I love Shenzhen. Shenzhen Futian Port 深圳福田口岸 I like its wide city roads that are peppered with electric taxis. There are virtually so many electric cars on the street that if one pulls up just next to you at the junction you wouldn’t even realise it’s there. The street layouts, traffic lights and well-paved roads resemble something taken straight out of a Lego model. Well paved roads And there are dozens of cafes that serve up a good coffee as well as numerous shops offering spicy Hunan, Sichuan and Chongqing cuisine. Nanshan district, which is home to China’s tech giants and hundreds of budding tech unicorns has a coastline that somewhat resembles Singapore’s East Coast Park. Commonly known as China’s Silicon Valley, Nanshan is characterised by lush trees and shrubs neatly placed on both sides of its roads. Futian district, Shenzhen Further down the road east towards the Futian district, pockets of greenery weave between towering skyscrapers and mid-century modern styled office buildings. And on some evenings, you can even enjoy the fancy laser light shows against the city skyline with the iconic Ping An Financial Center in the background. Shenzhen light show with Ping An Financial Center in the background Despite its urban backdrop, you can still find traces of history and heritage in the back alleys of the old towns (城中村). This co-existence of old and new is what makes the city unique in its own way, in some ways similar to Shanghai’s Xujiahui  district, or Singapore’s Tiong Bahru estate. If not for the Internet restrictions and WeChat Pay / Alipay, the neighbourhoods do not even feel like China but more like an adapted version of Hong Kong. Huanggang cun (皇岗村) in Shenzhen amidst the Futian city skyline This is just Shenzhen. In close proximity are at least seven other cities in the Greater Bay Area with a similar profile. Each with its own distinctive heritage, each bubbling with its own economic engine, each liveable in its own way, each with the potential to displace Hong Kong as the new regional powerhouse, if not for Hong Kong’s legacy infrastructure and position as an international financial hub. Some might even say this is the dark side of the Greater Bay Area initiative. Source: BBC If you are a frequent traveler to Hong Kong or reside in the city like me, there is a noticeable quietness in Central, which is traditionally home to all the big banks and funds. Even being in Singapore recently, there is an observable contrast to Singapore’s Marina Bay city centre. Standing at the lobby of the Marina Bay Financial Center, you can even feel the difference in energy level and vibe. Singapore's Marina Bay city skyline Part of the quietness in Hong Kong is also attributed to the out flows of travellers across the border. Hundred thousands of people flock to Shenzhen on a daily basis from Hong Kong. Coffee for one is significantly cheaper in Shenzhen. It’s on average RMB 28 vs HKD 45 for a flat white depending on where you get your daily grind. At some cafes such as Manner Coffee , flat whites are going for only RMB 18, and the quality of coffee is no less than decent. Eating in Shenzhen is generally much cheaper as well, not to mention the good variety of both Asian and Western cuisines. Chinese food (all kinds) is undoubtedly more authentic in Shenzhen, no question here. Also, you can get cheap food and groceries delivered to the doorstep at basically any time of the day. The gig economy is extremely vibrant. Meituan  is incredibly accessible and affordable compared to Deliveroo or Foodpanda in Hong Kong. Those who struggle with the high rents and suffocating spaces in Hong Kong are finding it attractive to stay in Shenzhen while continuing to work in Hong Kong, putting up with the 1+ hour commute. Bloomberg even has a report on this . Truth be told, Shenzhen is even more accessible than you can imagine. There are abundant car pools, buses, even the East Rail Line (东铁线) on the Hong Kong MTR goes directly to Lok Ma Chau and Lo Wu in under 60 minutes. If you are impatient, there is always the 15-minute high speed rail option departing from the West Kowloon station in Hong.Kong. The East Rail Platform at Admiralty I have tried them all and the journey (even passing through immigration with a passport) is seamless, despite the crowds and rush hour. Hong Kong should in theory, benefit economically from this flow of people within the Greater Bay Area. But this has been disproportionate, with more people traveling  out  of Hong Kong in recent years to spend on entertainment and retail across the border . Once known as the “promised land” for doing business in China, Hong Kong has been haemorrhaging capital and resources. The big bucks and high life that people used to be drawn to 10 to 20 years ago do not exist anymore. There are lingering doubts as to whether it is still possible to make good returns from investing in China using Hong Kong as a springboard. Affluent residents are spending meticulously, but are also more careful about flaunting their wealth. I think the music started to slow in 2019 with the protests, followed by COVID restrictions which really broke the camel’s back. Decades of growth and reputation unwound in just a couple of years. These are indeed delicate times. The firms that used to be paying top dollar have moved out or relocated their bases elsewhere. If people are not earning the top dollars, they simply won’t be spending, whether it is dining out, partying or buying property. And no consumption simply means no economic growth. No wonder Thailand and Philippines are jealous about Taylor Swift’s exclusive performance in Singapore , which quite inadvertently channelled tourist arrivals, entertainment and retail activity away to the little red dot. More than just its Canto-pop concerts, Hong Kong needs a “ Taylor Swift event ” to bring back the buzz and hype to the city. [Photo credits: mine]

In 2015, following the completion of a USD 2 billion cross-border deal, I was invited on a Saturday morning to share some of the learning points and takeaways from that transaction in an academic setting. As point person on the deal, I was responsible for steering most of the conversations that took place. This included translating, proposing negotiation strategies, facilitating the discussions and at times managing emotions on both sides of the table. I vividly remember on one of the nights (I think it was probably around 1am), sitting in the client's office finalizing the deal documents when we received a competing bid on the deal. It was a turning point whereby we had to decide whether to jettison everything. On hindsight having completed that deal, I felt that the most important aspect in that whole process was: " If both sides are motivated to get the deal done, it will be done. " Everything else doesn't really matter. Seven years on, the complexities in deal execution still never cease to amaze me, that is probably why investment banking had been such an interesting career. Here are some additional learnings that I've consolidated below: (1) An issue only needs to be dealt with as long as the biggest stakeholder and/or someone important thinks so. (2) All transaction processes have unprecedented bumps and disagreements of sorts from fees to valuation, but a good negotiator knows how to play both sides of the game . (3) The drafting of most agreements is effectively a process of managing risk , less so of governing commercial interests, especially when everyone is convinced that the pie is big enough to be shared equitably. People only start to fall back on and scrutinize these documents when shit hits the fan. They are really just a formalised set of what-ifs and everyone hopes they won't ever have to re-look at these contracts when stuff blows up. (4) Following on the above, the essence and spirit of most agreements are in reality like guidelines . If no real harm is caused, any violation could simply warrant a slap on the wrist. The contract basically gives either party the legal right to punish the other party if real harm has been done. At the very bottomline, it’s all about whether interests are being thrown into jeopardy and the money, really. (5) MOUs and term sheets - while legally non-binding in nature - are important. They are an essential framework to help guide the drafting of the final legal documents. When done properly, they eliminate ambiguity and misunderstandings, enabling both parties to save a lot of time in the documentation phase (which ironically, is not in the interests of lawyers who are billed on time). That said, there will inevitably be blind spots in the negotiations. The proverbial devil is always in the details . (6) Engage a lawyer that: doesn’t think like a lawyer can dumb down complex legal concepts is able to articulate the consequences of certain nuances within the agreements can provide constructive solutions to resolve conflicts (7) Home-ground advantage has a cost. When you are holding the pen on drafting, expect to incur higher costs - both on expenses and time. That said, you do have some upper hand when it comes down to dictating the overall flow and structure of the agreements. (8) On the point of flow and structure, depending on which side of the table you are sitting, the drafting of nearly all documents generally comes down to two approaches: “ You can do everything , except for the following... ” “ You cannot do anything , except for the following... ” (9) Some lawyers provide maps (legal opinions), some lawyers will be your guide and chaperon you for the journey (legal advice). You will need to decide whether you need a map or a guide. Legal opinions don’t protect against anything, it serves only as an ‘expert opinion’ on outlining the risks and enforceability of key aspects in the transaction. Decision makers who cannot navigate the nuances in a cross-border deal or have no meaningful way of controlling the risks in a deal fall back on the ‘tightness’ of a legal opinion. Good legal advice on the other hand will tell you where the pot-holes are, the hidden corners, why you should take certain routes instead of short cuts, etc. It goes a step further, implementing the mechanisms to clearly define and safeguard relevant risks and commercial interests. (10) The closing phase of any documentation process is almost as important as the drafting and negotiation phase.

