United 300

Nokia N93

A video my brother made...

The Game: Casino Royale

Last weekend, I participated in a treasure hunt/wild goose chase that stretched from 5pm on Saturday to 12 noon on Sunday. That was the longest stretch of consciousness I've experienced since my days in green :P

The game basically starts with a mighty difficult puzzle which you solve for a location in Singapore where (surprise!) you get to pick up another mighty difficult puzzle, and so on.... This game originated in the Bay area and was thoughtfully organized by a bunch of crazy Stanford folk who are trying to spread the gospel here.

You can try your hand at some of the puzzles from the Stanford game by clicking here.

God and the Stock Market

While this may sound somewhat sacrilegious, I think the stock market is a pretty good analogy for one's walk with God. Let us take the Sraits Times Index (STI) as our case in point and assume that how well our life is going is equivalent to the closing price of the STI each day.

For anyone just starting out at trading equities, or the more risky warrants, you know that emotions play a big part in determining where prices will be each day. Stock market guidebooks and gurus often talk about the 2 biggest hurdles that every investor needs to keep in check, namely fear and greed. But often times one cannot help but feel the pinch when a one-day correction wipes out over 5% of your investment (as on 28 Feb 2007).

In the same way, we occasionally face obstacles in life that appear so big that we just feel like throwing in the towel. Whether it's our relationships, or our work, or our spiritual walk, we get coaxed into thinking that all is lost. So we give up, cut our losses and swear never to use our hard-earned money to buy the STI ETF ever again.

However, had we taken a longer term view of the STI over the past 5 years, we see that the upward trend is undeniable, and Feb 07 was just a drop in the ocean. That's comforting for long-term investors, though not very useful info for the short-term punters. But our relationship with God is not meant to be a hit and run. When we said the Sinner's Prayer, we were signing up for the long-term.

The problem is that we don't have the benefit of nice on-line charts to remind us of God's plan for our lives. And that's where journalling comes in. I will be the first to admit that it requires quite a bit of discipline to do, but the benefits are well worth it. As you recall the times when you thought all was lost, we see the hand of God reaching down and plucking you out from the depths of despair.

So we derive our confidence in God from past experience (historical trends) as well as good fundamental knowledge. Looking at the chart below, the STI looks a lot less friendly if we take a super long-term view. So it's ok to sell, but we need to do so for the right reasons.


How do we get insight into the fundamentals? With shares, we look at all the wonderful ratios out there, like P/E, ROE, ROA, P/B, etc. With our spiritual lives, it's all about prayer and reading the Bible, i.e. getting in touch with the most important insider of them all.

Claiming to be a Christian and not praying regularly is kind've like buying a stock and not reading the company's annual report -- you don't really know what's going on and are just hoping for the best. It's no wonder that when 28 Feb 07 hits, you panic and liquidate your holdings, only to regret just 2 months later.

I think some of the ideas may not map very well to the STI analogy, but I hope you get the point :) For avoidance of doubt, this is not an inducement to buy the STI :P

The Economics of Gifts (A Guide for Guys)

A while back, it was brought to my attention that girls may view gifts differently from the guy who's giving the gifts. For guys, our perception of the gifts we give can be presented as follows:

U = A(t1)C1 + A(t2)C2 + ... + A(tn)Cn

Where

• U = utility derived by the girl (i.e. number of brownie points scored by the guy)
• Cn = monetary/time cost of "n-th" gift; Cn <1
• A(tn) is a function (different for every girl) that is dependant on the timing of the "n-th" gift (e.g. Valentines Day, Birthday, Anniversary, random day, etc.)

In reality, the U perceived by the girl may be more:

U = A(t1)(B+0.1C1) + A(t2)(B+0.1C2) + ... + A(tn)(B+0.1Cn),

where B>1.

With reference to the first equation, guys usually think that they can give 01 x gigantic present (high C) to leverage on the A(tn) and get the biggest bang for their buck/time. They also assume that A(tn) is diminishing in n and hence try not to give too many presents due to the diminishing marginal utility.

However, if the second equation is true, then we guys really need to re-work the strategy and skew it more towards quantity since gifts with a high C will not be able to affect U that much in the long run if n is pitifully small.

Apologies for the lack of proper subscripts. I'm having trouble formatting on blogger.

Singapore Boleh!

