In recent years, I send and receive nearly no birthday, Christmas or new year wishes. This is a sharp contrast to ten years ago whereby my phone will be inundated with text greetings during these festive periods. I am not being unsociable, I have not gotten dark , neither am I complaining too. There is a kind of unspoken peace that comes with the quiet mornings following a public holiday. Besides, most of these text messages involves a transactional agenda hiding behind a " how-are-you-doing-in-life " coffee chat. The truth is that social gatherings bore me these days. According to American author Mel Robbins, " When people come and go in your life, 99% of the time it’s not personal. " Most of the time, this is attributed to proximity, timing  and energy, which are the pillars to social interactions. When you were little, you were mostly in the same neighborhood with most of your friends, going to the same school, and doing the same things. It is not surprising that many of our fondest and purest memories are back in our school-going days. By the time you hit your twenties and beyond, everybody starts to embark on different timelines. Some are pursuing jobs, going to graduate school, or getting married. Others are moving out of the city or moving into the city. Everybody's proximity  and timing  are now different. You can have fantastic energy  with somebody and then if you decide you're not drinking anymore, the energy's off. If you decide to get focused on fitness, the energy's off. If you have very different political beliefs, the energy's  off.  It is not personal. The energy is just off . For many years now, I had renounced posting on social media, keeping only my LinkedIn profile intact to upkeep a digital identity and writing content here. Some folks think I have gotten dark . For me, it is just a progressive realization. Everyone has moved on and are located in different cities, or in various stages of their lives in which priorities are different. After two decades, the playbook has changed for everyone. As I get older, I am also increasingly less empathetic to people who add unnecessary drama to their lives. I have less patience to those who are consistently comparing their net worth to others, name-dropping in social circles, or make their circumstances and situation your responsibility to solve. Whenever someone asks for an opinion, I find myself almost always agreeing with them. Don't get me wrong. I enjoy a healthy debate occasionally but in my experience, nine out of ten times the person on the opposite end of the table isn't really looking for a genuine opinion. They are either trying to sell you something, get assurance on a certain point of view, or just to show off. I try to avoid settings like these. No amount of explaining or words will change a conclusion that someone has committed to keeping. I am not trying to be unfriendly, I am more selective about where I focus my energy on. These realizations are not epiphanies distilled from working in a rat race over the years, they are simply moments of clarity .

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

A copy of the bible can often be found in the drawer of the bedside cabinet in most hotels. Like most travelers, I casually ignore this, partly because I don't have any affinity for the bible, but also because I tend to overlook and treat it as part of the hotel room fittings (apologies to the folks at Gideon International ). So as I was searching for some writing material in my Marriott hotel room in Shanghai, instead of a bible, I stumbled upon a book titled " Spirit to Serve - Our Stories" . The book basically showcased the lives and experiences of various hotel employees from all over the world, each summarized with a caption and a 1 to 2 page writeup. I am not usually fond of reading corporate marketing material but ended up flipping through the pages. Inside were interesting stories about Marriott's employees - from hotel managers, room attendants, concierge staff, chefs to butlers and bellboys / bellmen. One of those stories included a head bartender who moved from Cambodia to Washington DC more than 30 years ago and he described how many memorable friendships were forged with the returning guests. There was also a story about a mother of four and how she juggled work at the hotel and family time at home. I found many of these stories intriguing and ended up going through most of them. Towards the end of the book, I came across this afterword which I thought was quite meaningful and that it should have been placed right up front: The Twelve Rules of Success Continually challenge your team to do better. Take good care of your employees, and they'll take good care of your customers, and the customers will come back. Celebrate your people's successes, not your own. Know what you're good at and mine those competencies for all you're worth. Do it and do it now. Err on the side of taking action. Communicate. Listen to your customers, associates and competitors. See and be seen. Get out of your office, walk around, make yourself visible and accessible. Success is in the details. It's more important to hire people with the right qualities than with specific experience. Customer needs may vary, but their bias for quality never does. Eliminate the cause of a mistake. Don't just clean it up. View every problem as an opportunity to grow. I have stayed at my hotel in Hong Kong for nearly three years now. Truth be told, the guest-facing staff hasn't changed that much. In fact, most of them recognise me, even if I had gone on an overseas trip for a long time and haven't been back for weeks. I know this because they always pass me my courier packages as soon as they see me step in through the main lobby entrance. In fact, some time back, I heard that it is quite common to see hotel employees working with the same hotel for more than twenty years. I don't think many of them are paid top dollar, and the skills for the service industry are somewhat transferrable. On the contrary, for many white-collared jobs, it is relatively more commonplace to see people moving around only after a few years. So it got me thinking: Assuming we say that Marriott is a successful brand / corporation, if it's not about the money, then what keeps these people working at the same place for years and even decades? Is there a hidden incentive scheme that I am unaware of? Or is it the familiarity of the environment? The social support that comes with forging familial relationships with colleagues? A genuine sense of satisfaction from a customer service role? A good line manager? Or is it mostly just a lack of better options out there? For corporations that are religiously fixated on pursuing performance and the bottom-line results, have they sacrificed some aspects of their corporate branding and employee loyalty in the process of being successful? "Today's analysts will be tomorrow's managers. Today's managers will be tomorrow's Vice Presidents. Today's Vice Presidents will be tomorrow's CEOs and business owners."

