Saturday, November 29, 2008

What is this feeling...

Exams are finally over! This is my most shiong semester ever. I think that AT and AFA is a deadly combo, should be taken with care. I'm most uncertain about the outcome of my essay based exams. The two numerical ones are just off. AFA would depends on how much prof gives us marks for 'workings'. For MS, the finals is so freakin easy that in a course the 'bells' the students, mid terms will become the determining factor....n i didn't do well in midterms....haiz...

On a positive note, i am truly grateful for my experience in Accounting Theory. It opens my mind to new ideas, new realities and possibly, new definition of 'true and fair' that accountants hold so dear to. I also realize how inadequate my abilities to read, write, and speak are. If i can't express my thoughts, how will the other party understand what i intend to say.

Thankful to all those people who helped me tremendously this sem, xin hong, chin ta, shakeeb, say wai, wen xiang and many more.... I hope we all do well.

Reading jie chao's post on the futility of exams makes me a little sad. I agree with his general idea that exams tells us little about how a person will perform when given a task. But i think that to a limited sense, it shows the discipline, mental curiosity and work ethics a person has. Furthermore, in the SMU where a subject that can be taught over a year is taught in 14 three hours seminar, to do well, one must learn 'how to learn'. If someone is equipped with the right skills to learn, one can evolve and adapt to the ever changing environment. What we learn in schools have a useful life of probably 4-6 years after graduation anyway. So have the right perspective and attitude towards learning is what i've gained most over the past 3 years.

Time to apply some more financial institutions in hope of getting some internship opportunities next summer. Given the current nationalization of banks, i wonder what the future of the financial market will look like....

To all my friends applying for internships, ALL THE BEST! 

so tired....i am.....rather lost....sleep....

Sunday, November 23, 2008

One Day More!

Listened to Les Miserables on my way to school. Sang (hopefully silently) in the MRT and felt better.

I'm really stressed out by this exam, more so than any other terms. It could be a combi of the modules that i'm taking and also that Andrew, Daniel & Damien, whom i've depended so much on for the past few exams are now on exchange. Fortunately those that are still around provides me with sufficient support to survive...

There is a glimmer of hope for AFA, understood some concepts better over the past week. However, speed is still a HUGE problem. Since i don't have the luxury of time during exam, i must level up in terms of speed over the next few days.

Tmrw is my AT exam. I think i got my content knowledge. But how do i present them in a form that show the prof i know my stuff? The following advice is given by Prof JJ "Try to spend a little time reflecting back on what it took to write a good General Paper in A levels....Also, try not to be repetitive in your arguments....Of course style is important so try to write with a dark pen, in a way that I can read, and with good professional quality." GP is my weakest subject in JC and I've not written a single argumentative essay for the past 6 years!!! I can only imagine the pain JJ will be going through trying to decipher my message when he marks my paper.

MS, by Prof Pascale is NOT EASY. Haiz, Andrew said she's fine and that her exams are fine. But now i realised that that's Andrew speaking. Once he understands something, he can execute smoothly. I can't do that. I need to practise. MS as taught by Pascale is so fluid that attempts to spot qn and find model solutions are futile. Totally ignored MPW. Leaving it for the rest of Friday afternnon and Sat moring before sitting for the exam.

One day more to AT. One week more to liberation! Run Freedom Run!!!!

To whoever reading this blog and having exams. ALL THE BEST!






Tomorrow is the judgement day
Tomorrow we'll discover
What our God in Heaven has in store!
One more dawn
One more day
One day more!

Wednesday, November 19, 2008

Learning Curve

From MPW...Stages of learning
1. Unconscious Incompetence
2. Conscious Incompetence
3. Conscious Competence
4. Unconscious Competence

My improvements in AFA over the past week;
Unconscious Incompetence --> Conscious Incompetence

Luckily there's such a thing called 'past year paper' and 'exams'. If not i'll probably be at the stage of unconscious incompetence forever.

The current financial tsunami showed the world who has been swimming naked when the tide was high...mmm...the market has a peculiar way of showing off the emperor's new clothes. However, those who can identify accurately their own circle of competence, AND not stray out of it, will probably be constantly in a state of Conscious or Unconscious Competence. Ask the Fried Hokkien Mee uncle if he thinks about what to do after heating the wok he'll probably laugh. Thats Unconscious Competence.

Hopefully within a week i can level up....

Tuesday, November 18, 2008

Comic Relief

Joel sent me these funny pix...much needed relief form studying...thx!












Sunday, November 16, 2008

Personality test

Saw this on cg's blog and tried it out. mmmm...quite true.

Quiz available here

Your view on yourself:

Other people find you very interesting, but you are really hiding your true self. Your friends love you because you are a good listener. They'll probably still love you if you learn to be yourself with them.

The type of girlfriend/boyfriend you are looking for:

You are a true romantic. When you are in love, you will do anything and everything to keep your love true.

