Posted by: donmihaihai | October 18, 2008

Secured, envy, scare and Taipei.

What a week. Everything in stock market has no value, only cash do. It appears like everyone is selling into cash. There is don’t need to value the stock or calculate the intrinsic value, because if something is cheap or so call defensive, it still get sell down. Now this make me recalled one of my previous posting title “Apple Days”, quoted from “The House of Morgan”. It said something like, “Downtown real estate was so depressed that building companies defaulted; astute investors who bought their bonds become the future owners of Wall Street.” With each increasing day, I am feeling increasing secured. It seem like I have passed one of the biggest test in term of psychology. I am in Taipei now and the thought of this posting began when I was at the top of one of the northest mountain top, Windy cloudy and cold but I was smiling. And I committed one of the worse sin — envy.

I envy WB. I envy Bruce R. Berkowitz. I do not envy WB when he was sitting on US$30 to 40 billion cash with little to buy. But… I want those billions now or like Bruce R. Berkowitz having 1/5 of its portfolio in cash. With these cash, I can buy companies selling not just at a discount to their infrasonic value but at prices that suggesting that they are insolvent. Paying distressed price for a healthy company? What an investor dream.

On hindsight, I should have build my portfolio with big cash cushion or at least start selling when at the beginning of the bear market. Looking at this financial crisis where runs becoming increasing common on whatever kind financial institutions, it is like chaos theory where everything are not being line up but just keep triggering and the richer scale keep increasing, from an earthquake of 6 to 7 to 8, keep continuing. To me, at each turn, it erupts bigger as it seems to becoming better. There is no way to predict how big this is going to be.. unless of course hindsight.

Here come with the problem, when a stock is selling at a wide discount to it intrinsic value, I must not purchase it because I think that the price will drop even much much further? What happen if the market simple just turn for the better(of course, now I know it did not) then I will be committing one of the biggest errors of omission. Well, what happening right now doesn’t not happen often. Other than now and Asian Crisis, or perhaps some smaller one when are we witnessing this kind of runs that spread from countries to countries? Not even WB or CM as they both live more than 3/4 of a century.

I may think about the cash portion but I will still say, I envy them now but I do not envy them when they are sitting on billions of cash. And I don’t have load of money.

I am scare. I am scare because I am going to look for job soon. I stepped out of school fresh as Asian Crisis and Technology bust, now, almost 10 years later I am going to be out of job when this crisis is at full blown… Anyway, life is not bad as this time I am more prepared. Like stock market, I can’t predict what going to happen but I can prepare myself.

Last part written in Singapore.

Taipei, a country of mountains, air pollution, chaos and Taipei’s meimei. Young Chinese lady riding a small scooter is a common sight, it is part of Taipei. That is the same for carpark, row and row of bike parking slots. Which mean heavy air pollution especially when trees are not seen being part of the city planning. From the look of Taipei, I immediately conclude that the pace of urbanistion that push Taipei into a city is destroying their nature. A subject that where I am having an increasing interests. I almost jumped when I saw the 1st bird in the evening near Taipei 101and that was the only one I saw in Taipei city. I couldn’t help myself, keep asking locals where are the birds.

The way Taipei’s lady speaks is very sweet and I think Taipei service level is pretty high even for those roadside food stalls. Just as I see Chinese everywhere, working at all kind of jobs(except some construction, very low pay jobs that are being taken by foreigner), the majority of the youth are taking, having a university degree. Up to a point where a local told me, some does not want to take up a degree. Worse than Singapore, I think most of them are unlikely to get out of the rat race. Majority are confined to the bottom of the pyramid.

Two reasons why I think Singaporean has a better chances of climbing the pyramid than Taiwanese are 1) the many of the low level jobs are taken up by foreign worker which permit Singaporean with better education to climb higher and get a better job. While this come with cost, it is a decision made by Government and no Singaporean( I think so as who want the pay of foreign worker?) wants to turn back. 2) For whatever reasons, Singaporean is keener to learn as compare to Taiwanese. It can be seem by the amount of peoples reading in MRT in Singapore and Taipei. While chaos breeds creativity and entrepreneurship, their education system is going to restrict them when come to internationalisation.

Talking about education and literate, I keep thinking that for people who are literate but unable to exercise thinking or judgment is somehow more dangerous than illiterate. Dangerous against who? Who ever rule the country mostly. Especially in countries like Singapore or Taiwan where majority are literate but unable to get out of the bottom of the pyramid. I think that include Japan and Hong Kong too. Many people think that being educated mean intelligent or able to think but I am slowly throwing that mindset away because for country like Singapore, learning how to read and write is just like learning how to walk, ran and hunt like native hunter. We are force feed by this at young age. And I believe we being literate is not smarter than those native hunter just that we process a different set of skills for survivor. This is seemed to be observed by Jared Diamond.

The worse thing about these “Literate illiterate” is that they can be easily misled by other whether on purpose or not through opinions. And then keep going round and round on some subject, mostly due to standard of living, life, country etc etc and unable to get out…. I think Charlie Munger said it the best. He said something like “Those who do not read good book have no advantage against those who don’t read(or illiterate).” One of example happened recently is the minibond Saga. No it is not about those uncles, ah pek but those wearing smart business shirt and suit armed themselves with degree, etc etc but how many read those prospectuses both for buyer and sale agents? What about senior management higher up or those ppls bring in product? It is as if this whole group of literate suddenly forgets how to read and think the prospectus/products, think about the consequences of misleading and misselling..

Bye bye Taipei. I am looking forward for my trip to China next week… after that I will has to face the reality of looking a job at this current gloomy time.

Advertisements

Responses

  1. You must be at Taipei “Seven Star” mountain summit; the highest point in Taiwan. Great place to mediate and think of your future…

    All the best to your job hunting!

    Ryan

  2. Thank you. But I am not sure if it is “seven star” but is at Jiufeng. Nice place.

  3. Hi dnhh, nice to see you went to taiwan. i just came back from there for a 8 day trip.

    Taroko gorge, Jiu Fen, Mao Bi Tou were some of the nice places.

    We might even have met each other without us realising.

  4. […] I haven’t had a good vacation this year and me friend’s wanna go for a trip so we went on a sight seeing trip in Taiwan. It just so happen that donmihaihai also went on a taiwan trip. […]

  5. Hi Drizzt,

    Oh..what a coincidence.. But we might have met each other a couple of times in Singapore without realising.. 😛

    I would love it more if the air pollution is lower.

  6. Hi Guys,

    Seems like everyone is going Taiwan. I will be going there too for a 8 day trip 2 weeks from now.

    The tallest mountain in Taiwan should be Yu Shan unless we are talking about man made structures. Wanted to go there but too much of a hassle, it’s like having to climb Mount Kinabalu – lots of equipment to prepare.

    donmihaihai,
    I’m sure you will be able to land yourself a good job. I was studying IT during the dot com crash and with determination and a little bit of luck, I manage to find a job in IT just after the dot com crash. Of course, expectations have to be lowered.

    Cheers!

  7. Hi Derek,

    Enjoy your trip… and thank you.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Categories

%d bloggers like this: