Wednesday, December 6, 2017

What will I do after achieving Financial Freedom (part 1)

This post is a response to La Papillion's most recent post (see here). Now I am starting to think twice whether is it a bad idea to respond to his post. I have plenty of thoughts concerning this topic and I think it would be quite difficult to form it into a coherent whole.

I think the most important thing is to know why you want what you want. Not many people are able to sufficiently distill their raison d'être and clearly articulate it to others. Personally, I struggle with expressing my worldview to others. It always end up not coming out the way I want it to sound.

People generally encounter obstacles in the first phase. They live their life without careful reflection, unconscious to the fact that there is another realm of existence that they have not considered before. The closest illustration that I can whip up on the spot now is to invoke Edwin A. Abbott's novel Flatland. In Flatland, there are various creatures that live on different dimensions. One fine day, Sphere, a 3-dimensional creature, visited the 2-dimensional world. A Square, a 2-dimensional creature, failed to grasp the realities of Sphere and the 3-dimensional world in which Sphere belonged to. When A Square had the chance to visit Pointland, the 1-dimensional world, he experienced the same frustration of trying to communicate his reality to another being who is unable to shift its reference point to that of another. (Actually, Plato's Allegory of the Cave could also be used here).

Why does this happen? A fundamental shift in cognition is jarring. It forces the individual to confront the most basic of questions: What is the meaning of life, what am I here for, and what do I want out of it/how do I lead my life. Fortunately, many do not need to ask themselves these questions. Life is somewhat structured in a manner that they could engage in various activities without thinking through why they do what they do. Often, it is society and the people around us that shape us to live this way. This is not wrong. In life, we are inundated with all sorts of pressing deadlines, urgent concerns, and just plain noise that distract us from contemplative introspection. We need to sit down and craft out a coherent worldview that accommodates the potential scenarios that life could throw at us, and our prioritization of what do we want to make out of life. Not doing so is like being a driftwood out at sea, bobbing wherever the waves take you.

Being a driftwood is dangerous. From what I have observed, there are some who mistake financial freedom as the be-all and end-all. Financial freedom is not a panacea. It does not generate meaning. Meaning has to be self-generated, else the person could just be an empty husk post-financial freedom. A hollow being that seeks substitutes after substitutes to patch what they deemed to be lacking in their lives. SMOL and Wall Street Playboys have emphasized this fact multiple times in their writings. A downward spiral could occur for those unprepared to manage this. Wall Street Playboys highlighted some vices that people who have "made it" gravitate to. In SMOL's comment to STE, he highlighted male seniors who go around as auditors of mystical garden assets.

I shall try to attempt to articulate what I want out of life; how I can convert what I enjoy doing now to what I could potentially do when I am financially free. Of course this is susceptible to change. Whenever we reach some sort of milestone, we readily redefine who we are as a person and look for avenues in which we could further develop as a person. This is growth.

Family and Friends
I am highly introverted, hence low amounts of social stimulation would suffice for me. I aim for quality, not quantity. At this present moment, I am blessed enough to recognize that I have abundance in this area.

In terms of family, I am very close to my mum. With or without financial freedom, I am spending quite a lot of time with her. To some extent, this will mitigate any deathbed regrets of "what if", "if only", etc.

I have a few good friends who watch my back. We mutually support one another. They are not perfect, and neither am I.

When I studied a module on Developmental Psychology in my undergraduate days, the Socioemotional Selectivity Theory really gelled with me. As people age, they gravitate towards people in their inner circle. They know who matter most to them and prioritize these individuals over everybody else.

Do I know who I value the most? Do I know who belongs to my inner circle? As my inner circle, do I accord to them a higher priority than frenemies, fair-weather friends, and acquaintances?

Would how I treat my inner circle significantly differ from pre-financial freedom to post-financial freedom? Generally, it is okay, but it could be better.