In the last couple of years, Hong Kong had remained relatively “closed” to the rest of the world. Once a vibrant city home to conferences and events, I think the city is bearing the brunt on the psychological and commercial front from reduced travel globally. No one is making plans to get in, unless it was home. This was favorable from the perspective of a traveller as accommodation prices once considered to be incredibly high for Hong Kong, had plummeted significantly. I had never given much consideration towards the amount of rent paid only until recently. As most of the world opens up, the return of overseas travel has led to steadily increasing airfares and hotel rates. When I returned to Hong Kong this year, I discovered that the lease on my place had gone up by about 30%. Last year had been a tough period for Hong Kong. 14-day quarantines, tourist inflows from China taking a hit while businesses and residents were relocating away. So this year, with the anticipation of the world re-opening up, I foresee that prices will continue to increase into next year. When I graduated from university, I had been one of the lucky ones that did not have to worry about paying the rent on my apartment. After amassing enough savings over 3 to 4 years, I made that decision to buy an apartment rather than renting one. Renting had never really been a consideration for me, maybe because being a resident in my own country, home ownership was the de facto option. Or at least it was so until I moved to Hong Kong last year. From an economical standpoint, owning a place and servicing the mortgage payments work pretty much in the same way as rent with a few key differences. Both rent and mortgage service are cash expenses, but the behavioural psychology behind paying the mortgage every month can be quite different from rent. With regular mortgage payments, one takes some comfort in home ownership , knowing that your equity position generally improves with every month of debt repaid (assuming the value of your home doesn’t go down). Property has generally been accepted to be a good store of value. While interest rates on a home loan can be as brutal as paying rent, with rent, cash out flow is basically a one way street. A sunk expense with no return on investment. Rents remain much more sensitive to sudden price spikes driven by abrupt changes in supply and demand. Interest rates can be volatile but are insulated against market forces as the mortgage payments are largely priced and sized on your income. To add on, it can be difficult to call a rented place home, especially if you do not have long term visibility of staying in that city. This uncertainty leads to a great deal of inertia when it comes to upgrading your living conditions. Therefore, to an immigrant, the bottom line is everything i.e. the less I pay in rent, the more I bring home in cash. While I consider myself middle-class and one of the more fortunate and relatively better-placed immigrants, I can totally feel what it is like to be an outsider alone in a foreign country earning a living, setting aside as much as possible every month with the end goal of going home one day.

