E-Prep Course
I have already started on my E-Prep course conducted by Nanyang Technological University on Business Finance and made some progress:
Chapter 1 - An Overview of Financial Management (Completed)
Chapter 2 - Time Value of Money (Completed)
Chapter 3 - Financial Statements, Cash Flow and Taxes
Chapter 4 - Analysis of Financial Statements
Chapter 5 - Financial Markets and Institutions
Supposed to finish the module within 3 months and so far 2 weeks have passed, thus it's going at a relatively fast pace:)
Driving
Must obtain my driving licence before August, managed to clear all the theory tests and all that's left is the practical part.
Temporary Job
I must make a decision on which job I am going to take up after my ORD; my priority is to gain relevant experience in Banking & Finance and currently I have four options to choose from. One of them may offer the experience but I will not put my hopes too high and instead opt for the better-paying ones in case if things don't work out as well as I have expected.
Investment Analysis & Portfolio Management
Being a defensive investor, I have allocated a substantial percentage of my net worth in Singapore equities after my analysis has shown that the stock is trading at a discount from it's intrinsic value. In addition, I am psychologically prepared in the event that the market price of my holdings has declined on a temporary basis. One should never be forced to sell. Thinking of branching out into other assets to diversify away the risk after receiving income from the temp job(s).
Youth Investor Stock Challenge
A competition organised by OCBC Securities and SIAS which I have taken part and will commence at mid January. Due to the short time frame, a value approach based on fundamental analysis may produce limited results in the short term and therefore I am 'forced' to pick up some technical analysis tools. Guess I will be looking at more and more charts...
Fitness
It's important to be proactive and maintain a healthy lifestyle after NS, otherwise it's really easy to gain all the weight back in just a few months. Morning run everyday and gym sessions on every Monday, Wednesday and Friday. Will consider picking up another new sport if time permits, perhaps tennis or golf.
Organisation
It's certainly a positive sign that several of my buddies share similar interests with me, it would be great if we can work together and conduct some insightful research. Besides that each of us can also have our own specialisation - equities, bonds, real estate and options trading. Leveraging on each other's knowledge can definitely achieve synergy:)
I must, and I will achieve all these goals in 2010.
Sunday, December 27, 2009
Friday, December 18, 2009
Financial Literacy
Financial Literacy
Managed to read the following books during my spare time or leisure:
Security Analysis
Rich Dad Poor Dad
One Up on Wall Street
The Intelligent Investor
The Essays of Warren Buffett
The Theory of Investment Value
Benjamin Graham on Value Investing
Common Stocks and Uncommon Profits
The Five Rules for Successful Stock Investing
The Neatest Little Guide to Stockmarket Investing
What is financial literacy, and why is it so important? I acknowledge the fact that people address and view this issue differently, however, a low perceived importance regarding financial affairs does not necessarily diminish its influence on our everyday lives. The old paradigm of achieving success has placed a flawed emphasis solely on intelligence quotient and emotional quotient, while these vital elements are indispensible, a new component has emerged - financial quotient.
While attaining excellent grades and studying at a prestigious institution used to provide a ticket to a life of luxury through high earning power, times have changed. The rules of the game have changed, just as how our economy has transformed to what it it today. Playing the new game using an old set of rules produces unthinkable consequences. We must learn to adapt to this changing world, for those who don't will eventually fail and face the fate of elimination.
Conversely, the shrewd few who invest their time and money to master the rules of the game will thrive, grow and prosper for generations to come. It is the survival of the smartest, the ones who are intelligent enough to recognise the effective means to achieve what they want, typically in standard Machiavellian fashion.
Shamefully enough, I have yet to gain a thorough understanding of the ideas expressed in these famous works. Nevertheless, I have already embarked on a financial journey and reached to an end of the NS stage. Results are mixed, but overall there is an improvement in my position and I am thankful of that. No one can predict what will happen in the future, but throughout passage of time we can still reasonably expect that generally sound principles produce sound results, and we must act on the assumption that they will continue to do so.
Managed to read the following books during my spare time or leisure:
Security Analysis
Rich Dad Poor Dad
One Up on Wall Street
The Intelligent Investor
The Essays of Warren Buffett
The Theory of Investment Value
Benjamin Graham on Value Investing
Common Stocks and Uncommon Profits
The Five Rules for Successful Stock Investing
The Neatest Little Guide to Stockmarket Investing
What is financial literacy, and why is it so important? I acknowledge the fact that people address and view this issue differently, however, a low perceived importance regarding financial affairs does not necessarily diminish its influence on our everyday lives. The old paradigm of achieving success has placed a flawed emphasis solely on intelligence quotient and emotional quotient, while these vital elements are indispensible, a new component has emerged - financial quotient.
While attaining excellent grades and studying at a prestigious institution used to provide a ticket to a life of luxury through high earning power, times have changed. The rules of the game have changed, just as how our economy has transformed to what it it today. Playing the new game using an old set of rules produces unthinkable consequences. We must learn to adapt to this changing world, for those who don't will eventually fail and face the fate of elimination.
Conversely, the shrewd few who invest their time and money to master the rules of the game will thrive, grow and prosper for generations to come. It is the survival of the smartest, the ones who are intelligent enough to recognise the effective means to achieve what they want, typically in standard Machiavellian fashion.
Shamefully enough, I have yet to gain a thorough understanding of the ideas expressed in these famous works. Nevertheless, I have already embarked on a financial journey and reached to an end of the NS stage. Results are mixed, but overall there is an improvement in my position and I am thankful of that. No one can predict what will happen in the future, but throughout passage of time we can still reasonably expect that generally sound principles produce sound results, and we must act on the assumption that they will continue to do so.