To throw a spanner in the works, what if all my family and friends died in a catastrophe? Theoretically, my spiritual core will mitigate this to some extent. In fact, I might challenge myself and use the amount of time taken to bounce back from the adverse event as an indicator of my spirituality. Second, to borrow concepts from personal finance/investing, I should practise some sort of socioemotional diversification and socioemotional energy allocation. I am open to the possibility of developing greater friendships with others who are currently not part of my inner circle but have the potential to be part of my inner circle and have reached out to them (I think this is one example of INTJ personality type trying to "optimize friendship.")

Interests, hobbies, and the like
Ho, ho, ho. I think I can write a lot here. But for the sake of my reader's sanity, I shall attempt to keep it brief. Unlike LP, I classify spirituality with meaningful work together, as they intertwine together in my life. As meaningful work is something that I am genuinely interested in to do, I classify it under the overarching category of interests and hobbies.

In one of my recent post, I shared that I enjoy my vocation as a noob-level researcher. Hence, work, to me, is something that I find interesting and actively engage in. Well, that is not 100% true. There will be politics at work, workplace stressors, and certain pointless stuff that I need to do because that is "how work is structured" (As a Social Science Researcher, why should I waste time commuting to work, access journal databases that could also be accessed at home, write stuff, and waste even more time to commute back home? A better alternative is to permanently work from home, unless there's a need to head back to the office) that mildly annoys me from time to time.

After achieving financial freedom, I would still prefer to work. I would like to keep myself cognitively active, soak up ideas from brighter minds (there's plenty, especially in research), bounce off random ideas I have with these individuals (maybe I should do a separate post on the random research topics I have in mind?), and experience a sense of achievement from doing well in what I am interested in.

My research interest is in <censored> psychology (censored because with all the information in this post, it will reveal my true identity). I have moderate interest in the Cognitive Neuroscience branch of Psychology and Quantitative Psychology. I have taken a module on the former in my undergraduate life and I enjoyed it. As for the latter, I am occasionally reading up on it in my spare time to challenge and entertain myself.

Outside of social science research, another vocational path which I am interested in is data science. For this reason, I have taken up R programming. Regular readers would know that I have written multiple R scripts on my older blog posts to help me with some routine investing tasks  (e.g. stock correlation computations, dividend yield trend calculation). Depending on how you see it ("fun" or "boliao"), I have done some sentiment analysis on my WhatsApp chat with financial blogger friend, Rolf.

If I were retired, I could also consider working on some side programming projects that I am interested in but lack the time and expertise to do so. For example, developing an actual investment app that I can use. Quite shiok what! I will know what metrics I want and how I exactly calculate those metrics. In the process of developing the app, I would learn plenty of nifty stuff from back-end databases to front-end user interfaces, etc. Learning more about text mining would be good too. That way, I can parse selected data from financial reports automatically. For fun's sake, I have also thought of some sort of "wisdom harvester" to summarize the wisdom of Uncle CW, Uncle Temperament, and SMOL from their respective blogs. :D (have yet to think of the actual mechanism though; I only possess a rudimentary grasp of text mining).

If my readers have noticed, the specialist diplomas I have taken do not relate at all to my work. I signed up for them out of interest. I could argue that it links back to my work, but such an argument is, at best, tenuous.

In my second specialist diploma, I played around with microcontrollers such as Arduino. I have also thought of growing my own food at home. It's not to "save money" or what not. It is just something that I want to try. Then one day, it struck me that I could combine electrical/electronic engineering (Arduino) with growing my own food at home. Automating the watering of crops, temperature measurement, soil quality measurement, etc. Learning about these two fields and integrating them together could occupy a huge chunk of my time already.

In my current specialist diploma, I learned how to better optimize the presentation of myself online. I'm a hobbyist blogger, but if I ever want to commercialize my brand, I could do so (Nah!). Most entertaining is to understand why certain optimizations work and their underlying mechanics. A whole new world, really.

Oh! Right, I almost forgot about personal finance/investing. So far, I am enjoying all the readings. My analyses are still pretty superficial and it could be developed further. Let's just say that I screw up my investing journey totally. Like, I get a 0.01% annualized return over the next 30 years. Would I engage in counterfactual thinking where I convince myself that I should have spent my time on more productive outlets? Not quite. I still managed to learn valuable skills such as how business owners think by reading between the lines, hone my bullshit-detector, etc.

