Lost Generation

This is amazing. Thanks Jeremy!

Being Happy and Successful...

When people ask Warren Buffett 'do u think u are successful', he often reply with a 'i dun know what successful means, but i sure know i'm happy.' Success is getting what you want, happiness is wantng what you get. How true! But how many of us truly know what we want?

Its like we spend our whole life climbing a mountain but to realise that at the peak, what we truly love is the river that flows at the bottom of the mountain (maybe because there's a Tim Hortons nearby).

Read a article by David Maister who specialises in professional service firms (law, acct, invesment banking, consulting, etc). His articles are easy to read, insightful and highly relevant even after 20 years. Went to google him and this guy blogs! haha. It was the following speech that's on his blog that's really impactful.

If u have the time, please read the full article.

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Stephen C. Ellis - the managing partner at the law firm of Tucker, Ellis & West.

What follows is the commencement address he gave at Case Western reserve School of Law in Cleveland, Ohio on May 19, 2008.

The title of his remarks is "On Being a Happy(and Successful) Lawyer

Now we’re going to do a ten second experiment. Take a moment and reflect on the occasions when you felt truly happy - and please don’t name ‘listening to this talk”. [8 seconds of silence]

I submit that not one of you is thinking about money or material things. Our best times are always with people we care about, doing things that bring us closer together. But knowing that, we let ourselves climb on this treadmill, running harder and harder, like that donkey trying to catch the carrot on a stick.

I believe this is beginning to change, at least in the arena where lawyers have to keep increasing the hours they devote to work. Hours are being recognized as an irrational measure of value. Nobody calls a lawyer asking them to please spend twenty hours on a project. Clients want to pay us for what we do, not how long it takes us to do it.

If you’ve decided to become a lawyer solely to make money if to you it’s simply a job I fear you’ll hate it. As a career and a calling it’s great, and unbelievably interesting, but as simply a job, it’s way too hard and stressful. It’s the people, the pace and the endless puzzles of the law that make being a lawyer fulfilling. If you want tons of money for working twenty hours a day and nausea-inducing stress, Wall Street investment banking may be just the thing . In that business the grand old men are burnt out at 45.

Over the past few years I’ve come to some conclusions on finding guideposts that will give us lawyers the best chance of being successful, in the sense of truly enjoying our lives and careers as lawyers. They are simple, some might say “trite”. But 36 years of listening to happy and desperately unhappy lawyers and watching colleagues succeed as lawyers and people, and some fail, I know that these may be cliché’s, but I also know they are true.

First, be someone others count on. Most folks talk a good game; very few come through. Clients come to you because they have a situation they cannot solve on their own. Most are not looking for an analysis of the law. Most want you to solve a problem. So solve it, don’t add to their problem by being hard to find, by missing deadlines, or by simply describing their problem back to them. It’s like going to the dentist when you have a toothache. You want it fixed and you want it fixed now. That’s what a client wants every time they talk to you. Walk in with a problem, walk out with a solution.

What they want is someone they can count on to make their lives simpler, to accomplish what they want accomplished. If you can simply do that, you’ll be sought out as an extraordinarily effective lawyer. And there is a real difference in your sense of self between being simply a resource; somebody who knows the law, and the person that people count on to solve their problems.

Second - be an interesting person, for your own good and so that clients think of you as more than a lawyer. A decent definition of hell is a dinner party companion who is a first year lawyer on the day after his or her first trial. Law stuff is interesting mostly to lawyers. In fact, it’s real interesting to lawyers, so that’s what we talk about all the time, just like you talk about law school all the time.

Force yourself to do be able to talk about more than law - read books, go to movies, be part of politics, go to lectures. You’ll meet people, you’ll be able to talk about things that other people find interesting, and you won’t burn out on your job.

The horror stories you hear about associates working 2500 hours a year? You will be surprised when you see how much of that is self imposed. These young lawyers get caught up in the chase and find that what they’re doing more interesting than anything else- so they become that boring self absorbed dining companion. The world’s full of great people with jobs and hobbies that are just as demanding and just as fascinating as yours, (assuming you make yourself get a hobby). Learn about them. You’ll be happier and much more fun to be with.