Sunday, December 13, 2009
Asset Allocation
Everything which has a beginning also has an end, this statement can be soundly applied onto my National Service, which started 20 months ago on April 2008 and is coming to a close in Feb next year. Through disciplined saving and prudent spending (though there were occasional self-pampering involved), I find myself in charge of a modest amount of capital to allocate and manage.
Indeed, I have explored a great variety of financial instruments, which can range from the "safe" corporate bonds and governmental obligations to "speculative" options and futures trading. I found many of their concepts and characteristics interesting; but when it comes down to selecting one to build a portfolio the choices are pretty much limited.
Graham's philosophy resonates well with me, and thus I believe the first question one should ask is to elect to be a defensive or aggressive investor. Defensive means freedom from concern, annoyance, the need for making frequent decisions. Conversely, aggressive suggests the willingness and the ability to spend time searching for the ever present bargain opportunities.
Attaining the average result requires a minimum effort, but to achieve superior results, even of a slight magnitude, is much harder than it looks. Due to my limited knowledge and experience, it is probably wise to select the defensive (non-enterprising) path.
As Graham stated, percepts crystallised out of experience may run the risk of not withstanding the test of time. Understanding this inevitable development can well reduce the risk. While sweeping statements or easy generalizations (eg any bond is safer than any stock-try not to tell this to a bondholder full of defaulted bonds) do not retain its validity through the passage of time, the enduring principles are the ones which are closely relation to human nature and behaviour. A leopard never changes its spots. Concepts of behavioural finance such as overconfidence, loss aversion and mental accounting are useful ideas which offer explaination for some of the financial phenomenon we witness today.
Never stop thinking.
Indeed, I have explored a great variety of financial instruments, which can range from the "safe" corporate bonds and governmental obligations to "speculative" options and futures trading. I found many of their concepts and characteristics interesting; but when it comes down to selecting one to build a portfolio the choices are pretty much limited.
Graham's philosophy resonates well with me, and thus I believe the first question one should ask is to elect to be a defensive or aggressive investor. Defensive means freedom from concern, annoyance, the need for making frequent decisions. Conversely, aggressive suggests the willingness and the ability to spend time searching for the ever present bargain opportunities.
Attaining the average result requires a minimum effort, but to achieve superior results, even of a slight magnitude, is much harder than it looks. Due to my limited knowledge and experience, it is probably wise to select the defensive (non-enterprising) path.
As Graham stated, percepts crystallised out of experience may run the risk of not withstanding the test of time. Understanding this inevitable development can well reduce the risk. While sweeping statements or easy generalizations (eg any bond is safer than any stock-try not to tell this to a bondholder full of defaulted bonds) do not retain its validity through the passage of time, the enduring principles are the ones which are closely relation to human nature and behaviour. A leopard never changes its spots. Concepts of behavioural finance such as overconfidence, loss aversion and mental accounting are useful ideas which offer explaination for some of the financial phenomenon we witness today.
Never stop thinking.
Thursday, December 03, 2009
Update
Alright since I have received comments that I should update my blog, I shall gladly do so:) As a matter of fact, I don't even think that people actually read my blog. My sincere apologies for blurting out this comment, since I seldom do extraordinary or significant activities. I am worried these mundane events might bore my reader to death. So let's get back to the story, then.
One of the most enjoyable activities one can do in the army is to clear leave, and I shall state some of the things I have done:
1) Signed up for an E-PREP course, namely 'Business Finance' conducted by Nanyang Technological University. Well since I am going to study finance or finance related topics at the undergraduate level I guess it's a pretty safe bet to attend an introductory course to get a hang of what Finance's all about.
2) Registered myself as a student member of Securities Investor Association of Singapore (SIAS) as soon as I have collected my SMU student card (I matriculated just a couple of weeks ago). The logic behind this move driven by the need to attain more sophisticated financial statement analysis methods, my current superficial knowledge of accounting is very much limited; and to tear the annual reports of various companies apart I will need to acquire more information and practice more.
3) Last but not least, create a trading account at Central Depository Pte Ltd and most probably with PhilipCapital as my online brokerage. When I look back at that time when I just enlisted in the army, I was just a regular young kid with no serious goals or ambition. The thoughts of pursuing my interests and cultivating my passion didn't really cross my mind yet until after NJC. Perhaps all the studying there kind of buried my desire to achieve what I want.
"So what do you want to do in the future?"
"I don't know, maybe business?"
Now I know.
One of the most enjoyable activities one can do in the army is to clear leave, and I shall state some of the things I have done:
1) Signed up for an E-PREP course, namely 'Business Finance' conducted by Nanyang Technological University. Well since I am going to study finance or finance related topics at the undergraduate level I guess it's a pretty safe bet to attend an introductory course to get a hang of what Finance's all about.
2) Registered myself as a student member of Securities Investor Association of Singapore (SIAS) as soon as I have collected my SMU student card (I matriculated just a couple of weeks ago). The logic behind this move driven by the need to attain more sophisticated financial statement analysis methods, my current superficial knowledge of accounting is very much limited; and to tear the annual reports of various companies apart I will need to acquire more information and practice more.
3) Last but not least, create a trading account at Central Depository Pte Ltd and most probably with PhilipCapital as my online brokerage. When I look back at that time when I just enlisted in the army, I was just a regular young kid with no serious goals or ambition. The thoughts of pursuing my interests and cultivating my passion didn't really cross my mind yet until after NJC. Perhaps all the studying there kind of buried my desire to achieve what I want.
"So what do you want to do in the future?"
"I don't know, maybe business?"
Now I know.
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