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

Tectonic level changes "Do you know how big is a billion ? Just imagine every person tossing a coin at you at the same time." This was how one of my flatmates used to whimsically describe the scale, the 'massive-ness' of China and its potential market opportunity when I used to live in Shanghai. Some weeks back, Mark Mobius, a seasoned investor renowned for his bullishness on emerging markets and China said that he " cannot get his money out ". Mr Mobius' experience might have just come down to a technical glitch in his personal bank account but the media obviously loves to blow this out of proportion to create headlines. Capital controls have been existent since China's opening up and market reforms decades ago. Companies and investors who were first movers into the country know and understand this. There are many ways in which flows of capital are designed, structured and moved in and out of China - the VIE model, SAFE registration, and designated cash pools. That said, earlier this year, regulators in China also published an article guiding the application and use of long-term foreign debt in China. Among other finer details, it states that the process has become more substantive rather than procedural--more explicit approval is required for companies in China wanting to bring in foreign debt. In simple terms, there are no more “ FYIs ” when it comes to moving money in and out of China. To complicate things further, the SOFR rate which sets the benchmark for most USD-denominated lending had risen dramatically over the last twelve months, in quite the opposite direction to the China’s benchmark lending rate . The macroeconomic forces at play—both global and local—seem to be discouraging the flow of foreign capital to and from the country. There is a nagging feeling that the narrative on China, in spite of its huge market, has been changing at the tectonic level. The new playbook. For years, fund managers have profited from arbitraging risk premiums between emerging and mature markets of the world. The principles of investing are simple: Money should go to where it has the lowest risk (note that familiarity with markets drives risk as well) The lower the odds of something happening, the higher the expected return i.e. Tails drive everything . Therefore, the playbook reads: Borrow USD to invest in the emerging markets of China and the rest of Asia. Lately that playbook has somewhat changed: Emerging from a pandemic-induced recession, one would expect the central banks to maintain its low interest rate policy to drive economic growth. But they had been slow in addressing the rapid bloating in asset prices which subsequently peaked in 2022. China, on the other hand, which had been closed out from the rest of the world due to geopolitical tensions decided to go in the opposite direction. Short-term dollar-based deposit rates today have elevated to roughly five percent, which meant investors get a relatively decent return for not doing anything . Not very long ago, a five percent return was the benchmark for investing in a 'stable market' and not doing anything with your money yields anywhere from 0.3% to 0.5%. Under this new playbook, many fund managers are finding it incredibly difficult to justify their dollar-based investments in emerging markets. For China, there is an added wrinkle of politics at play. Last year, the Chinese government announced slashing the compensation for senior executives at Chinese investment banks. State-run financial firms and regulators were not spared either as part of the reforms highlighted at the recent two sessions. Even Bao Fan , the deal-making rock star of many tech darlings in China and chief of brokerage firm, China Renaissance, went missing only to re-surface some weeks later with news that he was assisting the authorities with investigations. The anti-corruption narrative obviously doesn’t go down well against the already gloomy broader macroeconomic backdrop and simply reinforces China as an “ un-investable ” market. Faith. Some believe that all of this started in Shanghai after Jack Ma's controversial speech in 2020 and also part of China's push for common prosperity. Either way, all of this seems to be the un-intended consequence of doing well or achieving outsized returns. If you are facing high cost of funds and still have to contend with limited returns in a regime that is unpredictable, largely state-controlled and “ anti-greed ”, it can be really challenging to convince asset allocators to put more money there. The billion-people story which used to be a highlight also doesn't sell as well as before. Embracing policy is a choice for investors offshore but a necessity for firms operating in China. That said, ultimately one just needs to be a believer--a believer in the policies and directions set forth by the incumbent few who are in power, and possibly a lot of faith , something which happens to be incredibly difficult to come by these days.

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

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

It just goes to show that even seemingly intelligent humans, when desperate, gullible and possibly even bored enough, will believe nearly everything you tell them and to some extent, resort to illogical behaviour to get what they want. When something good or bad happens, we lean towards seeking answers retrospectively. We look logically for these answers by re-tracing the steps and putting together the pieces leading up to the events that take place. There is usually a connection between the cause and effect. For example, “ he is so small and thin today because he didn’t eat well when he was younger ”, or “ he works in a mediocre job now because he didn’t study hard in school then ”.  Conversely, we make the subsequent conclusions in nearly every aspect of our day to day lives, for example: Studying harder maximises your probability of getting good results ; or: working harder increases your probability of doing well later in life . But whenever the science and logic fails us and things don’t go according to plan, we fall back on, or turn to the spiritual side of things. Humans seek comfort in rationalising stuff that happens to them, both the good ones and bad ones, but especially the bad ones. Hence, the existence of the avocado bell curve god,  drinking water mixed with the ashes of books, and the wearing of good luck charms, gods in other forms, amongst others. The truth is sometimes, the good and bad things that happen in life, they happen for no logical reason at all. A winning lottery ticket, contracting a deadly virus, a plane crash, bad timing when making an investment, black swan events, etc. Events that can significantly change the course of one's life . Life is a lot simpler when we start to make peace with  the things around us, rather than try to make sense of the things the happen around us. “We are so good at justifying things to avoid our deepest fears. That is one trick the mind is really good at.” - Alicia Cramer

Some weeks ago in Shenzhen, I got into the back seat of a taxi, and to my surprise, found the driver watching a douyin video of an influencer speaking in Chinese and then narrating the same phrase again in English. Apparently it was a video that taught viewers how to speak the English language. I have been teaching financial modelling for over 5 years now. But at the first ever class held in July 2018, the delivery was so badly curated that it was clumsy and in my opinion somewhat even embarrassing. I had spent weeks preparing for it, assembling a deck of over 500 slides. In those slides were numerous case studies and valuable content which I had amassed from over 10 years of corporate finance experience. It was by some measure, a work of art . Yet, in spite of those, I received possibly the lowest rating ever for a financial modelling course. Someone in the class even openly remarked, " how can anyone teach financial modelling like that?? " Turns out that being a teacher and a practitioner can be two vastly different things. Being good in your trade does not imply that you are good at transferring that trade knowledge . Having years of industry experience does not necessarily mean that you are a good teacher. Even good teachers need training regardless of their age and background. Just as some aspects of your job sometimes needs to be re-learned or upgraded. I recently gave a one-hour workshop on business and corporate finance in Hong Kong to a group of university undergraduates from the Guangzhou Huashang College (广州华商学院). The workshop was part of a three-day immersion program to get the students acquainted with the prospects of working or studying overseas. The flow of the workshop was basically the same content I had been doing over and over again for the last five years at SMU, condensed into a sixty-minute session, and further watered down for an audience with basically little to no working experience. The catch was that everything was to be done in Chinese , which put me at risk of being reduced to a babbling idiot. It might not sound like a big deal, but for me, this was the first time ever that I had to deliver a class (somewhat professionally) in a second language. Sure enough, being based in HK and Shenzhen over the last three years, I have had to communicate and present plenty in Chinese. I had also done cross-border M&A deals in China during my banking days. However, I always had the benefit of a safety net - coworkers around me who could help fill in the gaps. This was entirely different . The aftermath? Not as bad as I expected. Neither was it as smooth as I wanted it to be. But most of all, it was refreshing. The entire experience was a discovery process and a learning opportunity for them as much as it was for me. The point is: When we are in our twenties, it is conveniently easy to commit to learning. Every lead or project is seen as an opportunity to clock some mileage, hone technical skills and sharpen the sword. Practice makes perfect. There is that insatiable thirst for acquiring more knowledge, which leads to opening many doors in the future. When we move onto the thirties, that mileage elevates us to become subject matter experts, but we also become increasingly narrow and selective in terms of the assignments and projects we undertake. Beyond the thirties and into the forties, companies, shareholders and the people who hire you become more impatient and less forgiving. Results get prioritised and learning often takes a back seat. Amidst many lost opportunities and closed doors, it becomes easy to forget the enthusiasm of the twenties, easy to stop learning: Easy to stop learning a new trade, a new product or service, the workings of a whole new industry, take on a new role at work, a new way of doing things, or even a new language . As for the taxi driver in Shenzhen: If someone older than me with a presumably mediocre income and virtually no university education can bother to learn English in a largely Chinese environment, in anticipation that he might need to use it one day to communicate with his foreign passengers, what excuses do we have for not picking up a new skill when the opportunity arises? Never stop learning.

On 24 June, Singapore Airlines completed the full redemption of all its outstanding MCB (mandatory convertible bonds) that had been issued during the throes of COVID-19. This means that if you had put in money to buy those bonds in 2021, the company returns the entire sum that you had invested, with a pre-agreed premium on the investment, even if you were content to keep it to maturity and have them converted into shares. The Business Times calls this " an interesting chapter of its history ". I think it's a good lesson in corporate finance and financial management, and we need more creative structuring like this in our capital markets. The premium for the final redemption works out to about 12.6%, which translates to be roughly 4.0% per year: Had SIA not followed through with the redemption, allowed you to hold those bonds, and converted the face value at S$ 4.84 per share at maturity, the IRR would be closer to 8%, depending on where you think the share price lands in 2031. Now a 4% to 8% annualised investment return over ten years may not seem like a lot if you compare it with interest rates today and also look back on how delicate things were during COVID-19. Some airlines even came close to bankruptcy during that period of time. Cost of capital was high. Buying airlines and all things travel-related were high risk investments, especially if you think about the speed at which SIA was haemorrhaging capital to the tune of S$ 8.8 billion in a year after its band aid of a rights issue in 2020. Even with sovereign underwriting from Temasek Holdings, there was simply no saying when the bleeding would stop. But ignoring the grim backdrop, a 10-year sovereign-backed corporate bond with step-up interest rates of 4 to 6% would have been a highly attractive investment, considering SOFR rates were at approximately 1.5% in 2020. The real pot at the end of the rainbow was swapping those bonds into SIA shares, in which the conversion price was at a big discount to SIA’s share price at pre-pandemic levels. After all, the prime minister had given his soft endorsement, saying that “ SIA will be a great way to fly again ”. How much worser could it get? What made a significant difference also was that the convertible bond offer was given exclusively to existing shareholders - a creative concoction of debt and equity. If you had missed out on the 2020 rights issue, buying SIA shares off the market would provide another window of opportunity to get in, or double down, albeit at an even lower price. And then you get the bonds as well, which ultimately increases the probability of a successful convertible bond issuance. It’s an ingenious way to market a deal. Most companies will just go on roadshows, paint a rosy picture against a hockey stick chart and promise the eventuality of brighter days ahead. But these MCBs were essentially structured as a “private club”, open only to existing investors, with a ten-year bet on the aviation sector and SIA’s reigning leadership over that period. Looking back, I think the conversion mechanics in the whole deal was arbitrary. The huge equity upside from swapping those bonds into equity at S$ 4.84 per share was probably meant to justify the low cost of debt. If you ask me, I think no one really baked in a scenario to have those bonds converted to shares. Ten years would give SIA sufficient runway to set aside capital to redeem those bonds at any time: Three years tops for the pandemic to play out and the economy to recover, plus another seven years or so to turn around. The worst case? Air travel doesn’t recover and the company’s business model becomes permanently altered. A remote possibility nevertheless, in which case, swapping those bonds into equity wouldn’t really be such a bad deal after all. [Disclaimer: I was a holder of SIA shares and its MCBs.]

