The last few months have been colorful. From the 1MDB case, the downfall of Luckin Coffee, Hin Leong, and now Wirecard. Who dare says now that the lack of transparency and fraud only exists in emerging markets? Firms in mature economies are equally susceptible to financial misconduct, and this is even if a Big 4 firm signs off on the accounts. I've sat in a small part of an auditor's workflow many years back when I started my career in finance. It is not glamorous. But the partners and managers onsite make the entire process look and feel extremely professional. Don't get me wrong. I think audit is a decent job and an essential service for the proper functioning of all businesses globally. A lot of work goes behind organizing and presenting the 3 financial statements, and many shareholders and institutional investors often take this for granted when they download it off the company website to read or when they receive the hard copies in their mailbox. But that said, very few really know the work of an auditor or even how finance processes in companies work e.g. how an invoice is being processed and reports generated, how cash is being deposited into a bank account and the corresponding salaries and expenses paid out to employees and suppliers. Not everyone appreciates this - especially when you are an employee sitting comfortably behind a desk. As an employee, analyst or investor, you pick up the audited financial statements and you expect that the numbers to be "the Word". If the cash in bank line item on the balance sheet reads $100 million yesterday and the company isn't expecting a huge payment out to creditors today, you'd assume that there is really $100 million in the bank today. In reality, that $100 million is 'virtual' money. Unless you sight the bank accounts that contain the cash, there is no reasonable way to ascertain that this is correct. The same applies to trade receivables and inventories - have you tried walking into a manufacturing plant or warehouse to count and add up all the machines and stores? It's not so straightforward. I've counted machines on racks and also gone through the process of collating bank statements and validating the totals, ensuring that the total cash reconciles with the cash line item in the balance sheet. It's significantly under-appreciated and tedious. The rest of the world assumes that someone has gone and done this work. So whenever a fraud happens, the first thing investors blame are the auditors who sign off on the numbers. Auditors then turn to the company directors and say the disclosures aren't accurate and adequate. The whole exercise turns into a domino of a blame game, unfortunately. But that's how the world works and at the end of the day, while you can seek recourse for negligence, misconduct, etc, the damage has been done. Investors are the ones who have lost their monies. The head of the snake (possibly) goes to jail, and everyone else working across the value chain got paid, and that is the moral hazard here. Where does the blame game stop? In 2002, Enron's financial scandal resulted in the bankruptcy of long time accounting firm Arthur Andersen. While AA were the biggest casualty amongst third parties, many questioned whether or not those who played a part in advising Enron had a part to play in its downfall. "What accountability does it--or any consulting firm--have for the ideas and concepts it launches into a company? If in fact McKinsey should share the blame because of the ideas and concepts it launched into Enron, then why stop there? Perhaps you should also blame the brilliant professors at the business schools from which McKinsey recruits many of its consultants and who may have taught the same concepts to Enron executives." - Bloomberg One of the readers probably says it best: "As a longtime management consultant, I must take issue with your understanding of the management-consulting process. A company will frequently seek advice and then argue for the opposite conclusion. Or the company will partially implement your suggestions, often because it has sought advice from other professionals who provide conflicting advice. In addition, you ignore the political dimension. Frequently, the client has the right solution in-house, and the consultant merely resolves the internal conflict--with the added bonus that management doesn't have to take responsibility should things go awry." Consultants and auditors provide the appropriate check and balances required by every large organization. In good times, nobody cares. It is only when shit hits the fan that the relevant stakeholders come to light. Suddenly everyone wants to know the person who signed off on the books. So, consultants are effectively there to 'backstop' blame. If someone on the inside wants to siphon money out, these people should be really careful and not be afraid to ask the difficult questions, even if it costs them. But then again, it's hard to bite the hand that feeds you. If you owe the bank a million dollars, the bank owns you, if you owe the bank a billion dollars, you own the bank . Ditto for credit agencies and auditors. As cynical as it sounds, what this brutal cliche truth is: Be careful with your money. Most asset managers often invest using someone else's money. But that is never really the same as using your own money. Good market, you get more; bad market, you get less. Either way, at the end of the day, you still get paid. And since cash flow is the yardstick here, when an investment goes sideways, the guy who puts his money on the table ultimately gets the short end of the stick. When money talks, people will try to pull wool over your eye and show you only what they want you to see. No banker sells a lousy product, they call it a " high risk " investment (there's a reason why they named risky fixed income instruments junk bonds ). It is catchy in the world of finance and somehow for some reason, investors like the idea of dabbling in a game of probability every now and then when the stakes are high. But risk is perception based, and everyone's idea of risk is fundamentally different. It is not only a function of one's appetite to invest, but also reflects access to all available information. To make it even more complex - it is also driven by individual interpretation of that information, even if you did have access to it. Based on this definition, any investment made by an unsophisticated investor is almost always deemed high risk, regardless of the quality of the underlying investment. My high school friend who used to work in fixed income used to tell me: Everyday we flip open the papers and read exactly the same stuff in the news, yet what you and I see and what others see is entirely different. If you put your money down on the table and lose it, you only have yourself to blame. That is the only rule of the game.

I must have gotten myself in the "wrong" career 14 years ago. Last weekend, some guy called me on my mobile saying that he had gotten my contact from his friend who works at a bank. I don't know the banker but I reckoned it was passed on from one of my friends. So this person who called me operates his own business. Private company, SME, typical entrepreneur who founded, grew the business and now kind of stuck in a situation where he basically can't take his foot off the pedal. He had reached a bottleneck and was faced with the choice of either continuing to toil at his company for the rest of his life, or exit and cash out. " Why don't you hire your banker friend to find you an investor? " Apparently, his friend had felt that the deal was too small for the bank to warrant a proper M&A mandate, which is probably why he decided to called me. But the advice didn't stop there. His friend went on to recommend that he should not pay any fees for advisors who were helping him to find a buyer. "What should I do? I don't want to pay fees." I told him (through the phone) that he should hire someone, groom them to help him run the business and who could someday take over his role. I said that it wouldn't be immediate and will take some time, possibly 1-2 years. I also mentioned that he'd need to also invest time to train this person, but the upside is that he would be able to gradually take his foot off the pedal. "But then lidat it'll hit my bottom line and profits..." Good grief. You want someone to help you to do the work of finding investors but you don't want to pay them for their time. Not to forget the contacts acquired during the investor search process. You are also not willing to invest in your staff to help you with your business, yet still want to make decent profits by shaking leg? You think everything is free ah? It feels like boutique and smallish M&A shops were set up to work on deals that fall through the cracks of the large IBs - for free . The M&A fee model is broken. To understand and make sense of why this is happening, we must look back in time to the pre-2008 global financial crisis when financial advisors billed their clients based on an upfront fee, a monthly retainer followed by a completion / success fee, depending on the scope of mandate. This model was broken after 2008, when pure investment banks were rolled into less risky commercial banks as part of a global systemic de-risking process. The consolidation of the functions turned banks into a one-stop-shop for loans, leveraging proprietary industry networks and providing strategic advice for raising capital. They had started to market themselves this way, building the case for getting a foot in an M&A or IPO deal by offering loans to companies. In the post-GFC low interest rate era of 2009, this accelerated the entire process, resulting in the likes of Stanchart and HSBC emerging as the new kids on the block coming out from that crisis. Many of them even went one step further by working with the private banking side, managing the wealth of business owners, especially those who reaped a bounty from a recent sale of their business or cashed out some from an initial public offering of shares. It was a complete solution. Lend to these companies, help them to grow, acquire overseas or sell non-core businesses, find a strategic or financial investor, sell shares in the capital markets as part of an IPO and park the sale proceeds with wealth management. The banking model transformed and the larger, more established market players had figured an ingenious way of getting fees out from every single step in the process. In doing so, companies also figured they could stop paying retainer fees for sale processes (regardless of how complex the deal was) since they were already existing clients of the bank. And so, the no-retainer-success-fee-only trend just caught on. The advisory market in Asia is not only crowded but incredibly fragmented, in addition to waiving the retainers, banks started to outdo each other in a cutthroat competition of reducing their success fees. I don't blame companies for wanting to pay only success fees on M&A and capital raising deals because the large banks have been spoiling them over the last decade. The investor search process has also changed dramatically due to globalization and digitization. Most of the important work in a sale process is really about knowing where to look. Number crunching and beautiful marketing presentation decks just make the exercise look professional. Most sellers don't crave for that. Over the last 10+ years, a lot of people have been travelling across borders, discovering new markets and pools of capital overseas (not so much now due to the coronavirus). This makes it easier for both sellers and buyers across the globe to meet on their own terms. The availability of online investor databases and sensationalized media reporting has also led to sellers being more independent in their search of the right buyer. The process has gotten so dynamic that a lot of 'agents' with decent full time jobs also do "M&A work" on a part time basis, getting a cut of the fees in return. Is the pure-play M&A advisory still a good business to be in? We can all cry foul over companies not wanting to pay retainer fees, but in the most realistic sense, this is just a consolidation at play where only the bigger players with the full spectrum of banking solutions are able to be in the business. The revenue from commercial lending subsidizes the deal-advisory overheads. How will this evolve and change over the next 10 years? I don't really know. Will this be the status quo dominated by the larger incumbents? Will we see an onset of 'robo-like' advisors eventually eliminating the traditional financial advisor's role? Will companies be able to do book-building for IPO roadshows without the need to hire bankers?