As much as I try, I still fail to summarize what I want to do post-financial freedom in one blog post. Stay tuned for part 2 (most likely there might be a part 3, 4, 5, etc). Do note that I have yet to get started on other non-bookish hobbies yet.

tldr: Unintelligent Nerd has plenty of interests he could pursue if he has achieved financial freedom. He can do a successful job of Ownself Entertain Ownself. He will list some more interests in his next few postings.

Monday, December 4, 2017

A Quick Analysis of Société Bic

A couple of months back, I was looking through the consumer staples sector and I came across Société Bic that is listed on the Euronext Paris (EPA). For those unaware, EPA is the French stock exchange.


Société Bic is a company that sells stationery, lighters, and razors. I personally have come across the ballpoint pens that the company sells. I don't think I have come across the other two product categories which they carry. What I liked is that the company is not dependent on any one category of product; their revenue sources are quite diversified (see screenshot below) and demand for their products are generally stable.



Fortunately for non-French speaking individuals like me, their investor relations page and other documents are in English.

According to their 2016 annual report, the reported revenue and net income is €2025M and €249M, respectively. Compared to their 2015 financial performance (revenue: 2242; net income: 325), this is a drop of ~10 and ~23 percent, respectively.

Is this concerning? At a superficial level (because I have yet to dig deeper into this company!), it does not appear to be the case. From my screen capture below, revenue and net income seems to hover around the same range.


With the exception of 2015, earnings per share remains within the 5 euros range. Dividend-wise, the company increased the amount of dividends distributed in 2016 even though EPS declined in 2016 (see screenshot below). Correspondingly, the payout ratio increased.


I've taken a quick look at the trend in numbers of shares outstanding for financial years 2014 to 2016. The change is minimal.

I like their balance sheet as the company has no debt.

Cash flow from operations is healthy. Their main business of selling stationery, lighters, and razors generate cash flow for them. After taking into account capital expenditures, the company has shown positive free cash flow over the years.

According to Morningstar's website, the PE trend is starting to become more attractive.


As I am yield-focused, Morningstar shows that Société Bic is currently trading at 3.6% yield. Using my R script (see here), the chart shows that Société Bic could yield up to ~5.75% (based on what happened during the Great Financial Crisis).


Not vested as my inclination towards small positions, coupled with custodian fees, transaction charges, and taxes would put me in the red (even after considering dividends received). -.-"

Saturday, December 2, 2017

Free course for Temasek Poly Alumni

Just a quick post. Don't say Unintelligent Nerd bojio when there's free lobangs.

Apparently, Temasek Poly Alumni are entitled to redeem one free SkillsFuture Series course (see here for details). The course has to commence within the period of January to December 2018.

Sunday, November 19, 2017

Working for Free/Working for Entertainment

It has been quite some time since I've last blogged. My specialist diploma programme is now underway and I'm taking a breather now that I have completed most of my project work. In the course of my studies, I came to re-confront my naivety because of something my lecturer shared with the class.

I have not really shared this in detail in my blog before. Why am I investing? Is it a means to escape the rat race?

Nope.

I have always been enamoured with the life of a researcher. What joyous fun it is to spend my days theorizing, thinking up of experiments, and observing whether my hypotheses are able to stand the test of scrutiny. It is fun to read journal articles and learn how better minds think. The nuance in their thinking. The way they communicate their expertise. Their mastery over one or more fields and their octopus-like capability to draw insights from one domain to enrich their knowledge in another domain.

Well, that's how it is.

Until I realized in my undergraduate life that there are folks who are able to pursue what I want to pursue with absolute ease. These are your rich kids......and there's quite a handful of them in my field. As is often the case, their parents are public figures, business owners, or high-ranking executives.

After some time, the green-eye monster reared within me. I rationalized that because of their wealth and connections, they are easily able to go much more further than me. I rationalized that they are able to get job experience faster because of pa and ma's help. What I did actually have evidence of was that these individuals work for free in some cases. Money is of no concern to them. For some of these less-than-remarkable rich kids, a "job" is just a plaything to them. For the other group of highly-motivated, high-achieving heirs of elite parents, a "job" is an entertaining avenue for them to collect achievements and beef up their resume to the stars.