The toughest lawyer is not the one who is the most obnoxious. Clients will say they want a tough son of a gun to make somebody life’s miserable, a real bulldog, etc.
Don’t be that person. It’s been my 100% uniform experience that the bulldog only adds time, expense, stress and confusion to an otherwise inevitable result. Even clients can’t stand them after a couple of months.

And finally and hands down most importantly, and please pass this on to your friends and your children, because it’s really important — Be nice and have fun. Just doing that makes life better for everybody, mostly you.

Sesame Street: Andrea Bocelli's Lullabye To Elmo

Arbitrage, 麻油鸡& Acquisition

I love the way my Derivatives class is taught. Often in Singapore, we first learn the definition, then the formula, then we 'apply' to question. The way Prof Busaba teaches derivatives is to first help us get the intuition behind the instrument, then move on to a numerical example. From there, we generalize the case and arrive at the 'given formula'. A very refreshing way to learn new concepts.

He shared with us a fact that has been bugging arbitrageur and folks that support EMH - 1 year oil futures vs. spot oil price has HUGE spread that cannot be easily explained by pricing model.

FACTS: Spot price = 43.81, Futures (Mar 09) = 55.61

Given the figures, the implied cost of carry is about 23.8%. For oil, the cost of carry is basically cost of capital + storage cost. If cost of capital is 10% (hey, 30 risk-free rate is only abt 3%) and cost to store is about 5%, then there is a 8% spread that CANNOT be explained.

Can u imagine if we see an advertisement in Straits Times saying that in one year's time NTUC will be buying toilet paper from me at 55.61 if i enter into agreement with it. All i have to do is borrow 43.81 from my dad, buy the toilet paper, store at some dry basement...sell the toilet paper back to NTUC at 55.61, pay my dad some interest, and compensate whoever lent me their basement, and the rest of the money is mine to keep!

ie. Profit = Agreed selling price - cost price - interest - storage cost!!!

Haha. Any friends here that have low cost access to capital and also a HUGE basement to store barrels of oil ?!?!?! Call me :)

To the see the intraday futures prices, click here.

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Managed to cook 麻油鸡today, my most ambitious dish yet! Super proud of it given that it was my first attempt and the final product is quite edible. I couldn't find 米酒, so i used some super strong liquor i found in the cabinet. Haha. So my 麻油鸡 is super nice for the super cold weather.

The soup u see was prepared by my landlord. and the dumpling thing beside veg was bought from a neighbour that sells homemade food. Since it reminded me of 锅贴, i 'educated' my host that it SHOULD be taken with ginger and vinegar. Sadly there no 黑醋 around, so i used red wine vinegar. Taste great!

My latest acquisition is my HUMIDIFIER!!!

Now my room is Warm and Moist. Sounds a lot like the weather back home huh?

Haha. My summer palace in the winter wonderland!!!

Home away from home

This week the weather is really a killer. On a good day its -10 degrees and on a cold day its -27 degrees!!! I'm wearing 5 layers and has given up walking to school in the morning. 2 weeks away from mid term exams. Have to start mugging. Haha. Didn't expect to study hard for this exchange, but i guess i'll do so anyway.


Did my home cooked meal today. Since I'm just feeding me myself and I, cooking is really quite a hassle. But i managed to prepare my Lemon Chiken Rice meal today. It cost 8 CAD to buy this outside. Prepare at home, the chicken i bought + sauce + veg prob cost less than 3 CAD. Of course have to do some allocation of overhead and labour cost. Haha, but how to measure the sense of satisfaction of creating ur own meal :)



Going healthy here, my landlord eats organic food and such. So my chicken rice is BROWN RICE. My daily bread is Organic Whole Meal Bread.

What a better way than to end off a meal with a cup of hot chocolate and home made (organic) apple pie.