There’s nothing you should regret in life - all the good things that you have today are a result of everything that has happened. Consistency has a compounding effect. You usually don’t see the results until a very long time later. Never look down on anyone because of what they do. Complain less, stop victimising yourself and move on. General knowledge, financial literacy and personal health are ultimately your own responsibilities. When traveling, take the cheapest and happiest mode of transport available. Never kick someone when they are down. Learn to give and receive compliment and feedback. Don’t ever get cocky. Ego and wealth are like items on a balance sheet. Here today and possibly gone tomorrow. Being hands-on is the simplest and purest form of leadership. Find the courage to disagree. Own your mistakes. Run your own race. Don’t ever believe that you can second guess the stock market. Pay it forward by learning to teach and mentor younger people. It is not where you work that is your source of economic power - it is your health and attitude. The media is curated by people who are biased. Everyone has a bias. Be critical and discerning, don’t believe everything you read and hear. In this day and age, a healthy digital footprint is important. Anyone who tells you otherwise is smoking you. When someone says ‘just trust me’, you really should think twice. Invest in a tailored shirt, and a good suit. Don’t cheap out on ties and a good pair of shoes. Dressing well shows that you take your business seriously. Candidates with decorated CVs and impeccable credentials do not always make the best workers. Never believe someone who says that they are purely helping you out of goodwill and have nothing to profit or gain from doing so. Be a jack of all trades and a master of at least one or two. Even in the most helpless of situations, it is absolutely critical to have a healthy sense of optimism. Treat investors’ money as your own. A fantastic career not only enables you to pay your bills but also pushes your limits, builds character and helps you to grow as a person. Never compromise on quality. Focus on creating a great product rather than calibrate quality to price. Never limit yourself by the stereotypes placed on you by others. Bell curves and rankings are just part of a game played by people with their own agendas. Just because you lack the vintage of a good school or a “bulge bracket” doesn’t give you an excuse to underperform. Not everyone who is older than you is wiser than you. Wisdom is acquired through working on the day to day chores, not age. Contrary to conventional wisdom, people don’t really change that much. There is a difference between keeping still and not doing anything. Make sure you are on the right side. You can’t see where you are going if you keep covering your eyes on the way down a rollercoaster ride. Never allow social media to define your identity or create a false sense of security. Life is not measured in terms of likes and followers. Everyone is entitled to their point of view, but only the people with skin in the game get to make decisions. Most people who are looking for your opinion usually don’t want you to disagree with them. There is no such thing as ‘I have no choice’. You always have the right to decide. Age should never be used as an excuse for not being up to date or learning new stuff. Usually, no one is incompetent. Everyone is good at something. Some people are just placed in the wrong places at the wrong time. If you can’t get to keep your money, there is no point in proving that you are right.

About 10 years ago, people were laughing, criticising and maybe even booing at the older generation of politicians for attempting to connect with the younger 4G/5G population using social media . Today, our prime minister's Twitter account has nearly 800,000 followers. Likewise for some of our other politicians. Whether this has helped in influencing the elections, no one can really say, but certainly this has helped in enabling more voices from the public - for good or for bad. Besides, there is also a host of other factors influencing popularity and voting - personal interaction, perception from other media, etc. But this number is still outstanding on any level, whether in the government / public or private sector. Not every company out there has that ability to amass that many followers. And it shows the importance of managing public relations at the digital level. So when I hear the “campaigning vans” circling our estate these few days, I think: “This must be how elections” were done in the 1960s and 70s. There was no Internet, no TVs and the only way candidates could get word out was to announce themselves over the loud hailers and door knocking. The door knocking still happens today though - and nothing can replace the human touch. But today's election rallies go beyond the door knocks. We have Facebook live videos, Zoom 'townhall' webinars, Instagram stories, etc. I am not sure if the older generation resonates with this (probably why there is still door knocking and vans still patrol the streets). Quite a few of them I know are still pretty resistant to posting stuff online, doing internet banking and making online payments. Only time will tell whether or not these have been really effective, but for now, based on the viewership numbers and the real-time comments appearing during those live feeds, these digital initiatives seem to be the one thing in this year's election that is proving to be giving the social media saavy people an edge.

So few investors / punters do due diligence on the companies they invest in. Many people jump too quickly into the bandwagon because they believe that the large and reputable investors have got it figured out . They think that if the big wigs are there, "something must be right" or they must have access to proprietary information that led to their decision. "They must see something in there that we don't" These funds have several hundred investments across hundreds of millions of dollars. If one investment goes south, they rely on the rest to keep the entire portfolio afloat. Are you diversified enough that way to take the risk? The next time you put your money into something, think again - is FOMO driving you? Are you absolutely sure about what you are getting yourself into?

Some days I just sit here and have a beer. Not on my laptop or iPad. Just sitting here, watching people go by, unwinding and decluttering my mind. The process, prima facie, looks unproductive and frivolous but it soothes and calms me. It clears the thoughts in my head so that I am able to think and make better decisions especially in situations when I do not have the luxury of time to react. I acknowledge the irony of it with the beer glass in the picture.

Tasseography is the divine art of reading patterns in tea leaves. People believe that energy is transmitted through the tea leaves during the process and the resulting arrangement gives us insights of our past, present and future. Technical analysis is somewhat like tasseography, at least in my opinion. A lot of sentiments and 'energy' are embedded in the financial markets. There are possibly at least ten major events taking place in the world at any point of time, which are likely to move the markets. Some are speculative, some are anticipated, some are premeditated. It is basically chaos theory at work. A complex system at heart. I do not believe in charts. I also have zero appreciation and understanding for the creative lines constructed by chartists and punters. I once sat in a course on technical analysis many years ago. It was intriguing and captivating. Something about the way the overlays on the candlesticks is being explained and how it nicely fits into share price trends really convinces you that with the right observations and tools, you can try to predict those stock drops and spikes. But since I have never had much luck with stocks and charts, it probably means I suck at it or am just a very lousy investor. But in times like these, I can't help but take a step back and re-look at the bigger trends that have taken place over the last two decades, which is best observed through charts. This is the DJIA from 2002 to 2005. The end of 2002 was when the full impact of SARS was felt in the market. The market probably pre-empted some of that effect a couple of months before, Within approximately 12 months, stock prices had reverted back to its pre-crisis levels. One can argue that the spread of the virus at that point of time was somewhat limited by a relatively moderate travel activity globally. And it didn't stop there. The next 5 years that followed saw one of the longest bull runs ever. Was it that the impact from SARS was less pronounced as compared to COVID-19? Was it the release of pent-up demand from consumers 2002-2003? Was it the onset of globalization and the opening up of China, one of the world's largest economies, to the rest of the world? Then the worst thing happened in 2008. In September, Bear Stearns, who had heavily dealt in the securitization of assets and liabilities, was stripped and offered as a sacrifice to one of the largest banks in the US, while Lehman Brothers was taken out in the streets and shot in the head. Yet again within about two years, the DJIA had once again recovered to pre GFC levels, with the intervention of the central banks through QE and the moderation of aggressive risk-taking by the consolidation of pure investment banks into commercial banks. In the seven years that followed, saw once again, the best bull market the world had ever seen. And this is us today. Not quite pre-COVID levels based on end 2019, not that far behind. We have come a long way. The world today as compared to 2003 is very different - globalization, connected-ness, lifestyles, China, the iPhone and Zoom calls. Were we able to foresee back then in 2003 and 2008 how the markets would have turned out? How is that different today? To analyze a "complex" system of an infinitely large number of moving parts (that we have almost no control of), we sometimes need to step back from the action and make the decisions based on the big picture. Stocks go up and down all the time. Volatility is the norm. But if you believe in the mean reversion to normalization , the long-term trend is still bullish.

