Tuesday, June 18, 2013

The Little Investment Guide Book

Last weekend I read another investment guide called the little book about making money or something like that.  I don't know why it is always called the little book, something like the popular For Dummies series. I think someone started it long ago, a retired investment banker who wanted to share his experience and wrote a slim volume with the title my little book that started a trend though the writer was emphasizing passive investment. A week before I read another slim volume called 'The Sages' about George Soros, Warren Buffett and Paul Volcker.  It was a very educational book and the investment styles of both Soros and Buffett are so much different.  Volcker who was the Federal Reserve head before the infamous Greenspan is another specie. The common link is their down to earth insight and prescience towards crisis and their calls for financial reform.I realize again my ignorance after reading these books.

The little book series was about fundamental investment along the Buffett (and Benjamin Graham) school of thought. Soros on the other hand is a strategic and macroeconomic thinker, familiar with global trends - he is uniquely qualified to have a world view; born in Hungary, fleeing Eastern Europe in the wake of both the Nazi and then Communist take over, studying economics in London, earning his living as a stock broker, before moving to Wall Street in New York and soon started a hedge fund. Buffett on the other hand, never left the country, studying the fundamentals of companies and buying and holding stock or businesses while Soros made his riches exploiting opportunities all over the world, gaining notoriety when shorting the British pound and 'breaking' the bank of England.

I prefer Buffett's buy and hold strategy, looking for bargain stocks that have lost favor with the general market (thereby cheap) or in a turnaround position but fraught with risk. I am again reading another book by Jim Rogers called 'Street Smarts'. Rogers worked with Soros and co created the Quantum Hedge Fund. He made his riches investing in trends like Soros until he retired and traveled the world. He now lives in Singapore, preparing his family for the coming Chinese century, his young children studying Mandarin. Soros and Rogers have a world view and are strategic thinkers similar to other known investors like Mark Mobius and John Templeton. In experience I am biased towards the Soros view, born in one Asian country (Philippines) where I studied economics (that dismal science), living and investing in Singapore, following a buy and hold strategy and moving to the US and modestly investing in American stocks and real estate following value investing guidelines.

Unfortunately I don't have the patience or the inclination to study companies like Buffett, instead focusing on cheap blue chip companies that are recovering their former glory or trying to improve their business after a downturn or unpopular in the market. Companies like Bank of America, Nokia and City bank. I just borrowed a new guide called the little book about trading which will hopefully round out my learning. I am not a brilliant investor by any standard and think my meager investment are both widespread - diversified as some gurus would say and as Buffett would say - diversification is the strategy of those who are ignorant of the market or something like that. I don't have the big pockets or guts of a Buffet or Soros and prefer diversifying my modest savings so I wont lose everything in one disaster following Nassim Taleb's Black Swan thesis. Hence, I don't have the deep technical skills needed in value analysis but instead compensate with a strategic view of the economy by buying cheap stocks and real estate for the long term, exploiting the bearish trends until the bulls recover.

To conclude, I am a mish mash of theories whether Benjamin Graham, or the efficient market theory but with some investment experience in the stock market of three different countries in a mix of stock, mutual funds, ETFs, REITS and investment bonds.  I can understand economic trends and try to profit from them with an understanding of macroeconomic theory (but all hogwash as Buffett would say stating that he would not change his investment even if a central banker whispered a secret  his ear- a testament to his knowledge of the companies he has invested in). Therefore I am a modest investor following Kiyosaki's Rich Dad Poor Dad strategy of investing in real estate while keeping myself updated of world trends by watching television shows like the BBC's recent 'Changing Wealth' about today's high net worth individuals. This is called improving one's financial literacy as Kiyosaki would say.

At the end of the day, I think I have come at the right opportunity with both the real estate and stock market prices down due to the financial crisis of 2008-09 and with my modest knowledge and experience, I invested my meager savings in rental property and stocks, experiencing a good return now that the US economy is recovering. Luck plays a big part as Taleb would say but opportunity prefers the person with a prepared mind. Such is the circumstances I find myself in, where investment opportunities abound while I adjust to my new circumstances and job challenges. I think I would have invested more if not for the Roth IRA restrictions which limit ones contribution per year. Other method would risk the payment of capital gains taxes. I guess I am an opportunist looking for the next wave, trying to profit modestly and avoiding loss just like everybody else, saving hard earned money from the monster of inflation

Monday, June 17, 2013

New Job

I have been at my new job for a month now. Similar to the support role in Singapore but in a wider arena - more people, more requests, more applications and more developers. Technically it is not a difficult job but the volume and scale requires one to be organized, disciplined and unhesitating. It is a job that requires instant action or one will be left behind.  Not only is the assignment new but I have to keep working on my current project as an analyst plus the other assignments given me: on obsolescence and coordination with the China project – a contributor role that is not big but pressured because of China; the name itself giving import and priority above all else. But the local office has its own priorities and agenda which make the gathering of resources difficult. So ones needs to be shrewd like King Rat, where one learns to scrap by, looking for any lead or opportunity or advantage that will one can get by with, the barest minimum to claim a passing score if not all out success.

Frankly, I like the job and the effort would be easy if it was the only thing I did but one still goes about his own agenda, continuing to clutter one’s mind with endless input that one cannot help it. The situation reminds me of Nam June Paik’s exhibit at the National Gallery in Washington, DC where one long wall in an immense room is filled with television or computer screens displaying images all over the world while a small section entitled Matrix goes about its own set of images and not coordinated with the other screens. It was the first time that I appreciated modern electronic art and that was the first time I realized what Paik wanted to say, with his modern exhibits of television screens amidst a garden, robots and more television screen which seem to portray the digital age and its dizzying complexity and confusion. It was the first time I felt that art could indeed guide the world by providing insight to ordinary people. I sat down and watch the images unfold in the multitude of screen, each telling its own story then coming together to tell the same story like river collapsing into an ocean, the images constantly changing and merging together.


I had never appreciated avant garde art before and did not quite understand Paik’s work but I understood immediately the disorientation due to technology that he wanted to express, as I compared my job with its constant email alerts from automated programs, where people across the organization create tickets which zap through the ether into my inbox and which I need to undertake a sequence of actions corresponding to the message. I miss the old days when one meets people and talks to them and work through a problem, although that does not go away but one has to schedule meetings, book rooms create agendas before one could have a simple conversation with the aggrieved user like in the past. The job is bewildering, where one accelerates intake of stimuli which I rather like and one of my strengths so I am in an area of advantage. This allows to one have extracurricular activities like continuing my reading in history, art, finance economics and investment. It’s funny that one finds himself in fruitful circumstances where one has opportunities to invest in real estate and stocks which also produce stress with the desire to participate in the boom.