This will be the final post for this blog.
However! It’s not the end.
The blog will merely be relocating to ryangoh.wordpress.com
I’m exploring how to use the various themes and widgets there as well as working on a couple of things. Things have been going swimmingly well in my personal and investing life.
Please update your bookmarks!
The Singapore Department of Statistics (Singstat) released the 2010 census recently. This is the first statistical release comprising "Demographic characteristics, Education, Language and Religion".
I’m not sure how many people noticed this stat but I sure did.
In the age bracket ‘25-34 years’, 46.5% of Resident Non-student population has a University degree. (link here. Pg. 25, Table 2).
If the implication of that statistic and trend hasn’t hit you yet, then let me spell out what it means. It means that almost 1 in 2 young working adults has a degree. That also means that if you are a young working adult without a degree, good luck to you. Don’t expect to get a job that pays relatively well to the amount of work you have to do. Instead, look for a job that rewards you for your abilities and not your paper. (Ed: Ideally all jobs should be like this but we know that’s not true in reality.)
If you’re a young working adult with a degree, well…out of every 10 people, there’s probably another 3-4 more people like you. Therefore, if you haven’t already distinguished your degree from the other degrees, you’re probably better off following the path that young working adults without degrees should take.
What does this mean for our children (young or yet to be born)?
Of course, this means that our children will all have to attain some form of higher education as a base requirement much like how an O levels certificate was enough for our grandparents’ generation.
The smart thing to do, I think, would be to help your children develop an interest and continued mastery of a skill from the youngest age possible. It could be anything from being good at a sport, or music or bartending or cooking, baking etc. etc. (I’d pick investing and stock picking for my child but we’ll see how that plays out) but the idea is to have your child develop an interest the thing he’s relatively good at as early as possible and aid the development of that skill as much as possible. Why? After all, it’s been proven that the people who got best at what they do only got there by repeatedly working at what they’d like to do. (see Outliers by Malcolm Gladwell for this)
Also, in this age and day, where technology is breaking down barriers for collaboration, it makes a lot more sense to be really really good at one thing and collaborate with others who are good at other areas in order to create something bigger and better. If you’re good at that one skill, be assured that your skill will be sought for collaboration.
In short, the skills I think are necessary for the future are:
- A skill in a niche real-world activity (which combines a multitude of basic foundational skills)
- Collaborative skills (mastery of the necessary collaborative technology and people skills)
I’m not sure how true this is but I’ve been hearing that some old folks out there may judge a person’s potential better half based on certain external factors such as:
1) Type of housing- i.e. whether the person stays in a HDB flat or not. (For foreign friends, HDB refers to a public housing flat)
2) Educational level- i.e. whether the person is a university graduate or not.
3) Face shape and other physical attributes that may be considered ‘unlucky’ or undesirable.
My retorts:
1) Housing:
I can understand that some old folks may think that if someone comes from a family that stays in a HDB flat and if the person’s opposite number stays in a landed property, the old folks of the party staying in the landed property may think that the other party may have at least a partly hidden agenda in ‘loving’ the other. i.e. he/she is after the other family’s wealth or at least, it’s the easier way out to a more comfortable life.
That may have been true in the past but now, with some 80% of the Singapore population living in public housing, how can it be true that only poorer people live in public housing? After all, by definition, there are some 30% of the population living in public housing that are families that have above median wealth. Also, there is a greater trend of offspring of families that have stayed in private housing all their lives, moving into public housing as they start their own families.
So for those old folks that think this way and yet lament about how their grandkids don’t wanna get married, please figure it out already- the odds are against you.
Seeing a person with fancy and expensive stuff doesn’t make them rich, all you can tell is how much they’ve spent.
2) Educational Qualifications
Quite frankly, a University degree doesn’t mean a lot nowadays. There are plenty of private universities or overseas universities that accept most students. Furthermore, compared to universities in the UK or other parts of Europe where students do a ‘3 + 1′ for a Masters degree compared to the local universities which offer a ‘3 + 1′ for a Bachelors with honours, we seem rather shortchanged (although I hear the difference is cosmetic but advertising NGOs and MNCs seem to think otherwise)
I don’t really give two hoots about graduating with a Bachelors or Masters though. There have been too many examples of people without degrees turning out to be gems and people with degrees turning out to be duds so that says a lot about having these kind of qualifications. Case in point: the SLA deputy director who cheated 11.8m SGD of taxpayers’ monies.
