, That would make (10 x 12) x (5 x 12) x (5 x 12) golfballs in the schoolbus. That makes 518400 golf balls.

Also, if I could do math, I would have been an accountant not a lawyer.

2. You are shrunk to the height of a nickel and your mass is proportionally reduced so as to maintain your original density. You are then thrown into an empty glass blender. The blades will start moving in 60 seconds. What do you do?

I am about 66 inches tall. A nickel is about half an inch in diameter (which I assume what the question is asking, cos "height" could mean the thickness of the nickel). I weight about 160 pounds. I will weight 0.134 lbs or 2.1 ounces when I am shrunk down.

That's about the weight of 10 nickels, for perspective.

I would probably be able to generate enough force to really screw with the blades so that they won't even work, cos blender blades are actually pretty flimsy when force is applied perpedicular to the business end. Plus, most blenders have anti-locking mechanisms, so screwing with the blades will cause them to lock, which will in turn stop them from spinning.

3. How much should you charge to wash all the windows in Seattle?

It depends on how much it would cost me, how many other people can wash all the windows in Seattle, and how much the people in Seattle want their windows washed in aggregate. I can plug in some numbers but it will pretty much be making shit up.

4. How would you find out if a machine’s stack grows up or down in memory?

Say what?

5. Explain a database in three sentences to your eight-year-old nephew.

(a) Imagine every book you could ever want.

(b) Imagine all of these books stored in one place.

(c) Imagine a librarian to assist you to finding any book you want.

6. How many times a day does a clock’s hands overlap?

23 times, once an hour, except for midnight (or noon if you are callibrating from that point). Yes I know this is the wrong answer, but I'm being honest here.

7. You have to get from point A to point B. You don’t know if you can get there. What would you do?

I use Google maps, and follow the directions.

8. Imagine you have a closet full of shirts. It’s very hard to find a shirt. So what can you do to organize your shirts for easy retrieval?

I use my laundry as an indication of how used a set of shirts are. 4 washes a month means that shirt rises to the top of the pile, and get the most accessible area. Fewer washes go down the pile progressively. Shirts I never wash, I never wear, so that goes to the bottom of the pile, and into the least accessible area.

The unwashed shirts go to salvation army. The exception is winter clothing and suits. I will keep a set vacuum sealed and packed away for when I need it.

9. Every man in a village of 100 married couples has cheated on his wife. Every wife in the village instantly knows when a man other than her husband has cheated, but does not know when her own husband has. The village has a law that does not allow for adultery. Any wife who can prove that her husband is unfaithful must kill him that very day. The women of the village would never disobey this law. One day, the queen of the village visits and announces that at least one husband has been unfaithful. What happens?

One of two things can occur - no one talks, or everyone talks.

In a situation where no one talks, no one does anything. This is because the queen of the village's information does not add anything new to the table. Because every married couple has cheated on his wife, and every woman knows when a man other than her husband has cheated, each woman knows that 99 of the men in the village has cheated - which corroborates what the queen has said. Because each woman cannot PROVE that her husband has cheated, no one dies.

If any one woman asks any other woman the magic question "Did my husband cheat?" and gets an honest answer, then every man in the village dies. ONE woman executing her husband signals to the rest of the wives that she knows her husband had cheated. However, since every woman knows that every other husband had cheated except their own, the fact that one husband is executed MUST mean that every husband in the village has cheated. Once this is established, all husbands will be executed.

10. In a country in which people only want boys, every family continues to have children until they have a boy. if they have a girl, they have another child. if they have a boy, they stop. what is the proportion of boys to girls in the country?

Dammit. I know this is an "infinite series that tends towards 100%" question but I can't remember the math.

11. If the probability of observing a car in 30 minutes on a highway is 0.95, what is the probability of observing a car in 10 minutes (assuming constant default probability)?

I can't even begin to figure out the math of this.

