Saturday, July 23, 2016

The risk of trading

Dear Mr. Tan
I have attended your financial planning talk previously. Recently I took an interest in trading, having read many successful stories of Singaporeans getting rich within a short time. It does sound doubtful, moreover I have zero knowledge of trading. However I came across this article in straits times online which reads our yet another success story.

I can't say I'm not interested. I have registered at their site but have yet to verify the account and start trading. Their registration costs $250, and the site asks for verification photo taken of personal ID in addition to credit card details and home address and phone no. I am wary of this as I'm very new to it. I would like to seek your advice on trading. Is it advisable?


Trading is just like gambling. Sometimes, you win, sometimes you lose. But the chance of losing is higher, as you have to pay for the expenses of the people running the trading platform.

If you trade on a platform, you also face an additional risk that the platform may "cheat" the customer, or put pressure on the customer to engage in more trading activities. You need to be sure that you are using a reliable platform. I do not know the reliability of


Obama - disappointing legacy

Mr. Tan,
I find President Obama 8 years as President to be quite disappointing. He was appointed in 2008 on a platform of change. He promised to change the way that the government worked in Washington. He promised to fix the gridlock. He received overwhelming support. The Democratic Party won over control of the House and the Senate.

He did not carry out is promise. Congress in Washington continued to be gridlocked. He was not able to pass through the reforms that he promised. His Affordable Care Act, also called Obamacare, was passed through in a watered down version. It was a big disappointment.

The mid term election in 2010 saw the Democrats lost control over the House. They lost control over the Senate in 2012.

After that, President Obama virtually did nothing. He spent the rest of his time giving speeches - he is good at that - but nothing else.

The Affordable Care Act was not great. It lead to further increase in health care cost. The Republicans all wanted to repeal the Act when they have the chance.

It is so sad that Prsident Obama did not leave behind any legacy for people to remember. During his term, there was a big increase in violence - senseless shootings and now shooting of the police officers.

What are your views?

I agree with your assessment. I am also disappointed that he did not achieve much during his 8 years are President. Although the employment figures had improved, most of the new jobs were low paying, part time jobs. The income disparity continued to widen.

Many ordinary workers are now against the establishment. They went for Bernie Sanders and Donald Trump.

Shape Quiz Puzzle

Someone sent a message to me through WhatsApp, He is interested to buy 130 pieces of this puzzle. I gave him a sample before and he found it to be interesting. He will get a good discount for this large order.

Resilient stock markets

The US stock market is now at a record high. The fear over the UK exit from Europe is over. The UK stock market has also recovered. Looks like the global stock markets are resilient.

Learn to be an expert underwriter

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All the best.

Friday, July 22, 2016

100 problems to be solved

Our elites in Singapore are excellent in identifying problems, especially exotic ones. But they are quite poor in finding solutions to the practical day to day problems.

I saw this document that identified 100 key challenges facing the financial technology industry. I was shocked - 100 problems. What has the people in charge been doing these past decades? Just sit down and worry about the problems?

Many of these problems have solutions that can be implemented immediately. But they required somone to take charge and to make the judgement.

Money laundering activities

Three banks in Singapore, DBS, Standard Chartered and UBS, are cited by the Monetary Authority of Singapore for lapses in the monitoring and reporting of transactions that are suspected to be money laundering. See this report.

I understand that banks also have to monitor transactions that are linked to "financing of terrorism".

Frankly, I do not blame the banks for these lapses. I blame the MAS.

It is easy for MAS to tell the banks to monitor and report "suspicious transactions" but what are these transactions? How are they to be identified? Does MAS take the lead in guiding the banks on this responsibility?

It is easy to know that certain people are involved in money laundering or illegal activities after the facts are known, and then trace their transactions. It is difficult to know that these people are suspects in the first place.

In their blind attempt to implement these regulations, banks have resorted to ineffective practices of spending a lot of unproductive time to monitor ordinary citizens opening bank accounts, I have to spend two hours to open two bank accounts just to place a fixed deposit. This is ridiculous.

If MAS really wants to tackle the roots of the problem and to have a more effective monitoring system, they have to take a different approach. Here are my suggestions.

a) Allow people to open bank accounts without the unnecessary hassle.
b) Require banks to ask for the reason and source of funds for transfers that exceed a threshold per transaction and for each month. These transactions are to be reported to a central database managed by MAS
c) Require banks to report transactions made by certain persons who are on a blacklist maintained by MAS in the central database. These are people who are suspected to be linked to money laundering or financing of terrorism.

This monitoring and reporting will involve the collection of large volume of transactions. MAS can implement algorithms to monitor these transactions and identify those transactions that need to further investigated.