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

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

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

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

I recently finished lecturing a couple of corporate finance and financial modeling courses curated for working professionals. The most common feedback was either that the pace was too fast or it was challenging to keep up with the accounting math. Coming from an engineering background where math is like an innate skillset, I try to keep the logic as simple as possible. Looking back, sometimes I wished someone had shared these with me earlier right from the start when I embarked on my investment banking career. In case you are looking for a plain layman's explanation, this article effectively summarizes everything you need to know about investment banking and corporate finance: (1) Decision-making All of corporate finance effectively comes down to decision making. And when it comes to decision making, there are essentially two questions to ask: - To invest or not to invest? - Where is the money coming from? (2) Investing decisions The decision to invest is all about cost-benefit i.e. do the future benefits of doing this outweigh the costs of mobilising capital ? Valuation (NPV) and returns (IRR) are the main yardsticks of how companies evaluate an investment. NPV ( Net Present Value ) measures the value of an asset based on its future cash flows, while IRR (Internal Rate of Return) gives the return on an investment based on an initial outlay and a future cash payout. However, one cannot make sense of the value of an asset or business without first considering where the money is coming from, which leads us to the next point. (3) Financing decisions There are only two ways you can fund a business--equity or debt. Lenders care about profits only to the extent it affects their ability to receive a repayment on the debt, but for equity investors profits are really what matters. Both equity and debt have strings attached. Equity requires you to share any future profits in the business. Debt requires you to ensure that the investment is made whole with an agreed fixed payment of sorts. Unlike equity, debt prioritizes wealth preservation . To do so, lenders will ask for all sorts of comfort and security over what businesses can offer to ensure that their capital will not be jeopardized. The banks call this collateral . They will also create boundaries around what borrowers can do and cannot do. These are called "red lines". Cross the line and the bank has the right to ask for an early repayment. Using the analogy of a queue, debt holders stand in front and equity holders stand behind. Because of where they stand in queue, equity is almost always more costly than debt. This is a simple risk-reward logic and are also the irrefutable rules of the financial markets i.e. If I stand further behind the queue, I expect a bigger payout. The decision making process here therefore involves weighing the cost of capital against the potential returns of investing in a certain project. (4) Relativity Nearly all of business valuation involves some form of comparison. Interest rates set by central banks all over the world are a widely accepted benchmark for a rate of return on capital with minimum risk. Therefore, any premium above the benchmark rate comes from how financing institutions are perceiving risk. There is no reason why an investor would put their money on the line for a business if there was a similar and less risky alternative elsewhere. In other cases, rates of return are used to also drive and influence policy making. For example the widely accepted long-term target inflation rate of 2% came about from a meeting of central banks in New Zealand dating back to 1988 [1] . According to one person, “ The figure was plucked out of the air to influence the public’s expectations ”. To quote Eugene Fama [2] : “ I’d compare stock pickers to astrologers, but I don’t want to bad-mouth the astrologers. ” Everyone who makes a living in finance thinks they know it all. But there are no correct answers, only comparisons which arise from differing points of views. (5) Storytelling According to archaeologists, cave paintings that date thousands of years ago indicate storytelling was an important aspect of how humans communicate and evolve. Listening to stories causes the brain to release oxytocin which is associated with empathy and cooperation--People are drawn to stories because they can relate to them. Stories shape our beliefs, and beliefs drives decision making. Therefore, for what it’s worth, story telling has become an important part of finance. The narrative helps investors make up their minds about whether a business is good or bad[ 3 ]. Since no one can accurately predict how things in the future are going to turn out, history becomes a convenient fallback, society rewards good storytellers, and people being humans, do love to listen to a good story.  (6) Simplicity Finance doesn't need to be complicated. Even stuff such as financial modeling and complex structures such as leverage buyouts (LBOs) isn't as complicated as bankers make them out to be. Take for instance, LBOs are the equivalent of buying a house on a mortgage--the bulk of the purchase is typically funded with a huge bank loan comprising between 60-80% of the property price. The difference lies in how the debt is serviced. With buying a house, the cash flows come from rental income. In a LBO, cash flows come from operating the business. Assuming the value of the asset remains the same, the value of ownership (equity) naturally increases as debt gets paid down, enabling the home owner (or equity holder) to realize its return on investment. That’s all there is to it. When you think about it, a lot of what goes on in corporate finance are actually very relatable to what we do in daily life. It pays to remember that most of what we learn about how financial markets work and and business valuation were originated from the West, largely because the US and the dollar led the charge on how capital is being raised since the history of corporate finance as we know it. Since then, a number of things have changed. The world became more globalized, investors at all levels have better access and knowledge to putting money to work, information is now more pervasive with technology and social media. There is also a huge supply of capital seeking new avenues for returns.  A number of global events that took place over the last few decades had also dramatically shaped the way we apply the frameworks of corporate finance such as estimating growth, calculating risk premiums, deriving cost of capital and using valuation multiples. As a practitioner, it is important to take these nuances into our approach when looking at businesses. Here are some real life examples: One billion people. How do you forecast cash flows in the world’s fastest growing economy? In early 2000, China opened up, embarking on huge market reforms that put it on the global economic map. It became one of the hottest investment destination and everyone wanted a piece of the pie. I was fortunate to have witnessed first hand how businesses had successfully produced insanely affordable smartphones, put them in the hands of even the poorest people and connecting everyone in the country. China also leapfrogged the entire credit card economy, going from cash to cashless transactions. Putting the two together meant that one billion people now had the power to spend on just about anything at the convenience of their fingertips. Double digit growth is not out-performance, it is the norm. If you truly understand and appreciate this, trying to project cash flows and using DCF in China at that point of time will fiercely challenge your understanding of local market dynamics and the assumptions around growth rates to derive the value of a Chinese company. “Mature market” risk premium. Given the state of world affairs, are countries such as the US  still a “mature market”? The financial crisis in 2008 that kicked off the collapse of Lehman Brothers and subsequently the dissolution of pure-play investment banks, also led to the over-printing of money in the US. Since then, liquidity has been the go-to playbook for solving any financial crisis. For a long time now, the US market has always been positioned as the baseline for what constitutes a mature market, along with other high-performing financial capitals of the world. Today, whether the US will continue to honor its USD 30+ trillion debt obligations will not only test the strength of the US dollar and the credibility of its treasury bonds, but ultimately also our textbook definition of what makes up a “mature and stable market”.  If the LIBOR, the London Interbank Offered Rate (which at one point of time had been used as the benchmark for setting interest rates all over the world) can be abolished [4] , we must accept the very possibility that our understanding of what defines a stable market return could already be outdated. AT1 bonds. Geopolitics contin ue to have a big influence on financial markets, so does debt still stand in front of equity? The default on the now defunct Credit Suisse’s AT1 bonds in early 2023 also raises disturbing questions on our conventional understanding of how debt and equity works. For example, is debt financing really less risky when an important strategic shareholder owns part of a business? When countries start to weaponize economic and financial policy through bailouts, tariffs and sanctions, do companies and investors continue to apply the weighted average cost of capital ("WACC") to quantify and justify their decisions? Exorbitant valuation multiples Investors are paying exorbitant multiples for AI companies. Elsewhere in the world, an investor is paying 100 times on sales for Zhipu, a large-model AI company that recently debuted on the HK exchange but has no earnings yet. There is no decent financial model that could justify a company being valued at 100x sales. But as Lee Kai Fu [5]  once said of the AI bubble in these companies, “ If you believe there is 2x, 3x, 5x growth for the next three years, it is going to justify that valuation at some point. The bubble is merely that it has gotten ahead of itself, not the likelihood of growth in the future. ” The all-time historical high of a price-to-sales ratio for the S&P 500 and the NASDAQ was approximately 3.4x and 7x respectively. Even tech darling Nvidia only touched 30-40x at its recent peak. That makes it highly irrational to think that any business could be valued at 100x price-to-sales. Put that into your model. ——— There are no correct answers to the questions above. One thing that is for sure is that there are definitely are a lot more events taking place in the world that has transformed the way we look at businesses. In short, the rules that we used to learn in books, the rules that govern how financial markets supposedly work, are different from what happens in the real world, and it will continue to stay that way.  Finance teaches us that value - especially intrinsic value - is the sum of the present value of all future cash flows. Reality however often tells another story. It is necessary to still know how the math works on paper, but acknowledging and understanding this difference is perhaps the most important lesson in corporate finance. [1] "Of Kiwis and Currencies: How a 2% Inflation Target Became Global Economic Gospel" - The New York Times . [2] Lunch with Eugene Fama - The Financial Times . [3] In my opinion, relying on IRRs, MOCs and DPIs to assess and determine the performance of a company or a fund manager violates one of the cardinal rules of investing: History is not the best indicator of the future. Also, good bankers do not always make good investors, good investors do not always make good operators of businesses and managing capital is fundamentally different from running a business. An investor is only as good as his last trade. [4] In 2012, it was first discovered that banks were colluding to manipulate the benchmark interest rates to profit from trading and mask the troubles that banks were facing following the 2008 financial crisis. It was fully phased out in the middle of 2023. [5] "Sinovation Ventures Lee Kai Fu on The China-US AI Race" - Bloomberg .

