Charlie Munger Interesting Advices

Charlie Munger, Vice Chairman of Berkshire Hathaway had an interview with CNBC Becky Quick. Here are a few quotes which I think are interesting:-

On Question whether the golden era of investing is over
"Now is tougher. …… The valuations have come up. And the competition sorting through those opportunities is more intelligent and more aggressive and more numerous. Of course it's harder."

On Munger's generation of investors
"The opportunities that we all remember came from a demoralized period when about 90% of the natural stock buyers got very discouraged with stocks. That's what created the opportunity for these fabulous records that my generation had. And that was a rare opportunity that came to a rare group of people of whom I was one. And Warren was another."

On US politics and government
"Sometimes the Democrats are in, sometimes the Republicans. In my lifetime, the country run better, net, because we had two parties, each of which was partly in control. If either party had been totally in control of all branches of the government, I think we would be way worse off today."

On US national debt which has reached US$22 Trillion
"Yeah, we're in new territory...… Well, I don't worry much, because every era is a cinch that a great nation will, in due time, be ruined. So I -- time and -- whether it's Rome, where is Britain in its heyday, they all pass. And so our turn is bound to come someday. But I don't like thinking about it too much. It's like my own death. Why should I enjoy thinking about it? But is it coming some day? Sure. Of course it is."

Worries on Nuclear Bombs
"Its a nuclear war. A nuclear war would be a real, real disaster. Global warming is something we could cope with if we had to. But a nuclear war is - that's - that is really serious."

Anything that rises to Munger radar screen now that may be under the radar for other people
"Well, nobody knows how much of this money printing we can do..... That we can ignore the whole subject and just print money as convenient. Well, that's the way the Roman Empire behaved, then it was ruined. And that's the way the Weimar Republic was ruined. And - it's - there is a point where it's dangerous. You know, and of course, my attitude when something is big and dangerous is to stay a long way away from it......"

A display in Dachau Concentration Camp showing the effect of printing money in Germany

On what are the secret to life is, to a long and happy life
"You don't have a lot of envy, you don't have a lot of resentment, you don't overspend your income, you stay cheerful in spite of your troubles. You deal with reliable people and you do what you're supposed to do. And all these simple rules work so well to make your life better. And they're so trite.|"
"And-- staying cheerful -- with -- because it's a wise thing to do. Is that so hard? And can you be cheerful when you're absolutely mired in deep hatred and resentment? Of course you can't. So why would you take it on?"

On raising children
"I have not -- many of my children have worked out well. And I've had very little to do with it. I think they come into the world, to a certain extent, pre-made. And you just sit there and watch. I don't think they're -- it's been simply amazing to me a parent to note know much is sort of preordained. The shy baby is the shy adult. The booming, obnoxious, domineering baby is the booming, domineering, obnoxious adult. I've never found a way to fix that. I can be cheerful about it, but I can't fix it. I can change my reaction, but I can't change the outcome."

Feb 2019.
Credit: CNBC

Emirates Economy Class Review

I took Emirates Economy Class to Dubai, a seven hours trip.

Here is my review:-

1) Food - Emirates has better food than Qatar Airlines. The food was tasty enough for me. The drinks were sufficiently served with a bar cart that followed behind the main meal cart. Singapore Airlines has equally good food comparable to Emirates.  However, China Southern Airlines stewardesses routinely walked along the isle asking passengers whether they want water. This service from China Southern Airlines is commendable for long flights

2) Flight Seat - Whether Singapore Airlines, Qatar Airlines or Emirates lines, the space available for economy class does not differ significantly. However, because Qatar and Emirates are flying connecting flights, ie Dubai or Doha are used as a base to consolidate passengers. Their flights are mostly full. This means that the chance of an empty seats is very low.  Singapore Airlines has a higher probability of an empty seat next to you.

3) Service - No difference between Singapore, Qatar or Emirates. You don't see the stewardesses in economy class after the meals are served. China Southern Airlines stewardesses do make routine rounds to address passenger needs. China Southern Airlines stewardess even perform their appreciation message for international flight.

