NYU professor, Scott Galloway [1]  says that the worst advice to give anyone fresh out of school is to: Follow your passion . Follow your passion. Anyone telling you to follow your passion is already rich. The person telling you to follow your passion probably made billions in a boring industry like iron ore and smelting. The more boring an industry, the greater your return on capital. And the monetary rewards, prestige, the recognition of being a subject matter expert, is what makes people passionate about what they do. "No one grows up thinking: " I'm passionate about tax law ", but the best tax lawyers fly private jets and have a much broader selection of mates than they deserve. And they get to do interesting stuff, which by the way, makes them passionate about tax law." Why things don't work. Nobody is trying to fix the problems within the organization. They are simply just trying to make (or milk) enough money so that the problems don’t matter to them anymore. Success is the greatest imposter.  "In life, business, or martial arts, winning is a falsehood.  It seduces smart people into thinking that they are invincible. It tricks good people into believing that they are infallible. And it robs all people of reality and truth.  Don’t believe the hype. And don’t eat your own bullshit. Or you will lose everything.  The only antidote to the poison of success is humility, hunger, and gratitude. Stay humble. Stay hungry. Stay grateful. And outwork everyone." - Chatri Sityodtong It's relatively easy to be humbled when you have been beaten or when you have failed. But staying humble when you are ahead and winning is a much more difficult task. Solitude. Many people still do not understand why early morning coffees and hotpot alone mean so much to me. "Solitude is dangerous. It's very addictive. It becomes a habit after you realize how peaceful and calm it is. It's like you don't want to deal with people anymore because they drain your energy." - Jim Carrey Simple brand-less self-worth. MUJI was born in an era characterized by the rapid globalization of Japan, a booming pop culture and the yearning for a unique identity. This gave rise to the emergence of bold and somewhat psychedelic advertising which targeted consumers who favored branded and lavish goods. Contrary to the global brands, MUJI adopts a non-aggressive "no-brand" marketing approach. Far from lacking any product identity, it champions the idea that quality should speak for itself, eliminating the need for flashy logos or advertising campaigns[ 2 ]. But MUJI wasn't just about selling affordable quality merchandise, it was selling minimalism . While the rest of the world thrived on an insatiable appetite of wanting more, MUJI strips away this extravagance, reducing it to functional simplicity . Waste not, want not. "In the MUJI concept, design intervenes in the making of things. This counters the rest of the world, which runs on the fuel of capital and appetite. Japan, looking upon the world from its detached location at the eastern end of Asia, has built an aesthetic that is infinitely attractive to human rationality, not within luxury and extravagance, but simplicity." True minimalists often live in perfect balance with their surroundings and have an acute sense of self-worth. They avoid the excesses, and seek neither external validation from association with a brand, nor do they care about how the world looks at them. Prada charges over a thousand dollars for a bag, for which you can get for probably fifty bucks directly from a factory in China or somewhere else. Christian Dior designer slippers are priced at about sixty times more than the popular Havaianas , which are ten times more costly than your regular flip flops. If you step back and think about it: Almost no one will spend an inordinate amount of time looking at your footwear under normal circumstances, so why the need to splurge? Designer and luxury stores are not selling expensive items. They are really selling self-worth to people who do not have any. The illusion of freedom. Slaves used to work all day, everyday with no pay. But they had free food, water and shelter. Today, we work all day, nearly every day and get paid. But with the money we make, we spend on food, water and shelter. In both situations (past and present) we are still slaves. The only thing that is different is the illusion of freedom. Being rich. Some of the most well-off people I know aren't bankers, lawyers or doctors. "Doing well with money has little to do with how smart you are and a lot to do with how you behave. And behavior is hard to teach, even to smart people. A genius who loses control of their emotions can be a financial disaster. The opposite is also true. Ordinary folks with no financial education can be wealthy if they have a handful of behavioral skills that have nothing to do with formal measures of intelligence." - Morgan Housel You are free to leave, but you are also free to starve. Almost everybody spends most of their life living in a totalitarian system. It's called having a job. "When you have a job, you are under total control of the masters of the enterprise. They determine what you wear, when you go to the bathroom, what you do – the very idea of a wage contract is selling yourself into servitude. These are private governments. They're more totalitarian than governments are. They can't legally murder you but they can control everything that you do. Yes, you are free to leave, but you're also free to starve. You have a choice between starving or selling yourself into tyranny." - Noam Chomsky [3] People prefer fiction over the truth. It's getting more difficult to get access to reliable sources of information. “The vast majority of information is not the truth. A key misconception - especially in places such as Silicon Valley - is to equate information with truth.  Most information is junk. The truth is a very rare, costly and precious kind of information. To write a truthful story, you need to invest a lot of time, effort and money into research, and fact-checking. Whereas fiction is very very cheap.” - Yuval Noah Harari You can make a hundred mistakes and do no wrong. In 2016, Jared Kushner came across a book titled " Death by China " as part of an unwitting research on the Internet. The book was authored by Peter Navarro, an economics professor who would later end up being Trump's advisor for economic policy during his presidential campaign. Five years on after being voted in, Trump is defeated in the 2020 presidential election. The US Capitol is attacked by mobs resulting in the deaths of at least nine people and hundreds of injuries. Among those who allegedly coordinated the coup was loyal Trump supporter, Peter Navarro. When summoned to court, Navarro refuses, and is eventually sentenced to four-months in jail for contempt. In a turn of events, Trump “resurrects“ from the shadows and into his second presidential term in 2025 [4] , re-hires Navarro back into the administration, and makes him trade advisor. Navarro is widely credited as being the " architect " of Trump's tariffs, which has been the subject of much controversy in terms of how the rates had been calculated . This is a guy who has had a soft job offer from the President while serving jail-time. Trump was quoted as saying, " I would absolutely have Peter back. " This is also the same guy who invented a fictional expert in his book " Death by China ", that had been picked up by Jared Kushner nearly ten years ago. Navarro calls this fictional character " a whimsical device and pen name used throughout the years for opinions and purely entertainment value, not as a source of fact. " It just goes to show that you don't need brains and talent to get into the highest ranks of government or senior management. You can manufacture a tall story, openly defraud the public, talk rubbish, even go to jail, and yet still come back unbowed, unbent, unbroken [5] , providing counsel to the most powerful people in the world. You can make a hundred mistakes and still do no wrong -- as long as you are in the right social circles of influence. Sometimes, who you know is more important than who you are . [1] Scott Galloway's video clip on "the worst advice given to young people": https://www.youtube.com/watch?v=1feBz5ifT-U [2] Yuko Kikuchi, Japanese Modernisation and Mingei Theory, Cultural Nationalism and Oriental Orientalism, https://www.routledge.com/Japanese-Modernisation-and-Mingei-Theory-Cultural-Nationalism-and-Oriental-Orientalism/Kikuchi/p/book/9780415405829?srsltid=AfmBOopQ_vV76QWQout87cBKasyWwgeN4FQHIx7FHmkE-7tqpsqZ5smD. [3] Noam Chomsky's ideologies have somewhat generated public controversy. This is an editorial article on his life at 96: https://theconversation.com/noam-chomsky-at-96-the-linguist-educator-philosopher-and-public-thinker-has-had-a-massive-intellectual-and-moral-influence-232698 [4] Peter Navarro: the economist who has outsmarted Elon Musk and has the ear of Donald Trump https://www.theguardian.com/us-news/2025/apr/21/peter-navarro-the-economist-who-has-outsmarted-elon-musk-and-has-the-ear-of-donald-trump [5] To borrow a phrase from the title of the film series " Game of Thrones" (Season 5 Episode 6) https://www.imdb.com/title/tt3866842/

(In the spirit of celebrating national day...) If there was ever a modern day HBS corporate case study that highlights the resilience of Singapore firms, Singapore Airlines (SIA) might just make the cut.  About just slightly over a year ago in May 2023, SIA reported highest ever net profit in its 76-year history , outperforming its long-time competitor in Hong Kong, Cathay Pacific (CX). Like the onset of COVID which has been widely seen as an 'unprecedented' occurrence, this unprecedented performance could also be attributed to the timely confluence of various events - the restarting of global travel, abolishment of hotel quarantines, Singapore’s re-opening to the rest of the world, while Hong Kong continued to suffocate under mostly closed doors. You can attribute this to the strong branding of Singapore’s flagship carrier, or its creative and fast response towards cost-cutting by putting a part of the fleet in cold storage, offering up meals in the air , or the ironclad financial backstop by parent company Temasek Holdings when the company embarked on its fundraising spree in 2020 to stem the cash bleed.  There are possibly a dozen other reasons, but one simply cannot ignore that these circumstances - both internally and externally - have facilitated the emergence of SIA as one of the champions from the pandemic. That was nearly two years ago. Since then, the world has re-opened and life as we know it has mostly returned to normal. But financial markets and the current state of the global economy are now paying the price for cheap money used to cushion the economic impact of COVID-19. The volatile state of geopolitics has also been putting a drag on growth.  In Asia’s largest market, cracks have also started to form for a while. Unemployment data in China remains stubbornly high, debt-ridden property developers are still in a process of unwinding, there is also diminished spending on luxury items across the board, significant pay cuts within the finance sector, and not to mention the outflows of foreign capital. Even policies around trade have increasingly become a weaponized tool for statecraft.  Investors and market watchers seem to be waiting for a rude ‘wakeup call’.  Maybe something must be broken, such as a market crash, or a big recession, before things finally (and hopefully) start to get better. The more important question perhaps is: for how long more? Even Hong Kong, a key financial center for China and once touted as the go-to hub for IPOs in Asia, have also fallen victim to the exodus of investors. And just like how SIA overtook CX when it bounced back from the pandemic, the biggest beneficiary of this outflow of investors seems to be Singapore. Just last week, MAS announced that a team had been assembled to “strengthen the equities market development” in Singapore as part of boosting the city’s position as a choice destination for equities investors. Aside from incentives, this initiative also includes amongst others, the establishment of more financing vehicles, corporate structures, share classes, encouraging research coverage, as well as fostering greater engagement with private and public stakeholders within the capital markets ecosystem. For years, the Singapore Exchange has been beleaguered by poor liquidity and the quality of its listings.  Based on a PwC report , in 2023, only 7 companies went public in Singapore as compared to 73 and 79 in Hong Kong and Indonesia respectively. Over that same period, both Hong Kong and Indonesia had also raised US$ 5.94 billion and US$ 3.55 billion respectively from the IPO of companies.  By comparison, Singapore as a listing destination had raised only US$ 0.03 billion, a miniscule fraction of the nearly S$ 900 billion of assets managed by private equity, venture capital and hedge fund investors in the city. Combine this with over S$ 800 billion in deposits from the commercial banks , this in theory should present an opportunity to mobilise at least SGD 1.7 trillion of retail and institutional capital, direct some of it towards public growth capital for Singapore companies, and in the process, re-igniting the sleepy equities market. As long as China remains an economic powerhouse in the region, Hong Kong’s position as the center of Asia’s equities markets will be difficult to replace. But there is a silver lining. Singapore can benefit from companies looking to diversify their business outside of China or use it as a springboard for markets in Southeast Asia. We have a unique window of opportunity.  Much like how SIA had turned itself around in 2022, if we play our cards well today, Singapore’s equities market might have a fighting chance to capitalize on this current trend to re-invent itself as a winner within the region.