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

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

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

We recently completed the test run of a new product as part of a market feasibility study. Despite having seen my fair share of feasibility studies in my banking days, I rarely sit on the opposite end—which is having to really think about putting the outcome of the report into action. But this isn’t quite my first stint at building a new product or entering a new market. In 2016, I had to assemble a conference from scratch, from financing to execution, nearly single-handedly. We later institutionalised the platform, calling it the Asia Investment Conference and replicated as an annual production. I later realised that the banks also had something similar that connected large investors to companies (usually public listed ones) that were looking to raise capital. They called this product “corporate access” and housed it under the equities division. The actual process of testing a new product in the market can be incredibly demoralizing. It’s basically rejection after rejection. In the process of carrying out the market study, I must have stepped on so many toes I wonder if we can truly spin this into a commercial venture. According to aero-propulsion engineering, most of a plane's fuel is burned when it is taxi-ing and taking off , not when cruising in mid air. It takes the most amount of energy for a plane to break that initial resistance, to move, to reach escape velocity and to eventually fly. When building a new product or a new business, all the team members must have the ability to overcome that initial resistance. And the truth is: If you are building anything new, you are always going to face resistance .  The team cannot be complainers. They cannot keep lamenting on the fact that this is a new market, a new product, or that there are simply not enough resources and internal / external support to do whatever they need to do. They certainly also cannot be wasting time putting together slides to explain in ten different ways why something doesn’t work, or why it cannot be done. They neither feel victimized nor do they spend time assigning blame.  They just get it done. There is no room for excuses, because that’s the only way to break that initial resistance, that is all there is to it.