4) Planes - All Singapore, Qatar or Emirates are rather new. I notice that Emirates and Qatar switch on their mood lighting with beautiful stars filled ceiling. Beautiful. Singapore Airlines does not switch on its mood lighting for economy section.

5) Baggage Handling - Both Emirates and Qatar airlines are disappointment. For Emirates, my luggage was found damage after flight. For Qatar, my luggage was found to be opened and my suit soiled after flight. I have no such problem with Singapore Airlines or China Southern Airlines. So it is advisable to bring a durable luggage when travelling with Emirates or Qatar airlines.

Founding of Singapore - 200 Years

Sir Stamford Raffles arrived on the island of Singapore on 28 January 1819. Back in 1819, Singapore has an indigenous population of about 150 people.

Today is the 200th anniversary of Raffles arrival. Our population has grown to about 6 million people, crowded onto a small island. Raffles had set up a trading post in Singapore which allowed it to prosper given its strategic location between Europe, India and China, Japan. This is despite an absence of natural resources.

Dubai Skyscrapers Part 2

Dubai Creek Tower model at Dubai Mall

Not only is the Burj Khalifa not tall enough at 830m, the UAE is building another structure which is 1.2 to 1.3 km tall. It is known as the Dubai Creek Tower. The tower as shown in the photo above is a slender structure with cable like supports. It looks like a tall rocket that is about to blast off to space. Around the centre of this tower lies observatory decks.

Obviously, it doesn't come cheap. This is another project to showcase Arabs wealth.

While it is another engineering feat making the engineers laughing to the banks, it doesn't makes economical sense. The monies could be spent on research that could make human lives better, reduce the number of hunger death, reduce pollution, reduce climate impact, lower risk of terrorism, improve cultural appreciation etc.

It just reminds me of the Tower of Babel mentioned in the Book of Genesis of the Old Testament.

Dubai Blue Sky

Being a desert climate, there is little rain all year round. I took a picture of the blue sky which show a cloudless sky. The blue is unedited and natural.

Dubai Skyscrapers

The quantity of skyscrapers in Dubai is amazing. There are so many construction works on-going in the city that one wonders whether there are real buyers to these real estate. They are building condos, hotels, malls and offices everywhere along the main spine (where the metro lies).

While there are attempts to go Green through the use of solar panels, this cannot be said for design of infrastructure, eg the volume of chilled water required for cooling space is tremendous. The volume of water needed to make the landscape looks green is huge. Otherwise it will just be desert sand. Dubai uses desalination techniques to extract water from the sea. Without energy (from petrol or gas), the malls, offices will not work. But there is a certain lifespan for energy even though it is available cheaply in this region. There seems to be an emphasis on extravagant, from artificial pool (in a desert), creek, reclamation from desert sand and massive tall buildings

Dubai is traditionally a trading hub. One can see in its Gold Souk and the spice trades. But trading should not give supernormal profits. While I understand that the government of UAE is trying their best to diversify to non-oil industry, there must be development in pace of demand. Expats will simply leave in times of economic crisis.

What I like about Dubai is the availability of cheap petrol and relatively cheap car prices. Eg Mitsubishi Attrage is about 36000 Dirham. There is 5% value added tax. Food prices are comparable to Singapore prices. Winter climate is fantastic.

Dubai Architecture

Other than the skyscrapers, Dubai traditional looking buildings do have certain architectural identity such as the cantilever protruded feature , the curve opening with Islamic details and the circular roof. These traditional design looks good on modern buildings and is unique to this region. I also notice that many buildings have limited opening/windows due to the possibility of sand storm. This impedes natural ventilation but nowadays they are cooled by air-conditioning.