I could not recall how I stumbled onto investing. All I thought of back then was that income investing could even the odds in my favour. It seems viable. An alternative income stream, so to speak, to prop myself up if I return back to school as a full-time student, or in the worst case scenario, to work for free doing the things I liked best if enough high-achieving rich kids flood my industry and "spoil market" and work for free.

What really was drilled into my head is that I am too naive. Heirs don't flock to the social sciences only. They do open businesses that bleed cash flow. Wait! What? Well, they are passion projects with income support from their "sponsors."

Financial engineering. Much.

Monday, October 30, 2017

Random thoughts on various subjects

It has been quite some time since I've last blogged. My life has been a flurry of activities since my third specialist diploma programme commenced around two weeks back. So far, lessons are interesting and challenging. But this time round, there is more internal turmoil within me. Intrinsic motivation is somehow quite diminished and it takes considerable effort to muster my energy level. I guess I must be quite burnt out.

I have been accumulating blog topics in my mind. As I am not able to expand on each individual idea to a full-length blog post, I will be using this blog post as a cathartic tool, so don't mind the hodgepodge-ness of the topics.

1). I have always thought that investing in a private company (be it equity or debt) is quite cool. Before learning about investing, I wonder how people are able to source out such lobangs and participate in them. These opportunities seem to be more arcane and alluring, more so than their publicly-listed counterparts. Is it alluring because such opportunities are rare for ordinary folks like me? I guess so.

You could create a brokerage account and plonk in some money on publicly-listed entities. However, you can't do that for private companies. You need to know the right individuals before doing so.

A couple of weeks back, I was given this opportunity to invest in a private company's debt. Nope, I did not invest.

Looking back, I am quite surprised at my nonchalance. I would have expected myself to be quite eager for such opportunities. Former yield-pig me would surely have been tempted by the 18% per annum yield. Now? I know such yield is fraught with potential dangers. Further, it will eat up 40% of my war chest. Plus, I do not know much of the industry.

2). Opportunities come to those who are prepared. My team at work has expanded significantly. One of my new colleagues shared that a friend from another research cluster is looking for a freelance IT guy. As I am the "residential IT guy" (am I? data analyst/researcher = IT guy?), I was offered this opportunity. Well, the remuneration is worth salivating (1.5 years my salary), but I know I am not up for the task.

My existing colleagues were quick to hop on the bandwagon once they heard about the remuneration package. They thought I was up for the task and wanted to freeload on my effort. Visibly disappointed after learning the truth, they commented that the IT industry is highly lucrative and is something worth learning. Oh really?

I started learning R programming approximately 3 months before starting to learn about investing. That's like exactly 3 years of hard-knocks, frustrations, and banging my head against the metaphorical wall. And I barely scratch the most superficial surface of statistical programming.

Well, some people think they can suka suka learn IT and earn millions. Not easy bro/sis.

3). Compared to other industries, I find that the social science sector is quite forgiving and familial. Yes, there are still subterfuge and covert operations, but, generally, the environment is quite benign. I have seen my fair share of workplace shenanigans from fellow millennials. In other sectors, these shenanigans would get them either blacklisted or fired.

Hence, it came as a surprise that an individual from my previous company was terminated from her job. Her misdeed? She and another colleague was caught sleeping at their desks during lunch hour by the guy who sits at the top of the organization chart.

Meanwhile........other millennials such as my existing colleagues remain utterly in the dark as to what could potentially happen with just a single misstep at work........

4). The silver lining is that said lady who was terminated was saved by my boss. There was an opening in my current organization and my boss roped her into our project and assigned her under me.

I do not know what to make of this. In a way, this is also an indication that I am progressing in my career, right? An added responsibility (first time for me, in fact) to learn how to manage people that is under me.

Then and again, aiyo, I'd rather much do my own work and mind my own business. But I'll rise up to the challenge and take it in my stride.