There have been multiple narratives on why the current US administration is engaging a war on trade. Many say it all comes down to the huge US$9 trillion fiscal debt due this year, which the government can choose to either pay back or refinance. But refinancing is costly because interest rates are high. So the idea is that Trump announces tariffs -> global trade volumes are affected -> costs go up -> earnings come down -> growth slows. Trump creates a synthetic recession and interest rates come down. Some others say it is to bring back the jobs and manufacturing capabilities to the US.  But doing this means uprooting asset-heavy supply chains. Capex is long-term and relocating manufacturing hubs doesn’t happen overnight. Then there are those who think of the tariffs as a political tool. Get companies to pledge loyalty to the US -> local businesses will lobby to get import concessions -> foreign exporters negotiate bilateral arrangements -> US becomes the superpower of the world again. But no matter how you try and make sense of it, the overall state of global affairs today looks something like this: A thread on X recently written by Tanvi Ratna sums this up nicely: There is apparently also much confusion as to who are paying for the tariffs. The tariff is paid by the importer of the goods, who then in theory, passes the increase in costs to the end consumer. But in reality, things aren't so simple. Exporters who are hard pressed to sell may end up having to reduce their prices, hence indirectly bearing the costs of these tariffs. The pricing dynamics get even more complicated when we start looking across the spectrum from low cost items all the way to high value goods. It might be ok to pay a few more dollars for a pair of jeans but the purchasing considerations might be very different for an electric car. Still, there is little sense in trying to predict what a madman is trying to do [2] , what impact his decisions will have in a complex geopolitical system of moving parts, and how this will play out for global trade and financial markets in the near term. Best to simply just go outdoors take a walk and enjoy the breeze. And to draw some wisdom from Vishal Khandelwal : “Quieten the constant chatter in your mind that may lead you to act all the time, do your work and then, please shut up and wait.” [1] Howard Marks on credit yields and Trump's tariffs, Bloomberg TV - https://www.youtube.com/watch?v=KpnUyGM5M-I [2] "Is Trump playing the mad man?", The Economist - https://www.youtube.com/watch?v=wIeTXYRajhw

Nearly everyone I know who started out in banking or private equity had the goal of a five figure monthly salary in mind, or being able to buy a home at an early age, take leisurely trips around the world, shopping at whim. It was this idea of financial freedom that caught us. No need for a billion dollars, just enough to live life on our terms. If you extrapolate that income over a period of say 7 to 10 years, it is easy to see how that could be possible. When you are a twenty-something year-old looking at someone else in their late thirties or forties working in the same career as you, it can be extremely easy to be disillusioned into thinking you can do this forever . But life is often never that straight. Pulling the hours and all nighters for that long a time can be both mentally and physically exhausting. It comes with the sacrifice of personal time, family and friends. Most people are oblivious to how much you have to give up (and put up with) when you work almost 7-days a week, go home past midnight and never see your family and friends for extended periods of time - all for that juicy bonus at the end of every year. Then there is also that temptation of starting a business, or a side gig, open a shop or something like that. After all what is the use of earning the big bucks when you can’t get to be your own boss one day? Some of us would go on to invest a part of that income into either public equities or the private markets. Both pathways requires staking a significant portion of capital. The lucky ones got out alive and sometimes with a decent profit. But there are also those who unfortunately come out with losses on the other end. Either way, statistically, it always seem to play out to the same result: We continue struggling to keep the lights on and do the jobs we do in order to justify our aspirations and lifestyles, whatever that may be. If you are a smart guy, you’ll figure the right time to get out before the hamster wheel consumes you. After all, the whole point of why we got into the high paying jobs was because it was always more than just about amassing money, correct? Life beyond wall street David Rubenstein, one of the co-founders of private equity firm, Carlyle, has his own talk show where it would seem that he is having a ball interviewing leaders and celebrities globally and from all walks of life. Both Steve Schwarzman (Blackstone) and Ray Dalio (Bridgewater) have turned to writing memoirs to share their collective experience and wisdom from doing business over the years. Andrew Ross Sorkin, no doubt a much younger chap and has a somewhat parallel career to Wall Street, has made his name both as a successful finance journalist and producer of TV show, Billions . Recently, one of my younger friends also highlighted to me that even the chief of Goldman Sachs, David Solomon, has apparently also started his own gig as a DJ . While they are not the best examples (primarily because they are either in the celebrity realm or billionaires), it demonstrates that there is possibly an alternative life beyond Wall Street. And everyone who has made it in some way or another, finds self-fulfilment in doing something either unrelated or tangential to finance, publicly or in the private domain. Professional decline When you are in your twenties, you spend most years in the accumulation of cash. If you are the ambitious type, you might even set your sights on climbing the corporate or industry ladder. You work all-nighters and pump nitro just to get there. By the time you reach the thirties and touching forty, and if you are lucky enough to have some credentials, you find yourself in a nice position whereby you can capitalise on the knowledge, experience and the resources. It is relatively easy to earn well from here on, but also just as easy to get caught up in workplace politics and corporate re-orgs. You are a high-cost resource treading on a thin line and might find yourself working twice as hard just to justify your existence. It’s a never-ending cycle of work and more work. Many years back, a friend sent me this article titled “ Your Professional Decline is Coming Sooner Than You Think ”. It talks about how high performance individuals often struggle personally for many years past their prime. And it is important that we start to think about what comes next when the music starts to slow down. I have kept re-reading this article from time to time over the years, not because I’m not getting any younger, but more as a reminder of the fact that we are not invincible forever. We have been taught to plan our careers upon graduation but no one ever mentions about how we should plan the second good half of our professional lives, and that, I think, is important. [1] https://www.washingtonian.com/2017/10/26/david-rubenstein-become-tv-star/ [2] " King of Capital " chronicles the story of Blackstone; and Ray Dalio's " Principles " [3] https://www.vanityfair.com/news/2016/01/billions-showtime-andrew-ross-sorkin-brings-wall-street-drama-to-tv?srsltid=AfmBOooCOenxowMUUnVx_3iMzYbMnozD4mAUknV6YLLXNVLFq6BMQwsB [4] David Solomon ended his gig as a DJ in 2023 after being flagged by the board as a potential distraction from his main work. https://www.theguardian.com/business/2023/oct/17/goldman-sachs-ceo-david-solomon-dj-gigs-d-sol#:~:text=1%20year%20old-,Goldman%20Sachs%20CEO%20David%20Solomon,gigs%20due%20to%20media%20'distraction'&text=The%20music%20has%20stopped%20for,him%20from%20his%20main%20job .

Remember how people used to queue for Hello Kitty toys at McDonalds? Consider this: You are queueing in line for that limited edition item and suddenly realize that it'll be sold out by the time it reaches you. The thought of walking away empty-handed drives you to think of other ways, including negotiating with the folks in front of you. But everyone respects the unwritten rule of the queue - first-come-first-served , get in line and wait for your turn. Desperate and frantic, you decide to go bat-crap crazy and threaten to burn the whole store down if you don't get your toy, putting the entire queue and McDonalds store in jeopardy. Suddenly the store manager comes over to appease you, bringing you to the front of the queue, effectively guaranteeing a reward for your troubles. Make enough noise, create enough damage and you'll get something. For years, practitioners in the industry have been taught, have understood, and have accepted that equity holders stand behind debt holders in the queue to redeem cash flows of a business. These are the rules of the game relating to the priority of how cash in a business would be distributed, if and when assets are being liquidated. It's a basic principle codified in financial markets theory. But that rule seemed to have changed forever when Credit Suisse decided to write off a huge chunk of their AT1 debt last week and facilitate any residual payments to shareholders. Senior debt letting common equity know who's in charge [Source: Twitter] "Protectionism, geopolitical self-interest and state intervention, in other words, seem to have over-ruled free-market principles." - Financial T imes By allowing the "free market principles" to take reign and go its natural course, the Swiss government runs the risk of embarrassing a certain influential Middle Eastern shareholder who recently invested in Credit Suisse, and in the process, taking the rap for the bank's current state of affairs. Investors and onlookers would ask, " why bother even doing a capital raise in the first place only to write it all off within months? ". There would be a crisis of confidence in management, possibly wider overhanging doubts over stability in the region, including the country's position as a global wealth management hub. And then no one would put money in Switzerland anymore, a cost possibly too high for the government to bear. When the reputation of your country is at stake, all concepts of equity and debt gets thrown out of the window. Bottomline: Rather than adhere by the rules governing capitalist theory, it is far better to offend those who can afford to be offended than to risk a systemic meltdown. Of course extreme situations call for extreme measures. Under the normal course of business, every one is happy to stand in line and play by the rules. Decent wages for decent work, a fair share of the pie for a fair amount of effort invested. Most investors who walk into a share agreement try not to think too much about a material adverse outcome. But when the house is on fire, everything is up for grabs and all stakeholders - equity and debt - will scramble for the exit. I think the uncomfortable truth today, that no one talks about explicitly, is that: rather than fight a war using conventional arms, political decision-makers around the world have found a way to weaponise the workings of financial markets and monetary policies to drive their own agendas, in the process distorting how we perceive value. Any country in world can 'own' another country by simply imposing trade sanctions, ridiculous tariffs, and in extreme cases, confiscate assets - assuming one country is heavily reliant on the other for the import of certain critical goods and services. By creating dependency, you are weakening the bargaining power of the other party, and lesser bargaining power generally comes with lower value. Nassim Taleb also talks about this in his book under the section: " How to legally own a person ": "Every organization wants a certain number of people associated with it to be deprived of a certain share of their freedom. How do you own these people? First, by conditioning and psychological manipulation; second, by tweaking them to have some skin in the game, forcing them to have something significant to lose if they disobey authority—something hard to do with gyrovague beggars who flout their scorn for material possessions. In the orders of the mafia, things are simple: made men (that is, ordained) can be whacked if the capo suspects a lack of allegiance, with a transitory stay in the trunk of a car—and a guaranteed presence of the boss at their funerals. For other professions, skin in the game comes in more subtle forms." For good or for bad, sovereign risk has become even more closely intertwined with equity risk. When you buy a stock or a bond, it is no longer as simple as taking a view on profitability, future cash flows and room for improvements, but also the strategic importance of a company's position in the ecosystem. DCF does not capture all of that. In fact, no amount of number crunching and analysis allow for an accurate appraisal of any company's fair value today, primarily because the so-called free market is no longer that free. Instead of willing buyer, willing seller, the market economy is now to a good extent, influenced by statecraft, driven by the common interests of various governments. The treatment of Credit Suisse's AT1 bonds has also further demonstrated and reinforced how loosely-held and trivial the definition of equity and debt can be when push comes to shove. For what it is worth (as it has always been), value will forever be driven by the willingness of another party to take the asset off your hands at their own free will.