Before emails became the norm at the workplace. People worked around the boundaries of the 9-to-6 work hour regime. The generally accepted convention was that: If you'd tried to reach someone after hours, there would be no one there to pick up the phone, because everyone at the office had gone home. The only way you could try to reach out to that person again was to call back the following morning. The telephone or face-to-face meetings were socially and professionally accepted protocols. First email addresses, then came the personal computer. In addition to receiving just a verbal confirmation, we then had the ability to communicate and access a wider variety of information media - lengthy text messages, pictures and sometimes videos (bandwidth permitting). This transformation gave way to many opportunities for individuals and businesses to communicate: digital e- receipts containing information that would allow us to reduce the back-and-forth phone calls, allowing us to make collective decisions in a much quicker way. Although the speed at which we conducted business increased significantly, we were still constrained by the boundaries of normal working hours as personal computers were largely used in the office and people left their workstations at the end of the day. Laptops and WiFi. We used to access the Internet by plugging one of these cards into the side of our laptops. That enabled us to surf the net wherever that was an Internet access point - at school, at work, in the cafe, at public places, etc. More importantly, with Internet on the move, we could now send and receive emails virtually anywhere. Having access to emails at home implied that people were able to continue to respond even after the stipulated working hours. Implied is the operative word here because there are no real obligations to reply a client or your boss after working hours. But think about the potential consequences that come along with this: A competitor might beat you at responding to a potential sales lead while you were " out of the office ". You might have missed that long awaited promotion at the workplace just because you failed to scratch the itch in your boss' brain on an idea for a new product launch at 1am in the morning. So, now we have started to over-step the boundaries. In the past your performance was judged based on your presence and delivery at the workplace. Today, in the digital world, you are omni-present and being judged all of the time. Responsive-ness (or in this case the lack of it) translates to missed opportunities, lower sales, and lower bonuses. This vicious cycle and frenzy of responding to emails after office hours gets propagated over the years, and clients/bosses grew accustomed to the instant gratification of having an almost immediate response from a vendor/colleague. Just think about the number of times you had felt uneasy just because a friend or a colleague didn't reply to your email "immediately". Instant gratification. Emails and instant messaging are now so cheap (and virtually free) that we are communicating and replying every minute on a daily basis. A compulsive need to reply every message. Today, my whatsapp and wechat sometimes looks like this: I used to have a compulsive need to reply to every message that comes in. The habit stemmed from years of working in a corporate finance role where every deliverable was expected to be served in double-quick real time. It was to the extent that even the mere sound of the notification (both email and whatsapp) gave me butterflies in my stomach. Half the time, it was an email coming in from someone expecting work to be done. The process was hard-wired and programmed into my nerves and I'd lived the majority of my work life (>10 years) on that instinct. It was unhealthy. Today, I am glad that I have grown out of this toxic mindset, which has obviously resulted in the consistent backlog of messages in my phone. I also do not feel any guilt for not replying someone on a timely basis. My whatsapp chat list is like my email inbox. I reply only if the matter requires my urgent attention (in which case, the person would have most likely called me), or when it is convenient for me. Email takes a back seat. The introduction of Whatsapp, Wechat, Line, etc have blurred the lines between our social and professional circles. It is the defacto go-to channel for getting things done - at home of at the office. Email is just for keeping things on the record . As COVID-19 continues to keep people at home, these communication tools will increasingly be the norm with Zoom being the latest addition to the family. It is going to feel somewhat awkward in navigating a world where nearly all business dealings are done away from the office and in an entirely virtual domain or even from home. No more visits to posh looking offices in the city area or meetings in gigantic boardrooms overlooking the waterfront bay. "It is great to meet you on Zoom. By the way, the background behind me is my study where I spend nearly most of my waking hours. This is my new suit. I'm not wearing long pants by the way. In fact, I'm probably not wearing any pants at all." It might end up becoming a new way of life. Digitization and technology makes all things possible. An example is the signing of official paper documents. Physical copies and in-person signatures might have been mandatory in the past but in today's context many companies have come to accept e-signatures as the standard. Today, we speak of work-from-home ("WFH") as if it is a separate and alternative business continuity procedure. But in years to come, the physical dimensions of what defines the office and what defines the home will be so blurred that the term WFH will no longer be relevant. The phrases: " I'm working at the office today " or " I'm working from home today ", will hold no meaning. It'll just be: "I'm working" and you will be deemed to be working ALL the time.

Zoom's share price was up 40% last week. "If we can work well together online now, perhaps it will permanently reduce the need for business travel" Work-from-home protocols, tele-commuting, webinars and virtual meetings may permanently alter business travel, which accounts for a significant portion of aviation revenues. Zoom isn't the only winner here. Given the restrictions on daily commuting, technology has become an enabler of businesses and lifestyles. Many tech-related stocks ranging from cloud computing, e-commerce to data security have benefited greatly as a result of this migration to the digital realm. Early investors in Zoom and other tech stocks were lucky. But one might wonder if it still makes sense to even buy its shares. At its peak, Zoom traded at more than 2,000 price-to-earnings, implying a dividend yield of 0.05% . “Our ability to keep people around the world connected, coupled with our strong execution, led to revenue growth of 355% year-over-year" - quote from Zoom's recent earnings call Clearly investors are not buying technology stocks for their dividends. Everyone who has a positive rating on the sector is valuing it based off the scenario that we won't be returning to our offices soon. Not at least within the next 12 months. A few months ago, people had already been speculating about a second wave. This has since emerged in several major cities - South Korea, Hong Kong and Japan. The effect of the virus is also festering down south in Australia where it is currently winter. Governments are holding their breath in anticipation of a third wave towards the year end. For now, it doesn't look like the nightmare of travel bans and city lockdowns are easing anytime soon. This virus could linger around for a few years and you could be using Zoom for a longer time than you think. Right place at the right time Using Zoom underscores the innate desire to engage in a face-to-face setting. Apple has tried to do this with FaceTime in the peer-to-peer context. Skype has video calls. Polycom even offers an immersive platform which is targeted at large corporates with the budget to invest in virtual-presence-type meetings. Doing so allows their professionals based in multiple cities to communicate in real-time without the need to fly to a single location. While these paid-for-service features have not been cheap, corporates weigh the trade-off between the cost of a business class air ticket vis-a-vis the cost of an enterprise-grade platform. Video conferencing is not state-of-the-art tech. But Zoom was caught in the right place at the right time. In a world without safe distancing and masks, demand for real-time video communications and webinar broadcasts might never have evolved into the defacto standard today. Unlike Polycom, Zoom had somehow managed to make tele-presence accessible easily and quickly for everyone across all budgets during a time where the world needs it the most . Albeit the initial security issues that surfaced as a result of its popularity, the app continues to serve its main purpose of facilitating conversations between people and it connects seamlessly. Most importantly: it just works . Take a look at Apple. The technical specifications of its products are not superior to the Microsoft or Android counterparts. In fact, Apple products are pricey . But loyal fans of Apple (including me) continue to buy the iPhones and Macbooks, happy to settle for a less than top-notch hardware. Maybe it's Apple's iCloud ecosystem, or the make of the phone. Or maybe there's something enigmatic and addictive about its minimalistic design that appeals to a certain group of users. And just like how people are drawn to the allure of Apple's simplicity, if there's anything that Zoom has gotten right, it is probably the ease of installation and use. More important than usability, the majority of governments and organizations around the world have also mandated extended periods of work-from-home procedures and no physical client meetings. Very draconian you say, but who can afford the socio-economic risk of a second lockdown? What happens when the show is over? After this pandemic is over (either through herd immunity or via a vaccine), I am guessing that most people would still use Zoom in their day to day work, but the real question is how many will continue to pay for its enterprise grade functionalities? Keeping in mind our natural instincts to engage someone else in person, and also because as humans, we will probably start to forget the pain of the initial lockdowns. People around the world will likely ditch the newly formed "work-from-home status quo" and revert to air travel, physical meetings and mass events. But in the current day where airline stocks continue to battle for survival and media reporting new cases daily, it might be easy to rationalize why Zoom can trade at 2,000 times earnings. Investors and stock watchers can be restless and impatient people. In 2013 , CEO of Apple, Tim Cook, told the media that " some really great stuff [was] coming in the fall and across all of 2014 ". This was equivalent to saying: " We've got nothing for you this year, but stay tuned next year! ". Analysts and investors listening to the briefing were unimpressed and Apple's share price took a mild beating. Like the ubiquitous smart phone, video-conferencing tools are not cutting edge technology. It remains to be seen if Zoom can really deliver on growth through innovation, transformation and create sustainable value for its customers in the same way Apple had done with the iPhone.

With so much negativity around closed-up economies, city lockdowns, finding a vaccine, one can't help but wonder why valuations - especially for tech firms - are sky rocketing . Long term over short term In any asset pricing exercise, there are two fundamental parameters to look at: future free cash flows and the discount rate. The future free cash flows of the assets are whatever anyone thinks it to be: three, five or even ten years out. The discount rate addresses the question of " what is my expected return for purchasing a certain stock vs putting my money into a safe haven such as a government bond ". If you look at consensus data over the next 12 months, nearly every analyst on Wall Street is predicting a decline in revenue and earnings, for a good reason - sluggish economic growth, deferred order books, and overall lower discretionary spending. This indirectly tells us that: The performance of the NASDAQ shows that no one is bothered with what happens over the next 12 months when it comes to valuation. Because investors are not relying on the near-term outlook for guidance, the pricing of today's tech stocks are driven by one of the two: Future cash flows over the longer term, or Just pure hokum. If you think about it intuitively, valuing businesses based on the data estimates looking out 3 to 5 years becomes a more viable alternative because no one can meaningfully price any business under circumstances today. Times are unprecedented; It is an anomaly, a black swan scenario. Applying the 1-year forward multiple to value a business just does not make any sense. This is similar in 2000 where the surge in prices of technology and Internet firms resulted in many investors rushing in to cash-in on the tremendous growth opportunities offered. Therefore the pricing observed in the current market is a reflection of investors projecting incomes based on estimates 2 to 3 years out. The DCF models are for 10-years and they are willing to pay even if the earnings today were crappy. Discount rates reflect opportunity costs Government bonds have been widely accepted as the basis for pricing assets. It is considered to be default-free and therefore commonly used as the "risk-free" rate in valuation models. All cash flow valuation models that use the discount rate are based off this simple concept. At the peak of the dot com bubble, the 10-year treasury yield - which was the benchmark for a "safe haven" and a default-free investment - hovered at between 5 to 6%. At some point of time, investors started to doubt the rich valuations of these Internet firms, and decided they were much better off putting their money in either government bonds that gave decent returns of 6.0%, or invest in the broader market, represented by the S&P 500. One thing led to another and the bubble burst. The key difference between 2000 and now is that treasury yields today are trading at 0.72% . Which means that investors who decide to cash out from their richly valued stocks get effectively next to nothing if they buy bonds or other fixed income instruments. That, in part, is what is keeping the bubble inflated today. In addition to that, city and country wide lockdowns from the pandemic have posed a serious risk for global trade and growth. Essentially, no trading = no growth. No growth = no inflation. To climb out of this economic rut, governments around the world have committed to keeping the near-to-mid-term interest rates low ( read the Fed's recent announcement in August about its inflation rate policy ). So it is against this backdrop of a grim economy, the lack of other options in putting money to work and choice of taking a much longer term view on cash flows, that many investors are dumping money in equities. As I am writing this, I do realize that there are wide ranging perspectives from different people out there, as well as numerous datasets that when aggregated and analyzed, could also be used to explain the current phenomenon. But the market is irrational, inefficient, unpredictable. And I have never been a good trader. Only time will tell if we are in the early stages of a new age of growth or if bubble will eventually burst.