Dubai Food

In the 5 days in Dubai, I have not eaten sufficient local dishes to give a conclusive comment on the food. But I notice that Dubai has a variety of food, mainly focusing on Arabs, Indians and Western dishes.  These are the food I have eaten and some little comments:-

Wimpy at Naif Street - This is the best street food I have eaten. It is simple Kebab which cost just 5 Dirham. The melon juice cost 10 Dirham which was one of the best melon juice I had. I believe the restaurant may have added milk into the juice. Simple and tasty meal near the Gold Souk. I would recommend it.

Indian Food - The first photo below shows Chicken Briyani. It was prepared with spices and yoghurt. It was well prepared and the chicken is tender and tasty. The food was purchased and served to us.  The second photo shows food taken from an Indian restaurant. It was beautifully prepared and tasty. It was of course expensive.

Iranian Food - The restaurant was recommended by a youtuber. There were many photos of celebrities and even royalties who had visited the restaurant. I had mutton kebab as shown which cost 32 Dirham. The food was a bit dry despite of the yoghurt which tasted too sour for my liking. Somehow, I thought there would be better dishes which I could order.

Kebab Fast-food in Dubai Mall - I guessed this was a Turkish kebab (but could be wrong). It cost me 23 Dirham. The accompanied sauce was good but there was no vegetables. They gave 3 dough which I could not finish.

Dubai UAE 13 - 17 Jan 19

Dubai Old Town near Gold Souk

I am in Dubai, UAE from 13 Jan 19 to 17 Jan 19 on a work trip.

First Impression
- Largely influenced by UK standard - from power plug, widely used of English, English radio stations that play British singers songs, eg U2 etc.
- Not so many Chinese influx as compared to Japan. Filipinos are working mainly in service industry.
- Mainly Arabs and Indians.
- Just separated with Iran with just one Strait. At the time of visit, Israel had just attacked Iranian targets in Syria.
- Many Spices trading. I bought one of the most expensive spice in the world, Saffron at 20 Dirham for 2 gram (20 Dirham is equivalent to SGD $7.60 or USD$5.4). It smells good.
- A simple train service with only 2 lines - Green and Red. The NOL card for train costs 25 Dirham has a value of 19 Dirham.
- Street food is almost same price as Singapore. One simple meal cost 15 Dirham (SGD5.70) comprises of kebab and a fruit drinks.
- Weather in January is good at 23 degree Celsius. Good for walking around.
- Still many construction works in Dubai city, showing infrastructural development and the abundance oil money and wealth.

Written in Dubai

Goldman Sachs

2 years ago, on 8 December 2016, I wrote on the Blog that I sold away my Goldman Sachs at a price of US$234.50 and made a good profit.

On 20 Dec 18, the Dow Jones had dropped to a level of 22,859 from its peak of 26,959. A drop of 15% from its peak. A piece of Goldman Sachs is now priced at slightly more than US$168, compared to US$275, more than US$100 off this peak. I bought some of the equity back.

Is there down side risk? Yes, certainly there is with this current bear market. This is expected due to investor irrationalism. Is there up side gain? Yes, in the long term. The PE ratio currently is just 12.29.

Warren Buffett owns this equity. It has made him many good profits. It has made me some good profit. Happy Investing!

Tokyo Yamanote Line

Yamanote Line in 1963 - Screen capture from YouTube Michael Rogge film

Yamanote Line in 2018 with familiar lime green colour

Back in 1993, when I first visited Japan. Hotel Metropolitan, in Ikebukuro was where I had stayed and the Yamanote Line was the first train line I had taken. Japan was the first country I had travelled located at more than 5 hours in flight from my home. It had opened my eyes to the world beyond South East Asia. It had bullet train, Sony electronics, Matsushita electronics, Hitachi, Toyota cars, Honda cars etc. An economic power house. In 1993, Japan was at the start of recession. It had enjoyed economic growth since WW2 and lasted till early 1990s. Since then Japan inflation is close to zero. Back in 1993, a meal could be bought for 1000 yen or less. In 2018, 25 years later, a meal could still be bought for less than 1000 yen. (eg Ramen).