I spent my Saturday morning at work listening to a talk by Nicky Tan about his lessons learnt during his investigation into the collapse of Barings Bank back in 1995. For those of you who can't remember, Barings Bank was the oldest private bank in England at the time, but it was brought down "single-handedly" by a rogue trader, Nick Leeson, who was based in Singapore. Leeson made an astounding number of bad bets on futures contracts, and in so doing lost $1.4 billion on behalf of the bank, even though he was actually not allowed to do any prop trading. Meanwhile, the bank's management was supposedly oblivious to what was happening and kept on borrowing money to fund Leeson's trades, thinking that the trades were being done on behalf of their clients.

While some of the risk management lessons that Nicky Tan pointed out were certainly pertinent to the work that MAS does, probably my #1 take-home of the day was his advice to us as Singaporeans not to think too lowly of ourselves. At the time, the Bank of England was all out to drag Singapore's name through the mud and place the blame for Barings' collapse entirely on the shoulders of the Singapore regulators. Nicky Tan and his partner, Sundaresh Menon, both who were only in their early thirties at the time, managed to produce a report that was internationally recognised to be of better quality than that produced by the Bank of England's investigators and effectively helped to keep Singapore's reputation intact.

He went on to tell us about how he managed to beat Merrill Lynch and Credit Suisse in carrying out a $15b restructuring all on the strength of a team of Singaporeans. While there may be an element of bragging in there, the point still stands that we really have to curb our 妄自菲薄 attitude and start believing in our God-given talents and abilities. We often get intimidated by people who speak better or dress better than us, but by adopting the typical Asian attitude of keeping quiet in class for example, half the battle is already lost.

The Underrated Investment

All working Singaporeans should know that our CPF account is split into "ordinary" and "special". The ordinary accounts (OA) pays 2.5% interest p.a., while the special account (SA) pays 4%. For both accounts, you can only start drawing down on them when you hit 55 years old.

Why does the SA pay you 4%? Because the government is trying to encourage long term savings. While the savings in the OA can be used to buy a home, pay for CPF insurance or for investment and education, the savings in the SA are for old age, contingency purposes and investment in retirement-related financial products. In other words, once you put money in the SA, it's pretty much stuck there till you're 55 (Note that the transfer from OA to SA is irreversible).

Many people view this as a bad thing, especially since many of us use CPF money to purchase property. However, let us consider the following:

1. It is probably not prudent to liquidate all your worldly possessions to pay for a house, hence it is likely that you're gonna have some savings left over even after purchasing a property
   
2. It is a good idea to start saving for retirement as early as possible so that you can experience the power of compound interest
3. Your bank account gives you a pretty crap interest on your savings
4. Stocks will give you 7-8% pa in the long run, but they are not without risks
5. The current yield on Singapore Government Bonds is around 3+% on the top end, but carries significantly lower risk compared to stocks.
   
6. A sensible asset allocation for your investment portfolio would have to involve some diversification across different asset classes, be they equities, bonds, commodities, etc.

So if we think of the CPF SA as a long term government bond with a practically risk-free 4% yield, that sounds like a pretty sweet deal to me. So instead of buying bonds, transfer more funds into your SA! A strong case can be made for starting these transfers early when one looks at the power of compounding in action.

Why we Pray

The question regarding what's the point of prayer was something I struggled with back in my 2nd year of college. That summer, I had embarked on a bid to pen my thoughts down but I kind've got stuck half way and my computer subsequently crashed anyway.

Recently, a friend of mine sent out an e-mail with a couple of questions on prayer and how to approach it. This was my reply, albeit some 2 years in the making...

I think the very basic question we have to tackle first is whether prayer changes the way things play out. For example, if we're planning a picnic, can we somehow ensure that it doesn't rain if we pray and fast for the whole week before that? Several passages in the Bible seem to support this concept that prayer can somehow influence God's decisions. Examples would include Jacob wrestling with God (Genesis 32), Abraham pleading of for Sodom (Genesis 18:16-33) and the Persistent Widow (Luke 18:1-8). Going along these lines, it would appear that "persistent prayer" would be equivalent to beating God into submission. So events like prayer retreats would be seen as concerted efforts to somehow change God's mind since we somehow know better than Him. To me, this does not paint a picture of a omnipotent and omniscient God. If we expected certain results every time we went through a series of rituals like prayer and fasting, we would be equating God to some kinds of scientific phenomenon where x + y = desired outcome. I believe that God is so much more than that.

Based on my understanding of the Bible, I believe that we can make the following statements about God:

1) God has our best interests at heart
2) God knows our desires and needs before we even utter a word

So how are we to understand prayer in that case? I believe that prayer is meant to change us rather than to change God. When we pray to God, we are essentially seeking to communicate with Him so as to build up our relationship. Why would we want to build up our relationship? So that we can be on the same page as God, discerning where He is at work and joining Him in that work. I believe prayer is more about aligning our interests and our direction with those of God, rather than trying to sway Him to see things our way. Why then do we say that "the prayer of a righteous man is powerful and effective" (James 5:16b)? Because a righteous man's prayer would be in line with God's purposes and desires, and hence apparently more effective.

What I'm saying is not just "oh, it didn't happen coz God said no", but instead I'm taking it one step further to see prayer not as a vehicle for our desires to be fulfilled, but an opportunity to have them transformed into those of God.

So how does this play out when one is looking for a job or hoping for physical healing? I believe that we shouldn't box God in and expect Him to meet us the way we see fit. If we believe God is sovereign in all circumstances, even in the face of great uncertainty or adversity, then we shouldn't worry about not chalking up that 5 hrs of prayer a day coz God's going to be pissed off and therefore not answer our prayer positively. While we should certainly feel free to voice the desires of our heart, our focus should be on God and not ourselves. Easy to say, but hard to execute. Think about Paul who wrote a bunch of letters encouraging believers while he himself was in prison. If we take Colossians for example, Paul spends the bulk of the letter refuting Colossian heresy and trying to bring the church back on track. It is only at the end where he asks for the church to "pray for us too, that God may open a door for our message, so that we may proclaim the mystery of Christ, for which I am in chains." (Colossians 4:3) This is very different from saying "please pray that I get out of prison 'coz I'm having a hard time here."

Hence I believe that in times of adversity, we should seek God's wisdom through prayer, so that we can have the peace that transcends all understanding in the face of trials. If we believe that God is sovereign and good, I see no reason for us to have to do a bunch of somersaults to catch his attention and have Him accede to our requests.

If any of the above is heresy, someone please let me know.

Calvin and Hobbes

Good Book

I randomly picked this up at the library and found it a really good read. The Art of Pricing gives you some insight to how you should think about price-setting, with the point being the need for price differentiation. As a seller, you have to think beyond the one "magic" price and try to capture the value of your product more effectively through a pricing policy that varies according to the type of buyer.

For those of us who are not CEOs, the book provides some theoretical basis for the discounts and package deals that we so often see in the papers. An example would be how restaurants typically price their main courses at a lower margin to entice customers to eat there. Once the customer chooses to eat there, the restaurant then makes most of its money off the over-priced drinks and desserts. Just think about N.Y.D.C (a cafe in Singapore): the budget main courses cost the same if not less than the desserts!

Car Wars

Botak Jones

Had dinner at Botak Jones this evening, Singapore's latest Ang-moh-run-western-stall-in-a- coffeeshop. My uncle's family went there yesterday night and had already warned us about the 45 min wait they endured, so when we managed to find a seat immediately upon arrival, we were suitably pleased. While the long queue for orders was rather daunting, it nonetheless gave us time to look through the extensive menu. When it was finally my turn, I put in the order and was soon informed that the wait would be about 1hr. "1hr"?!! It turns out that this ain't fast food. It is fresh food made to order, meaning a long wait, but also better makan.

My brother and I ordered the Botak Burger which was really good and imho, worth the wait, especially considering that it costs only $6.60. There is a monster version of the Botak Burger which is essentially the same thing but with 3 patties. That's 450 gms of burger. I think it's humanly impossible to take a complete bite out of that monster. :P

Anyhow, long story short, go check it out if you're in the area. :)

"Headshot!"

Last week I downloaded a 1GB+ demo of one of the most visually amazing games I have ever played. Company of Heroes is a WWII RTS (real-time strategy) that fully immerses the player in the heat of the battle, with stunning graphics and an incredibly interactive landscape. The transition from cut-scenes to game play is very smooth, and makes you feel as though you’re participating in this epic movie. Nonetheless, with all this fancy features, you need a pretty pimped out system to actually run the game in its full glory. My 1-year old PC was already struggling to keep up as its specs were below the minimum system requirements.