[ Disclaimer: I’m neither a parent nor speaking on behalf of all parents ] I was walking on the pedestrian bridge to Pacific Place in Hong Kong, watching people from various walks of life - young and old - pass when this thought came to mind: They say that those who have kids tend to look and behave older than they really are. It’s not just the result of long term fatigue and physical exertion, but also the experience and wisdom that comes with it - Knowing what to avoid, where to step, how fast to go, what not to eat. Older people, like parents, likewise share an inherent trait of being highly averse to risks, especially overly-high risks. Risk management is a very underrated attribute. It is boring, dull and invisible. Its virtues are often only realised in times of ruin or in hindsight as we grow older. Contrary to what we conveniently assume, wealth has little correlation with a person's line of work but more about just being around at the right place and the right time. I have seen high-flying bankers who used to hold lofty pay-checks, being being so-called "reduced" to the common man. And it's not only bankers, celebrities share a similar fate as well. People such as Michael Jackson, Mike Tyson and Nicholas Cage went into financial debt splurging on extravagant items. Hard to imagine sometimes. Being in a highly-desired job and earning a five-digit monthly pay-check upon graduation doesn't guarantee that you'll be financially well off in your 30s and 40s. And even if you find yourself in a financially advantageous position in your 40s, circumstances can change quickly overnight if you make a misstep. I find those swaggering in this category while exuding an air of arrogance incredibly vulnerable and borderline repulsive. So risk management isn't sometimes about portfolio growth and diversification, but more about knowing when to avoid bad decisions with drastic outcomes. Knowing when not to act when everyone else is getting excited about hopping on the bandwagon, learning how to avoid FOMO , and also when to move when everyone else is cowering. Those who are ruin-averse tend to be more humble and better at doing this. Experience is oftentimes good teacher. Steve Schwarzman of Blackstone once said in an interview with Bloomberg . There are no brave old people in finance. Because if you’re brave, you mostly get destroyed in your 30s and 40s. If you make it to your 50s and 60s and you’re still prospering, you have a very good sense of how to avoid problems and when to be conservative or aggressive with your investments.

Excerpt from "The Art of Spending Money" by Morgan Housel. I recently finished lecturing a couple of corporate finance and financial modeling courses curated for working professionals. The most common feedback was either that the pace was too fast or it was challenging to keep up with the accounting math. Coming from an engineering background where math is like an innate skillset, I try to keep the logic as simple as possible. Looking back, sometimes I wished someone had shared these with me earlier right from the start when I embarked on my investment banking career. In case you need a layman's explanation, this article effectively summarizes everything you need to know about investment banking and corporate finance: (1) All corporate finance comes down to decision making. Everything involving the work of corporate finance comes down to these two things: Investing decisions and financing decisions. (2) There are only two ways to fund a business. There is only either equity or debt. Using the analogy of a queue , debt holders stand in front and equity holders stand behind. These are the irrefutable rules of the financial markets. Lenders care only about profits to the extent it jeopardizes their recovery of the debt but for equity investors, profits are all that matters. (3) There are no correct answers. Nearly all of business valuation involves some form of comparison. Interest rates set by central banks all over the world are a widely accepted benchmark for a minimum rate of return. The rest of it comes from how institutions are perceiving and pricing risk. What we observe in the markets are mostly a result of irrational and agenda-driven decision making. For example the widely assumed perpetual growth rate of 2% came about from a meeting of central banks in New Zealand dating back to 1990 [1] . According to one person, “ The figure was plucked out of the air to influence the public’s expectations ”. To quote Eugene Fama [2] : “I’d compare stock pickers to astrologers, but I don’t want to bad-mouth the astrologers.” There are no correct answers, only differing points of views. (4) Storytelling is an important part of valuation. According to archaeologists, cave paintings that date thousands of years ago indicate that story telling was an important aspect of how humans communicate and evolve. Listening to stories causes the brain to release oxytocin which is associated with empathy and cooperation.  For what it’s worth, story telling is an important part of finance. The narrative helps investors make up their minds about whether a business is good or bad. In my opinion, relying on IRRs, MOCs and DPIs to assess and determine the performance of a company or a fund manager violates one of the cardinal rules of investing: History is not the best indicator of the future. Also, good bankers do not always make good investors, good investors do not always make good operators of businesses and managing capital is fundamentally different from running a business. An investor is only as good as his last investment. But since no one can accurately predict how things in the future are going to turn out, history becomes a convenient fallback, society somehow ends up rewarding good storytellers, and people being humans, do love to listen to a good story.  (5) It's not complicated. Financial modeling and leverage buyouts (LBOs) need not be as complicated as bankers make them to be. LBOs are like a buying a house on a mortgage. The bulk of the purchase is usually funded with a huge bank loan (or bank loans). The difference lies in how the debt is serviced. With a home purchase, the cash flows come from your salary. In a LBO, the cash flows are generated from running the business. Assuming the value of the asset remains the same, the value of your ownership (equity) naturally increases as the debt gets paid down. That’s all there is to it. When you think about it, a lot of what goes on in corporate finance are actually very relatable to daily life. Most of what we learn about how financial markets work and how to value businesses were originated from the West, largely because the US and the dollar led the charge on how capital is being raised since the history of corporate finance as we know it. Since then, a number of things have changed. The world became more globalized, investors at all levels have better access and knowledge to putting money to work, information is now more pervasive with technology and social media. In short, an oversupply of capital seeking new avenues for getting returns.  A number of global events that took place over the last few decades had also dramatically shaped the way we apply the frameworks of corporate finance such as estimating growth, calculating risk premiums, deriving cost of capital and using valuation multiples: Projecting cash flows in a high growth economy: In early 2000, China opened up, embarking on huge market reforms that put it on the global economic map. It became one of the hottest investment destination and everyone wanted a piece of the pie. I was fortunate to have witnessed first hand how businesses had successfully produced insanely affordable smartphones, put them in the hands of even the poorest people and connecting everyone in the country. China also leapfrogged the entire credit card economy, going from cash to cashless. Putting the two together meant that one billion people now had the power to spend on just about anything at the convenience of their fingertips. If you truly understand and appreciate this, trying to project cash flows and using DCF at that point of time will fiercely challenge your approach towards trying to wrap your head around the growth rates and valuation of a Chinese company. Stable market risk premium? The financial crisis in 2008 that kicked off the collapse of Lehman Brothers and subsequently the dissolution of pure-play investment banks, also led to the over-printing of money in the US. Since then, liquidity has been the go-to playbook for solving any financial crisis. For a long time now, the US market has always been positioned as the baseline for what constitutes a mature market, along with other high-performing financial capitals of the world. Today, whether the US will continue to honor its USD 30+ trillion debt obligations will not only test the strength of the US dollar and the credibility of its treasury bonds, but ultimately also our textbook definition of what makes up a “ mature and stable market ”.  If the LIBOR, the London Interbank Offered Rate (which at one point of time had been used as the benchmark for setting interest rates all over the world) can be abolished [3] , we must accept the very possibility that our understanding of what defines a stable market return could already be outdated. Bending the rules of the WACC : The default on the now defunct Credit Suisse’s AT1 bonds in early 2023 also raises disturbing questions on our conventional understanding of how debt and equity works. For example, is debt financing really less risky when an important strategic shareholder owns part of a business? When countries start to weaponize economic and financial policy through bailouts, tariffs and sanctions, do companies and investors continue to apply the weighted average cost of capital ("WACC") to quantify and justify their decisions? Exorbitant valuation multiples : Elsewhere in the world, an investor is paying 100 times on sales for Zhipu , a large-model AI company that recently debuted on the HK exchange but has no earnings yet. There is no decent financial model that could justify a company being valued at 100x sales. But as Lee Kai Fu [4] once said of the AI bubble in these companies, “If you believe there is 2x, 3x, 5x growth for the next three years, it is going to justify that valuation at some point. The bubble is merely that it has gotten ahead of itself, not the likelihood of growth in the future.” The all-time historical high of a price-to-sales ratio for the S&P 500 and the NASDAQ was approximately 3.4x and 7x respectively. Even tech darling Nvidia only touched 30-40x at its recent peak. That makes it highly irrational to think that any business could be valued at 100x price-to-sales. Put that into your model. There are no straight answers to the questions above. One thing that is for sure is that there are definitely are a lot more events taking place in the world that has transformed the way we look at businesses. In short, the rules that we used to learn in books, the rules that govern how financial markets supposedly work, are different from what happens in the real world, and it will continue to stay that way.  Finance teaches us that value - especially intrinsic value - is the sum of the present value of all future cash flows. Reality however often tells another story. It is necessary to still know how the math works on paper, but acknowledging and understanding this difference is perhaps the most important lesson in corporate finance. [1] "Of Kiwis and Currencies: How a 2% Inflation Target Became Global Economic Gospel" - The New York Times . [2] Lunch with Eugene Fama - The Financial Times . [3] In 2012, it was first discovered that banks were colluding to manipulate the benchmark interest rates to profit from trading and mask the troubles that banks were facing following the 2008 financial crisis. It was fully phased out in the middle of 2023. [4] "Sinovation Ventures Lee Kai Fu on The China-US AI Race" - Bloomberg .