My landlord and morning walking buddy 'jack', i still don't think he's 66.

Gosh! I think my double chin is getting more prominient! gotta wear more scarf!!! ~correct ans would be to exercise. Haha.

A small ski slope 15 mins away from where i stay.

Spencer - a really old dog and quite friendly to me.

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When i reached home yesterday, i was shocked and moved by the news of the airplane that 'crashed' in to the Hudson river. Leaving minutes after leaving La Guardia Airport, both engines of the plane went down (probably due to some stupid birds flying into it). Not finding a place to land, the pilot took the decision to land on the Hudson River, between New Jersey and New York City. Minutes after this crash landing, all 155 passenger (& 1 baby) and crew was saved from the sinking plane by other boats on the river. A miracle.

U can see that people are standing in the frigid Hudson river on the wings of the plane waiting for help. They were mostly calm. Hypothermia probably would have been deadly if any one feel into the river.

This once again emphasis the importance of regular re-training. Mentally rehearse for all possible scenarios, unlikely as it might sound. And the importance of keeping calm during uncertainty and that a great team is surely more than the sum of the parts.

Impressed

Was trying to log into the Ivey school network today during class and i can't. It has been like that all the time. But whenever i get into the library the wireless thing works. So i was convinced that there's something about my laptop absorbing the energy in the library so the wireless works.

Today during the value investing class, David told me that in class session (as shown in the eZone...something like SMU Vista), you are not allowed to access the internet...just eZone. 

Wow. No wonder no one messages or facebook during class. And i was thinking that everyone in Ivey is so disciplined. Hahaha. 

Some thoughts on investing

Over the past 2 days in the nice cozy basement where i stay, i've been thinking (not too hard) about what have i learnt about investing over the last year or so. What prompted me to do so was Xin Hong's post on his reflections. His comments on Bill Miller's portfolio action is particularly close to my heart as a substantial portion of my personal net worth is invested in Miller's Value Trust. Given the additional layer of fees Fundsupermart.com charges, Miller would have to Value Trust would have to outperform its index by almost 2-3% just to be on par with the S&P 500 index. 

His untimely stock pick for financials caused him to underperform severely. Basically, the last 5 years, he missed out on the natural resources and oil & gas sector boom, started holding substantial amount of financial companies and building companies early in 2007. Averaged down on these sectors when prices declined significantly, piled a few percent of his portfolio into Freedie Mac alone, which later went to almost zero, and has positioned the portfolio for rapid recovery way too early.

For a good summary of what happened in 2007 (hey that's 2 years ago), read this Bill Miller's 4th Quater 2007 commentary.

His decision that "What took us into this malaise will be what takes us out." laid the path of further underperformance in 2008. What got me pissed is that during the 1Q 2008 letter, Miller quoted his friend as saying his underperformance is just a form of “You mean, your deferred outperformance,”. It shows a form of misplaced arrogance. A hubris that is timely punished by a unmerciful market. 

However, look at the honesty Miller displayed in this 3Q letter, "Our portfolio has performed worse than most others, and worse than I would have imagined, in this current financial crisis. It has suffered from my overall optimism, long-term orientation, and inability to anticipate the depth and duration of the financial crisis in time to take proper action to mitigate losses." 

Why have i stuck to Miller over the past 2 years? My answer is sure dissatisfactory to any rational investor. Why Miller? over the over 10+ value funds that i admire, only Value Trust is offered in Singapore. The rest has SEC and MAS regulation governing against unaccredited Singapore investor from owning it. 

Why did i not sell when he wrote his super arrogant letter? Cuz i'm stuck with the notion that i've already paid 2% commission on it, the net asset value per share has fell by over 30%, and if i sell and it goes up, i'll bite myself. Totally irrational portfolio decision.

Why am i still holding it? Cuz i like the new portfolio mix now. He's defensive, but not TOO defensive. I understand most of the rationale for the stocks holding in the Value Trust, and mostly agree with them. I'm still shackled by my damned bias to make full rational decisions. And i think Miller will perform well after this crises. He's super smart and i think honest, he'll do well...or i wish i hope. 