Still on the same theme, I so happened to watch TaeGukGi last night and was both shocked and amazed by the graphic depictions of war on the frontlines. After about 2hrs of death and destruction, I found myself wondering how one could actually make a game based on war. Ok, I guess the answer is obvious. In all honesty, when I was playing CoH, I was thoroughly enjoying mowing down the evil Nazis and dropping artillery on their advancing tanks. But after the movie, I started to feel rather guilty about having sent my computer troops to their untimely end.

I’m no stranger to violence in computer games. I’ve played my fair share of Mortal Kombat and Grand Theft Auto, and I’ve never really thought that it was a big deal when you accidentally run over pedestrians in a game. C’mon, it’s a game! I don’t think shooting someone in a game today means that I’m going to be a serial killer in 10 years. But I do think that it’s troubling that killing people in games is actually entertaining. Whether it’s Ghost Recon or Hitman, whether you’re the good guy or the bad guy, there is a morbid joy in taking the life of your perceived “enemy.”

Back in the army, a practice that made me incredibly uncomfortable was when we had to do press-ups and shout “kill, kill, kill” each time. Don’t get me wrong, I think that Singapore certainly needs an army and that National Service is important for our country’s security. If the need ever arises, I think that it is acceptable to kill in self-defence. However, killing to protect your loved ones is different from killing people for sport, and the popularity of violent computer games certainly reveal that we (or at least me and a lot of other people) take morbid pleasure in killing people for fun. Indeed few sounds are more satisfying/annoying than the computer annoucing "headshot" during a Counterstrike session.

Now I don’t know what to do with this ‘revelation.’ Should I then switch from playing DOA to DOA Extreme Beach Volleyball? (though I think that would bring up a whole different set of issues). Or perhaps stick to FIFA and Championship Manager? Or maybe play games like Halo where you are killing aliens and not people? Does that really change anything?

Some Thoughts on Financial Responsibility

As most the guys in my cohort begin seeing a positive cashflow for the first time in some 25 years, many of us are starting wrestle with the responsibilities of working life. All of a sudden you need to worry about things like buying insurance, investing your savings, and buying big ticket items like a house and car. I too have been trying to navigate through this sea of information, and for those of you who are actually reading this, here are some of my key learning points:

On insurance:

1) Make sure that you have Life Insurance that covers you both in the event of death, as well as in the event you get hit by one of the 30 major illnesses. The premiums start climbing really quickly as you get older, so it is very important to get in as soon as possible. You may be able to hold off on the accident and health insurance, as well as the hospitalization and surgery insurance, but you must buy into life insurance early. See this insurance as an investment that you make today for the benefit of your future spouse and kids in the event that something happens to you. But do not treat insurance as an investment for yourself.

2) Which brings be to my second point: It's probably not a good idea to buy investment-linked insurance. If you want insurance, buy insurance. If you want to invest, go buy some index funds or something. Don’t mix up the two because essentially you are buying into a unit trust over which you have very little control. Even if you have the option to switch unit trusts “for free” (as in the scheme offered by Prudential), your choice is still limited since you only have one option for each major sector. However, if you know you're lazy and are not going to invest on your own, then this might be a convenient way to settle everything at a one-stop shop.

On investments:

1) Avoid structured products like the plague. These are the special “savings accounts” that are hawked to you at banks, promising you the potential of super high returns. Most of the time, the banks are buying an option from you and giving you really crappy returns for the amount of risk that you are being exposed to. Always ask the bank what your worst case scenario is coz you can actually come out of the whole endeavor negative.

2) Unit trusts such as those purchased through fundsupermart.com are the most straight forward way to diversify your portfolio across countries and thus reduce your exposure to the risks in the Singapore market. However, unit trusts on average under-perform the market in the long run, so you are probably better off buying passively managed index funds that track things like the S&P500 or the STI. This is a much less exciting way to invest, but it will likely give you more stable returns over the long run.

