Friday, July 29, 2011

Stop Complaining

Hey there,

A big problem in life is when you are not able to enjoy your citizenship.

You’re limited.

It is not good for a person.

Says one of the refugees in Kenya on another episode of Go Back to Where You Came From.


His daughter wants to be a teacher, another an engineer and his son, a doctor.

I have the opportunity to study medicine. I am lucky enough that my parents are able to loan me some money to invest with. These people survive, every day that they stay alive is a victory.

So why the heck are we complaining?

We’ve got opportunities all around us. It is up to us to sit on our asses or to grab them as they come.


Twitter: https://twitter.com/#!/Unintelinvestor

Tuesday, July 26, 2011

Lack of Insight

Hey there,

Finally found some time to watch Go Back to Where You Came From, a SBS documentary about a social experiment, sending a few Australians on a trip to let them experience how it is like to be asylum seekers coming to Australia. It was released on TV quite some time ago but it was during my exam period so I didnt manage to find the time to watch it. Even today, I only got to watch 1 episode of the 4 part series.

 I know the population in that show is not representative of the Australian population but wow. Wow. Wow. I lack the word to describe the lack of perspective some of these people have. I often joke around with my Australian friends about how some of them just do not have perspective on how bad some things are and how some of the things that they worry about are so trivial. I sometimes laugh with friends when watching the news because of some of the stories the report. One that comes to mind is when politicians made a big deal out of the car that was given to Minister Kevin Rudd. They were worried that it was considered to be bribery. I lol-ed at that because I came from a place where bribery was embedded in the culture.

It is all relative I guess, if you grew up in a place where everybody is safe and you had proper education, cows being slaughtered “inhumanely” (assuming there is a humane way to kill animals) is a horrible horrible tragedy. However, if you grew up in a place where you can be shot dead because of your race or because you talked to an American soldier, getting on a boat with the hope of finding freedom is not that bad. I am flabbergasted that some of them did not thought that way and are adamant that getting on a boat to seek refuge is a stupid decision to make.

Some of the people in the show make me wonder if they have ever picked up the news papers or watched the news. I think you would have more of an understanding of things that happens around our world compared to these people if you had watched news for 10 minute or read the 10% of the papers fortnightly.

The insight that some of these people have reminds me of the insight that my 81 year old patient with vascular dementia, a pacemaker and brain surgery or the 85 year old lady sitting across her with a non-dominant stroke have. The former thinks its January and the latter thinks she is in the 1950s and that she is in a shopping center. At least she knows that she is not at home.

Anyways, yeah, I know that by no means I am very in touch with current affairs. I have a lot of reading to do to be up to date and these people gave me a very very good reason to never stop learning and reading.

I guess you do not need to have Alzheimer's or schizophrenia to lose insight. All you need is to stop educating yourself.

Thanks for reading, do leave comments or drop me emails. I always enjoy reading your opinion.

Cheers,

Next post Thursday

Twitter: https://twitter.com/#!/Unintelinvestor

Thursday, July 21, 2011

50% discount! ... not ...

Hey there,

I dropped my mum off at the airport in Sydney this morning then immediately drove back to hospital in Newcastle. Made it half an hour late but oh well. A few days ago, we were up in the blue mountains and this is what we saw...

A whole lot of fog.
 However, we were also lucky enough to see this.
And another thing that caught my eye was this.

50% discount. Permanently printed on the signboard. I’ve seen “discount” shops like this around Sydney as well.

My question is that if it is forever 50% discount, can it be considered a discount? Most shops just mark up the price by 50% then give you a 50% discount so that consumers get the perception that it is a bargain when in actual fact it is just normal price.

Once in Malaysia, there was a departmental store that had a promotion; for 10 minutes, you get an additional 20% for anything you can grab and pay for. Sounds good right? But if you visit the same departmental store in a different suburb, everything is marked down an additional 20% for the entire sale period. So in that 10 minute spending spree, they effectively got people to purchase things impulsively without hurting their margins. Clever.

This whole discount thing then brings me to another thing. Stimulus packages. To a certain extent, they help but if not careful, they can cause horrible horrible inflation. Think about it, if you give everybody 1000 dollars to buy a car, everybody is suddenly 1000 dollars richer and the car salesman knows that he can now charge you 1000 more for a car. If not 1000 dollars at least a few hundred dollars.

I know there are many different ways that stimulus packages are designed but what do you think about them? Do help boost a slow economy? Do they work? Or do they just cause inflation and do absolutely nothing for the economy. Do drop me comments or emails I look forward to reading them!

Tuesday, July 19, 2011

Financial Security

Hey there

I had just started a rotation in geriatrics yesterday and it has been rather interesting. Much like paediatrics, the patients you interact with sometimes do no understand what you are talking about, they might be disorientated, delirious, they might not be able to speak or understand what you are saying. So like in paediatrics, you often have to rely on partners or family.

I was sitting in a discharge meeting today. What happens is that the family and health professionals sit in a room and discuss what happens next to the patient upon discharge. On one side of the table, was the consultant, social worker, occupational therapist, 2 nurses and myself. On the other side, was the patient, her 2 daughters, a son in law, husband, interpreter and 2 representatives of the community carers. It reminded me of a board room meeting or a deposition or something. I didnt realised that a situation like that happened in medicine.

They were discussing what the next step for the patient should be. If she should go to a nursing home or if going home was possible. When you put family members in the same room, you can come to expect some sorta conflict and conflict was what we got. To cut a long story short, they finally made a decision and it was a fair compromise.

What struck me at first was that they needed a whole room of people to decide if she should go home. I came from Malaysia and you don’t have the privilege there, if you cannot afford healthcare privately, thats it. You have no opportunity to choose between home care of nursing home in the public system.

Next was that they were deciding on something as simple as going home. Being young and fairly healthy, I cannot imagine they day when people have to decided if I get to go back to my own home or not. The thought of it is fairly scary, such a basic human right in the hands of your family members and a bunch of health professionals. A bulk of their problem was the insecurity the family felt in the whole situation. On top of that, the poor husband, if the patient’s children cannot spare some time to care for their mum, there will be a huge burden on the poor man.

I guess thats part of my motivation to succeed financially in life. When I am old, and family cannot look after me, at least I can afford to pay for home care or private nurses. Security, afterall is what we all are after.

Financial security...

Facebook: https://www.facebook.com/theunintelligentinvestor
Twitter: https://twitter.com/#!/Unintelinvestor

Sunday, July 17, 2011

The Unintelligent Investor's Definition of the Week: Due Diligence

Due Diligence

Oxford definition: Reasonable steps taken by a person to avoid committing a tort or offenceA comprehensive appraisal of a business undertaken by a prospective buyer, especially its assets and liabilities and evaluate its commercial potential.

Unintelligent Investor’s explanation

I haven’t used a made-up-on-the-spot analogy for some time so here is one lol. When you buy an apple, your due diligence will be you looking at its skin and pressing on it to see if it might still be fresh. Or you want to buy a bunch of grapes it might be a good idea to pick one and try it to see if it is sweet lol.

When you perform due diligence on an investment, lets say a share, you look at its financial statements, the recommendations, the board of directors, look at the market depth, volume traded, last price, price of the share in the last x years, etc.

We investigate or do an audit of our potential investment. It is a very important step essential in almost any purchase of assets. It refers to a reasonable care we should take before entering an agreement. What is “reasonable” might be different to different people tho.

I am no accountant so analysing financial statements is not one of my best skills but I approach must companies with scepticism. I think being sceptical is an important part of due diligence. Some information we get from companies are skewed. So it is up to us to be sceptical and try and tease out what is actually going on.

What steps are involved in your due diligence?

Drop me a comment or send me an email. Discussions are always welcomed :)

Facebook: https://www.facebook.com/theunintelligentinvestor
Twitter: https://twitter.com/#!/Unintelinvestor

Friday, July 15, 2011

Guilty as Charged

Hey there

Yes I’m still sick and my mum is still here in Australia and I haven’t sorted out my semester yet. Heck I don’t even know where I’m supposed to turn up next week. But oh well I’ll get there.

Anyway I’m in Sydney at the moment and I’ll be heading up to the Blue Mountains tomorrow for some jungle trekking and caving. So I was driving and I realised that I didn’t have my wallet with me. That means no ID, no licence, no money, and no credit cards. All of a sudden I started driving very very cautiously. Never went over the speed limit, never overtook unnecessarily, brake as soon as the lights turned amber, and felt my heart rate sky rocket everytime I see a police car. Driving patterns that were so normal suddenly looked so risky.

I’m sure many of you experienced this before. It is quite funny really.