In recent years, I send and receive nearly no birthday, Christmas or new year wishes. This is a sharp contrast to ten years ago whereby my phone will be inundated with text greetings during these festive periods. But I am not complaining. On contrary, there is an unspoken peace of mind that comes with the quiet mornings. Besides, most of these text messages usually comes with a follow up coffee and a "how-are-you-doing-in-life" conversation. But social gatherings bore me these days. American author and lawyer, Mel Robbins says, " When people come and go in your life, 99% of the time it’s not personal. " (1) Proximity (2) Timing and (3) Energy are the pillars to social interactions. When you were little, you were probably in the same neighborhood (proximity) and timing of life with everybody. When you hit your twenties and beyond, everybody embarks on different timelines. Some are pursuing jobs, going to graduate school, or getting married. Others are moving out of the city or moving into the city. Everybody's proximity and timing are now different. And with regards to energy , the thing about energy is that it changes. You can have fantastic energy with somebody and then if you decide you're not drinking anymore, the energy's off. If you decide to get focused on fitness, the energy's off. If you have very different political beliefs, the energy's off. It's really not personal. I have also for many years now, renounced posting on all forms of social media, keeping only my LinkedIn profile intact mainly for a digital identity and writing stuff here. Some folks think I have gotten dark . I think it's just a progressive realization. There are no epiphanies, just moments of clarity.

I had crossed the mid-point of my economic life some months back. The term 'economic life' can be loosely defined as from the point of time one steps into the working world to the point at which one retires. The exact points of each varies by country, law and personal definition of course. According to the conventional wisdom of society and mainstream media, spending twenty years on the hamster wheel means that I am in the “prime” of my life. From another and somewhat darker  perspective, governments and organizations probably see an obedient, housebroken dog [ 1 ] who can be plugged into the system to make money on a tightly-controlled leash. Banks also love these people. It presents an opportunity to monetize another twenty years of revenue in the form of getting a fee from managing assets or receiving interest payments from these high income earners who live delicately under the weight of their mortgages. A former co-worker in banking used to say of our jobs, “ You are basically trading time for money ”. And being a non-replenishing commodity, time increasingly becomes more important than money. But after twenty years on the hamster wheel, I had realized we spend most of our time just learning how to game the system, living life by "passing" each level in the game, collecting coins to reach the end point. In fact, we had started to do this since our school days. Let me explain. The pathway to being an good student isn’t acquiring knowledge, but to excel at exams, and excellence is mostly marked on a bell curve. To get on the right end of the bell curve, one simply needs to be good at predicting which questions will come out so that you can maximize the probability of getting the highest grades. When I step into the exam hall, I am only concerned about my score relative to everyone else, and not whether I had enjoyed the learning process or could apply what I had learned. I had friends who graduated with distinctions in the field of Computer Engineering, but clueless on how to troubleshoot their network router at home. On the other hand, I also have many friends out there who aren't credentialed with a CFA or an MBA, and who are great at what they do. You can succeed at the workplace by gaming your way into getting employed. Just learn and exploit the dysfunctional aspects of an organization, give a false impression of capability and suck up to the right people. One of the co-founders at Y Combinator, Paul Graham [2] , once wrote: "There will always be a certain amount of fakeness in the work you do when you're being taught something, and if you measure their performance it's inevitable that people will exploit the difference to the point where much of what you're measuring is artifacts of the fakeness." That was how many of my former co-workers who were terrible at their jobs managed to stay hidden in the blind spots of their organizations every year. You can also succeed at fundraising by trying to learn the techniques for convincing large celebrity-like investors to endorse the business and using fanciful slide decks to tell stories. In fact, some firms have gotten so lost in telling stories when playing the fundraising game that they fail to realize customers and revenue are fundamentally what attracts investors.  The underrated truth was to always solve for cash flow from operating activities first then address cash flow from financing . But knowing how to manufacture a good equity story has become the yardstick for measuring performance and too many companies out there do it the other way around. We have spent nearly our whole lives learning how to game the system , just to beat the competition and look good. When you have been brought up most of your life learning how to game the system, the metric for success becomes defined as beating someone rather than curating the life you actually want.  Incidentally, these people who succeed in the competition are often the same ones who are suffocating those who are succeeding by doing what they love at their own pace. Some of us feel the pain of our own stagnation by looking outwards at everyone else progressing forward. But looking inwards, you realize all that resentment and envy stemmed from an unhealthy sense of competition.  There is nothing wrong with being ambitious, but the race for returns and big money has transformed most people into lifeless souls trying to step over each other at all costs.  Not all of us wants to outrun a ghost. Some of us just want to slow down and breathe. “The work was always something I loved. I never, ever stopped loving the work. But there were aspects of the way of life that went with it that I had never come to terms with — from the day I started out to today. There was something about that process that left me feeling hollowed out at the end of it. I was well acquainted with it. I understood that it was all part of the process, and that there would be a regeneration eventually. And it was only really in the last experience [...] that I began to feel quite strongly that maybe there wouldn’t be that regeneration anymore. That I just probably should just keep away from it, because I didn’t have anything else to offer.” - Daniel Day Lewis (retired British actor) [3] [1] To borrow a phrase from Nassim Taleb's book "Skin in the Game". [2] Most of what I had written had been a personal reflection after reading Paul Graham's essay on "Before the Startup" ( https://paulgraham.com ) [3] From an interview with Daniel Day Lewis on his retirement from film-making. ( https://www.rollingstone.com/tv-movies/tv-movie-features/daniel-day-lewis-son-ronan-anemone-interview-1235420815/ )

“All I ever wanted was the freedom to make my own mistakes.” - Mance Rayder [ 1 ] Chasing a pipe dream. Years back when we entered the advisory business, we had a whole bunch of M&A and capital raising deals. It was thrusted on to our plate by someone who claimed to know important people from all over the world. On our plate were companies looking to raise capital or those trying to get into new markets, early stage start ups looking for venture funding, or investors who were simply trying to put capital to work. It was a buffet of deals. We had spent a considerable effort evaluating each and every one of them. Most times it involved a systematic way of filtering and deciding whether or not to proceed. Other times we ended up having to do 'favours' such as meeting brokers of the deal as part of the process, sitting mindlessly in a lecture for days. When ever we hit an impasse, felt it wasn't cost-effective or disagreed with going ahead, someone would say: "When starting up, sometimes you just have to do the things that you don't like to do." But our deal pipeline had been so full - full of long shots and losers. Projects that had a low probability of closing, clients that likely couldn't pay, or simply just a waste of our time. Listening to our " elders and betters ", we almost never had any decision-making authority to kill the deal or proceed with what we felt made more commercial sense. It was probably only over a year later that I had begun to realize the ironic and toxic dumbness of it all: The idea of starting up had been ours, us bearing our own costs, but somehow suffocating under a blind workload, executing a totally different agenda that belonged to someone else, just to heed conventional wisdom, that it was part of the entrepreneurial journey , and we had to " do the things that we didn't like to do. " A lesson about vulnerability. I couldn't remember exactly when it started to dawn on me, but one day amidst the frenzy of calls and meetings, I woke up, subconsciously dragging my feet out of the house and feeling that morning anxiety of arriving at the office before 9:30am. I was also checking my emails and text messages in the same way I used to check my Blackberry  on a Friday evening ( yes we used Blackberry in those days ), hoping that you don’t get a nasty email from the ‘boss’ to turn round a slide deck by Monday. And in any job, the moment you start counting down to Fridays or dread Monday mornings, you are basically f****d. Back then I had been ‘working’ on several leads. I had no full context to these projects, no direct connection to the source, no tangible resources to mobilise. Perhaps, more importantly, no autonomy in dictating any of the commercial terms. It wasn’t even a client that I originated. I was stuffed to the neck with work that wasn't mine and was simply churning slides and spreadsheeting numbers. At every discussion, I found myself mostly on the receiving end, listening to fluffy ideas and being fed with lofty dreams, all the while being told to follow up on execution in the background. A lot of these didn't have any commercial mandates tied to it. It was basically a bunch of stuff that was done in goodwill, in the blind hope that would one day convert into a billion dollar opportunity. We were being played. And as the popular Chinese saying goes, I was being led by the nose . In that whole process, I think no one had really considered what I wanted for myself. It was a weird setting. Why? Because my intention of starting a business was to unshackle myself from a corporate job, but I ended up in a situation whereby I was working on someone else’s projects and providing the ‘weekly reports’ on a regular basis. Suddenly I was an employee all over again. The reality of it hit me hard when I ran this through my head and played it out right till the very end: I was no longer the owner of my business , whatever form it had evolved into: No say, no control, no money, no visibility, all of the downside and none of the upside. That whole process taught me something: In any moment of vulnerability, if you are not careful in protecting your dreams, someone else will show up and make you build their dreams for them. Sometimes people turn to those who are more “successful” without really aware that everyone is simply just trying to validate their own narrative, and what works for them may not work for you. Takeaways. In any enterprise with more than one shareholder, it is almost inevitable that decision-making and relationship dynamics get relatively complex. Everyone brings a set of different resources to the table. Some bring sweat, some bring relationships, some open doors, others bring influence. Regardless of no matter what you put into the pot, there are always some cardinal rules to abide by: Integrity and transparency above and before economics, always. Respect the money and capital i.e. everyone has the right to their opinion, but only those with skin in the game get to decide. In any deadlock or impasse, refer to point number 2. Whenever you feel that you are getting the short end of the stick, refer to point number 2. If you find yourself doing the things that you don't like to do, refer to point number 2 Doing business can be complicated, but everything fundamentally defaults to point number 2. You can bring up grey hairs and sweat from decades of experience, or show off selfie photos with the big shots. But none of that really matters until you put money on the table. That is all there is. And so, I still remember the January of 2020 (just before COVID), when I was walking to my usual morning coffee hangout in Singapore around the neighborhood, while reflecting upon decisions that were made over the last four years. On hindsight, I should have been panicking given the unnerving amount of cash in my bank account and thinking about what lies next. But even in those dark moments, I had found a quaint inner peace, taking responsibility of all the good and bad decisions that were made. It was a liberating feeling of sorts. A peaceful morning walk Perhaps all I really wanted out from starting a business was the freedom to do what I wanted, including the freedom to make my own mistakes . [1] Adapted from Mance Rayder, leader of the free folk , from the HBO series "Game of Thrones"

Some random thoughts on hatch day. True wealth. True wealth was never about the accumulation of money but a way of life. There is no point in comparing yourself with those who work 7-day work weeks, or clock 18-hour days earning heaps of money. This applies also to those working regular hours with relatively more ‘free time’ on their hand, and who are earning a fraction of the income. “There is no universal truth in terms of what makes up a good life, only what works for you and allows you to sleep peacefully at night” - Morgan Housel Once the rain is over... Once the rain is over, an umbrella becomes a burden to everyone. That’s how quickly loyalty ends when the benefits stop. Don’t take everything too personally. A lot of what we misconstrue as friendships and good relationships tend to be mostly transactional. Don’t overshare. Not everyone wants the best for you. Privacy is power, and people can’t ruin what they don’t know. Space. Give yourself space. Sometimes all you need is a little more space to think through things and solve your problems - space to breathe, space to take a step back and more importantly, to look at the bigger picture. Nature often provides a good setting for this. Self-responsibility. You bear ultimate responsibility for everything that happens to you. They say don't be too hard on yourself. That's only because most people don't want to face up to the fact that they are responsible for everything good or bad that happens to them. Once you recognise this, you stop assigning blame and focus on just getting to the root of fixing any issues. If something doesn’t work for you, change it, or eliminate it. Spend less than you earn. Run your life for gross profit. That means: spend within your means, and don't buy more than you can afford. Manage your finances based on gross profit, not revenue. Never chase or compare yourself with the high-income earners or those who own a lot of stuff. You don’t know what kind of liabilities come attached with it. The value of experiences. Buy experiences, not objects. Yoyogi Park, Tokyo Restful sleep. If the volatility of tens of thousands of dollars per day keeps you up at night, maybe you shouldn’t be managing money. You either get the job done, or not. In the early days of school, we were brought up believing that you get credited partially by showing your calculations and workings next to the answers in some exams, particularly for math and especially when it is the wrong answer. This was done mostly to encourage students who did not get the right answers, but showed effort in trying. In the working world, right answers are everything. Results drive everything. Stephen Schwarzman illustrates this aptly during his guest address at Yale where he shared his experience working at Lehman Brothers [start watching from 48:20]: "In the real world, there is only one grade for every project... which is an equivalent of an 'A' grade. And the definition of an 'A' isn't the same as in academics. In academics you can get an 'A' sometimes with a 90, sometimes with a 92, a 93... and that's sort of pretty good. In our world, an 'A' is a 100. This was shocking to me, because I wasn't an 'A' kind of person..." - Stephen Schwarzman Don't justify how hard you are trying to your clients or bosses. Stop complaining about how much work you have put in. No one is coming to pat you on the back or give you a gold star for your effort. No one cares, get over it. You either get it done, or not. That's it. What really matters. You matter only to the people who genuinely care about you. If you drop dead tomorrow, your line manager will posthumously say a few words of thanks and condolences, and then proceed to hire your replacement the very next day. You only matter to your company and your colleagues as far as economics go. Be that as it may, so easy to say, harder in practice. Reputation. So much depends on reputation, guard it with your life. Law number 5, from the book “ 48 Laws of Power ”. One of the most important things to a man is his reputation. Negotiation. When negotiating, remember that Nassim Taleb says: "What matters isn’t what a person has or doesn’t have, but what he or she is afraid of losing." Trust your gut. If you do something and find yourself awake and unable to sleep at night, with a nagging feeling in your chest or gut, it probably means that whatever you are doing is posing a threat to something of great importance to you, or is conflicting with your core values deep inside. Whatever that is, stop doing what you are doing. And the next time you do anything, remember that nagging feeling. At the end of the day, you are only accountable to yourself when you wake up in the morning. Be less judgmental. Don’t impose your moral high ground and standards on others in terms of what you think it means to be rich, what kind of work they are engaged in or what they say and do. You don’t know what they have gone through or have to put up with. “Some people were born to sit by a river. Some get struck by lightning. Some have an ear for music. Some are artists. Some swim. Some know buttons. Some know Shakespeare. Some are mothers. And some people - dance.” - Eric Roth (excerpt from the movie " The Curious Case of Benjamin Button ") Fat in organizations. Fat accumulates in organizations because most people work on the basis that it is better to follow instructions, even when it is wrong and get paid, rather than to be right and lose your only source of income. To paraphrase a Chinese colloquial saying: Stakeholders are the ones who foot the bill eventually (Also, see number 40 here .) The value of money. Money buys a lot of things, but the most important thing it buys is the option to walk away from everything.

The picture speaks for itself.