12. If you look at a clock and the time is 3:15, what is the angle between the hour and the minute hands? (The answer to this is not zero!)

It's a quarter of one-twelfth of a full circle. That's 7.5 degrees.

13. Four people need to cross a rickety rope bridge to get back to their camp at night. Unfortunately, they only have one flashlight and it only has enough light left for seventeen minutes. The bridge is too dangerous to cross without a flashlight, and it�s only strong enough to support two people at any given time. Each of the campers walks at a different speed. One can cross the bridge in 1 minute, another in 2 minutes, the third in 5 minutes, and the slow poke takes 10 minutes to cross. How do the campers make it across in 17 minutes?

Have 10 minute dude hold the torch and walk across while 5, 2, and 1 walk across in sequence. Here's the math.

5 and 10 minute dude start. 5 minute dude outpaces 10 minute dude, but 10 minute dude has torch pointing forward. Illuminated, 5 minute dude finishes and 10 minute dude is halfway across the bridge.

At this point, 10 minute dude must stop and point the torch backwards. 2 minute dude takes 1 minute to reach 10 minute dude's location and another minute to cross the bridge. In the time it takes for 2 minute dude to cross the bridge, 10 minute dude would have waited 1 minute, and progressed another one-tenths of the bridge. He's now at the 60% mark of the bridge.

Then comes 1 minute-dude. 10 minute dude must wait 60% of a minute, or 36 seconds, for 1 minute dude to reach his position before being able to continue forward. 1 minute dude finishes the remaining distance in 24 seconds but that is irrelevant because 10 minute dude still needs another 4 minutes to complete the journey.

The total time taken to cross the bridge is 10 minutes plus wait time which is 1 minute and 36 seconds, for a total of 11 minutes, 36 seconds, well before 17 minutes.

14. You are at a party with a friend and 10 people are present including you and the friend. your friend makes you a wager that for every person you find that has the same birthday as you, you get $1; for every person he finds that does not have the same birthday as you, he gets $2. would you accept the wager?

No, because statistically, you will need to find 2 birthday matches for every one non-birthday match there is in order to break even. Because the number of pairs for birthday matches is far less than the number of non-birthday matches, you will not find the critical mass you want no matter how many people there are in the room.

15. How many piano tuners are there in the entire world?

You know, I'd answer this question but McKinsey asks the same question. It's basically a bunch of numbers, assumptions and looking at the assumptions. I'll bite though.

There are 6 billion people in the world. 1.2 billion people live below the poverty line, and are too poor to buy pianos. 4.8 billion people remain. Since they are above the poverty line, it is fair to assume 5 people to a household (since large families tend to be associated with subsistence level living). 960 million families now.

Assuming a figure of 10% of these households have the inclination to own a piano. That's 96 million pianos worldwide. Assuming twice a year tuning, thats 192 million tunings a year. One piano takes a day to tune. Assuming 320 work days a year on average, it will take 600 thousand piano tuners worldwide to tune the pianos.

Assume also commercial piano ownage is negligible in light of this.

16. You have eight balls all of the same size. 7 of them weigh the same, and one of them weighs slightly more. How can you find the ball that is heavier by using a balance and only two weighings?

Grab any 6 balls. Weigh 3 per plate. 2 results can happen.

(a) Both sides are equal. You then weigh the remaining 2 balls and find the heavier one.

(b) One side is heavier than the other. You grab two balls from the remaining pile and weigh them. If one is heavier, that's your ball. If they are both equal, the remaining ball is the heavier one.

17. You have five pirates, ranked from 5 to 1 in descending order. The top pirate has the right to propose how 100 gold coins should be divided among them. But the others get to vote on his plan, and if fewer than half agree with him, he gets killed. How should he allocate the gold in order to maximize his share but live to enjoy it? (Hint: One pirate ends up with 98 percent of the gold.)

Start with the end in mind.