3) Buying a house is NOT necessarily an investment. I first encountered this idea in Kiyosaki’s Rich Dad, Poor Dad in which a house was classified as a liability rather than an asset. Today, most Singaporeans still think of buying a house as an investment. The argument against renting a home is often based on the assumption that the money you spent on rent is wasted since you end up with nothing at the end of the day. (See article) However, when you pay interest on your home loan, you also are throwing money away – money that could be better invested in other things. The important thing here is to separate an investment decision from a personal decision: should you buy the house that you want to live in, or the house that will give you the highest return? You need to realize that these two homes may not be the same. (I use “house” as a generic term since most of us, myself included, will scarcely be able to afford an actual house)

4) Having said that, HDBs are a whole different animal. The upfront discount given by the government means that your HDB unit will most likely substantially increase in value by the time you are allowed to sell it. So if you're sure you know exactly what type of place you want to stay in for at least the medium term, then a HDB unit is probably a good idea (if you qualify for it in the first place).

5) Nonetheless, the benefit of renting a place is that you will have the flexibility to change the location/size of your dwelling as your own needs change. For example, should you get sent overseas long term, there is no need for you to worry about servicing mortgages anddealing with tenants. Or you might want to rent a tiny place in the heart of Orchard Rd, and then shift to a larger place in Seng Kang once you start having kids.

6) Don’t buy a car if you can help it, coz in Singapore, it’s just way too costly in terms of depreciation and upkeep costs. (See article) Calling a cab is still far cheaper than owning a car when you factor in things like parking, ERP and time wasted finding parking.

Ok, that was quite a mouthful. Now must put disclaimer: "The above listed information does not constitute financial advice and should not be relied upon as such." I do not claim to be an expert and I would certainly welcome any comments and objections. It's only through talking more about these things that everyone gets a better idea of what's going on.

Live and Love

Our dear Quanhui is having a concert in Singapore at 3pm on 27 August at the YMS Auditorium (54 Waterloo St). Tickets are going at $8. You can watch a video of his singing talent, or check out his concert blog for more information.

Child Molesters Beware!

I've been meaning to put this image up ever since I saw this poster on my first day of work (which was a month ago). I just feel that this is such a ridiculous poster and it certainly joins the ranks of Singapore's earlier campaigns to make people smile more. First of all, who is the target audience of this message? There aren't many kids running around Singapore's CBD where this photo was taken. So perhaps we trying to educate the parents or scare off potential wrong-doers by showing them that the young kids have caught on to their evil ways.

Ninja Turtles!

After-party

About 10 hours ago, I landed in Changi Airport and was greeted by the friendly sounds of Singlish that filled the air. I've spent the last couple of weeks on a mad rampage to see the world before I get confined to a life of no more summer vacations :P After graduation, I headed down to Peru with my brother to embark on a 4-day hike to Machu Picchu along the Inca trail, an endeavor that was preceded by 3 days of altitude sickness which involved masive headaches and some degree of nausea. (Interesting fact: The best way to deal with altitude sickness in Peru is to drink coca tea or chew coca leaves. Incidentally, these leaves are one of the components in the manufacture of cocaine. No, you don't get high chewing the stuff itself.) Nonetheless, Machu Picchu and the other Inca sites are pretty darn amazing. The sheer scale and intricacy of the construction is truly a testament of what alot of people can do with alot of time. The jigsaw puzzle-like walls carved from stones dragged over from faraway mountains have even led one guy to theorize that the Incas must have had help from aliens. The Incas were also really into building terraces for agricultural purposes -- to experiment with plants and to acclimatize low altitude plants to higher altitudes. Now that's some pretty neat stuff! For anyone thinking of heading to Peru, I would highly recommend going on the Inca Trail, especially if you get hooked up with a decent company like SAS or Andean Life. The trek itself was pretty demanding since we didn't hire personal porters, but the service (which included hot tea during your wake-up call) was simply mind-boggling. It's luxury camping that well worth the price you're paying.

After Peru, my brother went back to Singapore (earning $300 along the way due to an overbooked flight), while I flew to Tokyo to meet up with my girlfriend. Having flown through Narita Airport on the way to the US about 3 times now, I've always wanted to see what Japan was like outside the terminal. In reality, not much is happening outside the terminal since it is about a 1.5 hr ride to the northeast corner of the city. We hit most of the major locations in Tokyo then headed out to Nikko for a day, which was an altogether more rural-esque escape. Highlights of the trip for me were the Tsukiji fish market (where we ate supposedly the best ultra-fresh sushi available), staying at a ryokan and looking at all the crazy food like US$157 watermelons and desserts that look like main-course items (e.g hamburgers, sandwiches, cod roe...)

So now I'm back in Singapore, exhausted from planes and trains, and starting work the day after tomorrow. Fun times :)

Graduation