A degree may pave the way but it certainly doesn’t make you walk it.
3) Unlucky physical attributes
No comment. Read ‘The Luck Factor’ by Richard Wiseman.
Superstition is costly.
For the investing public at least. This is way overdue but better late than never.
There used to be a very great forum for Singaporean Investors (at least for those investing primarily in SGX listed equities) called Afralug which in turn was an offshoot of the Wallstraits forum. Why was it great? It was great because of all the forummers there who contributed greatly to the investing community in Singapore. I personally learnt a lot about Value Investing there and the great thing is that the local examples quoted help to give practical examples to the theoratical lessons that one reads about in mostly American written investing books.
Unfortunately, Afralug went offline in September and never came back on.
However, the good news is that Afralug is back in a new incarnation with most of the valuable old forummers contributing once again. So head on over to ValueBuddies.
PS: Some of the old forummers like lark, koh_52 still haven’t signed up. Hopefully, if you read this. Please come back and share!
First, a trip to Universal Studios Singapore (USS) yesterday.
Then, a very good steamboat dinner tonight.
Nothing fancy, nothing too expensive and most importantly, with the right company. =)
Update (14 Sep 10): The Minister of State for Trade & Industry and Manpower, Mr. Lee Yi Shyan, has also weighed in on the debate. His reply, in full, can be found here. Basically, his take on Minimum Wage is that:
Also, saying that European countries with a minimum wage had average unemployment rate close to 8% doesn’t help much. Isn’t it a slap in the face by saying that countries with such high unemployment rate could be more productive than you? It just further shows that we were only growing due to throwing more (cheap) manpower at a problem. A short-term, quick and easy solution, no doubt. And anyone who knows how to calculate GDP can tell you how to do that.
You don’t need a million-dollar minister to come up with that.
Original Post
Prof Hui Weng Tat has sparked off a debate with his latest letter to the Straits Times in support of minimum wages. (link) As an out and out capitalist, my initial reaction was to protest against this train of thought. After all, isn’t textbook economics that setting a minimum wage imposes a price floor and hence leads to inefficiencies in the market? Apparently, I’m not the only one who thinks this way.
An article in the New Asia Republic by Christopher Pang has an even more attention grabbing title. "Min. Wage, Max. Damage" he claims. However, is it true of reality or merely confined to an academic exercise as Mr. Pang’s simple, textbook style explanation has demonstrated? I had to find out.
And then I found this. This paper has very good reviews of both past and current research on the topic and for those with lack of time to go through the entire thing, I shall highlight the more pertinent bits (in bold) of what it concludes:
While the findings of economists on the minimum wage are certainly not unanimous, the weight of opinion has clearly been moving toward a belief that the minimum wage improves the lives of low-wage workers without adverse consequences. Even, however, if the negative findings of some researchers were to be accurate, minimum wage workers as a whole would be better off, as the temporary losses of the few would be far more than offset by the wage gains of the many. The positive effects of the minimum wage are difficult to dispute. The minimum wage sets a floor for the value of work and lifts the living standards of low-wage workers.
So what made me change my mind? I figured that the textbook explanation could not be true if (a) so many countries have already instituted minimum wage and (b) so many academics have been working on the subjects. Of course, I found something else that was interesting. Here is a persepctive from a business owner (in the US):This last point help set the stage for our cases. I love hiring older workers at $5.15 an hour, and they love the job and line up for it. But what happens when I have to pay these less productive workers $6.00 an hour? What about $7.50? What about at $12.00 an hour? Here are some examples of what happens:
Case 1: The jobs just go away
Case 2: The jobs get outsourced to contractors
Case 3: The jobs get automated away
Case 4: Prices go up to customers
I’ve only put the main points here. He explains each case in greater detail on his site. What I found interesting in his response is ‘case 3′ and ‘case 4′. This is exactly a minimum wage would hurt if from the anecdotal point of view. If society is indeed on the whole better off as the data has shown, then I’m all for minimum wage.