Two people, A & B meet at a coffeeshop to catch up and talk about the recent state of things. A says, " Times are bad, this pandemic has really disrupted all my business and meetings. And I've lost so much money in one of my ventures". B nods in agreement and says, " Yes. It's really bad. I invested in this company awhile back and lost something like $5,000. It's really a struggle now ". A replies, " That's not a struggle man, $5,000 is nothing. My losses are in the hundreds of thousands. " Everyone's perception and threshold of money and risk are different. A thousand dollars are very different to the average person and a millionaire. Knowing that someone else lost more money than you does not make you feel better; Conversely, telling someone else that you'd lost more money doesn't make you feel better as well. Risk and reward is always equitable and pro-rata to capital contribution i.e. you cannot expect to get more than what you put in. Be rational and at peace with what you have invested and taken. A fool and his money are soon parted.

A thoughtful weekend read and a timely reminder for reflecting on all bad decisions made this year and in the last four years... "Life is tricky. It is never clear when you are at your peak (and about to head downwards into a death spiral) or at your bottom (and about to skyrocket upwards to your greatest heights). Right now, you could be sitting at the very peak of your life (or you could be sitting at the very bottom of your life), and there is no way to tell which is which. It is the scary truth for all of us. This truth applies to people, companies, and countries. Change can happen gradually over time or it can happen instantly. For me, 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. Always." - Chatri Sityodtong

Full house. One weekend afternoon, we visited a cafe nearby. The store was full and as a result, we had to wait behind the glass doors at the entrance. When a staff finally came up to us, all he did was beckon at the sign that was hung at the door, saying "FULL HOUSE". No greetings, no words of " sorry we are full, please wait. " He just went " tap-tap-tap" on the sign at the glass door and walked away. We left. At Starbucks, I almost always see tables with dirty cups, wet tables and used serviettes. The tables typically remain uncleared for a long time until a customer comes along looking for a seat. In one incident, I was even told that tissue paper costs $0.30 when I asked for the tables to be cleaned before I sat down. And when it is getting late, many times, the staff would often rearrange the chairs and tables loudly, sending a subtle unwelcoming message to all their customers: " Get out, we are closed ". On another weekday evening, I made a reservation at a fairly busy restaurant. The guy taking the reservations told me it was probably going to be at least a 15-minute wait and took down my number to call me when he got a table. Seeing that it was really crowded, we decided to take a walk around nearby and give him the benefit of time, coming back 30 minutes later. And when we showed up, he said rather triumphantly and self-conceitedly, " See, I told you, 15-minutes ". I wasn't expecting to be seated but I guess a better respond would be, " Sorry, we are really packed today and I promise to try my best. " Last week, I was browsing online for a set of Marshall speakers. I stumbled upon the website of a distributor, found the product catalogue, as well as their email contact. I decided to write and ask for the stock availability before making the trip down to the outlet. However, all I got back from the business development manager was an email reply to enquire directly from their website. I ended up getting those speakers elsewhere. Maybe it’s just me and I'm particular about the little things or we are just held hostage by poor service and there’s pretty much nothing that we can do about it. Singapore has no resources, limited land and a limited indigenous workforce. But what we lack in physical commodities, we make up for in service . For many years, we have pride ourselves in being the epitome of a world-class service-oriented economy. We constantly promote our quality onboard our flagship airline. We rave about having the best airport in the world, and by all measurable terms, we claim to provide top-notch service in everything we do. Every foreigner who visits Singapore tells me it's a clean place, people are nice and good, etc. This had been my impression way back until 2004 when I made my first trip alone overseas and stayed in China for a year. I realized that good service exists in many cities in Asia. It is not unique only in developed cities but even in the emerging ones, not just in their airports but it percolates through every segment of the economy, big and small. But why is our service deteriorating? I can only narrow this down to the fact that those in the services and non-PMET industries generally don't enjoy what they do . A zero-sum culture. From my conversations with friends, co-workers and clients, I get the impression that many companies in Singapore have a somewhat ' zero-sum' business culture, i.e. For an employer, once a deal has been made to hire someone, the company has a selfish interest to squeeze as much as they can out from the employee. This means lowballing salaries, scrimping on travel and employee benefits, and even pushing staff to work beyond stipulated hours. What do employees do in turn? They find every possible means to skive, cut corners and slack off. Everyone lives paycheck to paycheck, look forward to Fridays and hate the Monday blues. They stop loving what they do and stop enjoying going to work. It just becomes a job, doing it just for the money. This percolates across the value chain in the business ecosystem. Clients often try to "suck dry" their vendors / suppliers, milking them as much time as possible. There's no more professional decency, no mutual respect for personal time and resources, just emotionless transactional exchanges. After many years, this behaviour morphs into a toxic environment whereby two parties in any business transaction will always seek to take advantage of the other. I'm not saying that all companies are like that. But the relentless and fast pursuit for profits today can be a dangerous thing at the expense of culture. From laying the tarmac on the road, sweeping the sidewalks, making coffee behind the counters, to people pushing papers in the offices - every job is still a job . How do we instill a healthy respect and a sense of pride for the people who do what they do regardless of rank and file?

This is how most employees see their income - a gradual accumulation of their savings over time. The employee lives from paycheck to paycheck with the constant fear of retrenchment as he progresses up the corporate ladder. He is concerned only with his salary, the amount of increment at the end of the year, the size of his bonus and the number of leave days. On the other hand, this is how an entrepreneur sees the business: He is not only acutely aware of the cost structure, but also motivated to be as creative and innovative as possible so as to maximise his profits. He is driven that way because with the right ingredients at the right time, there is a chance that he might be able to achieve outsized returns on his investment. Four years into trudging and bruising, I retraced my steps and got myself thinking about what makes an entrepreneur , a business owner, a founder, and what drives them to do the stuff they do. Most people go into a new venture for the money. Some do it for the publicity. Media does a successful job of dramatizing those who start a business or raise their own fund. In fact, to me, it should always be about the money . I'm not being a mercenary, it's just more commercial . Unless you are operating a charity or social enterprise, starting a new business should always be about maximizing profits. Companies are sometimes willing to provide incentives and discounts to key customers or early takers at the expense of profits. This is fully understandable. That discount is an intangible marketing and relationship building cost, and the company expects that goodwill to pay off sometime in the future. There is also a lot of fun in building a business. But beyond the fun and the congratulatory notes from supportive friends, I sometimes wonder if people really know what they are getting into? Most people are oblivious. I caught up with a friend recently and shared with him what I'd been up to the last few weeks and months. Despite all the gloom around travel restrictions and crimping of dealflow, etc, I was sanguine and I got him enthusiastic about what we've been doing, the multiple platforms we have, the result of our hard work over the years, translating to tangible and " pursue-able" opportunities. He'd loved to be part of the "action". I really don't think people really appreciate or know, first-hand, the pain and struggles experienced by being a business owner. The pain of having to put up cash for operating overheads, do payrolls, pay for expenses, source for new revenue, execute, and yet, all at the same time, not having to draw a salary for yourself. So many choose to see only the rosy side. And because they see only what they want to see, they tend to be ignorant of what it really takes to operate a business and crystallize those nice sounding opportunities. I am not trying to be a wet blanket. Neither am I belittling our achievements over the past 4 years, nor am I trying to discourage people from pursuing a dream of starting up. But the struggles undertaken by someone on the path of entrepreneurship simply cannot be adequately described through conversations, the sharing of anecdotes in webinars, or inspiring commencement speeches and classroom workshops. Some want to be heroes. Some years back, I had closed a huge cross border M&A deal. Because of its size and complexity, it drew the attention of senior management, and as a result, I got an accelerated promotion (I think). More than just the vote of confidence at the workplace, the project gave me the breadth to exercise a great deal of autonomy throughout the negotiation process. Although being relatively 'junior' at that point in time, I was effectively thrown into the deep end of the pool to learn on the job. I ran negotiations with various stakeholders in the project, piloted the financial model between two contesting bidders and coordinated the work streams between the stakeholders and lawyers. It wasn't a perfect process: I mucked up some of the translation at some of the meetings between the parties, ran into impasses at negotiations where I felt helpless, and broke some parts of the financial model. Bankers who work on similar multi-million M&A and IPO deals often wear these similar deal creds like a badge of honour when they speak to their peers or at interviews. A lot unfortunately become arrogant and get carried away by the disillusionment that they are highly sought after professionals just simply because they were on the deal team. I loosely coin this as the ' hero mentality' . It is this misplaced sense of glory and pride that makes bankers arrogant. The hero mentality also leads many disgruntled employees from large organizations into starting their own business, who would then realize after falling flat on their faces and that once you jettison the big bank brand off your shoulders, it is not that easy after all. When you are running a deal in a large institution, your clients see you as an equivalent of the company you represent and are therefore willing to do business with you. You are an endorsement of your company i.e. you are nothing without the enterprise. Don't give yourself more credit beyond that. When you are operating your own firm, clients work with you choose you because of who you are personally . You are the brand of your own business. You have a significantly smaller reach and network and no one in the market knows you unless you have a personal relationship with them. The strength and extent of these networks are often smaller and weaker than what you think they are. Assembling an M&A deal takes more than just execution. Beyond financial models and info memos, there are "hidden" work streams involving years of investing into relationships. Most clients will not deal with directly with you or pay you at a commensurate level working for a large financial institution. For them, the credibility and the branding of engaging with an internationally recognised firm is what they paid for. So if you think that you did a lot of work in executing that M&A deal and deserve more credit than the organization employing you, think again - you probably would not be able to pull it off without leveraging on the global network and brand that is on your name card. Adding it all up, it sometimes looks like the net result between being an employee and starting a new business, making profits and then eventually selling it for a buttload of cash - could ultimately be the same. Perhaps one key difference there is that: While you can certainly live as an employee with a somewhat visible income stream, there is no guarantee you can exit your business profitably as an entrepreneur. That being said, the life skills you acquire from being a business owner remains starkly different from an employee. How does one define success in entrepreneurship? Can someone be considered a successful entrepreneur even when you are flat broke? Is the goal always to achieve a billion dollar valuation on your business? Is size the definitive metric for measuring entrepreneurial success?

Webinars and Zoom calls have now become a defacto way of life. Therefore, it should have been no surprise that Zoom launched its events marketplace last week, which involves allowing people to buy tickets for online events. I see this as a first part of a bigger plan that involves a gradual cannibalization of market share from companies such as EventBrite and XING, as well as a potential game changer for other industries such as education. Event registration and management are incredibly commoditized processes and highly competitive on pricing. While it is relatively easy for Zoom to move into ticketing, the learning curve would be much steeper for companies such as Eventbrite and XING to acquire and successfully integrate good video conferencing / webinar capabilities. The possibilities for Zoom going forward will be interesting: Ticketing & Events (launch of On Zoom). Will this cannibalize market share from Eventbrite/XING? Education (similar to Blackboard, Coursera and Masterclass). Is there a longer-term play at online learning and will this remain sustainable after recovery? Telehealth . Should Zoom make a huge move into telehealth or continue to function as the reliable connector between telehealth companies and their customers? Home electronics . Should they move into home appliances and electronics since video calls are going to be a huge part of our lives going forward? Check out Norwegian start up Neat . In each of these scenarios, the question that Zoom needs to answer is whether it makes more commercial sense to (i) acquire capabilities in this area or (ii) better off playing the role of a technology enabler to their customers (and incumbents).

Footfall has improved since circuit breaker in June. It's nowhere near pre-COVID levels but still it's better than none. Everyone is masked up except for those who are eating or having a coffee like me. The tables are now more widely spaced - which I'd always thought it should be that way. On the face of it, everyone seems to be getting used to the new normal. It's good to see some activity in the malls. It implies that the office crowd is back and that in turn drives the F&B businesses. It keeps people employed and keeps the economy running. Generally speaking, this crisis is somewhat different from the 2008 financial crisis. In theory, some jobs should only be more directly impacted than others, particularly those in the travel and tourism sectors. And savings from non essential travel should technically allow businesses to sustain operating expenses and maintain headcount. That said, as companies today have largely regional / global operations, and are significantly reliant on travel, the entire economy takes a hit. The lack of inter-city commute provides a good 'excuse' for many decision makers to withhold aggressive marketing and expansion plans, creating a further drag on revenues across the entire value chain. I imagine that the uncertainty can be unnerving. For now, let's all sit tight and I'll check back again in another three months.

In 1990, a psychologist quoted in the New York Times reported that people “ turn on the TV when they feel sad, lonely, upset or worried, and they need to distract themselves from their troubles. ” Another psychologist also said: “People who watch too much television from childhood grow up with a deprived fantasy life. For them, watching television substitutes for their own imagination.” How the phenomenon above has impacted our lifestyles and wellbeing is not new. Way back in the 1930s, a sociologist named Herbert Blumer published a paper titled “ Movies and Conduct ”. The observations from the research suggested that content shown on television and in the movies shape not only how young people interact socially, but also their attitudes to life and also how they choose to groom themselves. Although it was done decades ago, it isn't that different from how social media impacts our behavior and thinking today. Naturally, the adverse side-effects from watching too much TV made people start to moderate and minimize their "TV time". But did we stop watching the television and reading the news? Watching the television (much like browsing the Web on our mobile devices today) has been a significant part in our lives for a long time. In any interior design mock-up, the TV is almost always part of the living room. For many people, it might even be considered odd not to have one in the house. Not only was the TV an important part of the decor, it also enabled us to receive up-to-date information and news from around the world. And if you think about it, the time spent facing the screen in the old days isn't very different from we are indulging in Facebook, Instagram, Twitter, and Tik Tok in present day. With the Internet, those same feelings of deprivation, loneliness and worry are simply just manifested in different ways. In a similar way, the online ads that show up on our mobile devices technically aren’t that different from the conventional paper advertisements and billboards that we see on the sidewalks and highways. Every advert out there - online or offline - is reaching out to you and saying something, in hopes that they’ll eventually change your mind and perception on something: “don’t use their product, use ours, we are better.”, “do this, don’t do that.”, “Do the right thing, invest in your wellbeing.”, “Vote for us, make the right choice” . Can you blame the companies for putting out the advertisements that led you to buy their product? Were you under duress to act? Did you not have a choice? Newspapers have been around since the 17th century, and television since the 1920s. In the same way, Facebook, Instagram, Twitter and many other apps are probably also going to stay around for a very long time. Like it or not, these will become the norm for how anyone with a decent Internet connection will stay connected with the rest of the world. Along with that, our thoughts, our perspectives and bias on various topics will also continue to be shaped by them, the same way TV, movies and print advertisements have shaped civilisation since the early 1900s. Media, in its various forms, new or old, will always be a tool for commercial and political propaganda. We can choose to extricate from this dilemma by renouncing all social media, but one thing for sure is that we are ultimately responsible for how we let them influence the way we think.

I recently got rid of my LG TV because of the screen was flickering and I had no idea how to get this fixed without tearing the TV apart. Even so, I had no idea what was wrong with the picture and so I put it up for auction on Carousell. I managed to sell mine at $50. Not a bad deal, considering that displays these days are really cheap (as cheap as $400 for the non OLED versions) and most people would prefer to buy a new set rather than settle for a second-hand TV. So when the time came to finally change hands, the buyer did a power test on the TV and told me that the issue was likely due to a faulty motherboard arising most likely resulting from an electrical surge. This was somewhat true. The old electrical wiring in my house has been a problem and we have had multiple power trips whenever we operated the oven in baking mode. He recommended that I use a surge protector for some of my devices, which was a simple solution to the problem. How much it would eventually cost him to fix the TV, I don't know. But if he's right, and it doesn't cost much to replace the motherboard, he might be able to use it as good as new or even resell it on the market for possibly more than twice the price. It may not seem like a lot but it's still 2x on cost. If the secondary market for TV sets is large enough (which I believe it is) you are looking at a potential business involving hundreds of TVs and tens of thousands of dollars in transactions. Distressed investing is similar. Businesses that have been cast aside by unsavvy investors who are have no expertise or commercial interest in operating them get picked up by astute buyers who have an interest in these assets or the right resources to re-write their destiny. This investment approach is is not for the traditional buyer. It is not for someone who wants to run a conventional due diligence process and have all the right information lined up before investing in a company. Distressed investors have to be aggressively comfortable with the disarray (or lack) of data and fully aware that lots of on-the-ground work is needed to be done to re-assemble whatever little there is in the business. Perhaps another important factor here is whether these special sit funds also have the ability to triangulate and identify that unique pool of buyers who are interested in buying these "certified-refurbished" operating assets.