"Un-investable" is all about the perception of risk. Earlier this year in Singapore, I was having a conversation with someone from a bank about the creditworthiness of large state-owned-entities in China. Surprisingly, he actually saw this as a “high risk” business. If the counter-party had been one of the more familiar titans of the finance industry, that sentiment would have been very different. Apparently many still think that the business environment in China is still rampant with corruption and fraud. These same risks that investors are concerned about exist in many other countries as well, including the developed ones. Just take a look at 1MDB, Wirecard and Theranos. I recall a company sergeant major during my national service days who once said, “Soldiers all around the world behave in the same way once they put on their helmets and the uniform.” This is interestingly true. The helmet reminds everyone that: at the very core, we are essentially the same. In a similar fashion, consider a blue-collared production line worker sitting in China, Philippines, Italy, the US or anywhere else in the world that operates, say a machine, in more or less the same way. Because he is human, he experiences both good days and bad days. And on bad days, the quality of his work might be sub-standard. But at the end of every work day, he tries to get off punctually, goes back to his family, and starts his routine again the next day. You might attribute any quality defects to the fact that the product was manufactured in a relatively low cost location i.e. if something is lousy, it is easy to dismiss that it is cheap and “made in XXX”. After all we have been conditioned to conveniently draw trivial correlations between price and quality. Without this bias otherwise, you could have just as easily blamed it on the merchant who sold you the product. But corruption, fraud and quality control are smaller problems in the bigger context of things these days---Earlier this year, JPMorgan allegedly issued an “ un-investable ” call on China equities as a reflection of its unpredictability and geopolitical risks. All businesses need to embrace policy. Companies that end up on the wrong side of propaganda run the risk of getting cancelled , as can be seen from H&M’s business in China . But being cancelled goes against our ideologies and learnings of the free market, which is: identifying an environment with favourable supply-demand dynamics and taking scientifically calculated risks in raising capital to make money. State intervention is non-existent. For most places in the world, the market economy is the truth. In China, the authority is the truth. There’s no right or wrong. Most of us have simply been brought up imbued with the ideologies of an open economy that we become averse to a scenario in which autocratic intervention could make or break a business. We fear what we do not know or what we cannot control. And because of this, many companies write this off or cast a huge premium on country risk. Think for a moment how different the risk models and perceptions towards raising money (such as the weighted average cost of capital) would be for a domestic investor or owner of a Chinese company vs a foreign company. The assumptions driving the decision to invest should ideally be localized and go beyond the scientific calculations that we have been taught. Instead we consistently fall back on conventional wisdom (which are mostly capitalist-centered) defining what constitutes a 'mature' or 'stable' market return. For example, a common risk management strategy in the West involves diversification i.e. as long as we have enough eggs in the basket, we can always afford a few bad ones. In China, risk management is less of a game involving statistics but more about developing, embracing the ecosystem, staying in alignment with policies, and in the process, minimising (or sometimes even zero-rizing) the incidence of 'bad eggs'. This is inherently a very different way of doing business and ultimately a very different perspective of risk. In a slightly similar parallel, while modern Western medicine adopts a targeted approach towards treating afflictions and eliminating the ‘bad parts’, Chinese medicine tends to be more holistic, treating the entire system, including the patterns of symptoms. Because the fundamental perceptions and understanding of risks are different, many investors struggle with using scientific methods to quantify returns. Shan Weijian summarized this aptly in an interview last year : "Investment is a risky business, and China as a market, is not for the faint-hearted." On closer look, most of the policies are probably not meant to be autocratic or unreasonable. They exist to maintain a certain social stability, encourage economic activity and safeguard certain national interests - as with any sovereign state. Of course the whole inner workings of global trade are made up of many complex moving parts. But at the end of the day, these are just the rules of the game, and risk is just a measure of how well you think you can play that game. Starting a business in the US almost seems like fortune favours the bold . In China it feels more like: You better do as you are told . A very different image of entrepreneurship and doing business is portrayed in the West. Many of these are frequently sensationalised with stories of school dropouts creating billion dollar businesses, founders working out of a garage, cavalier businessmen who buck the trend, sidelining authority to grab resources on a level playing field, and numerous books celebrating corporate bravery. My first-hand experience in appreciating this difference was about 18 years ago when I embarked on the NUS Overseas College program in Shanghai. The idea of the program back then was to replicate in China, the “success stories” of entrepreneurship in the US - championing research & innovation and commercialising it. China at that point of time was less interested in leading the charge on technology and chose to prioritise large scale infrastructure investment and market reforms around reining in foreign investment. Some of the best businesses at that time weren’t centred around tech but the seemingly more boring and less sexy sectors. It was a very different economy and no one in the cohort had the slightest clue of how to adapt the program objectives to such a market. We were all learning along the way (摸着石头过河) from attending business meetings, fraternizing with colleagues, all the way down to getting visas and negotiating the rent on the apartment. We would later on also learn that the strategy of navigating in China (which probably still applies today), wasn’t so much about being the smartest guy in the room but more about handshakes and being able to connect the dots. Ideas and intelligence are nothing without endorsement. As such, individuals and high achievers who are used to thriving in a merit-based world and expect to use their minds to blow everyone off their seats will often find themselves stumbling in such an environment. Also, all the most important decisions are made centrally. There is almost always either a single decision maker or a small trusted circle of influence (almost mirroring the CCP style of governing) or if you like, using different share classes in a more western centric context. Language is culture and culture is language. Being effectively bilingual might be sufficient, but being able to speak the language does not automatically imply that you can assimilate into the culture. As with many cultures, there are almost always subtle undertones in both casual and professional banter between people, which is why as effective as Zoom and video meetings go, nothing can truly replace the relationships built with in-person meetings. Most of us would later on in our jobs apply these valuable learnings when we took on regional roles or help overseas and local companies in their expansion within China. Starting and running a business wasn’t the same as how most of the world saw it being done in the case of Facebook, Google, Apple or Amazon. The venture capital ecosystem in China didn’t really take off until maybe 10 years ago and the check sizes weren’t that large as well. Most of the time, it takes years for a company to grow, often staying in plain sight, having the right handshakes, playing by the rules of the game, and perhaps more importantly, having very very deep pockets. As you are reading this, the geopolitical and macroeconomic landscape is still constantly evolving, and we are still learning. There is certainly much more transparency today as compared to before, but the perspective of risk will continue to be an ongoing education process, and many investors and corporates seeking to do business in one of the largest economic powerhouses in the world will eventually need to find a way to balance expectations and reality.

1992 - PSLE. It was the year I took the PSLE ( Primary School Leaving Examinations ). Some might say I was in one of the top notch primary schools in today's terms. The school had come from humble beginnings, being located in a neighborhood whereby most of my friends stayed in HDB flats and everyone knew their neighbors. I had been fortunate enough to almost always be in the top one or two classes with the best performing students. Back then, my childhood dream had been to be a doctor. So for my PSLE, I had aimed for a score of over 260 (300 was the maximum) as that would surely propel me into the best secondary schools. But when the results came back, my score was an astounding 237 - a decent grade no doubt for many, but it fell incredibly short of what I had hoped for. I could not qualify for any of the schools that I had initially shortlisted and I remembered walking along the road to the bus stop just outside the school after collecting the result slip as mum and I re-evaluated my secondary school options. I eventually went to a secondary school that I had never heard of (which later also turned out to be quite a good school). Despite the turn of events, those four years were one of the most transformational periods of my life. Excellent teachers and numerous outdoors expeditions would shape me into a highly athletic, all-rounded and balanced person that good grades alone could not achieve. 1996 - Food poisoning. On the morning of my English 'O' levels, I came down with an extremely bad case of food poisoning. So bad that on that fateful morning, I had to be sent to the hospital. I vaguely remembered the nurse putting me on a drip as I gradually passed out on the wheelchair. Back then, I had enrolled in a triple science route as part of the pre-requisites to study medicine. I had nine subjects under my belt and English was just one of them. Failing or skipping the English papers meant that you had to re-take the entire year of school again, regardless of the other eight subjects. Everything was on the line here. By the time I had woken up, I remembered distinctively that it was 8:25 in the morning and a man was seated just across the bed where I was. The school had been informed of my circumstances and sent an invigilator to the ward. I ended up taking my English papers nearly an hour behind every one else, in a slightly woozy state and with a thick hypodermic needle stuck in my right arm. Although the doctors put the diagnosis as a simple bout of food poisoning, I was placed under further observation for a week. Ironic as it seemed, I scored an 'A' for all the papers that I sat for during my stay in the hospital. But I still fell short of the overall grade requirements to break into the top five junior colleges. 1999 - Career choices. I did well enough for my 'A's to do nearly any course I wanted in university except for medicine, which I eventually gave up when I traded biology for athletics , which I later obtained school colors for. As I left junior college and served my mandatory national service in the army, I had been offered a prestigious government teaching scholarship to study at some of the most reputable universities in the US. The catch was that I had to commit six years of my life to the public education sector upon graduation. So I passed. A year later when I graduated from OCS, they had once again offered to send me overseas to a military college in Japan and engineering school in exchange for serving six years in the army. I declined again, mostly because I didn't like the idea of working under a covenant. I figured there were much more job opportunities beyond civil service after four years of studying in a university. I wanted to be an engineer. Back then I remembered one of my teachers in junior college saying, " Go study engineering, it will always be in demand ". So I went and enrolled in Computer Engineering, believing that it would lead me to the holy grail of all professions. 2006 - China and the world of finance. Studying engineering in university proved to be much more difficult than I had thought. I was toeing the red line and nearly got booted out. But my life changed forever when I decided to spend a year living and working overseas in China. It was at a time when the country was undergoing market reforms and opening up to the world. I was introduced to the glittery world of business, finance and private equity. Everything that I initially looked forward to in an engineering career had basically been undone during those twelve months in Shanghai and I eventually convinced myself that after graduation I wanted to be in banking, more specifically investment banking . My entry into the corporate finance team at KPMG marked the day that I would renounce my engineering career forever. Based in Raffles Place, the heart of Singapore's financial center, I was excited to be in the league of like-minded aspiring fresh graduates, constantly on the lookout to make that transition into a bulge bracket bank with a five-figure monthly paycheck. But I missed that boat when the 2008 financial crisis struck, crippling the hiring plans of the large investment banks across the globe. In the twist of fate, I managed to join a mid-market Korean securities house that was looking to expand in Southeast Asia. I clocked my mileage, put in the hours and late nights, adhering to the rites of passage, before subsequently moving on to BNP Paribas and Standard Chartered Bank to get more exposure as part of a larger and more institutionalized corporate finance set up. 2010 - Rinse and repeat. Investment banking turned out to be a jealous and selfish bitch five years into the job, demanding one's personal and social time more than anything else. I had worked up to sixteen-hour work days, eighty-hour work weeks, pulling all-nighters, even on weekends and holidays. One of my co-workers summarized it aptly then: We were simply trading time for money. For many years, the routine had been: Wake up, drink coffee, generate pitch books, run financial models, update trading comps, get yelled at by seniors . Rinse and repeat. I had received several offers to jump ship , some of those include buy-side and corporate development roles that promised a more balanced lifestyle and decent pay check. But all this time inside my head was a voice that kept saying, " just stick to the plan, put up with this for a few years and then leave ." 2016 - Been there done that. Leaving banking to build a business from scratch was probably one of the best and worst things that happened to me. On hindsight (as with most of everything), it had been one of the most liberating initiatives I had done with my career. But nothing would prepare me for what was to come: Waking up every day without having to report to a boss at the office, learning the ropes of HR, operations, finance, legal and sales all at the same time. Not to mention the disappointment of getting repeatedly rejected by prospective clients. But most trying of all was the nagging anxiety of watching your bank account being depleted month after month. No one understands how difficult this process was without having ever gone through this first-hand. Entrepreneurship would basically test your limits and push you to the breaking point, again and again. It had been good mental training and personal development: Under any situation, no matter how hopeless and impossible it seemed, your mind would always force you to find a solution. Looking back, I recalled reading in some random article and people telling me that: Money shouldn't be the reason why you start a business. It should always revolve around purpose , it should involve solving a pain point in the industry, or making a better product, or offering a better service to the world. I never explicitly admitted it, but what mostly drove me to start a business was the naive illusion that I could make lots of money, and in a relatively short time. It was much later that I realized employees are in fact the richest people in the world. They will all be slaves but they are still rich [1] . 2021 - Moving to Hong Kong. It felt surreal the day I left Singapore. It had been an indefinite job posting and I had initially planned to return possibly after two years. I am into my fourth year now and residing in Hong Kong today feels so much different from it was three years ago. A part of it feels like a home and a sanctuary. Sometimes I think about how life would be like had I not accepted that offer to be based overseas. Paterson Walk, CWB... where I currently stay. Epilogue At the time of writing this, I was watching a documentary on CNA about a young man who had graduated from university and decided to make a living out of being a hawker as compared to the rest of his peers who went into white-collared jobs. He described how he started off, grew, and transformed his business along the way. Some of words relating to the twists and turns in his life stuck with me: [1] Entrepreneurs of course have the potential to be much more wealthy, but no one considers the tail event. Only a miniscule percentage of entrepreneurs make it really rich. For every mind-blowing successful start-up seen on social media, there are at least a thousand others that have failed and don't even show up in the headlines.