The problem can be dealt with more effectively, if MAS takes the responsibility. Will they?

Thursday, July 21, 2016

Huge spending on transport infrastructure

Public transport infrastructure has cost the government several billion dollars. Here are some figures that come to my mind:

a) Bus Service Enhancement Program $1 billion
b) Purchase of rolling stock from SMRT - $1 billion
c) Privatization of SMRT - $1 billion
d) Satelite based ERP system - $556 million.

When it comes to new MRT lines, it is  $10 to $20 billion for each line.

$1 billion here, $1 billion here. $10 billion here. $10 billion there. We are talking of billions not  hundreds of dollars. This government spends billions as if they print money.

Actually, they print paper COE and collect billions (it is $5 billion in a year). That is a wonderful mechanism. The only problem is - it is wasteful, jacks up the cost of living and the cost of doing business.

No wonder. We are now the most expensive city in the world.

Difficult to create a PIN in Krisflyer website

Singapore Airlines has a badly designed website. I had a lot of problems with it many years ago.

Recently, I have to register a Krisflyer account for my wife. The nightmare came back again.

I went through a very painful process to register a PIN. After many steps, it showed the following CAPCHA. I could not read it. When I tried to change it, it rejected my entry.

I tried a few times. After passing through the CAPCHA, it told me that my PIN is invalid. What is happening? I was just trying to create a PIN.

After going through this painful process for half an hour, the website told me that I am locked out. I have to come back in 24 hours time.

Why does Singapore Airlines designed website that is difficult to use. It is troublesome even to create a PIN.


Later, I realized how I got confused.

At the webpage, I was asked to enter the Krisflyer No, date of birth and email address for confirmation. I was then given a difficult CAPCHA.

I was then brought to another page which asked me to enter my PIN. I thought that this was the PIN that I preferred to use.

I just learned that they had sent a temporary PIN to my email address and I should be using that PIN. They should have made it clear.

I had a lot of problem with their website five years ago. I still have a lot of problem with it today.

Wednesday, July 20, 2016

CNN report on the Republican convention

Here is CNN's report on the Republican Convention. Wow!

Donald Trump claimed the mantle Tuesday as the Republican presidential nominee, capping a stunning rise to power for his insurgent campaign as a boisterous showing by his family and friends revived his convention after a rocky start.

Chris Christie, shaking off the disappointment of being passed over as Trump’s running mate, performed a show trial of Hillary Clinton, whipping the crowd into frenzied chants of “Lock her up!”

Trump’s son Donald Jr. sketched a portrait of his father as a champion of the working man who could unleash America’s potential. His half-sister Tiffany offered a more tender and less familiar view of her father.

We need a different approach to run our public services

The following qualities are required for top management to run a big organization successfully:

a) Motivation
b) Competence

Some leaders, including our Singapore leaders, thinks that the best way to motivate a top manager is through an attractive remuneration package. They think that self interest, or greed, is the best way to motivate top management. This is also the approach taken in big international corporations.

They overlook the flaw of this approach when it is exercised in a near monopolistic situation, such as the delivery of public services in a small country. It is easy to generate large profit for these businesses by taking advantage of their market power or by cutting cost to deliver a poorer quality of service, such as over packing of trainings or hospital wards.

A better approach for the delivery of public service is to find top managers who have the passion to serve the public good and the public interest. There are many capable people with this kind of motivation that can be found in any society. They are motivated by public interest, rather than personal greed.

Is it possible to find competent people who are motivated by public interest? Can they run the organizations efficiently, provide a good quality of service and keep the cost at an acceptable level?

The answer is "yes". The managers can be measured based on performance other than the maximization of profit. Most workers are measured on their ability to meet the requirements of the job, rather than the profit that are generated. The same approach can be applied to the managers of public owned corporations.

It is appropriate to apply the private sector approach for businesses that operate in a truly free market where there are many suppliers and where consumers have the ability to judge the quality of the products and services that they buy,

The big problems faced in Singapore is that our government leader adopt the private sector approach for the provision of public services that have monopoly power. They encouraged the top leaders to maximize the profits of these "private companies" and their own remuneration package, and do not realize the long term damage that has been caused.

The problem with SMRT is just an example of this flawed approach. It also applies to other sectors of the economy. It is time to rethink the approach to run these operations.

Make SMRT into a state owned corporation

Is it a good idea for Temasek to buy out SMRT and make it into a state owned company?

My view is "yes". It can be a state owned company and operate in the public interest. It will avoid the conflict of interest that is now inherent it its business model.