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

Schrödinger's cat Schrödinger stated that if you place a cat and something that could kill the cat (a radioactive atom) in a box and sealed it, you would not know if the cat was dead or alive until you opened the box, so that until the box was opened, the cat was (in a sense) both "dead and alive". This is used to represent how scientific theory works. No one knows if any scientific theory is right or wrong until said theory can be tested and proved. In business valuation, the pricing estimates done by analysts can be thought of both right and wrong, until proven by the market via an actual transacted deal between a buyer and seller. Disclaimer: I've never had much luck with stocks, which is sometimes quite the irony. I had spent countless hours before formally entering my corporate finance career learning the technicalities and ropes of valuation in hopes of being able to price a company correctly. Even after that, I've spent even more time working on countless models, valuing and running scenario analyses for different companies. Yet, in my poor judgement and over-compensated experience in investment banking, I could never get the pricing of businesses right - at least 90% of the time. In one meeting, I clearly remembered showing a company profile to a client which clearly showed that its share price was trading at historical lows. We were pitching them as a potential acquisition target. Because of its share price (and on hindsight, possibly also the lack of sufficient earnings consensus data), the forward price-to-earnings multiple was so low that mathematically, it was a no-brainer that the acquisition - regardless of how it was funded - would be earnings accretive. Fortunately the client didn't buy them (both the company and the idea) and the stock went into administration / receivership less than a year later. And you thought bankers had all the brains in the finance world. Asset pricing is full of bias For publicly listed companies, so many factors go into the pricing of their stock. Bankers and analysts run their DCF models and communicate valuation to potential investors based on their house view of "realistic growth" - which is pretty much predicated on and driven by the calculated guesses of the target company's CEO and CFO, people whom we trust are in the best positions to comment on an appropriate growth of the business. There's nothing wrong with trusting their numbers, except that this is subject to both experience and motivational bias . Who is to say the numbers are wrong? "This country needs a vaccine and you are going to have it by end of the year" - says Trump in a CNBC article. So when someone in a position of power says something like this above, I wonder if the intelligent analysts around the world are going to factor in a scenario of a year-end vaccine in their models. Trust but verify If you were smarter or came from the industry, you might be able to validate information coming out from management. Otherwise, you're pretty much left to the mercy of the company's guidance and/or research data done by external parties. Those same data are being gathered by humans on the ground and put together in a systematic and presentable way to be sold at a fee to investment banks and advisory firms. The excel valuation model that you do is basically a output from a "black box" of mathematical functions based on a series of numbers backed by those research. You can run the financial model a hundred times over, but yet you'll never be able to predict and foresee if a business is really valued that much. Why? Beyond the spreadsheet The common approaches to valuation for a growth company i.e. the market and income methods - are based almost solely on a single or few data points - next year's and subsequent five years financial estimates. Those future estimates of cash flows often do not take into consideration other critical factors such as: Cash collected (or more importantly - uncollected) from customers: a commonly overlooked metric in due diligence, found under the detailed notes of trade receivables in the financial statements Quality of revenues : whether customers really continue to buy the company's products over the longer term (for e.g. Apple) Management integrity and fraud : which has come under much spotlight recently especially with a number of US-listed China stocks such as iQiyi, TAL and Luckin . Geopolitical shocks : as what we are experiencing now with COVID-19, US-China trade tensions, food security, North Korea, changes in political leadership in different countries, etc All these are compounded by the fact that you are projecting free cash flows over 5-7 years and then applying a " terminal value " to arrive at a valuation. If you do the math, this "terminal value" often takes up 60-70% of the total business value, which means: After pulling all nighters and sitting through detailed interviews sessions with the management on their 5 year plan, and doing extensive research on what drives the industry, you are basically throwing more than half your weight and work into two BIG woozy variables - the long term sustainable growth rate and the weighted average cost of capital . Apart from the need to have some basis for negotiating deals, I don't believe in the practical application of terminal value to estimate the price tag of a business. Information is the one big thing that drives the price of a stock. Any unsophisticated retail investor can price a stock even without a properly functioning financial model. If there is proprietary information on a company, not known to the public and is expected to positively impact its outlook, there is a window of opportunity for the investor to profit from it. I am not talking only about proprietary information not only in the form of "insider news" but also proprietary intelligence, analysis and field research. At the end of the day, it is essentially about data collection and scrubbing. The closer you are to the source, the more confident you become about the credibility of that information - this is information proximity bias. But it does not automatically imply correct-ness. Your belief in that information is personally shaped by your knowledge in the subject matter and the level of trust you (and only you) have in the source. Many punters and investors get their hands burnt by relying on market rumours without first doing their homework - both in the form of understanding the company and perhaps more importantly, validating the source of that information. Whenever I receive unsolicited stock rumours and tips nowadays, I tend to assume that this information is already stale i.e. If someone is telling me that this company worth shorting or taking a long position, there is a high chance that this person has already taken a position, and it is also likely that the person before has also done the same, so on and forth i.e. two to three degrees away. There are no free lunches. Perhaps more important than the integrity of information itself is to ask: What does this person stand to gain from sharing-revealing-publishing this piece of news? Movements in the share prices of companies are very difficult to predict and understand. Many stay-at-home traders and professionals alike use technical analysis such as charts and patterns to try and explain why share prices move in a certain way. Some even claim to be able to feel the market sentiment. This ideology in itself is very complex for me. Not only is it self-fulfilling on a certain level but also potentially dangerous because it could ultimately lead you to believe that your way of thinking, your ideology is correct. The thing is: No one can really predict how stock prices will move. It's 50-50 every day. It's either up or down. And those are the odds that you deal with every day. Beyond charts, patterns and fundamental analysis, the movement in share prices are also driven by huge chunks of shares being exchanged by big institutional players such as hedge funds and asset managers. For larger companies, sometimes a dedicated team can be staffed to perform "treasury operations" which simply means buying and selling its own shares in the market - a 'loose' way for a company to control its share price in order to prevent sudden spikes. The power of publicity. The news and media are also very important catalysts to a company's share price. This also includes analyst coverage and recommendations on a stock. Because the information is in public, any revelation in the business will often result in significant share price movements. Perhaps the most obvious examples of these are investor activism and short seller attacks on public companies. Your DCF models, charts and expert research just aren't going to cut it if the information doesn't get picked up by the media. At the end of the day, business valuation and trading equities are a very personal thing. Every one sitting behind the desktop sees the same information and the same world in very different ways. Their views are inevitably shaped by their backgrounds and experiences. Also, the first-hand information of one person is another person's second-hand information. Like it or not, the sentiments and confidence of both parties looking at that same piece of information, is going to be somewhat different. And as a result of that, their decisions to buy or not to buy are also based largely on their own analysis and best judgement.

I recently rewatched SBF being interviewed on the David Rubenstein show - " Why do so many young people seem so attracted to crypto... it seems like young people are particularly are very interested in it. Why is that? " "If you're...you know... twenty-one years old, and trying to get access to markets... you want to be able to trade, to invest. You can sign up for an account on crypto-exchange and get full market access. If you try to get that same level of access in equities, in commodities, you can't get it. You're going to end up with heavily mediated access that has like pretty limited amounts of real interactive-ness, limited amounts of liquidity, limited amounts of size, limited amounts of market data. And so for a natively digital generation looking to take more control of their finances, actually being able to do it with crypto is a big big difference." - SBF Observe David Rubenstein's expression and you might detect a little skepticism and "wtf" in his responses. So much of the above subconsciously embodies a culture of wanting unlimited quantities of everything. It also speaks to the rebelliousness and perceived inadequacies in younger people, that they don't get the same opportunities and access as older folks. And how does having unlimited amounts of liquidity enable one to "take control of their finances"? That just sounds crazy. Whatever happened to spending within your means ? Call me old school but if you are twenty-one years old, you shouldn't be trying to "get access to markets", you should be trying to acquire hard skills and work experience to do something constructive to society and the economy. The problem with financial markets is that after awhile, everyone forgets the most basic purpose of a stock exchange: To enable businesses to raise money from providers of capital. Along the way, we somehow got carried away in the frenzy of buying and selling based on imagination and greed, passing on the hot potato down the line. Social media also amplifies a lot of that. For what the FTX fiasco is worth, it has highlighted that: Despite how far and sophisticated we have come in terms of building an efficient capital markets, our understanding of risk-reward has been severely distorted in the process. Leverage is increasingly being seen as a tool for achieving abnormal returns rather than a cost-effective way of expanding a business. The ability to tap on unlimited liquidity to have "more control over finances" simply removes having skin in the game. It transfers the risk onto the financial ecosystem, which is buoyed by layers and layers of story-telling. [ Read part I ]

For many, it is that time of the year again for festivities and holidays. However, it is also the time of the year for many companies to round up the hits and misses. Simon Sinek says that " you can’t incentivize performance, you can only incentivize behavior ". But what happens to an organization if you reward the right behaviour and fail to deliver on results? Embracing the philosophy of ' survival of the fittest' might be their best chance of staying afloat, should they continue to reward good behaviour at the expense of performance? Goldman Sachs, has an annual 'culling' ritual whereby it shaves off the underperforming 5% of its workforce. This might sound brutal but that practice is probably one of the key reasons why the investment bank has successfully maintained its leading edge amongst the rest of its competitors. In the book "Dream Big", Jim Collins also talks about private equity firm 3G Capital's corporate culture: "The very best people crave meritocracy, and mediocre people fear it." Generally, those who seek to cruise their way to a natural retirement should be eliminated for the greater commercial good of the company. Yet this is not always so. Large companies often have blind spots and loopholes within their organisational hierarchy for underperforming people to hide away. Sometimes, it is also more costly to replace a long-serving employee who has been too familiar with keeping up with the firm's day to day operations. But trimming the fat is a crucial aspect for staying alive. And in all of these scenarios, the firm pays the ultimate price in terms of profitability and efficiency. It can be very easy to feel victimised when you don't get credited or rewarded (monetarily) for the efforts that you put into a particular project or for achieving a breakthrough for the company. It could also be a certain line manager or a higher up finding fault with you. And this could be anything from a missed deadline, falling short of KPIs, or even not trying hard enough. Sometimes the way things work (or don’t work) within the company is not entirely your fault. The larger the company, the more complex and inter-connected the workings are. The reality is everyone is entitled to their opinion. Just remember that the ones who have real skin in the game (those who have something to really lose when things go bad) have the absolute right to ask questions and demand for results - even if they sound unreasonable. Don’t beat yourself up too much. But remember, as an employee, also don't be too quick to give yourself more credit than you deserve for your achievements at the workplace.

