I’ve always envied others who knew what they wanted to do when they grew up.
Me? I’ve no clue except I know I don’t like a desk bound kind of job.
By James Hon
The Checklist Manifesto by Atul Gawande inspired me to write this article about humans’ fallibility in trading.
Atul is a surgeon and he was appalled that despite availability of cure, studies have found that in a majority of cases, patients of critical ailments fail to receive complete or appropriate treatment.
Due to societal advancements, things have evolved over time from Simple to Complicated and then Complex. As the human brain is limited by the number of details and considerations it can attend to at any one time, it leads to skipping steps in the process and errors are committed.
The solution to this is simple – It is a checklist.
Atul discovered the works of checklists in the airline, construction, culinary and investment industry. Personally I am particularly interested with how checklists can help with our investments. Below is an excerpt from the book and a good story to illustrate.
Some years ago, Geoff Smart, a Ph.D. psychologist who was then at Claremont Graduate University, conducted a revealing research project.
He studied fifty-one venture capitalists, people who make gutsy, high-risk, multimillion-dollar investments in unproven start-up companies. Their work is quite unlike that of money managers like Pabrai and Cook and Spier, who invest in …read more
When we chit-chat or do bantering at our neighbourhood coffee shop, it’s OK to do a bit of talk “male chicken” here and there.
You are welcomed to do it here at this watering hole too.
But when it comes to putting your own money on the line, you may want to do a few more verification questions before you swallow what others say hook, line, and sinker…
Let me share some examples where blindly relying on other people’s heuristics may do more harm than good:
Top floor no good; too hot
Often we hear this urban myth shared by parrots who heard it from a friend of a friend or from their ah ma.
Not that their friend or ah ma were wrong, mind you.
Problem lies with you. Did you verify the context and perspective of their feedback?
The 4th storey of 4 storey walk-up apartment is “top floor”.
My current HDB flat’s top floor is 10 storey.
Contrast it with the newer HDB BTOs where top floor can be 47 storeys!
How about the 2nd level of a 2 storey landed bungalow? Is it “top floor” too?
Feeling sheepish now?
Blue chip stocks are safer
Eh? What exactly is a blue chip stock?
Are NOL, Chartered Semiconductor, Standard Chartered Bank, …read more
By Lionel Yeo
Two important things happen in late April:
First, it’s the only time of the year when I get to post this amazing meme:
(Hands up if you totally rocked to N’Sync songs in secondary school.)
Second, it’s also my birthday.
The fact that I can memorise all the lyrics of N’Sync songs betrays my age: 31 years young this year. As one of my friends so aptly puts it:
We’re at the age where if we step into a club, we’ll immediately feel like an Orientation Group Leader.
But hey, even though it sucks that I can’t keep my eyes open past midnight anymore, birthdays are a time to celebrate the people around us.
Yes, I’m talking about you, my loyal community of readers. Right now, over 4,000 of you have joined me on my email list, and I frickin’ love you guys to bits.
For example, when I asked you guys for your thoughts on my Dream Trip survey last week, over 40 of you responded with fantastically detailed answers. YOU GUYS ROCK! Your responses will help shape the content that I write for you in the future – so thank you.
It’s moments like these that make me feel really grateful and …read more
Ursula Le Guin’s ‘The Ones Who Walk Away from Omelas‘ is one of the most haunting and thought provoking short story I have ever read. If you have fifteen minutes to spare and you fancy a brain f$%k, do read it in its entirety.
The story began innocently enough. In the city of Omelas, nestled against the sea cradled by the snowcapped mountains in the distance, the Festival of Summer is just about underway. Gaiety is in full swing.
In other streets the music beat faster, a shimmering of gong and tambourine, and the people went dancing, the procession was a dance. Children dodged in and out, their high calls rising like swallows’ crossing flights, over the music and over the singing.
The citizens of Omelas were a fortunate bunch. They were ‘matured, intelligent, passionate adults whose lives are not wretched’. Imagine a perfect city, with perfect weather and perfect people leading perfectly healthy, wealthy and happy lives. That is Omelas for you.
The Child in the Basement
There is one more thing Le Guin would have us know. In the city itself, in the basement of one of the buildings, there lives a child. He (or she) is ten, but looks like six. …read more
Yup, it’s another case of “stealing with pride” from Patty’s facebook again!
By Alvin Chow
Portfolio management if one of the costliest mistakes that investors make.
Imagine a portfolio as a forest, and the stocks would be trees. Investors tend to focus a lot more on the individual trees that they forget about the forest. In a diversified portfolio, one tree is not as important when compared to the forest.
A stock that has made 50% does not mean much, because the portfolio of stocks can still lose money as a whole despite the one big gain in a stock.
A good gardener would understand portfolio management easily.
His aim is to maintain a nice looking garden. It would be a garden with blooming flowers and scent abound. To achieve that, he would have to do two main tasks; one, to rid the weeds and second, to fertilize and water the garden to keep the flowers growing.
That is exactly what an investor should do with his portfolio of stocks. Constantly ridding stocks that should not be in the holdings (weeds) and keep the ones that are still worthy (flowers).
Duh! So simple!
But often, traders and investors do the opposite – cut flowers and keep weeds.
I generally define traders to have higher frequency of entries and exits, and focus more on …read more
At a friend’s urging, I attended a ‘self improvement’ seminar last weekend. It was held in a convention center in town, and more than 100 people came together to embark on a journey of self discovery and powerful living.
The seminar was intense. The rules were laid down hard and fast. It was structured purposefully so that participants feel submissive and vulnerable. Breakdowns were common and for many in the room, it was an emotional roller coaster ride.
It was not my first encounter with this form of Large Group Awareness Training (LGAT). But it was the more intense (and to many, the more effective) one.
I would like to share an incident during the session. Names and details changed to protect the innocent.
Man Vs Wife
In response to the Facilitator, Man took to the mike. He felt stuck in his marriage and he wanted to share his predicament, hoping to achieve a breakthrough.
Facilitator: Tell us what happened.
Man: I have been married for 20 years. My Wife is a domineering character. She always insist on her own ways. She always jumps to conclusions. She has no trust in me. She never wants to….
Facilitator: Ok, tell us what happened.
Man: I just did.
Facilitator: No you …read more
By Lionel Yeo
Okay, I’ll admit it: I hate planning for travel.
8 years ago, I was a college student and found myself without any plans for the weeklong Fall Break. I would’ve been perfectly content to take a 2-hour bus ride to Manhattan and pig out on Chipotle.
Luckily, I had a couple of friends who had a MAJOR thirst for adventure.
Just as I was about to book my bus ticket, my friends called me and said, “Yo. We’re heading to West Virginia for a 2-day whitewater rafting trip on one of the toughest rivers in the world. You’re coming with us.”
In college, you learn never to say “No” to dumb-sounding experiences. This is terrible life advice, but in this case, it worked out.
We had an amazing time rafting through the Class V rapids. Once, the side of our raft hit a rock and all of us fell out of the raft, leaving our guide to come and rescue us. At night, we camped out, drank beers, and ate best steak I ever had under a blanket of stars.