Your readiness to commit to a relationship:

You are ready to commit as soon as you meet the right person. And you believe you will pretty much know as soon as you might that person.

The seriousness of your love:

Your have very sensible tactics when approaching the opposite sex. In many ways people find your straightforwardness attractive, so you will find yourself with plenty of dates.

Your views on education

Education is very important in life. You want to study hard and learn as much as you can.

The right job for you:

You're a practical person and will choose a secure job with a steady income. Knowing what you like to do is important. Find a regular job doing just that and you'll be set for life.

How do you view success:

You are afraid of failure and scared to have a go at the career you would like to have in case you don't succeed. Don't give up when you haven't yet even started! Be courageous.

What are you most afraid of:

You are afraid of things that you cannot control. Sometimes you show your anger to cover up how you feel.

Who is your true self:

You are mature, reasonable, honest and give good advice. People ask for your comments on all sorts of different issues. Sometimes you might find yourself in a dilemma when trapped with a problem, which your heart rather than your head needs to solve.

Friday, November 14, 2008

CQ

Bill Gross on common sense:

"A CQ is what I think of as a “Common Sense Quotient.” It refers to an ability to not just absorb information and recycle it upon demand, but to analyse it and apply it within a uniquely different environment or context. A CQ Mensa candidate is able to view the world in a state of apparent equilibrium and wonder – “does this make sense?” And if not, “what might change it, and when?” The problem with measuring CQ, however, is that you never can be quite sure that you or anyone else has it. It’s elusive and perhaps even ephemeral. It’s also uniquely personal: the world 
always makes sense when viewed from your own eyes – it’s those other people who can’t seem to understand. Still – in the business and investment worlds – time has a habit of unmasking one-dimensional pretenders who have the obvious IQ, but score below 100 with an experience-tested CQ. Warren Buffett, a bona fide Mensa in both categories, said it best many years ago in his usual folksy way: “You don’t know who’s swimming naked until the tide goes out.”

Read the latest Bill Gross article here. Subscribe to the podcast and listen to articles from 2 years ago. Amazing learning experience for me.

Thursday, November 13, 2008

Derivatives...yes no maybe?!?

Submitted our AFA project today. All projects finally submitted. Phew. Time to mug.

Reviewing FRS 39 today (tmrw and the next few days) and i tried to link it back to 'real life' situations. Then i thought of my Monopoly game with my cousins a few weeks ago. There was one transaction that i think i'm not sure how to account for.

The transaction

I want Jolyn's Pentonville Road (cost 120) and she wants my Leicester Square (cost 260). I have the other 2 light blue property so i'm keen to get my hands on Pentonville to form a set so as to built hotels for my lovely cousins to stay in. However Jolyn is NOT willing to part with it, cuz i think she only has no money on hand to develop her properties (even if she does form a complete set).

Meanwhile i have a hotel built on Vine Street ($2000 per stay). So i gave my cousin the deal of the century, she get to have Leicester AND one free stay at Vine street in exchange for Pentonville Road.  She agreed. How should should Jolyn account for her property?

She gave up Pentonville and gained 1 property and a free stay.

I think the journal entries would involve the following

Dr Free Stay
Dr Leicester
Cr Pentoville (at historical cost of $120)
Cr Gain on sale???

Now, should Leicester be valued at MY historical cost of $260, or at a exchange price of $XXX?
How should the free stay be valued? Is it a derivative? I think it is the present value of $2000 discounted at some rate given some probability distribution. But i don't think it fits the definition of either options or forwards. I can't even think of the payoff function from Jolyn's point of view...

Would there be the credit Gain on Sale? is it a residual after we value 'free stay', 'leicester' less 'pentoville'? If the 'free stay' is indeed a derivatives, is it governed by FRS 39?

by the way, Jolyn is Sec One. So i think she fully meets the 'knowledgeable and willing seller + arms length' criteria. I'm not a bully k?

ok. far too many question marks. Please tag to let me know what you think. (other than telling me you think i streeessssseeddddd. hahaha). 

Oh ya, thanks to cheeguan, i gotta clear some more CIP hours during the christmas caroling. yippee!

Sunday, November 9, 2008

The intelligent investor

Listened to "The Intelligent Investor" last night again to calm me down. Benjamin Graham divided investors into the 'defensive investor' and the 'enterprising investor'. The defensive investor seeks to achieve normal stock return without too much effort. The enterprising investor seeks to achieve abnormal profit by seeking out intelligent opportunities and exploit them.

Graham suggested that by holding a diversified list of stocks of the largest company should be the method employed by the defensive investor. Today, this could be achieved by purchasing a low cost index fund or ETF.