That feeling of crumbling... Here are some of the things that i had learned from these experiences: 1) Despair and greed (both) drive people to do irrational things. Being in financial distress tends to force you into doing impulsive and irrational things. However, stumbling into a lot of money (or profits) (i.e. s udden-wealth syndrome) can also be equally destructive. It leads to misplaced optimism, self-fulfilling arrogance, and impairs one’s ability to make sound decisions, which then leads back to financial distress. S uccess is truly the greatest imposter and you are only as free as your last trade . 2) Blocking out noise and opinions. Investing is a highly personal thing. Most people I meet so far tend to be very prescriptive about what they invest in i.e. they believe that what they say is the ‘holy grail’ based on their past experience and want to tell you what they know best. At other times, it is just pure ego doing the talking. I learned that disagreeing with them doesn’t work well. 99% of the time, it just pays more to nod and agree. After all, what's the point of proving you are right if you do not get to keep your money? I think sometimes people forget that: "What applies to you does not apply to me. Ipso facto , what works for you does not necessarily work for me." 3) Diversification is not about putting money across 50 different stocks. Diversification is not about beating the probability curve and putting capital to work across 50 different businesses. It is about setting aside an appropriate amount of cash, and with the deployed capital, to selectively invest only in the businesses which you understand. The quality of an investment portfolio - whether it comprises tradable stocks or shareholdings in private businesses - should never be judged purely on their ‘rockstars’. Media has a tendency to over-hype on successes than failure (cos' who wants to be associated with a cynic?). Be realistic and accepting that a portfolio will inevitably have winners and losers. In my opinion, people like to judge their “ stock-picking ” capabilities on the winners, and undermine too much the missteps they make on their losers. Collective performance of the portfolio is ultimately most important. Diversification is about risk management . And risk management is not about eliminating the bad eggs, it is about reducing the number of bad decisions, over time . 4) Make data-driven decisions. Information is a privilege especially in a digital age today. Anyone providing you with privileged information is either trying to show off, or has something to gain from doing so. Constantly keeping this in mind will enable you to make more data-driven evaluations and eventually the right decisions. The worst thing is ever do when it comes to investing is to blindly follow the lead of someone else. 5) Money is made in the sitting. Humans are gamblers at heart. There is money to be made from gambling but we are also excited by its thrill - the thrill of knowing that loads of money can be made overnight in a few minutes. Somehow, we seek that thrill and the world today has also grown so used to instant gratification. The reality is that no one grows rich overnight. You are a winner if you had been able to leave the gambling table sober with a pocket of slightly more cash than when you came in. Reality is: Stock markets exist to create avenues and platforms for companies to raise capital, not for investors to grow rich overnight. I recall once a threatening trader abusing a terrified accountant with impunity, telling him things such as 'I am busying earning money to pay your salary' (insinuating that accounting didn't add to the bottom line of the firm). But no problem, the people you meet when riding high are also the those you meet when riding low, and I saw the fellow getting some (more subtle) abuse from the same accountant before he got fired, as he eventually ran out of luck. You are free - but only as free as your last trade. - excerpt from the book "Skin in the Game", by Nassim Taleb

Someone asked me about paychecks recently. "Paycheck? What paycheck? We are business owners, we don't draw paychecks." Once you've owned a business before, it becomes nearly impossible to revert and think of work-life in terms of five-day work weeks, the concept of weekends, annual leave days and monthly paychecks. The definition of work is not about clocking hours in the office and just getting stuff done. It's also not purely about meeting sales targets and looking forward to that big bonus payout at the end of the year. It is about managing resources - both people (talent) and money (financial). So we don't live paycheck to paycheck, have no golden parachutes and no notice periods / "gardening leave". We also do not 'cash-in' any unused leave days (no leave days to speak of really), have virtually no possibility of getting fired from employment or taking severance pay. An entrepreneur is constantly kept on his toes not because he is afraid of losing his job but because he fears for his survival, he fears for cash flow as well as the supply of the resources around him - both people and money. That constant worry is what keeps him alive.

This is true for many investment banks. And people pay for complexity . But it's an odd world: Founders chasing publicity on social media, focusing on selling stories rather than selling products Companies (especially funds) announcing (and celebrating) an investment or acquisition in a business, almost sounding like: “ Look, we bought these guys ” or “ Hey I pulled that off, can you? ” Entrepreneurs focusing too much on beautifying powerpoint slide decks and looking for investors instead of devoting more resources towards building a real product and looking for customers. Some people spend too much time going around begging angel investors and VC funds for money to build their business. I once told a friend: Raising capital is equivalent to " cash flow from financing ". Why don't you focus more on developing " cash flow from operations ?". The same applies to private fund raising: If you have to wait to bring in OPM ( other people's money ) before kickstarting your fund, maybe you really shouldn't be in the PE/VC business. The end result is the same: solving for that funding gap. You are much better off spending your time and resources looking for customers (who are by the way, also non-dilutive to shareholding) rather than chasing after beauty pageants and roadshows month after month trying to bring in investors. I think a big problem nowadays is that many of us over-relate to what we read in social media. We constantly see how different forms of a Jeff Bezos or Elon Musk manifest themselves as visionaries of businesses i.e. people who make daring and sometimes cavalier remarks about their entrepreneurial ambitions, making headlines through that process. And what typically comes a few days later, a large venture capital or private equity firm, a middle eastern sovereign fund, or some other titan of an investor with deep pockets take a minority stake in the company. The narrative is thus complete. And weirdly for a lot of people, the brain puts one and one together concluding: " Go big, or go home " or " If I passionately try hard enough, someone will acquire us some day", or " some big company will buy us out" . It's easy to get caught up with the hype and optimism. After all, there are many precedents of successful tech founders who started from humble beginnings. While it is true that if you don't die trying, you won't make it , too many folks forget that the most important part of doing any business is reeling in customers, not telling stories to investors (but what do I know, right?) I also know a handful of folks who place too much emphasis on pursuing egotistic corporate titles , lamenting on why they aren't promoted or not given nice-sounding C-suite positions. Those who crave the adulation of social media and in the process, overcompensate themselves have no chivalry. They are all doing it backwards. Real business is in working the P&L, not in fluffy words and lofty titles. There is no point in calling yourself Chairman, CEO, CFO, CIO or any permutation of a CxO, Head of Business Development or Head of Investments if you have a lousy report card to show for. It's useless to garner a thousand followers if you can’t successfully monetise your product. You can call yourself anything you want really, but at the end of day if your designation doesn't get the job done and bring home the bacon , then what is the point?

Some of my new year resolves include: * Drink less (no more than a glass day). * Run a marathon (an offline one). * Be selectively ignorant to people, projects and information that drain my energy and time. * Remain focused on my personal goals and the big picture. But above it all, stay humble.

The last few weeks had been a huge tailspin for me. I relate it to a multitude of challenges compounded upon each other - first, the physical distancing barrier, then the business-cultural aspect of it and then the technicalities of the underlying business. To add on, although the world of investment and banking is not unfamiliar to me, the scope of publicity and investor relations work remains an uncharted territory. Compared to 5 years ago (or even 15 years ago), perhaps the biggest difference is that the mindset that one takes into any job, any role, any engagement. Never take on a job purely because of money . This might be one of the most important starting points in terms of getting the right mindset. Money is of course important but the experience of taking on the engagement should enable you to grow as a person, forge new relationships, learn new things that you never knew before, and naturally add to your professional credentials. To add on: Never switch jobs solely because the pay on the other side is higher. The "intangible assets" that you give up from making that move might cost you a lot more in the future. Never wear your designation / rank like a "political shield" or a "badge of honor", and let it get in the way of what you should be saying and doing. Most of the people that I know like to flaunt their status of being a VP, Director or being in C-suite roles. That kind of ego wears off fast when things go bad. The ability to be hands-on and execute will eventually outlive ego. Never stop moving or learning. Towards the ending scenes in the movie, The Martian , Matt Damon (as Mark Watney the astronaut) talks to a class at NASA saying: At some point, everything's gonna go south on you and you're going to say, this is it. This is how I end. Now you can either accept that, or you can get to work. That's all it is. You just begin. You do the math. You solve one problem and you solve the next one, and then the next. And If you solve enough problems, you get to come home. He didn't survive the journey back home by squatting in space, flaunting his celebrity status as an astronaut and griping about how people back on earth could have done better in trying to rescue him. Whether it is a Fortune 500 company, a small medium enterprise or a start up company, the most basic mission of any organization is just "getting things done." A true entrepreneur - whether he/she is running his/her own business or working in someone else's organization - doesn't care about pride or rank. He/she just cares about getting the job done and getting paid for it. Unfortunately, 99% of the people out there aren't entrepreneurs, so they make up excuses saying that they aren't paid enough for what they do or getting the corporate title they want. And for all the people out there who think that they are "too senior" to be hands-on or doing grunt work: I still take a lot of pride in being able to build a three-statement financial model from scratch. I consistently do this during the classes that I teach at SMU and remind everyone that it is really not that difficult . If you refrain from revisiting the basics every now and then just because you think you are "too senior" to be working on models, you are going to regret it much later on in life with that kind of mentality. Keep telling yourself that you are too good or qualified for any job or you should be getting more credit for your work and you'll also find yourself in a lot of trouble when you get older.

I miss Blatage cafe in Shanghai. Throwback: Blatage Cafe is located on the Pudong new area side, approximately 30 minutes by taxi (off-peak) door-to-door from where I usually stay in Shanghai (which is on the Puxi side). The small cozy cafe is along 滨江大道 on the Pudong side. From Superbrand mall (正大广场), it is at least a 20 minutes cycle on Mobike or a 40-minute leisurely walk along the river. During the spring and autumn mornings, this is an extremely therapeutic exercise especially on the weekends. The indoor seating capacity is no more than 10 and they serve an excellent flat white for 30 yuan . Although situated close to some private condos in the vicinity, somehow, there isn't a morning coffee culture where people get up early to grab coffee. Most times when I arrive at 830am, I am their first customer. Back home, the "Blatage-substitute" is 40 Hands cafe at Tiong Bahru. A lot of people ask me why I 'spend' so much on coffee when I can invest in a Nespresso machine and enjoy a cuppa from the comfort of home (I have one by the way). But just as people sign up and spend their money on regular yoga classes, I spend mine on 'coffee yoga' i.e. a faux yoga session where I substitute stretching exercises with sipping coffee (also note that a single yoga class ranges anywhere between $15 to $25 while an artisanal coffee is about $6). Just as people find inner peace and tranquility in an hour or so of meditation, I find mine through sitting by the street or in a quiet corner where I am able to reflect and declutter my inner thoughts. Not everyone understands this. But everyone needs their own Blatage coffee place . Similar to how religion provides spiritual closure to occurrences in life that we cannot rationalize, people who do yoga probably believe that it is the antidote to de-stressing from work. For me, this equates to having coffee in an undisturbed ambience even if I have to get up at 6:00 am. So, there isn't a need to architect a pricey escape into the Himalayas to seek private retreats. A lot of these can be found at your doorstep. You don’t need to fine-dine in order to enjoy good food. My favourite local hawker fare is the bak chor mee at Tiong Bahru market. You don’t need to own a car to have convenience. Even if I use Grab everyday my traveling commute expenses will probably never exceed $500 a month. And sometimes all you need is to buy a house in the right place with good access to public transportation. You don’t need to stay in a private condominium or landed property to enjoy your spatial environment. You just need the right renovation decor at home. What is the use of real estate if you wear it with a huge financial burden and/or can’t share it with your closest friends and family? You don’t need lots of money to be wealthy. In fact, you don’t even need to prove to anyone that you are wealthy. The wealthiest people are those who are comfortable in their own skin and do not give a f&*k about opinions from the rest of the world.

To understand and decide whether bitcoin is a good store of value, consider real estate, commodities and other asset classes. Real estate About twenty years ago, I remember hearing folks talk about property being a good store of value, something that has that ability to stand the test of time. In some ways that is true. Real estate has not only been able to preserve capital (albeit somewhat illiquid) but is also an instrument that has proven to deliver returns through steady capital appreciation and/or rental income. Within Asia, real estate has not only demonstrated resilience through the ups and downs, but also a beneficiary of domestic consumption and growth, buoyed partly by the prosperity of its regional economic titans: China, Japan, Korea, as well as Southeast Asia. A rising tide lifts all boats . That still holds true to a certain extent today, although the returns are not as attractive. However, property is still pretty much the go-to choice for many investors flushed with cash and those in search of a relatively safe-haven especially during a recession . Property - especially residential - survives particularly well during times of turbulence and economic downturn (at least in Asia). Rain or shine, the brick and mortar stands. People continue to trade and invest in real estate because fundamentally, they know that a roof over the head is a basic foundation of life based on Maslow's hierarchy of needs. Residential property is also somewhat a good proxy to the overall global economic cycle. The more resilient the economy, the higher the value of the property. Although the initial investment outlay can be high, it is also relatively liquid . And liquidity in valuation, is a metric that tends to be overlooked. In layman terms, this loosely translates to how easy it is for an asset to change hands. For example: You can list your second-hand car for a million dollars on Carousell, but at the end of the day, it's still worth nothing if it can't be sold. The price of a share in a company is only as real as how much others are willing to pay for it, not how much you want to sell it for. Furthermore, liquidity is also driven by the availability of buyers and sellers, and also shaped by the perception of the broader market. Lab grown diamonds. Consider: A diamond is valuable only because people say it is, not because of its clarity or cut. Jewelers and advertising companies around the world have done an extremely successful job in positioning the diamond at the apex of all precious stones. But the raw material for diamond is carbon - one of the most commonly available elements found on earth, ranked many times above gold, silver and platinum. Yet despite being available in relatively large quantities, consumers continue to pay absurd amounts of money for a small rock mounted on a ring or co-joined in a necklace. To add to the paradox, lab-grown diamonds are significantly cheaper than their natural counterparts, even though they share the exact same properties and make. In fact, according to this website : "I f you buy a lab-created diamond, you’d have a beautiful stone, yet no jeweler will buy it back." So is Bitcoin a good store of value? There's much talk of late about bitcoin being a store of value . I know very little about the world of bitcoin and cryptocurrencies - only limited to the banter that I read on Twitter and the news. Is bitcoin a good store of value? Only time will tell . Just like property, gold and other precious stones, it is considered a safe haven only as much as others see it . In this case, the devaluation (or eventual demise?) of the dollar is one of the key catalysts in the appreciation in value of bitcoin i.e.: Investors buy bitcoin and other cryptocurrencies because they have lost faith in fiat currency. And to take it to an extreme: They believe that the guy over the McDonald's counter will one day accept only a bitcoin-equivalent and reject cash as we know it today. Is that even imaginably possible? While this may sounds absurd, for a billionaire or any large investor sitting on heaps of cash (a commodity that is increasingly being "devalued" due to the US government committed to printing even more money over the next few years), this implies an erosion of their financial position. Based on this, it seems: Cash as we know it, is no longer king. I think that crypto-exchanges were created largely because of this phenomenon. These platforms are only viable and commercial if there is a sizeable market i.e. a significantly large pool of investors willing to seed the initiative and make the market . This is similar to early stock exchanges. They serve to provide an avenue for companies to raise capital, but also functions as an alternative route for investors looking to 'diversify' or park their money somewhere where they can, and at some point of time in the future, re-distribute (by selling) them to other asset classes. Everyone else in the 0.001% of the liquidity pool makes the market — smaller funds, family offices, retail investors , sheep, etc. Driving a paradigm shift in financial markets is big inertia. If you have written code before, you'll understand how painful and tedious is it to do software development. There's a reason why successive versions of Microsoft Windows in its early days were so slow and buggy. One can of course attribute it to processor speed and memory space (software blaming hardware), but the reality is that it's simply too lengthy and costly to eliminate the bugs by re-writing and building an entire operating system from scratch. Why demolish and re-build something when customers are willing to settle for a product with some occasional bugs and flaws? Far easier it is to patch the errors than to re-invent the wheel. So our financial system is not perfect: Benchmarking (or rigging) interest rates, opaque currency controls, money laundering, fraud, etc. But the reality is that the paper currency ( since its inception a thousand years ago ) still works as a medium for the exchange of goods and services. To revamp today's highly complex financial system using bitcoin or any crypto-alternative would simply take too much work, several generations of change and monetary reforms, or even require a " reset " on an astronomical scale resulting in the total lost of faith in fiat currency, sending us all back to the barter economy. Just as how asset values move in cycle with the economy, bitcoin will probably follow the same trajectory. However little we belittle the value of cash, there are many commodities and asset classes out there which serve as good alternatives to what we define as a "store of value". Bitcoin is only but just one of them.

More than ten years ago before COVID-19, I recall most of my days (and nights) spent in the office working on ppt slides and having discussions with my VPs and directors. Occasionally when they wanted to work directly on the numbers or show me how something was done, they would come over and sit at my desk space, typing away at my computer while I stood and watched how it was done. It was a simple gesture - fixing a problem right when and where it was needed, in person. And that simple gesture didn't only solve the problem (whether it was a glitch in the model or some formatting on powerpoint), it also demonstrated leadership right then and there. Today this is very different. No more in-person consultations and discussions, no more live demonstrations. Everything is done over Zoom. No more personal touch. There's a Chinese saying: "fighting the bull from across the mountain" (隔山打牛), which basically translates to trying to solve a problem from afar. So right now, that's how a lot of things are - both for businesses and down to the professionals working away at their desks (or from home). Clients and suppliers trying to deal with new normal of doing deals virtually without a handshake or sighting of the product. Employees and their line managers trying to make a project or a pitchbook work while being separated hundreds and thousands of kilometers, connected only by email or whatsapp / wechat. To take the challenge up a notch, imagine the difficulty of new joiners who may have never seen their bosses, co-workers and their office desks. Leadership and management in a virtual world is extremely difficult. It's difficult to show how things done. Difficult to foster camaraderie without a working lunch, chugging a few beers or simply just hanging out after work. Hard to show charisma and motivate others when you don't (in this case, can't) show up in person. Lots of things get lost in translation when you don't see, don't talk directly to the other party. Doing business across the front office to back office gets incredibly difficult. Zoom calls can only do much in facilitating communication in a physically disconnected world. But in order to restore the current situation back to equilibrium or the good ol' days, we'll eventually need to be able to go out and travel, meet people and forge collective experiences together.