Career Roadmap

20/20 Foresight is something that everyone loves to have. 20/20 hindsight is something that is much more achievable. Steve Jobs famous quote below highlights a useful point about uncertainties of the future and how to plan your journey forward in an unknowable future.  

Quote   You can't connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever. Unquote 
For a invetment / personal finance blog that is crowded out by personalities seeking to pursue financial freedom and flaunt their CPF statements, the fact that a high capital base is required to achieve FF is grossly neglected. Much is discussed in the investment blogger space about ways to min/max spending and savings, but mere mortals still need to focus on increasing their reliable income through their career / side jobs to build a substantial capital base. 
A career r…

Portfolio Review 2019 - Performance Review

Quantitative Measures
Beta = 0.76, VaR = 8.92%,
Expected Shortfall = 17.43%
Overall - Time = 19.99%

Performance Review for 2019

Beating the STI ETF benchmark is not difficult this year. As a market capitalized ETF, STI ETF was a late buyer in the REIT rally, which highlighted the downside of this methodology. Moreover, a lot of retail investors with larger proportion to REITS performed way better than me. My returns were also punished as I averaged down on Silverlake Axis on the recent price correction. I also sold off a percentage of STI ETF to increase my war chest instead of reallocating to US Stocks, resulting in the missing out of the Christmas rally and the year end momentum play.

The S and P 500 trounced the returns of most market participants. I am not certain whether the blind money / DCA via index investors resulted into this phenomenon. There is significantly high PE stocks in the index constituents. Stocks could be simply getting more expensive instead of being supported by …

Investing rules from John Templeton

Important points 1) Distinguish between Risk and uncertainty. It is possible to determine a low but imprecise probability of permanent loss. 
The Cameron School of Business put forth an important perspective. In casinos, the odds of winning, while quite small, are clearly defined.  If one plays at the roulette table, one knows that there is a likelihood of 1/38 that one can beat the spinning wheel. Or in the game of poker, one can calculate quite accurately the probability of being given any particular winning hand. The players are facing the so-called “known unknowns.” The gamblers are facing Risk, where the odds are given, as opposed to Uncertainty, where they are not. However, the odds of beating the stock market are rarely clearly defined. As a result, many investors face Uncertainty as opposed to Risk. That is to say, the investors are faced with the “unknown unknowns.” 
2) Market Prices / Sentiment may not coincide with economic reality. Look at the underlying numbers that determin…

The blind spots of indexing

The Blind spots of indexing The MSCI indices are market cap weighted indices, which means that stocks are weighted according to their market capitalization, calculated as stock price multiplied by total number of shares outstanding. Therefore, the stock with the largest market capitalization gets the highest weighting on the index. This reflects the fact that large-cap companies have a bigger impact on an economy than mid- or small-cap companies. A percent change in the price of the large cap stocks in an MSCI index will lead to a bigger movement in the index than a change in the price of a small-cap company. Each index in the MSCI family is reviewed quarterly and rebalanced twice a year. Stocks are added or removed from an index by analysts within MSCI Inc. to ensure that the index still acts as an effective equity benchmark for the market it represents. When an MSCI index is rebalanced, ETFs and mutual funds must also adjust their fund holdings since they are created to mirror the per…

Priced for Perfection