The other reason is as mentioned in ‘Case 3′. A minimum wage makes investing in new technologies or more efficient equipment feasible as outlined by that guy in his post. I am all for this as it increases productivity. And it is precisely this reason that I’ve changed my mind about minimum wages. As we all know, most of our phenomenal growth since the late 80s, early 90s have been driven by capital expenditure or labour growth. Productivity growth has been alarmingly low. Policies have encouraged first, growth by taking on more capital and then subsequently in the last couple years, by throwing more labour at the problem. This has resulted in growth but this is what I would call ‘easy growth’. It makes for good short term performance but doesn’t really allow us to be more competitive in the long-run.
So if the data and the logic of the capitalist is right, a minimum wage could make society better off on the whole and also, probably with approriate government policies, encourage productivity growth through innovation. If so, sign me up.
Note: The New Asia Republic article was my wake-up call. It was easily a cut and paste job from an elementary economics textbook. Likewise, those who think that a minimum wage might suddenly spur more elderly or unemployed to take on jobs that foreign workers currently do, my first thought is that labour isn’t homogenous.
Very happily holding onto to my gems. No indications that they’re duds so far. At least, not at the prices I got them.
1) First REIT
2) Adampak
3) The Hour Glass
4) GRP Ltd
5) Viz Branz Ltd
6) Spindex Industries
7) Micro Mechanics Holdings
Disclaimer: Not an inducement to buy or sell. If you like to discuss the merits/demerits of any one of them. Please feel free to leave comments and I will respond.
“You can’t stay in your corner of the Forest waiting for others to come to you. You have to go to them sometimes.”
- Winnie the Pooh.
I particularly like this quote because it’s a nice reminder of how we stick too close to our comfort zones most times. Sure, stepping out of one’s comfort zone means being akward, messing up sometimes and in the process, one might even get hurt a little sometimes. However, if we never stepped out, we wouldn’t have found a lot of wonderful things either.
Always have the courage to step out but do so with the wisdom to know that it’s the right path to step onto.
I smell a hint of xenophobia in Singapore
Ok, maybe xenophobia’s too strong a word but there is definitely a sense of dissatisfaction with the amount of foreigners living and working in Singapore. I mean, if you hang around the Singaporean blogosphere, it isn’t hard to sniff out the discontent but my latest reinforced relevation came when a middle-aged colleague told me quite strongly,
"Ryan. You don’t know ah. Everyday you drive in your car to work so you don’t know but there are so many of them (editor’s note: referring to foreigners) that sometimes you don’t even know if you’re living in the Singapore anymore. I mean, it’s quite sad to think of how our country’s going to be."
This was quite shocking, not so much because of the arguments made, but rather that my usually meek and quiet colleague was quite vocal about this point.
Now, usually I hate to write about matters like this since they tend to be more socio-political in nature rather than economic or investment-related but it’s a matter that I’ve been thinking and reading quite a bit on and of course, how open our country decides to be will affect the economy at large too.
So, what’s my stand?
Let me state it here very clearly:
I am all for foreigners coming to Singapore to seek a better life as long as they play by the same rules as we all do.
I’m a firm believer in meritocracy. The best person for the job should do the job. If that person (be they male, female, Chinese, Indian, Malay, Caucasian, PR, New Citizen, Gay, Single, Married or even Disabled) can do the job cheaper, I’d hire him. If that person asks for a higher wage but can justify that wage level due to being marginally more productive, I’d hire him. It’s as simple as that.
What’s my beef?
The problem I have with my fellow Singaporeans spouting xenophobic rhetoric like ‘Send them all back to China or Malaysia or wherever they come from!’ or ‘Ban PRs from buying HDB flats!’ is that it sounds like someone owes them a living for being born here. Spouting rhetoric like this is like going to a 100m race that’s being held on our home turf, having competition that you can’t beat and saying, "Hey, I’m Singaporean. You should let me start 20m ahead."
I’ve heard arguments of implementing a minimum wage so that currently low paying jobs would become more acceptable to Singaporeans. That way, we wouldn’t need foreign workers to come in and do jobs like hard labour in construction, making coffee in the kopitiam, clearing rubbish or sweeping the roads. One thing to note is that if this is done. There will most certainly be an increase in the general price level. So yea, your wages go up but your cost of living goes up too. Does that make you better off?