Tuesday, July 19, 2016

A complicated process to open a bank account

I visited Standard Chartered Bank to open a bank account for me and one for my wife and to place a fixed deposit on the Krisflyer promotion.

A customer relations officer spend two hours to help us through the complicated process.

The bank does not expect their customers to open the bank accounts online, as it would be too complicated. A counter service is still needed. The bank has found it necessary to provide this personal service.

Similarly, government agencies such as ACRA, Ministry of Manpower, Central Provident Fund and IRAS should offer this counter service, as their online website can be daunting.

Why should it be so complicated to open a bank account? This is a separate matter. I think that the process can be simplified considerably. The banks (and perhaps MAS regultions) are making it far too complicated.

I know that banks have to implement international regulations against money laundering, but there should be better ways to handle it rather than the complex paperwork!

Difficult to register a new company in ACRA website

A friend wanted to set up a new company. He had a lot of trouble with the ACRA website. He asked the ACRA staff if it is possible for him to visit the ACRA office and get the procedure sorted out with the help of the staff.

ACRA staff said that they have stopped the counter service after the launch of the new ACRA website.

ACRA should take note of the following:

a) Their staff handle the ACRA process every day. It is easy for them to know what to do, and is necessary, what is not necessary and what needs to be done.

b) The public is not familiar with their website and their registration process. It can be extremely painful for them to read tons of "how to do it" pages and still get lost.

c) ACRA should continue to provide the counter service for people who are not familiar with their complicated process.

I hope that ACRA and other government agencies realize that their online process can be quite difficult for the public who do not use their service regularly. They should provide an option for the public to use their staff who are familiar with their process.

High Speed Rail between Singapore and Kuala Lumpur - another step forward

Someone observed that it took three years of discussion to reach this stage of signing the Memorandum of Understanding. He observed that it was too long.

My view is that the time was not long, considering the need to do engineering studies and to estimate the cost and viability of the High Speed Rail. There was also the need to work out the respective shares to be contributed by the two countries.

Looking forward, the question is: Will this railway be feasible? I think so. In many countries in Europe, the railway is an important mode of transport.

Is budget airlines a better way to connect Singapore and Kuala Lumpur and other cities?

The asnwer is - we need both options. Where it can be connected by land and there is heavy traffic, railway makes a better option. But where it has to fly over mountains and oceans, and the traffic is light, airlines is a better option.

All the best to the Singapore KL High Speed Rail. I hope that it will soon connect to Ipoh, Penang and Bangkok.

Monday, July 18, 2016

An excellent marketing approach

The account manager of the Job Central Portal sent an email to me, showing the details of their services.

I replied to him asking him to call me on a specific date and time. He did. We had a good chat about his services. He explained what was available that might suit my business.

I told him that I will bear him in mind when the need arises in the future.

Here are the things that he did right:

a) He sent an email (instead of interrupting me with an unexpected phone call)
b) He called me at the appointed date and time
c) He explained the services offered by the portal and identified which service might suit me.

Congratulations to the account manager and the Job Central Portal.

Many other businesses engaged telemarketers who call me without any prior appointment. Usually, the call interrupts me at my work. Often, the telemarketers are based overseas. When I hear that it is a telemarketing call, I said immediately, "Good bye" and hang up.

Sunday, July 17, 2016

Complicated bus guide

I saw this bus guide at the bus stop in Stamford Road. It is extremely complicated to read. This guide has been used for over five years. I wonder if the Land Transport Authority has received feedback about this guide?
I hope that they will change it to be simpler for the public to read.

Difficult to read the name of the bus stop

Can you try to catch the display at the front of the bus. It tells you the name of the next stop. But it is interruptted by the message "Please move to the Rear" and "Bus Stopping". I hope that SMRT will change this display to allow the passengers to see the Bus Stop No or the name of the bus stop.

Digital display - SMRT bus

There are two digital display in SMRT bus.

The front display shows "Bus Stopping" and "Next Stop (name of stop). Please move to the rear".

It is difficult to read the (name of the stop) because it is moving and is pushed off the the screen by the "Please move to the rear message". Anyway, the (name of stop) is not helpful. For example "Blick 456".

The rear display was recently installed and shows "Bus Stopping".

It will be more helpful if the display shows "Stop No XX. Bus stopping". The XX is the sequential stop number.

I hope that SMRT will take this feedback and implement a simple change. Perhaps the Land Transport Authority can encourage them to improve the sign?

Get a reasonable return on your investment

Most people get a poor return from their investment because they invest in the wrong investment. In some cases, they invested in scams.

The best way to get a reasonable return is to avoid the scams. This is how you can achieve this goal.

How to win the business simulation game

This document explains how you can win the business simulation game.
The game can be played here:

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