Like when you haven’t done your work and the teacher starts asking questions so you curl up a little in your seat
Or when you walk pass the discipline teacher and he calls out your name, you immediately assume you did something wrong.
Or when you know somebody is watching, you pay extra attention to how you walk hoping that you don’t trip and fall.

I will not be getting my wallet back until Sunday when I go back up to Newcastle but trust me as soon as I get it back my driving patterns will immediately go back to normal i.e. I might not slow down when the lights turn amber, I might go a bit over the limit to overtake the car ahead, my heart rate will remain similar when I drive pass a police car. I’ll immediately go back to the level or risk I was taking before.

I find it interesting because the amount of risk we take really really depends on how much exposure we actually have. Even though we are not really doing anything wrong, we are extra cautious when we know the consequence is something like public humiliation (tripping on stage).

So if we take unnecessary risk from time to time because we are partially protected from the consequences, how can we expect banks to do any different? Banks sometimes take unnecessarily high amounts of risk because it is not their money to lose. If they make money, it is good for them, if not, just as well - moral hazard. Think about that when you wanna invest in a fund.

So when was the last time something like this happened to you? When was the last time you were extra conscious of what you are doing because you were worried of what people might think? What do you think about leaving your old car unlocked by the most dangerous street in your suburb so that it can be stolen and you can claim money from the insurance? Do leave me comments or send me an email. I enjoy reading your feedback and I’ll respond to them.

Next post Sunday!

Wednesday, July 13, 2011

Of Train Conductors and Fish Heads

Hey there

Sorry for missing both Sunday and yesterday’s posts.

I have been packing and travelling around a lot after convention, on top of that I have terrible tonsillitis and my mum is here in Australia so I gotta show her around as well. I was flat out yesterday and didnt even sleep well. It sucks being sick lol.

So I just got back home from meeting some friends after the hospital and finally found some time to have a breather while my mum is cooking dinner.

Something that I thought was quite funny happened a few days ago. My mum wanted to go to the Sydney fish markets so I brought her there. The easier way to get there is by tram so when I got onto the tram, the guy selling the ticket looked at me, my mum and my sister and asked with an Indian accent, “Star City?” (Star City is the casino in Sydney for those of you who do not know). I smiled and shook my head and he went “ahhhhhh, fish market”.

I then looked around and sure enough 90% of the people there were Asians and when we got to the Star City station, 90% of them went off, the remaining 10% got off at fish markets just in case you were wondering. So if that guy were to bet 1 dollar for everytime he asked an Asian if he or she was getting off at Star City, he would be pretty rich lol.

Anyway at the fish markets, my mum got pretty excited at the salmon fish heads. They were selling them for 3 dollars per kilo. My mum bought 2 kilo’s worth. In Malaysia, you can only get half a head at the same price. One man’s trash is another’s treasure? Probably where arbitrage trading comes in play lol.

Anyway this is just a very casual post, I seriously need to rest and have a nice break and look forward to starting at the hospital at 7a.m. tomorrow. Y.a.y.....

Thanks for reading! I promise postings will get back to normal as soon as I pull my life back together.

Anyways how are your holidays so far? Do drop me emails or comments!

Sunday, July 10, 2011

Rain Check

Hey guys

Once again, I need to take a rain check.

As some of you know, I've been away at 2 different conventions this past week and a half.

Well yesterday was the last day, so I had to pack up all my stuff, drive back to Newcastle from Sydney and get ready for hospital tomorrow. Sorry!

Back to normal on Tuesday!

Thursday, July 7, 2011

The Nocebo Effect

Hey there

I was in Global Health Convention for 4 days and it was followed by Australian Medical Student’s Association Convention and it is now on its 4th day. About a week of convention and one of the themes that keeps recurring is perception.

From Wikipedia, perception comes from the latin word percipio and it is the process of attaining awareness or understanding of the environment by organizing and interpreting sensory information. So from that definition alone, a same piece of information is probably perceived very differently by two different people because it is based on our own interpretation.

There was a talk given by Dr. Brian Davey, a deputy team leader working for the United Nations Special Comission biological monitoring inspections in Iraq, about chemical weapons. He stressed that chemical and biological weapons not only cause terrible physical harm to humans but also horrific psychological harm. He told us a few stories of terrorists using smoke grenades with no actual toxins being enough to scare an entire army and make them seek medical attention. Effectively removing them from the battle fields and wasting medical resources. An incident with anthrax in Japan caused 12 deaths but more than 5000 people seeked medical attention with the fear of being exposed. Imagine the stresses these perceived exposure to chemical weapons caused these people.

Some of you might have heard of Dr Charlie Teo, renowned neurosurgeon, he talked about one of his encounter with a patient. He had a quadriplegic patient who had a tumour in her spinal cord. Like all good doctors, he counselled and gave all relevant information to the patient in order to obtain informed consent. Like other neurosurgeons this lady saw before she came to Dr Teo for help, he implied that surgery would only buy her a little time and that being fully paralyzed from the neck downwards, quality of life wouldn’t be as good. He worded it better but that was the essence of his message to her. She got very offended and told him that he had no right to judge what quality of life is to her. She then went on to say that to her, being able to impart wisdom to her 2 teenage granddaughters is good quality of life. She didn’t need to be able to walk to be happy. So Dr Teo did the operation and he said a few years later, he saw her once again with her 2 granddaughters now no longer teenagers.

That to me was an excellent story on how we make assumptions based on our own perceptions. It is true that most of us regard ambulatory function as a major part of quality of life but we forget that being able to ambulate is not synonymous to good quality of life.

There was also a talk on the placebo effect. There was an experiment where 2 groups of patients were given the exact same sugar pill. One group was told that they were given standard top of the line pain killers and the other group was told that they were given almost out of date, ready to be thrown out pain killers. And the group with a perceived higher quality pain killer obtained better pain management. Remember that both are given sugar pills. A group of athletes that were told that they were given steroids when in actual fact they were given placebo pills ran faster than when they were not given any pills at all.

Now the opposite of placebo effect is the nocebo effect. For example, if you put a little probe on someone’s finger and gave them a little shock. Then you tell them that you are going to up the voltage and this time it is going to hurt. You give them the second shock with the exact same voltage and pretty much all of them will jump up and scream in pain. Once again, same voltage but very different perception to the shock.

I guess what I am getting at is that the markets are full of different perceptions. Some might even say that a price of a share is the net result of all human perception on that share’s future performance. A same news article can be read by 2 different people and be interpreted totally differently.

A company does not have to do badly to underperform. All that is needed is a group of people who thinks it is going to do badly.

It is hard but probably wise for us to consider more than one way to interpret information we receive. It is also probably wise for us to think about different perceptions to a same piece of evidence. It is up to us to identify nocebo effects and take advantage of the overreaction to negative news. If over selling occurs we can think about buying.

Thanks for reading! Do drop me comments or emails if you have any comments. I read and respond to all of them. If you like the site, like the page on facebook, repost it on facebook or follow me on twitter.

Next post on Sunday!

Tuesday, July 5, 2011

A Doctor's Take on Risk Management

Hey there,

I’m still in the middle of the Australian Medical Student Association Convention and it has been amazing so far. Yesterday, I heard a talk by Dr Glen Singleman. While working in the ED, he found a love for adventure and exploration so he decided that he wanted to work for the National Geographic Channel. He figured that he’ll be more employable if he had a filmmaking degree so he went back to Uni and then went on to work for NatGeo Channel as a cameraman/doctor for expeditions.

Oh and I probably should also mention that he holds various records like the highest altitude basejump, and highest wingsuit basejump. He also makes documentaries and did some deep sea explorations with the director of Avatar. Oh and remember that he is also a doctor. Lol, the things you can do.

With all these achievements under his belt, it is only appropriate that he gave a talk on risk management and fear. I usually learn about risk management from traders so it was really an interesting experience to hear a talk about risk management from the point of view of a doctor/explorer.

He loves what he does because in his point of view, if there is no exploration, there can be no discovery and when there is no discovery, there can be no progress. I think this is true in almost every aspect of life. If we do not want to put ourselves in a difficult situation every once in a while, how are we to learn? That’s why doctors often put medical students on the spot and even humiliate us every once in a while so that we learn.

As humans we experience fear a lot. That is probably because it is hardwired into our brains. It is part of every decision we make, from crossing the road, to deciding how much risk to take in the markets. It is because of fear that some students do not ask questions in classes, some researchers do not do certain experiments, some paths do not get explored, or if you are like my mum, sometimes the fear of flying can really affect your dream to travel the world. Fear, especially irrational fear can really limit our potentials as a human being.

There is a part in the brain called the amygdala, it is in the limbic system and it is a fairly primitive part of the brain so most if not all animals has this structure. All 5 senses: touch, taste, sight, hearing and smell goes through this structure and anything risky is identified and your brain can react in 0.1 second. You either fight, flight or freeze. So we cannot help but to decide if we want do so something based on how risky it is.

However, humans have another structure in the brain called the prefrontal cortex. Nerve roots from the prefrontal cortex can override these fears by carefully rationalizing, analysing and reasoning with the proper education and knowledge. The only way to do this well is if we have the knowledge to rationalize in the first place. It takes practice and discipline to do this. That’s why taking a history from a patient is easier the 100th time if compared to your 1st. I still remember how nervous I was the first time I had to talk to a patient. Same goes to deciding to make a trade in the stock exchange or closing a losing position. It is not easy to tell yourself to realize the loss and it takes practice to numb down the feeling.

Just imagine how many times you have to tell yourself that the parachute is going to work and statistically you are very unlikely to die from parachuting out of a plane if you were this doctor. Imagine how much discipline it takes.

His take home message was that we overcome fear by managing risk and we manage risk by educating ourselves. That’s why we go to medical school, so that we don’t kill patients and that’s why we read so many books about investing and practice with mock money before actually invest.

He ended his speech with a quote of T.S. Elliot
"Only those who will risk going too far can possibly find out how far one can go"

So how do you overcome your fears?

Thanks for reading! Do drop me emails or comments, I respond to and read all of them. If you like the site, like the page on Facebook, share the article on Facebook or follow me on Twitter!

Next post Thursday! xoxo

Sunday, July 3, 2011

The Unintelligent Investor's Definition of the Week: GDP

GDP

Oxford dictionary definition: abbreviation, gross domestic product
Gross domestic product: the total value of goods produced and services provided in a country during one year.

The Unintelligent Investor’s Explanation

There are a few ways to determine a country’s GDP you can look at their output, their income or their expenditure. Production is measured regardless of their uses.

GDP is often used as an indicator of a country’s standard of living. In Australia, a technical recession is when the country’s GDP shrinks for 2 quarters in a row. In China, you hear about GDP growth of 10%, 13%, etc and some people are calling it the next economic miracle. So GDP has always been used as a rough gauge of how the country is doing.

Another term used is GDP per-capita, which is the GDP divided by the population, giving you an average of how much money each person have in the country.

However, like most things in our world, many exceptions and assumptions apply which forces to think twice about a country’s economy when looking at their GDP.

As some of you might already know, I’m in the middle of a Global Health Conference in Sydney. This conference ends tomorrow and it is followed by AMSA Convention, which is a much bigger and general medical student convention.

So I was in one of the lectures in this conference and the speaker gave a very nice example. He said, lets assume that this lecture hall is a country, you are all students and lecturers don’t get paid much, we all don’t have money, hence our GDP will be very low. Lets say if suddenly Bill Gates came into the lecture theatre, our GDP growth will suddenly go through the roof, our GDP will sky rocket and our GDP per-capita will jump from a few dollars to a few million dollars. So in the newspapers, it will seem like our country is doing very well when in actual fact we are just as poor as before. (No unfortunately Bill Gates did not come into the room on cue)

Another thing that is great for GDP are natural disasters. GDP does not take into account the destruction caused by the disaster but accounts for all the reconstructions that occurs after. Unfortunately some people lose their lives in a disaster but this is fortunate for GDP per-capita because it decreases the denominator.

In paediatrics, one of the most important thing to do when looking after a child is to take serial measurements of their height and weight. Height and weight on its own is fairly useless but when you have old data to compare it with, suddenly you’re able to gauge if the child has been growing well, at the right rate, is he failing to thrive, etc. I guess the same applies to GDP. On its own, it might not be so useful but when used with other indicators and historic data, it might give us an idea of what the economy is doing.

In an ideal world, I can grow gold on a tree and GDP will include all externalities but I don’t have a tree that produces gold and GDP does not include externalities like pollution and domestic work. China’s GDP might be growing at an amazing rate but so is its pollution, in a world where I can grow gold on trees, that would be accounted for because pollution will ultimately cause poor health and decrease productivity and increase health costs.

These are just some of my thoughts and things that I’ve heard or read from various sources. So let me know what you think about GDP. Is it a useful indicator? What other indicators would you rather use?

Thanks for reading! Do leave me comments or send me an email. I read and respond to all of them. Click on the little like button to like the page on facebook or follow me on twitter!

Next post Tuesday!