Back to Yamanote, the line was first opened back in 1885. It was unique in that it circled the major Tokyo metropolitan cities with line distance of 34.5km (21 mile). Ikebukuro is one of the city. Back in 1993, the Yamanote was a green line with the train highlighted in lime green. I remembered taking the first ride from Ikebukuro to Ueno Station. Till this date, the Yamanote is still a green line. Somehow, in 2018, I did not find the Yamanote line to be so crowded. On the other hand, I found that Chuo Line was much more crowded during peak hour and physically it was packed till the door.

The other difference is that now, the announcement in train station could include Japanese, English and Chinese. Back in 1993, it was first only the first and second language. A change in economic circumstances.

Nonetheless, it was really memorable to seat on Yamanote line and also equally memorable was the sound of the periodic train track vibration which was so unique of Japan.

Tokyo Asakusa

The photos above were unedited other than adding copyright note. They were taken in the evening in Asakusa where there were fewer people and a cooler weather. As I did not bring along my travelling bag, the photos were taken with my iPhone 7.  I was pretty impressed with the camera of iPhone. Just look at how brilliant the red colour of the shrine was and how sharp the photos were. Beautiful! While there were many negative comments comparing iPhone and other Android phones in technical specifications, to me it is the output that matters. Despite a simple single lens camera, it was able to produce result comparable, if not better, than my Sony APS-C (A6000) camera even at dim night conditions. The price of iPhone is of course a premium over Android phones, but the overall user satisfaction is still guaranteed with a iPhone. That is after more than 2 years owning the iPhone 7.

I have been to Asakusa many years ago, but this is the first time I have been there at night with not so many people and the weather was cooling. The experience was magnificent.

Tokyo Food

Ramen and in this case Ichiran Ramen. Famous among foreigners. There was a queue formed to pay for the food. Overall it is tasty without sensing MSG. It should be made by boiling pigs bone for a long period of time. Thick broth makes a rick taste. At 870 Yen, it is reasonably priced considering other Ramen outlets. Was told that Ichiran originates from Kyushu region of Japan. This is the most value for money against its quality for the food I had.

Okonomiyaki - Japanese Pizza. The one on the left has flour and bacon, while the one on the right has noodle and flour. Tasty due to okonomiyaki sauce. It is highly recommended. The set cost about 1850 Yen for 2 persons including drinks. The restaurant at UDX Akihabara allows patrons to self cook or the chef will cook for you. It tastes real good.

Beef tongue croquette. When I walked into this restaurant, I thought it was a beef restaurant without knowing that they sell only beef tongue. I have the impression that it was beef croquette, probably due to my poor understanding of the language. Nonetheless I tried it. This was not the first time I ate beef tongue though. Its more of psychological than the taste and texture. It was quite expensive at about 1600 Yen.

Tempura soba. The soba is ok but there were only 2 pieces of prawn and one small green chilli. Priced at 1470 Yen, it seems expensive. But this is a famous shop in Asakusa. Quality wise the prawns are fresh and sweet.

Pufferfish - Also known "fugu". I had this in soup and fried format. Japanese delicacies. Poisonous if not prepared properly. Certain part of the fish is lethal and originates from its ovaries and liver. It must be prepared by a certified chef to remove the poison. Taste like ordinary fish and has many bones. Expensive at 10,000 yen for 2 persons. Would I try again? Probably not, considering the risk and price.

Unagi rice. The grilled eel is very expensive in Japan given the strong demand in Asia market. Many eels are originated from China or Taiwan. I paid 3700 Yen for this. Taste wise, I have tasted better one. This one has too many fine bones which disturbed the enjoyment. The meat is ok but the sauce could be better. There are cheaper ones around Tokyo.

Sake - Taste good and reasonably priced. This one costs about 250 Yen. Slight sweetness makes the sake easy to drink. Available in convenient stall.