"Illiquidity Is The New Leverage And Flows Are More Important Than Fundamentals" - Eric Peters, CIO, One River Asset Management Tulip mania The tulip mania in 1634 remains one of the most classic examples of how a frenzied rush can lead to exorbitant pricing. Tulips were something that was fashionable, and people pay for fashion. "It was unimaginable to most people that something as common as a flower could be worth so much more money than most people earned in a year." - Anne Goldar, Tulipmania When the hype ended, prices came crashing down and thousands lost their money. It is not about whether the tulips were indeed valuable, but the dynamics involving the disproportionate flow of capital and goods between willing buyers and sellers on both ends of the transaction. Understanding flows in initial public offerings IPO: The holy grail of PE/VC funds, early stage investors and founders of companies. Statistical studies have shown that the presence of cornerstone investors supports higher valuation multiples at IPO launch and sends an important signal to the rest of the market about the credibility of the issuer. Very often, the retail tranche of these offerings tend to be oversubscribed, and upon listing, typically drives up the share prices further in the secondary market. Hence a key unspoken difference in the way pitch books are being crafted by the ECM and M&A teams in investment banks: A generic M&A pitch book is carefully curated, well thought through and systematic. It includes meticulously calculated financial data of the target company, possible synergies, the sale process, negotiation strategy and a range of prices in which the outgoing shareholders or prospective buyers are likely to accept. An IPO deck is usually a storytelling process revolving around thematic information and capital flows , for example, what have the largest institutional investors been buying? Where in the world are investors putting their money over the next 12 months? What are the most attractive industry sectors right now? How big of a check are they writing? In banking jargon: Investor targeting . For the company going public, all that shareholders are really interested in is whether the deal will go through. A lot of institutional demand for a company's shares hinges on the ' flow quality ' of a company's shares. This effectively translates to two things: (i) a sizeable public float and (ii) a large enough daily trading volume, oftentimes prioritised over profitability . Because every institutional PM knows that regardless of how solid your revenue and profits are, they want the comfort knowing that they will be able to sell down their stake in the shortest possible time, just in case you f*&k up on the fundamentals. Flows are critical because they can happen very quickly, whereas fundamentals can be slightly more complex to appreciate, they take a little more information spoon-feeding and time to digest. Lehman Brothers At the peak of the financial crisis in 2008, Lehman Brothers had raised USD 11.9 billion of capital, an amount that apparently " more than offsets the impact of write downs ", and the firm had one of the lowest leverage ever in its history of being a public listed company. Even in those tumultuous times, S&P even gave and stood by its 'A' rating . But when KDB eventually terminated talks of a potential investment in the troubled firm, the shares tanked. The downfall of Lehman Brothers was in a large part due to money flowing out faster than it was coming in, as with its clients and staff. SVB The case of Silicon Valley Bank was a classic mis-step in asset-liability mismatch: Don't borrow 'fast moving money' to invest in slow-moving' money. The firm made some bad calls involving the forced liquidation of long-dated government securities leading to asset write downs, but the real nail in the coffin was due to the fact that many of its clients had pulled their money from the bank accounts at digital speed. CASA in banks are extremely short-term liabilities (effectively customer deposits) that can vanish quickly and significantly deplete a bank's cash position in a very short period of time. This was exacerbated with the rise of internet banking. While cost of deposits might appear cheap , deploying these relatively short-term funds and putting it to work in long-term investments was an obvious recipe for trouble, no matter how stable you think those long-term investments are. In SVB's case, these were risk-free government securities. Everyone in finance knows that the value of fixed-income investments goes down when interest rates go up. So it ended up as a double whammy: No one had expected the sudden account withdrawals. Just as no one expected the Fed to increase interest rates ten-fold within a year in its unrelenting fight against inflation. SVB could have held those long-term securities to maturity and not lose a single cent, no need for asset write downs, no need for panic. But the inevitable still happened and it all came down to capital flows . COVID-19 One of the key issues about the COVID-19 pandemic wasn’t just about the high mortality rate. Thousands of people young and old die from flu and pneumonia on a daily basis. Sure enough, cities and governments had to shutter their borders to put the spread of the virus under control. But a bigger issue was also the fact that many countries weren’t equipped to handle the large number of cases. It wasn’t just about keeping people alive or having sufficient beds and ventilators. It was also about the fact that there are only so many doctors and nurses at any given point of time. You can install top-quality healthcare amenities, bring in the best doctors and nurses and invest in state-of-the-art technology to develop the world's most powerful vaccine. But the system ain't shock-proof and just isn't designed to accommodate a scenario for which everyone visits the clinics or the hospitals at the same time . The flow of people will simply overwhelm any resources we have in place and cause our existing infrastructure to collapse. In the banking business, you can have the best relationship managers, the strictest compliance, the most bullet-proof risk management, excellent capital adequacy and a healthy net interest margin. But you can still go out of business if an abnormally large number of customers decide to take their money out, all at the same time. We conveniently assume that no one will really do this. Despite being robust and sophisticated, our banking ecosystem, capital markets, and state of our healthcare infrastructure just isn’t designed to handle extremities on any level. When it comes to decision making, scientific reasoning can only go as far as the human mind can comprehend and accept. For example, academic wisdom tells us to invest if the net present value of a project is more than zero. And we can always mathematically compute the value of a company based on future cash flows, but we still fall back on comparing IRRs across comparable companies and different industries to determine if we are getting a good deal on the table. Despite extensive research and studies in the area of finance, valuation in the real world is mostly driven by market comparison. We also subscribe to the concept of risk-reward trade-offs i.e. if you buy something on the cheap, expect a higher chance of something not going according to plan. And if it does work out, expect a huge payout. But some times the world works in very funny ways: You can pay a lot for something just because you think the risks are low, and still lose everything to a tail event . Also, valuation multiples say something about the correlation between the value of a business and its profits i.e. higher profits translates to higher value. Yet, trivially applying this to companies with low profitability can sometimes result in abnormally high or low multiples simply because sometimes the markets take a slightly longer time to appreciate the meaning of those profits. Banking and investing are all about flows. The most highly paid investment bankers aren't the ones who provided the most astute advice to corporate stakeholders, neither are they rewarded based on the outcome of those deals. They are rewarded based on the size of transactions closed. Investment banking is a flows business. Fundraising in the Southeast venture capital space hit a high of $2 billion in 2019, 75% more than 2018. No surprise that in that same period, the region was also coined as the " next tech battleground " for many large corporates, especially Chinese companies. The tech unicorns (billion-dollar companies on paper) that emerged was no doubt largely credited to significantly huge flows of capital into the region. Whatever happened to fundamentals? There isn't an exact figure, but it won't be surprising to know that even a large number of the most well-funded startups are losing money . Startup companies are meant to sacrifice profits in the short term for long-term gains. I'm not saying these companies are lousy. It's just that in the real world, the flows often do not always reflect the fundamentals. It's important to have enough " stupid money " in the system. Regardless of how badly or well a company is doing, valuation always needs to be supported by flows in the capital markets.