The concept of retiring early has always eluded me. Recently I decided to look at this from a mathematical and slightly whimsical approach just to see how the numbers add up. The results were interesting and the findings led me to do up a table calculating the annual salaries in each year starting from the age of 24, which is the average age at which one graduates from university, right up till an arbitrary retirement age of 55 (I assumed that past 55 years old, one increasingly finds it difficult to obtain gainful employment.) At age 24, starting with a monthly salary of S$ 3,000, I applied an annual wage increment of 3.0%, which is more or less in line with the headline inflation rate. The conclusion: Upon reaching the onset of the forties - more specifically - at forty years old , it will basically require approximately ten years to recover all the income that you have earned cumulatively over the last 16 years i.e. roughly equivalent to two thirds of the time taken. Of course this simple abstraction trivially excludes any bonus payments received throughout the years, which can significantly accelerate this. Also, not all wage increases follow the headline inflation. For example, getting promoted into a more senior position with added responsibilities typically comes with a bigger jump in pay, or sometimes even a multiple increase over current income levels. It is also common-place to see double digit percentage increments when jumping between firms and in some cases, even sign-on bonuses. But you get the point. In some ways, applying a 3% wage inflation over one's useful economic life seems a tad conservative and over-simplistic. Even for non C-suite positions, moving between grades typically involves a huge bump in salaries. So I decided to take it up a notch and model this using the pay progression in the consulting and finance industry, benchmarking this against what I recall from the Big Four accounting firms. The chart looks something like this: The duration to "equalize" your cumulative income earned comes down significantly once you hit your mid thirties and beyond. With decades of experience on your back, it will basically take you only half the time  required to obtain the same aggregate amount of income earned since you graduated - assuming you graduated at age 24. Again this excludes any ex gratia  payments along the way and significant pay bumps attributed to taking on more responsibilities on the job. Clearly, the golden years of making money comes during your late thirties. Extending this beyond the age of 40 makes this observation even more pronounced: At age 40, assuming your salary remains stagnant at $15,000 a month, it’ll take you only about 6 to 8 years to recover all the income that you have earned over the span of your economic life since graduation, again excluding any ex-gratia payments. In fact, many high performers in this age bracket consistently generate incomes well in excess of this amount, exponentially accelerating this process. One can see the obvious conclusion here. The pursuit of excellence often comes with expensive price tags, to the point where it will even feel like you are trading your waking hours for money. But the good money comes later in life. If you happen to be in your twenties, it is important to nurture a ' superpower ' and be extremely good at what you do, even if it doesn’t pay well in the short-term. Work can be a drag. But by giving up too early and 'retiring' at 40, you risk leaving behind a lot of money on the table.

Accountants, investors, and many large corporates around the world use the discount rate as the go-to metric for pricing any asset that has elements of uncertainties in its future economic value. In the context of business, discount rates simply provide a guide for analysts in terms of determining what an appropriate investment value should be, that is, based on a series of estimated future cash flows. It broadly takes into account the perceived risks in execution as well as the opportunity costs of deploying that capital. But perhaps more importantly, it represents the expected return of the investor. The bigger picture "The complexities exist to give bankers and lawyers a reason to exist." I had often thought: How were business deals discussed and negotiated decades ago before the invention of computers and spreadsheets? How did investors made the call for investing $10 million in a particular real estate that gave say a 7% yield over buying a cluster of houses in another remote part of the country? How did they know that investing $200,000 in the neighbourhood bakery would generate a return of 15% over the next three years? How did shareholders split equity? Did they have drag and tag clauses, used term sheets and signed MOUs? I think we had relatively simpler lives back in the days. Deals were probably mostly executed as gentlemen agreements or done in the presence of credible witnesses which gave the covenant legal effect. But aside from the law, your word meant everything, and high-level numbers were calculated with no one needing to build complicated financial models. Today we have powerful spreadsheets that can do intricate calculations on valuations and IRRs to three decimal places. We can also write code in spreadsheets that precisely calibrate 10 years of projected cash flows to comply with a DSCR [1] of exactly 1.3x, no more no less. By embedding programming code into spreadsheets, you can even automate certain calculations to value stock options, run scenarios for valuing start ups, do debt sizing, etc. On the documentation side, we have chunky shareholder agreements accompanied by pages of legal jargon comprising disclaimers, indemnities and warranties. Sometimes I feel that the complexities are there only to give bankers and lawyers a reason to exist. And the burden of technology and excessive information at our disposal have made us so caught up in being faster and overly precise that most of us lose sight of the bigger picture. A numbers game "Numbers when presented and analysed in huge quantities mean something." At every session of my Corporate Finance and Investment Banking Bootcamp class, there is almost always a newfound perspective and opinion on how we go about applying the discounted cash flow analysis to valuing businesses. I consciously hold back diving too deep into explaining the discount rate , or the weighted average cost of capital . “ Don’t spend too much time getting the right figure ”, I always said, and I sometimes question the appropriateness in my unorthodox teaching delivery. In my humble opinion, the discount rate has always been investor driven. Consider this: The primary objective of trying to value any business is to arrive at a decision of to " buy " or " not to buy " Assuming future cash flows are whatever they are, the outcome of using the NPV is solely driven by how much you want to make from the deal. i.e. If you want a higher return, you pay a lower value, and vice versa. If you had raised money elsewhere, then there is presumably a cost to that money, which is the cost of capital . And your appraisal of the expected return would take into account this cost, plus a premium from doing the transaction that allows you to sleep peacefully at night or even make a decent profit out of it. That’s all there is to it, really. There are always mis-priced deals in the real world whereby investors end up paying more than they should, and also business owners selling themselves short. Given the relative transparency in terms of how much banks charges their clients on taking out a loan, a big part of what drives any asset pricing really comes down to the cost of equity - a mathematical estimate calculated based on something called the Capital Asset Pricing Model (CAPM). The objective of the CAPM is to ascribe a commensurate return on equity based on the underlying risk of the asset. This is essentially driven by two things: Establishing a baseline (equivalent to a default-free risk) and; Adding a risk premium , which involves market volatility and taking a view of how borrowing increases risk in a business. Since volatility in share prices results in uncertainty, and uncertainty generally equates to risk, CAPM tries to transcribe volatility to risk. In chemistry, volatility is the tendency for something to evaporate under normal temperatures. In the finance world, volatility indicates the tendency of something to change rapidly and unpredictably, to deviate from the norm. Hence, beta in CAPM is simply a regression analysis to understand how far a company's share price deviates from the performance of the overall market. Within the boundaries of the CAPM model, we attribute this solely to the company's leverage i.e. A firm that borrows more to fund its business is deemed to be a higher risk than its peers . Beta and regression analysis But there are so many things that can affect the share prices, and leverage is only one of them. Furthermore, we are determining a return on equity based on a series of random events looking back over three to five years. First there is the conventional saying of: What happens in the past does not imply that it will happen the same way in the future. Secondly: The speed at which information travels across the world and its accessibility today is very much different from what it was more than 30 years ago. The retail and institutional investor community, which plays a huge role in influencing the movement of share prices, is also significantly larger than it was back then. Therefore CAPM essentially is a game of numbers. Living in an evidence-based, data-driven world, we believe that numbers, when presented and analysed in huge quantities, mean something. To make sense of a chaotic market "There is more art in valuation than science alone can justify." Recently, a hedge fund manager wrote a paper about the " less efficient market hypothesis " [2] , suggesting that capital markets today are not what they used to be. A multitude of factors today influence the movement of share prices - social media apparently being one of the biggest culprits. Not to mention low interest rates encourage punters and traders to gain access to cheap financing just to take huge speculative bets on companies they have no clue about [3] . It is probably getting so difficult to make sense of the stock market even with the abundance of information. So difficult that many investors have basically given up and turned to the trillion dollar ETF market which only became popularised over the last 20 years. Funds today can simply invest into a basket of stocks and just ride the trend. Besides, the idea of ascribing a single variable to a complex system of moving parts for valuing a business just seems absurd. Seth Klarman writes in his book "Margin of Safety": "I find it preposterous that a single number reflecting past price fluctuations could be thought to completely describe the risk in a security. Beta views risk solely from the perspective of market prices, failing to take into consideration specific business fundamentals or economic developments." Here's the interesting thing: Establishing a discount rate using the weighted average cost of capital in deriving the fair value of an asset is mostly aimed at bridging any expectation gap between a buyer and a seller. This is simply an attempt at using history and science to convince the other party that they are looking at things the wrong way. In reality, a lot of deals are done based on impulse, greed, competitive tension, fear-of-missing-out , herd mentality and in some cases bad judgement. There is more art  to valuation than science alone can justify. And it doesn't get better. The onset of COVID in 2020 had led to the emergence of meme stocks - something quite non-existent not very long ago - supported by an entire community of keyboard warriors with nothing better to do than ride on the trend of social media influencers. “For whatever reasons, markets now exhibit far more casino-like behavior than they did when I was young. The casino now resides in many homes and daily tempts the occupants.” - Warren Buffett So much for relying on math to make sensible investment decisions in a largely chaotic world. Where do we go from here? Don't get too caught up with the discount rate when it comes to valuation. If your objective is to impress the other party through a demonstration of knowing the inside workings of the financial markets, then go for it. But in my experience, most people sitting in this part of the world don't care much for CAPM and WACC. The ways investors and businessmen perceive value differ across sectors and geographies. Take for instance in China, where size is everything and winner takes it all, businesses will not think twice to burn cash through their balance sheets at the expense of grabbing market share. Profitability without scale is useless. But Southeast Asia can be somewhat different. The gameplay is a race for profitability - a simple function of maximising top-line and optimising expenses. Value is created by achieving profit break-even in the shortest possible time, fixing the cost structure and searching for dislocations in prices to arbitrage the market. Considering the difference in cultures and market dynamics across countries in this region, it is only logical and prudent that investors put more focus on earnings quality over size. Yet, most of what we learn about finance in the comfort zone of our classrooms are originated largely from the observations and statistical findings of financial markets in the US, which operate nothing like Asia. CAPM, for all its robust mathematical foundations, hadn't been able to capture the impact of black swan scenarios such as SARS, the 2008 financial crisis or COVID-19. I do not discredit the theories of finance. They have been after all backed by empirical data over long periods of time. As chaotic as the world may be, leaders of organisations cannot be seen to make decisions without relying on some form of credible evidence-based analysis. But the rules of capitalism that work well for an efficient, mature and functioning capital market, are sometimes irrelevant in other economies where there is information asymmetry and deals are done differently. Coming from a practitioner point of view, we should avoid being too numerically precise but instead be more commercial when it comes to valuing businesses. Unless someone higher up or sitting at the dominant end of the negotiating table says so, valuation is always just a number. Ultimately, it is the folks with the cash who decide what the magic number is, calibrated based on however much they want the returns to be. Value sits with the beholder of cash in his pockets, who are you to say otherwise? [1] DSCR = Debt service coverage ratio. Calculated as cash flows divided by debt service: a metric that measures how much cash flow buffer a company has to cover its interest and principal repayments. [2] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4942046 [3] Check out Mark Minervini's interview on CNBC as he gets asked about the companies he invested in. Simply hilarious.

Competitive rivalry A lot of professionals in the venture capital and mid-cap private equity space seem to be bad-mouthing each other. I attribute this to two reasons: Either a misplaced sense of pride or the intense competition in fundraising. The state of venture capital Venture capital investing looks like a game of ego . Every week I see numerous congratulatory posts relating to successful investments or fundraises on LinkedIn. It's all good. But a lot of folks seem to be either ignoring or oblivious to the long line of investors that has silently accumulated over the years and who are now queueing up for the exit. Someone recently told me that the DPI (distribution to paid-in) for VCs in Southeast Asia had apparently been only four percent in the last ten years. If we assume 2014 as the vintage year for which hot LP money started to pour into Asia and an average fund life of 10 years, this would indicate that the harvesting period has come due. But the hearsay of 4% DPI would suggest that 96% of capital deployed is still stuck, waiting to be sold, written down or written off. I haven’t been able to verify this. A lot of wealth is sitting in this part of the world [1] . Yet at the same time, a lot of VC money also wants to get out. Those who put their capital to work 7 to 10 years ago in early stage ventures are still waiting for their payday. GPs and founders face an incredibly tricky job of having to re-direct this flow of money somewhere, or to someone else, just to avoid a meltdown of the startup ecosystem and perhaps more importantly, repercussion from the broader investor community. Maybe they aren't really clueless. They just don't want to look bad by admitting that valuations had been overstretched in the earlier rounds of fundraising. Recession in China China is probably already in a recession - a contraction in economic growth, decreasing FDI flows , and stark unemployment. The financial behemoths such as JPMorgan, UBS and Nomura had also ‘downgraded’ China equities recently . Of course no one is publicly admitting it yet, because no one can verify the data and information [2] . But let’s not rock the boat now… The smoking gun here are the unemployment rates in Shenzhen , one of the country's core economic engines. I don’t see the economy getting better, not at least in the near term. The balance sheets of individuals first need to be fixed before companies can be fixed. That means prioritising job creation, spurring disposable incomes and sustainable consumption. The upcoming Single’s Day sales in November will be a bellwether for things to come. Tech jobs in China Many youths in China are retreating to the countryside in search of jobs and a more meaningful pace of life. The economy seems to be backtracking on being an innovation and manufacturing powerhouse, and losing ground as one of the go-to destinations for business expansion. A documentary on CNA reveals the state of affairs in some of the leading tech giants: "Everything that could be done has already been done. At this point, the work mostly involves minor fixes. Or we repeatedly work on the same functionalities. You might create one version today, then scrap it and create another version tomorrow, with only very subtle differences between the two. The improvements might be minimal or even negative. That’s the kind of work we are doing now. It feels like there are over a dozen teams all working to enhance and fix a small issue. How much significance does that really have?” - a tech professional-turned-farmer in China Founder's mentality One thing that founders dislike more than incompetency is hearing that “it can’t be done.” "Potato, potahto. " Wealth is created both by selling hot potatoes and selling ' hot potatoes' . You make money by either selling products or selling stories. It is easy to get carried away by confusing stories with products. The work of bankers Most of the bankers I meet today don’t know the half of what they are talking about ( sorry if this offends ). Whether it is wealth management products or advising on strategic decisions involving raising capital, bankers ain't got a clue. They mostly talk about the general market sentiment at meetings (nothing that is not already in the news), talk about corporate strategies using different words, and then take a slice from the proceeds of the fundraising. Aside from the infrastructure backbone that banks provide to facilitate huge flows of capital, the proprietary insights and value-add in arranging investor meetings seem to be either marginalised by fact that companies themselves can get access directly to the investors, or are otherwise non-existent. I would run deals very differently if I ever went back into banking... A pipe dream Getting listed on the SGX looks increasingly like a pipe dream . As much as regulators and industry groups have committed to spending the next 12 months discussing the way forward, there are some very fundamental issues that needs to be addressed, listing costs being only one of the factors. Following roughly two decades of successful REIT listings, investors trading on the SGX have gotten used to yields . Anything that doesn’t sound remotely like a fixed income product just isn’t attractive. Companies that raise capital via issuing new shares in Singapore simply do not offer the same outsized returns investors can be getting in other high growth markets and structured investments. The biggest selling point for any stock exchange therefore is liquidity. To solve for this, the 'tap' needs to be flowing. A cut in interest rates to “push” money from safe havens out into the open seems like one of the most direct way to solve for this. Beyond institutional participation, we need punters, speculators, aunties and uncles. Singapore already has the Sands and RWS casinos. For what it is worth, we now need to turn our exchange into a vibrant online marketplace that allows people to make 'bets' on the shares of companies. I use the word 'bet' loosely: When retail investors trade shares, we consider them to be punting. But when an institution trades, we say that they 'invest'. We use the proverbial labels "stupid money" and "smart money" to describe the two. The stereotype here is that the market believes risk can be assessed and quantified using statistical and mathematical models, accessible by "accredited" investors. When something goes wrong, it's bad judgement on the part of institutional investors, but comes off as gambling for retail investors. A proper functioning stock market requires the participation of both retail and institutions - that is why the exchange mandates publicly traded shares to be in the hands of at least 500 shareholders . Regulators and stock exchanges around the world can't say this, but the reality is "smart" money needs "stupid" money to create liquidity. The sophisticated models and assessment of returns that we 'worship' so much are built on a large stochastic universe of individual investors. In order to galvanise liquidity, greed, at this point, seems to be good. Selfish interests Everyone has their own selfish interests at the deal table whether it is running a $100,000 company or a billion dollar company. It is always the same: Everyone thinks they know it all, everyone wants you to listen to them, to do things their way, and to top it off, some even want your money. Clarity is king When looking back on my professional career over nearly two decades, I realised that most of my younger days were characterised by long hours of churning models and slides with very little time for critical thinking and in-depth analysis. This proportion changed over the years of course, but I wished that I had spent more time thinking and synthesising ideas. The clarity of mind, even when you are not doing anything, is always better than blind productivity. How to legitimately lose money A lot of people don't realise that the covenants involving raising equity are very different from debt. The science around risk-reward for both equity and debt is well documented. Equity holders are generally willing to risk all their capital in exchange for a share in future profits, while most debt holders prioritise capital preservation in exchange for lower returns. Both involve an obligation by the parties involved to perform, or not to do certain things, but fundamentally with debt, there is an implicit expectation that the investment can, and will almost always be recovered . It pays to keep this in mind when contemplating any investment: Companies and founders who are asking you to invest equity (as compared to a loan) are not just trying to up-sell you on the huge returns, they are also asking your permission to legitimately lose that money . [1] McKinsey also has an interesting report that details this flow of capital to Singapore particularly from family offices: https://www.mckinsey.com/industries/financial-services/our-insights/asia-pacifics-family-office-boom-opportunity-knocks [2] The Economist: “The Chinese authorities are concealing the state of the economy“, https://www.economist.com/briefing/2024/09/05/the-chinese-authorities-are-concealing-the-state-of-the-economy

Do not believe anything ever again. It is getting increasingly difficult to educate our kids with more technology today. “So you ask Google a question in whichever language in the world, what did Google answer with? It said, look, there seems to be 104 million sites on those . You can read all of them and make up your mind what the truth is. It's your truth.  2023, you switch on ChatGPT, you ask it a question, what does ChatGPT tell you? One answer. And that one answer is completely positioned as the truth." [1] Google used to be the default when searching basically for anything in the world. You would type a few key words in the search bar and a hundreds of seemingly unlimited entries would show up, allowing you to choose  what are the most appropriate results. You get to decide what is right and wrong with a buffet of choices. Today ChatGPT and a host of other blackbox AI-powered agents that claim to be more "efficient" narrows these to a few easy to view and choose options. Machines might have gotten smarter and more precise in being able to guess what the user wants. But that isn't always necessarily accurate or correct. Humans learn more effectively by making mistakes [2] , which improves their ability to appraise a situation or be a better judge of character. Errors and pain build resilience and values, allowing us to make wiser decisions. Some go through it more than others. And wisdom is something that tells you to go ahead or hold back on doing something even if most of the indicators show otherwise. Being able to act resolutely in a seemingly irrational sense is not in the rulebook and big data model of machine learning. Just like the news: That one headline event that took place, will come out in varying undertones when published in the Financial Times, SCMP, Straits Times, the Chinese news or any other platform across the globe. Nearly all media is propaganda. And digital media in its various forms (X, Weibo, Telegram, etc) is simply just a more entertaining way of putting ideologies into the minds of the masses. Just because something is widely reported in the media doesn’t mean that it is necessarily the right thing. A kid that watches Instagram growing up as compared to another watching Douyin  will be imbued with very different values and perspectives of how the world works. And with technology pushing the limits in virtual reality, it will get increasingly hairy to differentiate what is real and not real. As adults, most of us have had the benefit of accumulating enough scars to know what's good or bad for us, and therefore make informed and wise decisions. When fed with enough propaganda every day, even adults can be persuaded to bend their will and choices. What more can be said of the impressionable minds of kids? These days, with so many avenues of searching for information on the Internet, deepfakes and curated content being pushed to our devices, how do you then train young people to tell real from fake and discern right from wrong? How do you give them enough life experiences at an early age - and not just what they can read off books and the Internet - without permanently damaging their minds, instilling them to think on their feet independently, so that when they grow up and read the headlines or listen to someone talk, they will pause and ask, " Is that really the case? " "Do not believe anything ever again. Because the idea of asking a question and getting one answer for it is by absolute certainty not true." - Mo Gawdat Limitations. Years ago when I was just a young freshly minted investment banker at a social gathering, one of my older friends casually commented, “ I am not young anymore and can’t stay up to work the long hours like you guys, I have to sleep before midnight .” - an unnamed friend who was in the forties then Coming from an environment and work culture where all-nighters were worn like a badge of honor and people grab a few drinks after work before getting home after midnight, this was inconceivable.  Perhaps more inconceivable was the fact that fast forward nearly two decades today, I still push the hours. Since then, my work has evolved from being somewhat 90% confined to facing the monitor at my desk in Singapore, to mostly city-hopping, meeting and talking to people, while working out of hotels and on the move. I am not particularly proud of the long working hours and suitcase life, but these were part of the deal when I took on the job. As hectic as it sounds, I enjoy what I do in general. It was only in recent times that the frequency of falling sick had increased to the point that I start to question the limits of my body and ask, “ Is it time to really slow down? ” No more executive roles. Regardless of how we define and stereotype the characteristics of each generation of youngsters, the unspoken rite of passage that transcends time and industry is: Newbies and those fresh to the job, will first do the number crunching and leg work before being handed more important stuff.  It is a proven way for businesses to manage operational risk. Call it modern day apprenticeship. This is similar to how food recipes are handed down across generations, just like the 90-year old uncle who makes the char kway teow  that people religiously queue up for at the hawker centre in Singapore. Photo credit: mine When left to a pair of unseasoned kitchen hands, the quality of the char kway teow recipe gets compromised, because no one makes a better plate than the old man himself who adds just the perfect amount of ingredients in every serving. Execution excellence and mastery are forged and nurtured by simply doing something over and over again, for a very long time. But unlike char kway teow, most white collared roles will not expect you to do the heavy-lifting after a certain number of years. In large organisations, some will even consider it criminal to ask a senior person to run execution. The idea is once you push the forties and fifties, the nature of work tends to involve leading from the benches rather than from the trenches. There is a valid argument for succession and redundancy planning, but the main point was: Provide more counsel and less execution leadership. Managing grunt work is best left to the young foot soldiers. I recalled a conversation last year over a working lunch with an ex-senior partner at a top consulting firm. At the peak of his career, he socialised the idea of retiring into a corporate role to his higher up. This was at the onset of his late forties. The response that came back was, “ Just remember, there are no more executive roles after your fifties ”. And since then, I have kept this religiously in mind at every turn at the workplace. [1] The Sharjah Entrepreneurship Festival: https://www.instagram.com/sharjahef/ [2] "Making mistakes while studying actually helps you learn better" - Science Daily

Recipe for an average life. "A few hours of distraction everyday is the most common recipe of an average life. Assume you don't have much time, and focus. The years are short even when you clearly know what you want to do. Cut the noise and get things done. - Orange Book "If you know how hard it was and how long it took to build my little universe of peace and happiness, you would understand why I am so picky about who I allow in my life." - unknown Faith in people. “Better to give talented (unproven) people a chance, and endure a few disappointments along the way than to not believe in people at all. - Jim Collins Decision making. "The more the state plans, the more difficult planning becomes for the individual. - Friedrich A. Hayek, economist Almost all of life comes down to being able to think independently and make decisions. No governing body can act in the best interests of everyone. If you don't set your own goals, you will be given one. The importance of being "pigs". Lei Jun shares a whimsical anecdote from Xiaomi’s early days: "90% of success is attributed to luck (being in the right place at the right time). When a typhoon is approaching, even pigs can fly. Xiaomi didn't succeed because it was a great company or that I was incredibly capable. We were merely pigs in a vortex of a typhoon. So if we want to succeed, we must adopt the mentality of being 'pigs '." - Lei Jun , CEO and co-founder of Xiaomi [1] The wisdom of Pooh bear. Pooh Bear, there's one thing we didn't do today. And what thing might that be? Hmm... Nothing. Nothing? Christopher Robin, what exactly is "doing nothing"? Well I'm told it means going along, listening to all the things you can't hear, and not bothering. It's when people say, "What are you two doing?" and we say, "Oh, nothing"... and we do it! This is sort of a nothing thing we're doing right now.I wish it could last forever. Well then we must do it again tomorrow, and the tomorrow after and the tomorrow following that! - Christopher Robin and Pooh bear from the movie Winnie the Pooh John C. Maxwell once said in his book, The 360° Leader : " The greatest enemy of good thinking is busyness. " Are you truly free? "We are slaves to the opinions and words of others, slaves to what we see, slaves to the work that we do.  Our self esteem is highly dependent on the opinions of others. If others disapprove of us, we are disappointed and become doubtful about ourselves. And that is why we can never be truly free." - Jet Li, actor and martial artist [2] A choice of response. “When we are no longer able to change a situation, we are challenged to change ourselves.  Between stimulus and response there is a space. In that space is our power to choose our response. In our response lies our growth and our freedom." - Viktor Frankl, Holocaust survivor and Austrian psychologist Use the difficulty. One of Michael Caine's life philosophies was drawn from a stage rehearsal as a young actor: “...and they got carried away and started throwing things, he threw a chair, and it lodged in the doorway. And I went to open the door and said [to the producer], ‘ I'm sorry sir I can’t get in. There’s a chair in my way .’ He said, "What do you mean?" I said, "There's a chair there." He said, ‘ Use the difficulty .’ So I said, ‘ W-What do you mean, use the difficulty? ’ He said, ‘ Well, if it’s a comedy, fall over it, if it’s a drama, pick it up and smash it! ’ Now, I took that into my own life. There is never anything so bad, that you cannot use that difficulty. If you can use it a quarter of 1% to your advantage, you are ahead, you didn't let it get you down. That's my philosophy, use the difficulty." - Michael Caine , actor and war veteran [3] [1] Excerpt adapted and whimsically translated from - https://www.instagram.com/reel/DG2l0X6Ry10/?igsh=bjV1NGc1YWNkeXJo [2] Translated and slightly adjusted from the Mandarin version. Jet Li's anecdotes are largely influenced by his faith in Tibetan Buddhism. Full video (in Mandarin only) from the Tzu Chi Culture and Communication Foundation - https://www.instagram.com/tzuchicultureandcommunication/reel/DGh6jRhJcPs/Watch [3] From Michael Caine's interview with Michael Parkinson - https://youtu.be/t-7xyd5_IfY?si=qkx-E_wvwyQizdjB

Education. "I hereby sincerely apply for a job." We go to school not to learn how to write a resume, but to study. And we study so that we can solve problems within the real world. Consider this: Before going to school, identify a problem in the real world. Then go to school, study the problem and then think up of possible solutions. Draw up a plan of how to solve the problem. After graduating, go back into the real world and actually solve that problem. In that process, you have now created value, and can get someone to pay you for doing that.  Instead, we live in an education system that entices people to collect certificates and degrees. And the best thing that you can say after getting a certificate or degree is: “ I work well under pressure, I am a team player, I hereby sincerely apply for a job ”. From a purely academic standpoint, you are qualified to gain employment. Beyond that, nothing else shows that you can actually get stuff done. This is how we end up with so many graduates and postgraduates today who are simply looking to just get a high monthly salary rather than solving real world problems. "Back in the old days..." "你的苦不值得被承认" [1] Older people tend to conveniently project their experiences on younger people. Those who say that " we had it much worse off back in the days " are not trying to comfort you on the struggles you are facing today, neither have they given you any practical advice on how to go about dealing with them. Instead, what they are really doing is comparing who is worse off, and subtly hinting that what you are facing now is nothing compared to what they had gone through many years before. The truth is: Everyone goes through their own personal struggles. There is no basis for saying who has had a tougher time. Bringing up unhealthy comparisons to the past will only cause those who are currently struggling to feel more helpless. Staying humble. ...is not just about NOT showing off. Many people think that humility means keeping quiet and not bragging about how good you are. But being humble is not just about restraining yourself from showing off. Being humble is about being consciously aware that you are never good enough , that you are never the best , and that there is always room for being better - only if you are are willing to let your pride down and take the criticisms of others. The art of receiving feedback (especially negative ones) therefore becomes a very important element of being humble. When someone provides you with feedback, just listen and not rush in to justify yourself.  If your higher ups give you negative feedback, it simply means that your execution had been ineffective. If subordinates give feedback, this is merely observation on their part, albeit right or wrong.  Humility is about taking responsibility for the outcome, not about who’s looking good or bad. At the end of the day, the results are all that matters, not the process or delivery. Justifying yourself (especially in any negative outcome) will only demonstrate your need to always be right, and nothing good ever comes out of proving that you are right all the time. Treat everything professionally. Take nothing personally. [1] As seen from: https://www.instagram.com/reel/DIgSPPoxQcS/?igsh=dHV2eHJnN2YzMzJj

Social media had only really started to take off some time in 2009 . In the 2020 TV documentary The Social Dilemma , the show talks about how creators of social media encourage and nurture the addictions of users to help companies make money. But the impact of social media went beyond commercial exploits. Over the years, it also subtly cultivated a deep and unhealthy sense of emptiness . Luke Burgis talks about this using the story of a man with his martini in his book, Wanting : Social media has successfully connected strangers across geographical boundaries and re-connecting friends who have lost touch with each other over decades. It has also allowed us to keep up to date with what is going on around the world such as receiving breaking news about something happening halfway around the world, or browsing someone else's holiday pictures on Facebook, or reading about a friend closing a multi-million dollar deal with several well-known investors. We have had the privilege of more information but on the flip side, this has also amplified any feelings of envy, insecurity and greed . By understanding what drives these feelings could help us better appreciate why so many companies and founders choose to believe that they read, to inflate their corporate identities and "social circles" in hope that some investor will come along and take the bait. This is manifested in keywords across corporate websites, chasing social media endorsements, snagging a high-profile media interview, or participation in heavyweight conferences. As such, we have been led to believe that if something is sensational and disseminated widely enough, it often the "truth" - even better if someone seemingly important says something about it. Curating a healthy media presence is one thing, bullshitting to feed your ego is another ( as in the case of BN Group ). Celebrity endorsement is one of the most time-tested and effective ways to endorse a product. "It’s easy for someone to become an overnight expert on 'productivity' merely because they got published in the right place" - Excerpt from ' Wanting' Remember the reality TV show Shark Tank? Kevin O' Leary, aka Mr Wonderful, recently revealed taking a $15 million 'deal' from FTX to be its spokesperson . Never mind whether or not Mr Wonderful was a cryptocurrency-skeptic-turned-ambassador. In today's world, it seems that at the right price, people are willing to say enough bullshit to endorse a product or a company, regardless of whether they believe in it or not. This strategy has been effective in the business and investment world. Social media just made it better. People who consume bullshit will believe in bullshit. Feelings of envy and FOMO often drive people (and investors) to make foolish decisions. One of the biggest fears of any VC is to be left out in a multi-bagger deal. Some compensate for this through 'diversifying' their portfolios. Those who have staked their money have a vested interest. They want to make sure they don't look bad doing the deal, and therefore will do anything to ensure that the equity story holds up, at least long enough until they exit. This is the state of fundraising in the world today. This is the reason why we have so many asset bubbles. In light of the many recent frauds, scandals and apparent lapses in due diligence, investors have started to increasingly become more discerning about who they deal with, what they read in the media, the kind of information they are fed with, and perhaps even more importantly, where they put their money. If they haven't, they should. The era of bullshitting is over. Companies and people need to wake up to reality and stop the proverbial fake it till you make it , "over-packaging" their products and services, and start getting real about talking about fundamentals and their numbers.

It feels weird to say I'm traveling 'back' to Hong Kong after a business trip. I have spent the majority of my time here for the last 2+ years and there's a certain feeling of familiarity. Yet it feels nothing like going back home in Singapore. It's not a bad thing, just different. Beijing International Airport Whenever I travel, I often think about what it would be like to live in the visiting city. Not for a few days, but for months, and even years. Universities nowadays offer abundant opportunities for students to do this in the form of student exchange programs. It's an invaluable experience of learning to be independent and making more friends. Yet there is a subtle difference. With exchange programs, there is always a finish line. Exchange programs are pretty much like extended holidays with a simple commitment to set aside some hours for study, take an exam at the end of it all, and then go back to the comfort of home with an album full of instagram-able stories. Most who work overseas don't have a clear finish line, unless of course you have been sent there on a secondment with a visible plan of returning after a certain number of years. Unlike school, there is a commitment to deliver and perform in a largely unfamiliar environment. And if your familial and social support is back at home, there is sometimes also little to look forward to at the end of the day. The various circumstances, both external and internal, faced by those who venture abroad, are what makes them more tough and resilient, each in their own ways. People who have been born, bred and work in their home environment, or have assimilated into the indigenous fabric of society with their families may find this difficult to understand. This year marks my third year in Hong Kong. The experience of relocating in the capacity of a working professional, as I sometimes describe to colleagues and friends, comes down essentially to four things: Getting used to living apart from loved ones for an extended period of time Learning to use a second language as the lingua franca Embracing culture - both in the social and business setting Adapting to a new corporate environment or business function Some people adjust very quickly. Young folks and fresh graduates in particular, are almost like sponges , soaking everything up around them when thrown into a foreign place. When you relocate as an experienced hire, the slate is not empty and the "soaking" tends to be a bit slower. But in any case, anyone who has lived overseas for an extended period of time inevitably goes through at least one or more of the above. Each overlapping the other, each influencing the other. Everyone navigates this differently. Whether you are a budding professional or a seasoned hand, whether you are living overseas or starting work in a new environment, one of the most effective ways to get the most out of living in any foreign environment is to fully imbue yourself in the local life. In short: The faster you acclimatise to all aspects of your surroundings, the easier life becomes. " Comfort of home " is the term most people use to describe the country that they were born in. I might live out of a thirty-square-metre space without a kitchen stove or windows that open, but when traveling back from Beijing, Hong Kong is pretty much as good a home as is Singapore. 入港两周年 PS: This week officially marks two years of me residing in Hong Kong.