In a situation where there are only 2 pirates left, the fourth can either give everything to the fifth pirate, or the fifth pirate will vote no and the fourth will die. Hence, the fourth pirate will either die or live, but get nothing. He will be playing to avoid that situation, so he -will- vote yes to one gold coin, which is superior to all other alternatives.

If the situation reaches the third pirate, how the fifth votes depends on whether it is possible for the fifth pirate to force the third pirate to be executed and lead matters to the aforementioned situation with the fourth pirate. However, since the third needs only 1 vote, and since the fourth will vote for 1 gold coin, the third will divide the gold coin as 99 to himself and 1 for the fourth, securing his vote and making the fifth's vote irrelevant.

Hence, by the time it reached the third pirate's distribution, the fifth will get nothing. Hence, from the first to the second pirate, the fifth will vote yes to one gold coin, since it is impossible for the fifth to get a single gold coin if the third wants to ensure he gets away with the lion's share of the wealth while securing a vote.

Hence, the first pirate can give a gold coin to the fourth and fifth pirates, and keep 98 for himself. The fourth will accept one gold coin because any distribution prior to his own distribution that gives him one gold coin will result in a gain for him. The fifth pirate will not get anything by the time the third pirate distributes because the fourth pirate's situation will compel him to accept the offer of one gold coin from the third. Because he gains nothing by the time the third pirate's distribution comes around, he will accept a gold coin from anyone before the third pirate's distribution and make a gain. Two votes pass the resolution.

It isn't necessary to discuss the second pirate's situation anymore, since the second pirate's situation is identical to the first, but with a smaller pool of candidates. The second still needs 2 votes to secure his distribution, and he can essentially use the same solution as the first pirate.

What do you remember?

Obtained this from the Alchemist.

If you read this, if your eyes are passing over this right now, even if we don’t speak often, please post a comment with a memory of you and me. It can be anything you want — good or bad. When you’re finished, post this little paragraph on your blog and be surprised (or mortified) about what people remember about you.

Choices

My RSS feed currently looks like a self-help book. Of special note are Mr Wang's recent articles on regrets in choice of education and excerpts from the ever-inspiring Adrian Tan's commencement speech. Then I read Kenneth's entry on honouring hard choices.

I have this to say.

Life is organic. It takes you in directions you never expect to go. All throughout it you will face choices, directions, paths, routes, sidetracks, railroads and all manner of distractions, subtractions, attractions and simple traction.

I think that the classic dichotomy of "the road commonly travelled" and "the road less travelled" is absolute bollocks, for two reasons. First, it presumes you know the difference between the two as clearly as Robert Frost did. The second is that it assumes that life is nothing but a series of mutually exclusive choices.

(In fact, a bit of searching reveals that "The Road Not Taken" has in fact, two interpretations - one classic-inspirational, the second ironic, and cautioning against hindsight, but I digress)

This is my take - recognise that each decision is a sacrifice, a price for which you have no real price tag for until you've paid it. Know that the future is unknowable. Respect that every man has to make that sacrifice, and pity those who don't recognise that.

***********

I don't make it a secret that my reading law was, in fact, not my first choice. Somehow, though, I've made it work - I recognise that it affords me enough financial and social slack that I can pursue things I truly love. It is a price I gladly pay.

On the other hand, I know that because I pay this price, I pay another, which is the price of dabbling. And, yes, I am a dabbler. I've chose not to afford the time commitments to do what Ilkka or Kenneth or Greg does, because there are other things I want done, and because I pay the price for preserving my independence.

I don't strive for greatness, brilliance or to be remembered, respected or honoured in any way. It is something that other people get to confer on me if they choose to. I don't care if I am average, so long as being average is something I've chosen, not fallen into.

So here I am. I'm an average swordsman, an average lawyer, an average son, and probably a rather average writer as well. I'm glad I'm all of those things because I can't imagine me being one at the expense of the other.

Because I am all those things, I cannot imagine why one would be more important than the other.