Several years ago at this very table in the Starbucks at Capital Towers, I met with an investor to debrief him with some feedback after helping his company in its search for new capital. It was the same year that Joseph Schooling won Singapore’s first-ever gold medal in swimming at the Olympics. The gold wasn't only a victory in the local sports scene but also a symbolic inspiration to everyone that, dreams, no matter how small they were, could come true . It was on that day at Starbucks that my investor took this spirit with him into the fundraising process. We had just gone on a two week roadshow and had met with eleven fairly prominent investors in the local startup scene. Every session we went to had been a productive dialogue with both sides making the introductions and talking about the story, the pedigree of the founders, the company, technology, market, opportunity, etc. But unfortunately none of them said ‘yes’ to funding this 'dream'. “Why did Joseph Schooling win?” He asked me in a fairly stern sounding voice. Erm...because he trained hard? " No!! It was because he believed in himself! " alluding that we did not believe in the business enough to sell the story effectively. He continued rambling about how Schooling, a young boy born and bred in Singapore, became a global champion, all the while drawing parallels to his company - A champion in the making . He added: “It is a no brainer. People should be lining up for this! Why aren’t investors buying our business?” He continued to raise his voice and at one point even slammed the table. I just stood there, wide-eyed and speechless. The company put together a product demo on my suggestion a couple of weeks later as part of a follow-up from our roadshows. We had sent invitation memos to the folks that had we had met and informed them about the proposed two-hour session to be held in the company’s office at Telok Ayer. I thought it was a good idea. An opportunity to see first-hand how the product worked in real life. More importantly, a second chance for the company to prove itself and make a tangible impression after that first meeting. Of the 10 emails that we sent out, only two replied and eventually one showed up, largely because his office was located around the vicinity. Nevertheless I looked forward to it (also my first time watching the demo) and we went ahead. But the outcome was un-impressive to say the least. The demo did not go as smoothly as expected. There were technical issues and people ended up waiting while the engineers troubleshoot the problem. Long story short it all went as if the company was selling an over-priced archaic software that was full of bugs. Fortunately (or unfortunately) we had only one investor on scene to watch. We stopped the roadshows after that. I learned a few things that day. You can't put lipstick on a pig. A commercially viable product is at the heart of any start up. No company should go out there to raise institutional capital without being able to produce either (i) a working prototype or (ii) demonstrate that there are customers lining up to buy. Self-bias is a very real. What I saw in the founders was a blind and almost religious belief in their product. To the extent they weren't open to candid feedback. Having devoted almost all their time into the product, it's easier for founders to be oblivious to the shortcomings of their own business. A CEO (who is a non-founder) employed to raise capital for a startup is almost doomed to fail. There is no skin in the game. A founder that throws money to delegate a CEO for fundraising can be a huge red flag and a potential recipe for disaster.

Social media these days allow people to only showcase the "best" versions of themselves or what they choose to portray to the world. It's mostly about personal victories and trophies. The oopsies and slip-ups don't show up on the LinkedIn and Facebook feeds. But whenever something is achieved, the confetti and loud-hailers come out. Things are often more rosy than they sound. We often over-hype on the little successes we have and sweep our weaknesses under the carpet. For whatever excuse we have for doing that, it creates a version of ourselves that we want the world to associate us with and not really what we are. And like it or not, this phenomenon is here to stay.

Before 2020, I had been able to plan and book overseas trips up to Hong Kong, Shanghai, or virtually anywhere in the world within 24 hours to a week’s notice. Things are probably going to be slightly different now. A lot of people are saying that travelers and flights will come back when a vaccine is found. After reading what’s going on in the rest of the world and experiencing first-hand the situation at home, I think this is going to be challenging. Pent up travel demand can only go so far in driving the economic rebound. Fundamentally, both business and leisure travels are probably going to be less “ frivolous”. What this means is that less people are going to be able to say: “ Let’s book a ticket to city XXX tomorrow. ” or “ Let’s do a day trip to XXX ”. Cross-border traveling is going to be subject to mandatory immigration health checks, both in the departing and destination cities. And the lead time to make any travel plans could easily be extended by up to 48 hours at least. This creates a lot of friction for any travel planning and also provides a convenient excuse for unwilling jet setters who might now prefer to stay put. Going forward, there's going to be a group of people who will think twice before making impulsive or short term trips to anywhere in the world.

I have never been a good investor. Since the day I started working, I had been through maybe two or three market down-cycles. In every of those occasions, I'd always stayed out, not wanting to log into my account to see the red indicators of the counters. You'd think that people working in financial services will be more astute in terms of their judgement of public equities - what's undervalued or overvalued. But truth is: we know nothing about how public markets really work. "The role of financial markets is to take money away from mediocre and underperforming companies and put it in stable, growing, high return on capital companies. " Low risk investments such as fixed income instruments have an important role to play in the world of money management, especially when it comes to managing billions of dollars over long periods of time. "Almost all of the real money made in those areas is made only by extremely patient investors who invest once every ten or twenty years, liquidate their holdings once a decade and spend long, long periods of time in cash.” And when it comes to stock valuation, there are numerous scientific methodologies to calculate what the true value of a company is. But none of those scientific approaches guarantee any success in getting positive returns. "Trying to invest in those companies based on an analysis of value is more likely to result in opportunities missed than it is make money. An approach that is much more likely to be successful is:– Investing in high quality companies after a market decline of thirty percent, and retaining the liquidity to build positions in those companies after a fifty percent decline in the broad market averages. That takes extraordinary patience, which is a matter of personality." The goal is to be " liquid at the bottom " because " business cycles are primarily caused by the creation and destruction of debt. Those are functions of greed and fear, in other words of emotions. " It is said that " a long-term investor must be a patient person. A short term trader who thrives on, perhaps needs, constant activity is likely to be an impatient person. " I believe that Investing is an extremely and deeply personal thing. It's all about managing risk. Risk appetite is subjective. Each person can only figure what that is for himself/herself. No one else can do that. Once again, this is a personality issue. This is also the same reason why I do not believe in seminars and workshops that preach about obtaining wealth by punting in stocks. I have nothing against the technical aspects (charting, valuation and analyzing financial reports). But in most cases, it tends to always be about extrapolating the future, which no one really knows. "Successful investors...incorporate into their investment strategy, clear concepts of acceptable risk, what constitutes an acceptable level of inactivity and length of holding period after funds are committed. And successful investors stick to their strategy. That strategy – for instance sitting on cash, sitting on losing positions, sitting on winning positions — must be based on self-knowledge. If the strategy is out of sync with the personality, it won’t work, no matter how well it has worked for others." [With reference from https://microcapclub.com/2015/05/i-passed-on-berkshire-hathaway-at-97-per-share .]

Someone asked me about paychecks recently. Once you've owned  a business before, it becomes nearly impossible to think in terms of five-day work weeks, weekends as rest days, plan for annual leave and look forward to monthly pay checks. It is not about clocking the hours in the office . It is also not purely about year end sales targets and looking forward to receiving bonus payouts. Owning a business is about managing resources, people (talent) and money (financial). As business owners we don't live paycheck to paycheck. We usually don't have a choice on when we get paid. There are no golden parachutes, no notice periods or "gardening leave". We also don't have real leave days to speak of really, and we can't really fire ourselves in exchange for severance pay. An entrepreneur is constantly kept on his toes not because he is afraid of losing his job but because he fears for his survival, for cash flow, as well as the scarcity of the resources around him - both people and money. That constant worry is what keeps him alive.