Tokyo - Nikon Museum

Nikon FM2 first version

Camera Prototype

Camera Prototype

The information explains the 2 photographs above.

Nikon Museum located at Shinagawa is a must visit place if you love photography. It gives a history of all the SLR and other important cameras that the firm had manufactured from the beginning of 20th century. Nikon is indeed a great manufacturer of camera. Nothing can beat looking at these beautifully crafted cameras.

Having owned Nikon FM2 SLR camera, it is fantastic to see the camera being displayed as part of the many cameras on its historical shelf. The challenge I faced nowadays is weight, the camera body and lens weigh considerably when sufficient weather protection is included especially for high ends camera. The weight makes it difficult to carry for tour. Hence, nowadays, my default camera is the Sony A6000 which is light weight and easy to carry.

Nonetheless, do enjoy the beautiful cameras from the museum. The museum can be reached via Shinagawa station east exit and walking overhead connection (they called it skyway connection) from the station to Tower C of Intercity Tower. It is free-of-charge entry. Explanation is written in English and Japanese.

When I was visiting Asakusa, I saw a senior lady with a SLR film camera. While I didn't see the brand of the camera, it was really a great sight.

Nikon FM2 1984

The Nikon FM2 is shown in the museum. Notice that in the 1980s, the standard lens is a 50mm. It is beautiful and even more beautiful when it is held in hand. For my camera, I have a 28mm f1:2.8 as the standard lens. The body has a "Made in Japan" engraved below. Link to my blog for FM2 is shown below:-

https://e21s.blogspot.com/2014/06/nikon-fm2-n.html

Tokyo ~ 20th to 25th October 2018

Akihabara Tokyo

This is my forth time I visited Tokyo. The first was in 1993, 2nd in 1995 and 3rd in 1997. A whopping time gap of 21 years since my last visit. Japan has always been a country which I liked. Its people are fantastic, plenty of shopping malls with great quality stuffs, good transport system that makes travel easy and delicious quality food.  What reminds me of my visit in the last century was the sound of Japan train and sound of ambulance siren. These things do not changed.

When I visited Tokyo in 1993, the first train line which I took was Yamanote Line (山手线). This train circled inner Tokyo and goes to many important cities. I am happy that I was able to take this train again. The green colour on this train body is so distinct and familiar. In the 21st Century, the complex train schedule can all be planned by smart phone and google.

I visited Seiko Museum, Nikon Museum, National Museum of Nature and Science, National Museum of Western Art, Tokyo Tower and Toyota Mega Web. The National Museum of Western Art was not a planned visit in my itinerary but there is currently a exhibition on Rubens Art pieces, which attracted me.

End October is autumn in Tokyo and it is considered perfect weather for visit. I loved the temperature of 15 to 20 degree Celsius. The chance of typhoon is low during this period.

I stayed in Asakusabashi 浅草桥 which is a station east of Akihabara. Great location to stay if the intent is to go shopping in Akihabara. This area has lesser crowd than other popular cities in Tokyo. It has direct train service from Haneda Airport which is good plus point.

Quote of the Month

VW Beetle in Deutsches Museum

".... This thing is 52 years old and it still works great. And with that rear engine transmission design and it still handles really well for a car that is 52 years old. They are still fun to drive. So now you know, a Volkswagen made in ****** stuff. When men were men and cars were made of metal."

Scotty Kilmer describing his 1967 Volkswagen Squareback and comparing it to modern Volkswagen cars. (Sep 2018)
https://www.youtube.com/watch?v=7vDqyn-qmwM

My Thoughts on Malaysia GE14

It is indeed a shocking win by Parkatan Harapan in Malaysia Election on 9 May 2018. It is a significant historical event for Malaysia and may affect politics in Singapore.  This is similar to the US election 2016 where the media and political expert failed miserably in predicting the outcome of who will be the winner. This is due to flaw survey methodology and inability to predict human behavior prior to the actual election. There are signs though.