On a lighter note, I'm absolutely thrilled about my lessons at Ivey. I love their case method which is used to teach both technical subjects (derivatives and value investing) and the general business management courses. I'm amazed at the level of preparedness of the students in here. By end of discussions, the profs will then go through their slides, and i see that most if not all the key issues are discussed and 'taught'.

And i must say that i'm so lucky to done AFA in SMU last semester. The ability to tackle a tough subject on my own makes learning so much more fun as we can then move pass the 'how to' and move into the 'why;. And given that Prof JJ tortured us with the crazy amt of readings last sem, now reading case and academic journals are just plain fun. haha. A classic case of  先苦后甜。

This Thurs is projected to be -15 degrees celsius and with wind, it will feel like - 25. Think i'll have problem walking to the bus stop....burr....

There'll be a spring break from 11th Feb to 1st March, and Ontario is still projected to be in frigid winter. Thinking of going West coast in US or Mexico to escape the winter chills. Haha. Can't sell my portfolio to finance the trips. Will try to further extend my credit line with Pop and Mom finance house. Haha. Hope there won't be any credit terms or such. 

Ivey

3rd day of school today. It was great fun for the past few days. You guys who read this blog probably know that my notion of fun is rather odd, doing financial ratios are fun, balancing balance sheets are fun, getting AFA analytical checks are fun. Haha.

For Jan, my lessons would start at 8 and lasts all the way to 5 with some breaks in between. On NOT SNOWY days, i walk to school with Jacques (i think that's how to spell it), he's 66 and he struts across the snow with ease, and this poor chinese guy is trying to catch up constantly. Haha. I think that's the way to not get fat here, cuz Anita cooks the best soup and i'll have them at 7pm after i have dinner at 5 pm in school. I'm like having 5-6 meals; not all those mini-meals by the way, so getting REAL fat is a high probability event. Anita n Jacques rented their basement room to me, equipped with TV, microwave, fridge, boiler, bed WITH linens, and they are the sweetest couple in the world.

I'm doing 6 modules here, and students here told me that i've picked 2 of the most hardcore electives here - Derivatives, and Value Investing. I enjoyed my first 2 lessons. Instead of 'teaching' you the equations so you can just 'plug it in' (aka my "beloved FIIM" class in SMU), the professor here starts with very simple numerical examples, then build on it with more assumptions and scenarios, and at the end of the lesson, he'll 'generalise' the examples into equations. So if one is able to do the examples, he'll be able to understand the intuition behind the formulas. Wicked.

Posting pictures up on the blog is a real pain. And i have 2-3 business case to read each night, before the lesson next day. SO posting in January will be sloooowww. Once my mid term exam is done, I'll be left with 4 modules, of which there's only 1 exams. But January will be tough, cuz i'll have 4 exams in late Jan, and its pretty heavy weight...the courses, not me. Haha. Here's some pictures i took in school today. Its snowing, but not too windy, abt -4 degrees...so its considered warm. Haha.

that's supposed to be the ivey bldg behind my overexposed face

i think this is one of the oldest building in University of Western Ontario, where Ivey is situated in.
my eyes are like two slits, gotta learn how to open them....hahaha....



Time to go read my cases for tmrw! Oh ya, daylight saving means i sleep more!!!

Eat, read, sleep - my type of life :)

New York New York

Back in London, Ontario, Canada near Toronto after my awesome one week trip to New York.

Lesson will start tmrw at 8am! I'm super excited!!! Real lucky to have an elderly couple as my landlord. They're so warm and lovely. And my room is awesome. Equipped with fridge, microwave, tv...thinking that "WEI LOH" is a girl, as WEI is a girl's name in polish, she bought me a pink toothbrush. Haha.

Will write more on my wonderful new york trip this weekend. Meanwhile, let's see if my first attempt at flickr works.