Some might say that if we had a minimum wages and therefore less reliance on foreign labour, that fall in demand might offset the rise from increase in wage level. Debatable but even if we assume this to be true, then you would probably not see things like ION orchard, the Marina barrage or other such things being built. Would society be better off without these things? Maybe? But tell that to the crowds I see at these places (and don’t tell me everyone there is a tourist, you know that’s not true).
The way I see it
Complaining or ranting doesn’t solve any problems in the long run. We shouldn’t be asking the dealer to reshuffle the cards we’ve been dealt with. If you feel the dealer is being unfair to you, please play the game elsewhere or request a change of dealer the next round. Otherwise, please use your skills to play your best hand and get your best payoff from the game. We shouldn’t be allowing others who have got a better hand to be denied their chance at winning this round.
In case the above analogy is too abstract for some, what I’m essentially saying is that, if you don’t like the current government policies, vote for a candidate likely to represent your ideals when the elections come around. For me, I’d rather prefer to hone my skills at playing the game of life. If you aren’t happy with the wage you’re earning, think of how you could earn more money. This usually involves getting a better paying job through increasing your qualifications or finding better ways to do the same job and get your boss to recognize this fact, learning how to invest wisely, cut back on unnecessary expenses, moonlighting or even establishing some sideline.
In case, anyone thinks that’s impossible, I like to quote to examples that I personally know of.
Case one, there is a young guy that I know of who is only in his mid 20s but has a $150,000 portfolio of assets. He didn’t get an inheritance nor have rich folks to back him up. He did it by working damn hard (and he still does) as a tuition teacher while studying for his degree. And I understand he did this even while being attached (which once again, emphasizes the importance of finding a right partner in life).
Case two, a personal friend of mine comes from a single parent family. From young, her mother worked very hard to raise two children. My friend made it through university and is now a teacher. My friend, who comes from a single parent, low-income family made it through university on study loans and all and effectively boosted her family income from something like a $1,000 a month to at least $4,000 dollars a month. They may not qualify as rich but it shows that adversity can be overcome. How one overcomes that adverse circumstances, I don’t claim to know. All I know is that it isn’t impossible.
If we bother to stop ranting and think of a better way out of it, that is.
Recently I’ve become more involved a personal project that has potentially far-reaching implications on my life. This has led me to understand a lesson that I’ve been taught but never really understood. In essence, it is a fight of ideals. A struggle between theory and empirical evidence.
First let me illustrate the situation and my thoughts that led me up to the situation I’m in. It all began in March 2008…
March 2008
The economy as most people know by know, began experiencing its worse slowdown in years. For me, as a bright-eyed, know nothing student saw the signs as far back as August 2007 when several financial commentators that I follow were commenting that the housing bubble in the USA, leveraged by arcane instruments of finance that not even those who created or sold them understood fully, was about to pop. The slowdown in the markets beginning end 2007 cemented this viewpoint and I, an amatuer student in the markets and economy, wasn’t about to disagree. So what did I do?
I diversified. I reasoned that there was no sense in competing with thousands of other bright graduates for a job in the very sector that I loved reading about but not participating in. Along the way, a job in a totally different sector and offering a decent enough pay came along. I figured, ‘Hey, why not?’. After all, it would buy me time to ride out the crappy economy, build some capital for investing and also, allow me to work on gaining more recognized accreditation and knowledge.
Today
After two-plus years, I’ve seen the stock market pick up, the economy get better and my life has pretty much played out the way I expected- unspectacularly.
The fire within me burns. The good thing with diversification is that it provides the steady returns with minimal risk. That is it’s very intended effect. The downside is that ‘a jack of all trades is a master of none’. After all this time, I seem to have become a Jack. A master of none.
While others have focused on building something upon something, I’m still at ground zero for many things. I’m not saying that I’ve gained nothing of value from the job. In fact I’ve gained many wonderful things that have enriched my personal life from being on this job. It just seems that professionally, my life seems to be not much further off than when I first graduated.
It’s entirely my fault of course since this is the path I took based on the reasoning I had but I guess it wasn’t entirely bad. I experimented and got the results that taught me a lesson. If you want to get something, you have to pursue it wholeheartedly. You have to put all your efforts and thought into it. Only pursue something if it can act as a catalyst to propel your aim to greater heights.
Overemphasizing risks is for insurance agents to sell.
Fighting fear, not running from it, should be a daily activity.
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