After two years and given that it was the year end, I thought it was timely that I should spend some time to consolidate and reflect on the takeaways, the hits and the misses during this time. But nothing actually came to mind. So I spent the crossing-over to the new year in a relatively low key fashion. No celebration, not a lot of booze, no chugging of beers, no fanciful dinners or gatherings. All I did was head up to the open-air rooftop of my hotel at approximately 23:50 in anticipation of the fireworks overlooking the Hong Kong city skyline. Even after the clock struck 00:00, there was also no spectacular display of fireworks, not at least from where I stood. On the roof of Harbour Grand hotel. Yet, this was how I enjoyed the new year crossing. The simple peace and serenity of taking in the cool 15 degrees outdoor air, the sensation of looking forward to a restful morning on the following day. And perhaps more importantly that the rest of the world only wakes up and starts to go to work two days later. Some might even call it a short reprieve from the shitstorm of work awaiting in the first week of the new year. During my investment banking analyst days, a VP once asked me what I did on weekends. I gave him the rhetoric of being too busy catching up on work to be able to plan for anything else. It was true anyway. Whenever anyone asked me about my banking days, I always told them that we worked seven day weeks, had after dinner drinks at 9pm, went back up to work around 11pm, got off past midnight and then back into the office the next day at 930am. That routine changed slightly as we grew into our jobs with travel increasingly becoming a part of it but the hours never really changed. Aside from the mandatory 2-week compliance leave that we were entitled to, there was hardly any downtime, and hardly a moment to "switch off". This daily cycle can put a toll on you, both physically and mentally. I recalled one of my colleagues popping pills to regulate this blood pressure because he was getting increasingly affected by the incessant badgering, the non-stop phone calls and the never-ending refreshing of pitchbooks and financial models. " Regardless of how little time we have, one must learn how to block out work when it is time to rest. Otherwise, you would go crazy. " - that was what the VP had said to me. There is stress everywhere, in every blue-collar and white collar job, no matter how much you try to justify it using salary. It could take the form of overtime hours, a nasty boss, an unreasonable client, unhealthy working environment, etc. Everyone deals with the vicissitudes at work differently. Some say this deprivation of normality over long periods of working in a high pressure environment leads to overcompensation through the splurging on the extravagant stuff. Despite what the rest of the world says and thinks, I think one of the biggest takeaways from doing investment banking wasn't really the money, but the fact that you can put yourself under tremendous pressure and yet pull off functioning as a normal person under any circumstance (at least for those of us who made it out sane). Yet, there are those who seemingly made it out but never really left. You can of course leave an investment banking career and still stay rooted in a toxic mentality. These are the same people who continue to measure success through lofty titles, name dropping and the size of their pay checks. You can always sniff these people out by what they choose to talk about with you. Only just recently, I was re-connecting with an ex-colleague over WeChat. Much to my surprise, within a few text exchanges, he started asking where I was now, if it paid well and other stuff related to corporate hierarchies and knowing who's who. I did not write him again. And so, there will always be nasty people to meet and unpleasant experiences, but there is also the mindset we take with us to deal with it. We can continue to complain about working on weekends, how much of a pile of work awaits us on Mondays, how we are not commensurately comp-ed to our peers, how much we are sacrificing personal, social and family time for work, or how sucky the markets are. Endless worries. Life will forever be a struggle, but to some extent, we are almost always in control of the decisions we make and always have the choice of deciding how we want to let the little things shape us and the way we move forward.

At twenty, you don’t get the life you deserve, you are just the product of the environment you were lucky or unlucky to have. Then, as you get older, and enter your thirties, forties, and beyond, you notice how much agency you actually had on your life. Maybe you moved abroad, learned another language, another culture, another mindset, and became an entirely different person. Maybe you decided you had nothing to lose, and invested all your meager savings into the bet of a lifetime, and it worked out. Maybe you changed all your habits, and realized that you could be much healthier, smarter, stronger than you thought, if you simply maintain a better diet, a better training, a better sleep, a better routine. Maybe you fell in love, and realized that a great marriage was about so much more than physical attraction and intellectual compatibility: if you find yourself walking alongside with a kind, thoughtful, honest person who loves you back, you actually won the lottery. Maybe you met some great people during your journey, shared with them parts of your journey, overcame difficult challenges together, finally understood the real meaning of “friendship,” and that some people are worth trusting and making sacrifices for. Maybe you also had health issues, lost a few precious people that you loved, understood the fragility of life and the pain that comes with truly loving someone else, but also finally gained enough wisdom to appreciate the simple things in life, that are free and in abundance. It’s a long journey. The best and the worst things will happen to you. You can choose to act like a victim, or you can choose to respect yourself and be more resilient, mentally stronger, overall better. In the end, you will look back, you will connect the dots, and it will all make sense, that you got exactly what you deserved. Note: Read the above off X (Twitter), Orange Book

Day 4 of Singapore's so -coined "circuit breaker". This is how my re-designed work space looks like. My daily routine has totally been disrupted. I used to frequent the cafe that's near my place around 8-9am in the morning. I would sit there to start the day reading news, emails and top stories from the night before. Depending on the morning schedule, I could sit there for hours right up till lunch. These days I spend the entire mornings at home. I think this is a very trying period for many people. These are very uncertain times. Sure, I've been through economic uncertainties - the global financial crisis in 2008 which saw 100+ years-old Lehman vanish, the Eurozone crisis in 2011 and the oil supply glut in 2015. These crises were mainly driven by financial markets. People were nervous, some lost jobs and there was a lot of jitters in the office at times. So back then as an employee, I just sat tight, kept my head down and did my work. It was tough and everyone knew bonuses would be bad, salary increments would be crimped. But this time it was different for me. This is possibly the very first time I am experiencing a worldwide financial crisis and pandemic as an employer / entrepreneur. I worry not only about my own cash flows, but also payrolls, business expenses and also how the world will return to normalcy in 6 months, a year, maybe more? I keep wondering how this pandemic will change the way we do business, how it will affect cross border business travel and many others. And maybe for the first time, I truly understand how the sole proprietors out there and the marginally paid front line workers who live month by month are feeling. That sense less of helpless-ness and uncertainty that looms. Just last week, I overheard a young chap on the bus sitting behind me talking: I was supposed to have gotten that restaurant job... They were reviewing my salary but after the circuit-breaker announcement on Friday afternoon, they came back and told me they not hiring anymore. My wife also just lost her job last month, so I just need to find something to do for this month, maybe food delivery or something... The cash crunch is real for many. It's also creating a lot of tension for people. After I alighted the bus, I could hear another random person on the street arguing with someone over the phone. Fortunately the band aid here is that the government is giving discretionary payouts for low income families. I personally don't think it will be enough but I also believe that they are trying their best. This one month of circuit-breaking will be a big financial set back for many people and businesses, even with increased food delivery measures for F&B operators . It'll also be a game changer for the world in terms of how individuals will manage themselves and businesses will interact with each other. To be continued.

This is not a post about I told you so . It is about trying to understand how easily we can get carried away with mimetic desire and FOMO . About three years ago, someone asked me what I had thought about crypto-currency. I knew very little about it. I think I still know very little about it today. After all, this is an asset class that only came into more prominent existence over the last decade. Do I think an investment into crypto or bitcoin take off? I do not know. But perhaps, more important than what I think is actually what others think of it. And that is exactly what brought FTX down. Cryptocurrency, bitcoin, NFT, and all things in the metaverse, work the same way as stocks, bonds and paper money. The case with FTX is simply a bank run in the world of cryptocurrency. People who held these assets just lost faith in them. This is the unavoidable reality: Most of our material possessions are only as valuable as how others think it to be. That's all there is to it. FTX was at one point of time the second largest crypto-exchange in the world . So why doesn't a large financial firm like this get the same bailout treatment enjoyed by Bear Stearns, Wells Fargo or AIG? Similar to the downfall of Credit Suisse , why aren't the middle eastern investors stepping in to evaluate and put in more capital? The same group of people who decided in 2008 that Lehman Brothers should be taken out to the streets and shot in the head are basically the similar set of people who decide whether FTX should be saved. It's a systemic risk. If the fallout doesn't result in jeopardizing the greater good or threaten social-economic stability, we can afford for a few investors to lose money. But see, no one wants to hold that hot potato. When people say that they want to “ evaluate the situation " [1] before taking action, they are not waiting for the favourable outcome of a due diligence exercise. What they really want to know is whether there is sufficient faith in the market to ensure that the assets in the business can be monetised at some point of time in the future. This brings forth another argument: All virtual and digital assets are valuable only to the extent that they can be monetised . If bitcoin and cryptocurrencies are truly valuable as what their advocates say they are, shouldn't these be freely used in our daily transactions? If your company tomorrow decides that all employees shall be paid in ethereum or some other form of cryptocurrency, would you be amenable? And how does this compare to employees who are willing to accept discounted shares or stock options as an alternative form of wages? At the very core of it, it is simply because we all believe that, for better or worse, shares of a company (privately held or listed) can be readily sold in the future. There are even platforms today that facilitate the monetization of employee share options in privately held start ups. And so, digital assets, such as like cryptocurrencies, are essentially a derivative product. Just as the value of a share in a company is fundamentally derived from its intrinsic value, based on the future performance of its underlying business. But perhaps more importantly, shares in a business can be exchanged for cash. Cash, be it the dollar, euro, yen or renminbi, is fundamentally a derivative product. The value of cash is based on the fact that people can use it to exchange for goods and services, knowing full well that the counter-party on the other end of the table can use that money to do the same. Notwithstanding the multitude of currencies, the foreign exchange market is also a tried and tested system that so far works with traders all over the world. This is a USD 7 trillion market per day that works 24-7. Just loosely applying a 0.1% spread on this gives a USD 2.6 trillion annual wallet share - just on the FX business alone. Given the above, it is easy to see why there is so much resistance towards changing the status quo. The biggest stakeholders in the room are the institutions that hold the most amounts of cash. Maybe the 'new generation' of investors who have experienced the devaluation of cash due to the ridiculous printing of money into the system, want some credibility restored to the markets. I can also understand that inflation (and hyper-inflation in certain countries) eroding the savings of many individuals also partially makes the case for cryptocurrencies. But ironically, it also seems that a huge part of getting crypto adopted into the mainstream has gotten carried away by the greed of a few individuals. It's not that I don't believe in digital assets. Maybe it is just that I don't want it badly enough. [1] In an email, OKX commented on the FTX opportunity, saying that “at this point we are just evaluating the situation before we consider any participation from our side,” https://blockworks.co/news/ftx-bailout-candidate-list-is-shrinking-by-the-hour/

Reflections for the day: 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, 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. 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. 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. Run your life for gross profit, 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. Buy experiences, not objects. Yoyogi Park, Tokyo 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. Steve Scharzman 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..." 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. 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. 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. 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 (from the movie " The Curious Case of Benjamin Button ") 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 .) Money buys a lot of things , but the most important thing it buys is the option to walk away from everything.