The enterprising investor would however need to put in a lot more effort to achieve above average results. Empirically, most funds fail to outperform their benchmark. Given the huge resources asset managers have at hand, it could come to a surprise to many that why they can't do better than their benchmark. A benchmark is afterall simply an index of stocks chosen by a committee which exhibits certain basic characteristic (size, industry representation, profitability,etc). However, human nature would probably preclude exceptional performance. Its uncomfortable being alone. To outperform the average, by definition, would mean one has to be alone in certain decisions at times. Thus there are many closeted index hugger who simply over/under weigh certain stocks and HOPE to achieve alpha while charging obscene fees.

The author also suggests the experience told him that one is unlikely to be BOTH a defensive investor and a enterprising investor. A enterprising investor's behaves like a businessman tending over his share of businesses which he owns a minority stake. A successful enterprising investor is a successful businessman. How many successful businessman have you heard saying that 'if i put in less effort, i'll still be successful, just less so than i'm currently is.' If success in investing and in business is dichotomous, then one can't be both a successful defensive investor and successful enterprising investor.

----------------------------------------

I was reviewing Accounting Theory today and i'm really glad that SMU offers this course and Prof JJ teaches it.
In one session, he asked us (i) what is capital, (ii) what is income, (iii) Is income capital?

If we loosely define capital as what owners contribute to the firm, and income is simply revenue less expenses as we learn in all Financial accounting 101/3 course, then how do we reconcile (iii) Is income capital. We all know that income for a period is equivalent to ending capital less beginning capital adjusted for any capital contribution. Thus if we can't measure beginning and ending capital, how can we then 'measure' income?

We 'closes' income and all items on the profit and loss statement to the "retained earnings" on the balance sheet. If Income is a measure of 'flow/unit time', and balance sheet is a point in 'time', does it make sense to add income to balance sheet? Imagine you ask someone how much distance did he travel, and he adds speed (flow/unit time) to time!!! Accountants have implicitly multiplied the net profit by ONE unit time to allow it to be added to the balance sheet.

Is depreciation expense a asset? if i tell prof gan that, i think he'll faint :) but prof jj gave us the example that we can allocate depreciation expense to WIP, and WIP stays as an asset on you balance sheet until you sell it. So this 'expense' can be an 'asset'. Haha.

And if there's anyone who truly think that accounting is unbiased and judgement free, they would have to take this course. The very fact the many powerful corporations spent millions lobbying for certain accounting treatments tells us that there is real economic consequences when firms adopt different accounting treatments. The lobbying against the expensing of stock options during the mid 90s till early part of this decade is a telling story. Warren Buffett was the lone (and unheard...or heard but unheeded) voice (from major corporations) that believe that options should be expensed. But powerful VCs, pension plans and dotcom startups lobbied against it. It took the bursting of the dotcom bubble and the enron, worldcom debacle to wake SEC up to push for changes.

Accounting is a not a judgement free. Even if the accountants prepare it with the highest integrity, we still gotta read financial statements with a kidney failure inducing pinch of salt. Without thinking through all these issues, how can one be an Intelligent Investor?

Saturday, November 8, 2008

Disgust

Just had my AFA quiz. Utterly disgusted by my lack of preparation. I hate the face that's looking back at me when i stare into the mirror. Fcuking swine. To classify meself as pig would disgrace all pigs.

My mind went blank looking at the question on foreign exchange translation. Then the song 'lollipop' by Mika pops into my mind and the chorus goes on re-loop. The last time this happened was in year 1 during Management Accounting finals.

Only started revising on Weds. It took me 3 weeks to prepare for my first quiz. See how buang i am with only 3 days of preparation. Pearl Tan is such a wonderful professor. I do no justice to her great teachings. Talk so much in class but can't deliver the goods. Nothing but hot air.

"Resolve to perform what you ought, perform without fail what you resolve." ~ Ben Franklin

Live it.

Friday, November 7, 2008

Puppets



Ave Q is Wicked! hahaha!


And thanks to zkai who introduced me to Mika. Amazing talent!



Monday, November 3, 2008

Amazing Day


Watched Avenue Q today! Its amazing. 

Warning! Puppet Nudity on Stage. haha. These puppets do things on stage that only puppets can get away with. Mmmm...so now we know that on stage, as long as its puppets doing it, it will not be censored.

The cast is fun and sounds great. The energy level was high throughout and interaction with the audience was pretty good too. Glad that i watched it with the choir people, if not i'll be the ONLY one laughing that loud. I think i traumatized the very pregnant looking lady sitting beside me, she must be wondering what type of monster am i?

Went K-box afterwards. Released lots of pent up stress! haha. Never realised how much i like the Amy Winehouse's Rehab until just now where i have a huge urge to sing that song! Crazy woman...maybe that's why i identify with her songs...hahaha...

Weird. i can't post on my tagbox...something's wrong....

3 more weeks to EXAMS!!!! gotta put my act together and put on a brilliant performance. Its like in a musical, before the intermission, the song is typically the best song in the show. This term is my song before my break. The dark hours before dawn. I'll survive anyhow.