Too many people attempt to be "heroes" in their organisations. They seek the recognition, adulation, whatever you call it. But a five-minute fame is short-lived. At the end of the day, it is about whether you and the company can bring home the bacon. That's all that matters. In a fast moving and digital world that seeks instant gratification, patience  and foresight , are two highly underrated attributes amongst the young and inexperienced. "The problem is that it can be really easy to overestimate the importance of building your Roman empire and underestimate the importance of laying another brick. It’s just another brick. Why worry about it? Much better to think about the dream of Rome. Right? Actually Rome is just the result, the bricks are the system. The system is greater than the goal . Focusing on your habits is more important than worrying about your outcomes. Of course, there’s nothing necessarily impressive about laying a brick. It’s not a fantastic amount of work. It’s not a grand feat of strength or stamina or intelligence. Nobody is going to applaud you for it. But laying a brick every day, year after year? That’s how you build an empire." - James Clear

The last couple of weeks have been incredibly exciting for Singapore: SuperReturn Asia, DealStreetAsia's PE/VC event, the Milken Asia Summit, Forbes CEO conference and the F1. Visitors getting into Singapore today are neither required to serve any quarantine nor wear masks in public. Everything feels like it's been reverted back to 2019 - big MICE events, face-to-face meetings, public gatherings, etc. It almost feels surreal. Except that I am not in Singapore. Envious onlookers residing in Hong Kong can only drool at the party from afar and read about these large-scale social events in the news and LinkedIn feeds. Singapore's inaugural F1 event in 2008, as seen from 54F of OUB centre Last week, Hong Kong finally announced that it was lifting mandatory quarantine for arrivals into the city. From the 14-day quarantine implemented last year to 7 days and recently to 3+4, inbound travelers now simply need to do 0+3 i.e. no quarantine but just a 3-day monitoring period (still better than serving quarantine in China). It was a long awaited step, but some have said this was too little too late . Against the backdrop of an increasing number of people and firms moving from HK to Singapore , and the recent high-level summits taking place over the last couple of weeks, I guess HK is finally saying " enough is enough and we have to get back in the game or run the risk of really losing out in the long term. " It seems like Singapore has played its cards well and somehow "gotten ahead of the game". According to the HKEx quoted in an SCMP article , "Singapore may have the edge at the moment, but Hong Kong has more longer-term advantages to attract capital and talent" Despite COVID restrictions, the relatively high costs of housing, stilfing space and population exodus, there is some truth in HK being better positioned than Singapore in terms of leveraging the resources of Asia's largest economy - China. Besides, conference go-ers are generally indifferent to where the party is held as long as they are invited and there is reasonable certainty of a huge turnout. Understandably, those sitting on either side are motivated to swing the odds back into their favour. I am not trying to pre-empt whether or not the tables will eventually turn for both cities but recall back in 2020 at the onset of the pandemic, Hong Kong was at one point of time leading the charge on potentially emerging from the abyss. And then in a twist of events, it was tightened again in late 2020 due to the resurgence of the 'second wave' . When the dust finally settled in early-mid 2021, I vividly recalled HK was gradually moving back to larger group gatherings and reinstating back-to-the-office work. Over that same period, Singapore on the other hand was back-tracking. I had been preparing to depart Singapore in May, looking forward to getting some reprieve that at least face-to-face meetings were possible in Hong Kong. Singapore didn't make any significant headway in lifting the restrictions until later that same year . And then in 2022 after the spring break, HK again went into partial shutdown for over a month. Look, you might be wondering what is the point behind all of these. If there was anything I learned over the last 2 years from the pandemic, it is that nothing is ever really permanent . The stable state of things we are familiar with can be easily contested at some point of time or another. We took public gatherings for granted until COVID happened. Singaporeans took for granted chicken rice, a somewhat common staple would always be there until Malaysia halted the exports of Chicken for awhile in May 2022 . The same way energy stability in Europe have always been considered a given until they were forced to take sides amidst the Russia-Ukraine war. Even the economies that were halfway around the globe probably didn't expect their food supply chain to be disrupted by a territorial conflict involving one of the world's largest exporter of grains. Things can change in an instant. In 2021 when I thought Hong Kong had finally sorted COVID out and Singapore was still lagging far behind in terms of getting infection numbers under control, look how one year has totally reversed the state of things when Hong Kong became the unfortuate victim of the Omicron resurgence in February 2022. Just like the conference go-ers, the companies and workers that have relocated to Singapore can easily find themselves moving back to Hong Kong very quickly once normality has been restored. Change is the only constant and the race is long. Sometimes you are in front and sometimes you are behind. All things - no matter how good or bad they may seem to be today - can change very quickly.

In 2017, I had the opportunity to be in Riyadh for the first time ever to attend the Future Investment Initiative (FII) conference . FII was the country's inaugural flagship event, orchestrated to bring in some of the largest and wealthiest investors, companies and celebrities from around the world. The crown prince spared no expense hosting this multi-day event which was aimed at roping in foreign investment and elevating the Kingdom to the global stage. It was an effective way to market a nation. In fact, the event was so "high-profile" that it was dubbed “ Davos in the desert ” by CNBC. There are many parallel versions of the FII. The APEC summit, China's Boao Forum, and the Saint Petersburg International Economic Forum. In addition to rubbing shoulders with the who's who in the upper echelons of the business world, it was also an opportunity for attendees to get acquainted with the local environment and find out what the city has to offer as a destination for investment. Hong Kong had always synonymous with some of the largest financial conferences in the region. Coined as the "gateway to China", the city boasts of a highly efficient transport infrastructure, conducive for business travelers from all over the world to stop by for a few days of meetings. No one needs to plan ahead to be in Hong Kong. Hundreds of flights arrive and depart the city every day. An efficient customs clearance and a high-speed train connecting the airport to the city centre in 20 minutes, means that one can get in the morning and fly out at night. Work aside, there was always something to do in town: Bars, cultural festivals, concerts, business conferences, good food and shopping. Hong Kong is so cosmopolitan that there would almost always be an occasion for business meetings in the city. Almost every company with a meaningful global presence in Asia has an outpost in Hong Kong. At one point of time the city was even leading the charge in technology, convening the " most brilliant minds in international tech " at the annual RISE conference , a must-go event for any company that wants to make a serious impact to the tech scene in Asia. But there is less reason to get into Hong Kong today. Aside from the fact that many companies and conferences have shifted away, a string of covid testing procedures awaits visitors upon arrival at the airport. Compared to the past, getting into Hong Kong today has become a meticulously curated trip for many travelers. Despite efforts by the new HK chief executive to address the current state of affairs in the city at the recent inaugural policy address , people seemed to have somewhat lost confidence in what the future holds. To stem the further outflow of companies and talent, the government had also in recent months very publicly unveiled a high-level banking summit to host the titans of finance back in its city center. Despite this initiative, inbound quarantine measures and restrictive health monitoring continue to weigh. I can understand why Riyadh will need an event like the FII to invigorate the region. But never in my wildest imagination, would I have imagined Hong Kong resorting to high profile summits to lure high profile bankers, businessmen and investors to its city. The reality that Hong Kong now has to go out at length to advertise itself reveals how much its economic environment has deteriorated over the last few years. It used to be commonplace for investors to get rich in Hong Kong's capital markets. The city has enjoyed much success in being the go-to destination for businesses and equities market largely attributed to its proximity to China. The sheer size of the Chinese market and depth of liquidity in Hong Kong drives a tremendous amount of brokerage, trading and research coverage, which in turn drums up more investor awareness and draws in more capital for companies. The city has an impressive track record of companies that achieved multiple increases in market values as compared to its close neighbour Singapore, which is traditionally known for those seeking stable returns and wealth preservation. But aside from the recent exodus of companies and talent, the debt and equities market in Hong Kong has basically also dried up . In order to maintain its leading role as an IPO destination for Asia, the Hong Kong exchange had also initiated waiving revenue requirement for tech IPOs in an effort to revive the IPO market. I doubt this will be effective. Once we start lowering benchmarks and compromising on the quality of companies such as waiving revenue requirements (in the case of tech IPOs), things can start to get dangerous. And if we are not careful, this shift could end up being permanent and structural. Singapore is quite the classic example of how efforts in positioning itself as a listing hub has proved relatively futile. Its tie-up with NASDAQ and Tel Aviv has been questionable, none of which has produced any tangible results. Even, the newly launched SPAC framework, which was probably meant to be an avenue for VC firms and early tech investors to cash out, has yet to bear any fruits with only three pathetic listings to date, part of which could be attributed to the soft global equities market. Hong Kong never really needed to sell itself as a prime destination or lower its standards in order to attract the influx of capital and large companies. Maybe not until recently.