My maiden Carousell transaction. The attempt of communicating with the seller led me to discover a new estate in Singapore.

The picture speaks for itself.

The study of capital markets has always been both intriguing and amusing to me. A lot of its theories are backed by mathematics and statistics. But the system in reality is stochastic, complex, and at times even volatile. We can learn from our mistakes or the mistakes of others. History often serves as a good guide for making decisions but no one can guarantee a discrete outcome. Whether it is technical analysis with charts or regression models, the past is never a predictor of the future. With trading stocks, be it day trading or the well-thought through strategies adopted by the large hedge funds, I have always felt that one principle remains consistent: Both smart and dumb money goes wherever the big boys go. Those who got rich from trading think they know it all, but they were merely riding on the shoulders of giants. And so, it pays to know what the whales are doing. Last month, one fund manager became an unfortunate statistic of this system. Source: Twitter The letter widely circulated on social media attracted a flood of comments from the online community, some applauding his honesty for admitting his mistakes, cutting losses and returning money to LPs. Others lamented that he should have done better by hedging his positions like any respectable hedge fund. Nevertheless, for someone who has been in this business for over thirty years, this is a huge setback both personally to him and the investor community. One would think that any funds entrusted to a veteran fund manager would be in a safe pair of hands. But reality can be brutal. As one user puts it on Twitter : It only takes one bad month. One wrongly sized bad trade. It just goes to show that what we think we know of the workings involving financial markets do not always hold true. Whether you are managing ten thousand or ten million dollars, in the end, stock prices are driven by the simple economics of supply and demand. It always comes down to flows and the biggest whale here is obviously the government.

For most part of our education and up to university, we have been conditioned to conform and succeed. We have been constantly told and guided on what it takes to be a “successful person” and the parameters that define it. These include many things including - wealth, the “ right ” career, status, family, kids, education, being well liked and well behaved, etc etc - the list goes on. These ideologies gets further reinforced when we see the numerous self accolades and congratulatory messages on the social media feeds of our peers. In reality, life does not always go according to plan. Not everyone becomes a top achiever in their field or cohort, not everyone can get an impeccable score for their tests and be perceived as the role model playing immaculately by the rulebook. It's hard to live a life without blemishes or bumps. Being a perfectionist that way can be detrimental. It is not about being able to relate to others who are also imperfect or making you seem more real as a person. It all comes down to survival . In the case of vaccinations, a weakened virus is being intentionally introduced to the human body to disrupt the normal functioning of the biological system but also to enable the body's immune system to learn and defend itself from future similar threats. Another example: Inbreeding, which according to Darwin’s theory of evolution also illustrates that perfectionism through the lack of genetic diversity also results in weaker offspring. A blemish in pedigree is what makes the each generation of organisms better versions of themselves. It is the imperfection that makes them stronger and increases their probability of survival. Being too perfect makes one vulnerable to shocks - the shock of losing a job, money, health, basically anything precious. The little disruptions that throw us off the conventional course of life can be discomforting and at times debilitating. But they help build up our defences, make us mentally stronger and conditions us to be better prepared for other nasty surprises in life. And so these days when I see successful people being portrayed in the media, I don't necessarily always look up to them as perfect role models for where they are now. Many of them may have crossed boundaries and broken many rules before getting to where they are today. At the risk of sounding too pessimistic, many start-ups end up as failed ventures by following the conventional path of growth. Never try to be the perfect persona of what the world wants you to be.

"Do you know how big is a billion ? Just imagine every person tossing a coin at you at the same time." This was how one of my flatmates used to whimsically describe the scale, the 'massive-ness' of China and its potential market opportunity when I used to live in Shanghai. Some weeks back, Mark Mobius, a seasoned investor renowned for his bullishness on emerging markets and China said that he " cannot get his money out ". Mr Mobius' experience might have just come down to a technical glitch in his personal bank account, and the media obviously loves to blow this out of proportion to create headlines. Capital controls have been existent since China's opening up and reforms decades ago. Everyone who ventures into the country knows and understands this. There are many ways in which flows of capital are designed, structured and moved in and out of China - the VIE structure, SAFE registration, designated cash pools, etc. That said, earlier this year, the NDRC also published an article guiding the application and use of long-term foreign debt in China. Among other finer details, it states that the process has become more substantive rather than procedural i.e. a more explicit approval is required for companies in China wanting to bring in foreign debt. No more "FYI"s. To complicate things further, over the last 12 months, SOFR rates - the benchmark for most USD-denominated lending - had risen dramatically, in quite the opposite direction from the PBOC benchmark lending rate . Numerous factors, both macro and on the ground, seem to hint at discouraging the flow of foreign capital to and from the country. One cannot ignore the nagging feeling that the narrative on China, in spite of its huge market potential, has been changing on a tectonic level. For years, fund managers have profited from the risk premiums between emerging and mature markets of the world. The business of investing sometimes all simply boils down to simple principles of comparison: All else being the same, money should go to where it has the lowest risk i.e. where it is most familiar The lower the odds of something happening, the higher the expected return. Tails drive everything . Risk premiums are fundamentally priced off interest rates, a tool used to keep inflation in check; and foreign currency exchange swaps, effectively a measure of how risky one country stacks up against another. Lately those odds have been somewhat warped: Emerging from the pandemic, one would expect central banks to maintain its near zero-interest rate monetary stance and encourage growth. But the bloating in asset prices happened to quickly and by the time governments intervened, it was too late. China, on the other hand, which was much closed out from the rest of the world during this period, went in an opposite direction. Short-term dollar-based deposit rates today have elevated to the levels of 4 to 5%, which means investors get compensated with a 5% return just by not doing anything. Approximately 3-5 years ago, a 5% return was the average expected return for investing in a 'stable market' regime and not doing anything yields anywhere from 0.3% to 0.5%. Just the arbitrage on risk premiums have compressed so much globally, making it incredibly difficult for many fund managers to justify dollar-based investments in emerging markets. For China, there is an added wrinkle of politics at play. Last year, the CPC announced slashing the compensation for senior executives at Chinese investment banks. Even state-run financial firms and regulators were not spared either as part of the reforms highlighted at the recent two sessions (两会). Also, last month, Bao Fan, Chairman and chief of China Renaissance, the deal-making rock star of many tech darlings in China, went missing only to re-surface some weeks later with news that he was assisting the authorities with investigations . One might say that all of this started in Shanghai after Jack Ma's controversial speech in 2020 , and also part of China's push for common prosperity. Either way, all of this seems to be the un-intended consequence of "doing well" or achieving outsized returns in China. If you are facing high cost of funds and still have to contend with limited returns in a regime that is largely state-controlled, it can be really challenging to drive that equity story home. The billion-people market opportunity obviously doesn't sell as well as before. Embracing policy is a choice for investors offshore but a necessity for firms operating in China. That said, ultimately one just needs to be a believer. A believer in the policies and directions set forth by the incumbent few who are in power, and possibly a lot of faith , something which happens to be incredibly difficult to come by these days.

Human nature eventually catches up "This is the nature of capitalism, get over it." - Kevin O'Leary After nearly two decades of being in finance I still don't think I appreciate how capital markets work. It's not that I don't know how it works. There is a fine difference between not knowing and not appreciating . In 2008, most of the world lost faith in Wall Street: The housing market crash, the financial bailouts, quantitative easing... Sure, a few banks went under and were eliminated, but there was so much greed and risk taking followed by cheap money being flooded into the financial system. The events that followed made a lot of people lose faith in the traditional financial markets as we knew it. And so most of bitcoin and cryptocurrency came into existence as investors started to look for an alternative store of wealth. Cryptocurrency and digital assets were meant to be a good thing. It would be digitally secure and essentially "un-fraudable ". But human nature eventually catches up. Anyone can make a bet on anything The series of unfortunate events that led to the downfall of SBF  in late 2022, the poster boy for cryptocurrency, just goes to show that the process of trying to do a good thing can sometimes turn out bad, if not executed under the right moral guidance. FTX, once touted as one of the world's largest cryptocurrency exchange used to be valued at more than the NASDAQ . Its recent bankruptcy is a rude wake up call for those who religiously believe cryptocurrency is the future. Look, I'm not dismissing the credibility of crypto assets and bitcoin. But all of the digital tokens that changed hands on the platform had to start from somewhere: Cold hard cash being used to buy tokens. Someone who trades on any cryptocurrency platform ultimately believes that at some point of time in the future, those tokens can be exchanged for cash, ideally at a higher value. The buying and selling of stocks, listed options and contracts for difference work pretty much in the same way. Aside from the issuance of new shares, none of the money in those transactions flow to the company for expanding its business, or used towards investing in innovation or research. It just stays on the platform in circulation amongst the punters and speculators, creating a whole lot of flow volume, which translates to revenue for the intermediaries who facilitate this flow. The secondary market is the world's largest legalised gambling den. Anyone can make a bet on anything. The possibility of a business achieving a certain milestone, hitting a certain profit target, releasing a certain product. And people further make bets on those bets through structuring warrants, put and call options, CFDs, products that don't require people to come up with all the capital, just enough cash margin to buffer any unexpected losses. It's just comes down to finding enough buyers and sellers on both ends of the trade, effectively making the market. As long as those in the game keep the ball rolling i.e. someone is buying those shares and someone else is getting their capital back, prices continue to hold up and no one gets hurt. Sounds like a Ponzi scheme no? All crashes in the market happen primarily due to a crisis of confidence: A whole lot of people just wanting to get out. It just takes one misstep to screw everything up "Entrepreneurs must be powerful storytellers to win early stage support" Here is why I could never wrap my head around putting money in the markets: Investors (typically) pay the price of a share based on the amount of dividends the company pays in the future (this is essentially the dividend discount model). Let's just say this company one day receives a huge order from a customer which could potentially double its revenue, but unfortunately it doesn't have that much manufacturing capacity. It decides to raise money from shareholders or banks, in which those proceeds would be used to buy or build a new factory, thereby solving for the shortfall in production capacity. Investors then do the math involving the costs and benefits of putting their money into this initiative and decide how much to put in. With this new factory in place, the business now generates twice as much revenue, but it also implies that profits could potentially double, as with the value of the business. Suddenly, the idea of ownership in a larger company, the prospect of the business being a market leader and the reputation of being part of a billion-dollar enterprise with a high market value dawns on shareholders. They start to get carried away with window-dressing and telling fancy stories about the future of the business in order to drive the company's valuation, rather than focusing on product deliveries and execution. This is how modern-day capital markets management looks like. Share prices driven by stories and narratives rather than business fundamentals. If everyone is telling stories then who's telling the truth? Cryptocurrencies, like financial derivative products, also do nothing to drive the real economy. Aside from making up for flow volume and its re-saleability (which again, benefits the intermediaries), there is no real intrinsic value. There aren't enough merchants around the world today that would accept bitcoins or tokens in exchange for goods and services. Cryptocurrency isn't backed by an underlying business. Most bank accounts don't even offer virtual asset wallets that you can use for day-to-day transactions. You can't take out a loan using cryptocurrency as collateral. And regulators around the world are still wrapping their heads around how they should deal with this asset class. Gambling is a well known vice in society. There are always winners and losers on both sides with middlemen profiting from it. But as long as there is sufficient law and order, and no one creates a hole too big that it swallows the entire house, the show will go on. People will continue to speculate on the value of derivatives and bitcoin. No one calls fraud when things are smooth sailing and the pie is large enough to be shared. It just takes one bad egg, one wilful misstep, to screw everything up.