The DAP (Democratic Action Party) is finally able to govern together with other political parties forming the Parkatan Harapan. Historically, the DAP was formed by members of PAP and the principle of meritocracy, equality and fairness should prevail, although the deeply rooted corruption may be entrenched and would take immense political will to change. Look at China.  Parti Keadilan Rakyat is however famous for its 'reformasi' (reform) slogan.

I hope Malaysia will not be another Singapore. It will loose its character if it focuses on economical excellence.

Of course Tun Mahathir is not a simple person, historically. From Anwar imprisonment, his handling of Asian financial crisis, pulling the plug on CLOB, attitude towards Singapore etc. A leopard can't change its spots.

Recent days have seen the Finance Minister Mr Lim announcing that Malaysia is in debt by 1 Trillion Ringgit. That is not a small sum. It is a 1 with 12 zeros behind. He knows that he should avoid printing money as a means of solving the debt issue. Fortunately, Malaysia is blessed with oil and palm resources. He should consider attracting investor to invest in Malaysia, something which Mr Lim is familiar from managing Penang.

Every means of attracting foreign monies should be considered. Malaysia neighbor is Singapore. Singaporean are known to spend their economic wealth across the causeway. The present government should seriously consider means of increasing such inflow of a strong currency. Every dollar spent has its multiplying effect. Policy change may include making it easier at the custom for Singaporeans to clear immigration. Reduction in tax on entry. Allowing Singaporeans VISA entry to Malaysia to be extended to say 3 months, especially for retirees. Facilitating purchase of property and vehicle. Improving security for foreigners. Protecting foreigner interest (removing the fear from the hard hand solution implemented during Asian financial crisis). Over long term, such expenditure in Malaysia would create employment. A win-win situation.

Singapore and Malaysia was once a single country.

Quote of the Month

"But it is not tougher to succeed now than it was 20 or 30 or 50 years ago. The America that you see 20 or 30 years from now is going to be far more prosperous and talent will always be rewarded. Hardwork will be rewarded. We will have a wonderful future."

Warren Buffett on good habits and start saving early,

Interview with Yahoo Finance Editor-in-Chief, Andy Serwer

 

"In other words, for every dollar you could have made in American business, you'd have less than a penny of gain by buying into a store of value which people tell you to run to every time you get scared by the headlines."

 



Warren Buffet at 2018 Berkshire Hathaway 2018 Annual Meeting
He shared that US$10,000 invested in S&P Index Fund in 1942 would be worth US$51 Million in 2018. The same US$10,000 invested in Gold would approximately US$400,000 in 2018.

Vanguard S&P 500 ETF (VOO)

The Dow Jones dropped below 24000 (intra-day) on 3 May 18. I have been waiting for this level for a few weeks while trying to settle my trading account issue at Charles Schwab.

With the issue settled, I bought some VOO which is a ETF reflecting S&P performance at a unit price of US$240.09. This purchase follows Mr Warren Buffett advice on S&P and my personal experience with Vanguard mutual funds (VBINX). Unfortunately, as a foreigner, Vanguard or the FED has prevented me to purchase mutual funds outside of US. Previously I could purchase mutual funds. I have purchased VBINX more than 10 years ago (in 2007) even before the financial crisis in 2008/2009. The dividend from VBINX was reinvested throughout the years and this mutual fund has been one of the best performed fund over a long period of time. Back in 2007, the Dow Jones was just 13500.

With this in mind, I bought VOO with the intention to hold it for long term, as what Mr Buffett has advised, with dividends reinvested.

The other thing that surprised me was the commission that Charles Schwab earns is just US$4.95. Back in 2007, it was US$14.95. Competition has eroded trading firms commission. Of course, there could even be cheaper commission rate, but I am happy with the support service that Charles Schwab customer service provides.

VOO has an expense ratio of just 0.04%, one of the lowest in its category. This is fantastic for long term investor. The ETF has another advantage in that its price moves with the market and unlike mutual fund where the index is given only at the end of the trading day.