I have never been much of a waterfront-living type of person, but the view of the Victoria harbour can be quite addictive. Quiet mornings overlooking the harbour are some of my most enjoyable moments over the weekends in Hong Kong. I realised recently that for a lot of companies out there, it's actually the season of promotions . For a number of friends whom I've known for some time and who were newly minted, I'm truly happy for them. Those that I have been acquainted with on a more personal level have all been very consistent people. Some of them came from relatively humble beginnings, either from totally unrelated backgrounds or started off in companies that practically had no bragging rights when you showed up at social events. A lot of them were hungry for technical skills and deal experience, and wanted to acquire these in the course of their work. Technical skills were important as juniors, but I think what made them stand out were often the softer aspects: the ability to make friends, staying in touch, knowing how to navigate politics at the workplace, or just having the ability to survive in an environment with repeated rounds of layoffs and corporate re-organisations. Looking back on more than 17 years of being in the workforce, you realise that consistency and patience are sometimes all highly under-rated attributes. That said, success means different things to everyone. I think that most consider landing a promotion, a big bonus payout, being publicly recognised or associated with someone reputable or distinguished in their field, the hallmarks of success. Being appreciated and recognised at the workplace is being important. The need for career progression has also been deeply inculcated as part of "life after graduation", especially for those who have had the privilege of going to school. No matter which it was, it mostly all came down to being able to accumulate more money, and so, all of success seems to come down to that moment of glory and the wealth that accompanies it. But the most valuable form of wealth is not having to impress anyone. Social comparison is the biggest culprit of dissatisfaction. See, because not everything can be measured in dollars and cents. The same way not everything is measured in terms of lofty positions and titles, or material possessions. Also, I learned recently that more important than getting rich is how to stay rich. A good number of people I know earn an average or less-than-average income and stay in very humble houses. In theory, they should be worse off when compared to those who are earning a lot more. But many of them are "doing well" simply because they didn't take excessive risk with their money, stayed consistent and perhaps well-grounded in their material expectations. Most of all, I think they stayed contented . "At your highest moment, be careful, that’s when the devil comes for you." This was what Denzel Washington said to Will Smith after his notorious outburst on Chris Rock at the Oscars in 2022. Although Will Smith won an award that night, he was subsequently banned from the Academy events for the next ten years. Today’s success story can very quickly turn into tomorrow’s failure. At any point of time, nothing is ever so good or bad as it seems.

The reason we work. Learnings from a hearse driver ( read off LinkedIn ). "You could be professionally correct, but being correct does not mean that it is the right thing to do." - said an unnamed older colleague over lunch On dealing with people in a position of great authority and power.

Words from a few folks which I had whiskey with today: Not all PE firms are created the same: One of the best things to do is to track all the projects that these guys put money into. Everything they touch just turns from gold to brass. Instead of the “Midas” touch, they have the “minus” touch. Like the Forbes under 40, there should be a separate league table for investment deals called “Forty under 40”: The top forty deals that have an IRR of -40% or less... On China: A lot of private equity return models are broken: When it comes to decision making... Stupid questions asked by stupid people... The world needs enough stupid investors for astute investors to thrive. Investor relations is an art:

August is shaping up to be one of my busiest months. On top of three webinars every weekend, I have a couple of two-day on-campus classes. I think Zoom fatigue is real and the offline classes provide a huge reprieve. However, the valuation and financial modelling classes always made me think about how I could enhance my existing content and in-class experience in each successive session. I don't claim to be the best and most experienced on the street, but I think where I am different is my perspective of looking at financial modelling and business valuation. Perhaps that is the unique value-add I bring to the table. I thoroughly enjoyed the 2-hour talking session last night on Zoom and was possibly the youngest panellist. We spoke and shared our views on what to expect in the next 6-12 months, personal experiences and opinions on valuation and investing, amongst others. We also discussed the current situation around the pandemic and how people and companies should remain flexible and adaptable for the uncertainties that lie ahead. Learning on the job. During my corporate finance days, I tend to be the junior 'play-maker'. I don’t crave to be in the limelight. I'm happy to just sit in and meetings and watch the show. Occasionally, I get the ball, I pass, someone scores a goal, sometimes I score. Everyone gets paid at the end of the day. Everyone wins. I'm happy. Tired, yes - but happy. So I had spent most of the early chapters of my career being the nice guy, helping out where-ever I can, whenever I can. On one occasion as an analyst, a VP had requested some help for work to be done for an RFP due on Monday. An email was sent out to the analyst pool on a Friday and I was the only sucker that said yes. Sounds like a common Friday evening horror story? I ended up burning my weekend doing up the presentation deck. In fact, many weekends were like that. It was a sacrificial rites of passage as an analyst in investment banking. Someone put this in perspective for me: You're basically trading time for money . I still enjoyed what I did. I disliked the mundane work, but just wanted to show up and be a team player. As time passed, I increasingly became the go-to guy for a lot of what we knew as JIT (just-in-time) projects. It could be a comps table that needed refreshing an hour before a client meeting., a model that needed updating before a meeting, or a pitch-book that required assembly in 24 hours. I had proven to be one of the most efficient and effective analysts in the team. I took pride in what I did, and I still do today. But in the frenzy and rush of producing all the work, I had unwittingly lost sight of the " bigger-picture " investment banking business model - I just did what I was told and dedicated very little bandwidth to develop myself more professionally in other aspects. As the days passed into years, my professional growth became increasingly stunted and fuelled by the mindless monotony of spreadsheeting and churning pitch books. Compensation. In negotiating any compensation, one must first ask the difficult question: What value do I bring to the table? When you graduate from school and someone hands you a $10k paycheck, you are expected to be the most powerful sponge on earth. Your job is to soak up anything and everything as fast as possible. You are the " smallest gear " in the entire system required to produce the highest torque - that’s your leverage . That leverage has a premium and that is what companies are paying for. When you eventually evolve into middle and senior management, you become the large gear . You are measured based on your ability to drive as many smaller gears as possible. A large and heavy gear which does not drive anything is both costly and redundant, and will inevitably be scrapped. Therefore in starting up any business or pursuing any career, one needs to first understand your role within the firm - are you a small gear or a large gear? If you can't make a difference to the organization you work for and its clients, there is really very little that you can ask for commercially. Don’t get me wrong and under-price yourself. Shoot for the sky if you can. But remember that if you ask for high fees or draw a high salary, you must deliver . And don’t get cocky. More importantly, don’t ever be complacent. 羊毛出在羊身上 Everything has a cost, nothing comes for free. It was much later in my investment banking years, and after starting a business, that I truly appreciated what revenue model and cost structure really means. As an employee, your salary is a cost to the organization, and your main job is to bring in revenue for the firm. Everything else that you do in that process is ancillary to that main task. Beyond salaries, the firm incurs other overheads such as rent, administrative expenses, entertainment costs, etc - all of which are important in supporting the operating infrastructure of the business. The firm's most critical focus is to be profitable. To do that, it needs to grow revenues as much as possible, and it depends on the best employees and sales people to achieve that goal. Usually, the people who are most instrumental to that growth will be rewarded, but in larger organisations, there is always bound to be some dislocation of credit. Don't get too quickly disgruntled when you get paid a lesser bonus than expected. Unless you run your own enterprise, your remuneration is never perfectly correlated or proportional to the firm's profits. You are just an employee , a cost center, and not a shareholder. Understanding this corporate dynamics early on in your career makes you more sensitive to not only the firm’s P&L, but also the need to intelligently source for sales and develop yourself personally. Over the years, when I started my own business and spoke with more people outside the banking industry, I increasingly appreciated the costs of customer acquisition and the value of relationship building. Your work experience gets increasingly diluted and worthless if you choose to sit behind a desk doing endless powerpoint pitches and spreadsheets. In banking, the one thing that many junior analysts (and even associates) fail to realise is the importance of doing small talk with professional parties, engaging colleagues from other departments within the bank, and even client interaction. Every individual is different. Some like to go deep into numbers, others like to hear the big picture. Some like bragging about their achievements while others just want to complain and vent their frustrations to an external party. Regardless of the shapes and sizes that people come in, the interactions - whether direct or indirect - are ultimately contributory to helping the firm bring home the beef that pays the salaries and bonuses. You can choose to systematically and independently acquire technical skills from a corporate finance manual, but there are no handbooks for learning the ropes of business from the "s chool of hard knocks" . So don't get too frustrated if you aren't hitting home runs by showing off your beautiful presentation or financial model to your bosses or clients. Sometimes, your greatest value is in just showing up or being a small cog in a big system. Being commercial. From a statistical point of view, not every one will make managing director in an investment bank. This is not abnormal. In an ideal world, the funnel is straight, and 100% of all analysts would make associate, 100% of all associates would make VP and VPs to MDs. But the reality is that attrition happens at every rung. Making Partner or MD isn’t the pinnacle of your career. I used to think that MDs were the creme de la creme in the investment banking world. But the truth is, many of them are just successful in navigating corporate politics and hierarchy within the firm. MDs are really just highly paid salesmen within the bank. MDs exist only because the banks believe that their relationships with senior industry people and clients can be monetised at some point of time. Their KPIs are based on the bank's revenues and not on whether they make your life easier. It is also because of this that most cultures in investment banks appear to be toxic. Don't take it personally, it's all just comes down to sales and the bottomline . As someone lower down the rung of the ladder, if you focus too much on pleasing your bosses and co-workers as part of climbing the corporate ladder, you'll find yourself rudely awakened ten years later into a miserable job. So, everyone - junior or senior - needs to learn to be commercial , and that means understanding how the business of your firm works and who the real customers are. Above all, be smart, be a good listener and nurture good analytical skills. Learn more to solve problems rather than pleasing people.

I love Shenzhen. 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. 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. 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. 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. 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. 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. 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. 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]

“Rome wasn’t built in a day but they were laying bricks every hour.” "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." [Excerpt from James Clear ] I've seen 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.