Revelation @ Ocean Park

Took Alistair and Ryan to Ocean Park just before Term 4 start on Monday.  Long story short, we tried to beat the crowd and had lunch at 11:30 next to the games area.  While we were eating the crap fast food there (wonder why they never serve decent food in amusement park?), we were watching people pay to play games at the stall to win those soft toys hanging above the stand.  And everytime someone wins anything, they'll ring the bell loudly (Remember 77777? the slot machine in the casino?).  There were many different games, a catapult game to get a frog into the hole; throw a ring into a bottle neck; throwing bean bags at the stacked cubes; basketball; kick soccer into holes; and a softball shooting game to name a few.

Alistair watched as we were eating and he was gagging to try his luck (or skill he thought).  He counted the frogs where people tried to catapult into the hole; he had "experience" with throwing rings into the bottle necks (we had a bucket load last time and got none in); and he knew how hard it was to dismantle the lead cubes with bean bags.  But he was confident that with his super soccer skill, he could kick the soccer balls into the many holes.  The result?

There was this one ridiculous game which i thought was a crime to be allowed in the Park.  The game was simple, just to throw a ball into any coloured squares.  But, listen to this, all the white squares had holes below them that drain the ball out for collection EXCEPT the coloured squares, which had a shallow base so even if you're skillful or lucky enough to land a ball in the square, it would most likely to bounce out.  This game is so deceiving that IMHO is a crime to conn the kids into paying (i mean playing).

I was the sober guy who kept telling Alistair the odds in each game (I wasn't popular to be honest).  But in real life, am I the sober one when it comes to investing in business?  How many times was I being conned into these seemingly easy games?

- Monopoly SOE power generator yet to realise that they don't have pricing power as the government use cheaper pricing from the power generators as a policy tool to stimulate economy
- Oligopolistic Oil company that seemed very cheap but that was trading at the peak of the cycle
- Downstream Gas Distributor with all the reasons to prosper given environmental concerns and monopolistic nature; yet to find out that the majority owner has a different agenda for this vechicle (crown jewel asset in the parent co)?

Other seemingly easy "games" that are known not to be easy that i am reminding myself to never touch:
- Capital intensive, yet extremely competitive sector of Airlines
- the very cyclical ports and container shipping industry
- cat risk prone tech industry (e.g. HCV drug, BMS Opdivo being killed by Merck's Keytruda)

In the end, we played the basketball game (which the odds were well understood) at the other end of the park where the ring was not as high up.  Ryan scored 2 out of 4, Alistair scored 1 out of 6 and I scored 3 out of 6.  We won an air Hammer and a Cookie Monster soft toy.

The lessons here are:
- Understand the role luck plays in a game vs required skills.  Operate within circle of competence (I am relatively more skillful at basketball than catapulting frogs)
- look at all the possible traps in the game (ie the shallow base in the colour squares game)
- operate only in a game where you understand the odds and can foresee the possible outcomes
- play in a "boring" game (vs a glamorous one) which you can almost certainly walk away with a small price at least
- find a stall with a good smiling operator that is happy to give you the price vs those stall operator with a bad attitude that hate to give you a price when you win
- don't get sucked-in by the bells of others' winnings!

Money vs Wealth

This is a piece to remind myself about the meaning of money.  This reminder is important as it provides the big picture to resist the useless emotion of jeolasy (which is the biggest enermy to risk management - i'll write a piece on this topic separately).

I have been reading news on Cheng Yu Tung, third richest man in HK and 57th or so in the Forbe's world richest list. He passed away at 91 after 4 years of coma post his stroke.  Another piece of news is regarding Joseph Lau, who is a shrewd stock market operator, but also a fugitive who has been reported to be suffering from kidney failure which requires dialysis 4 times a week.  This two men's listed entities probably woudn't have made you rich had one invested in them even from a long term perspective.

You can have all the money in the world, and yet, the money is used to prolong a low-quality life. Why would Cheng's family allow him to suffer an extra 4 years of coma? (put me in for NFR/DNR if it ever happens to me pls) And if I was Joseph Lau, i would probably be guessing the incentive of the people around me. The meaning of money for these tycoons is pretty useless at their stage.

What is wealth? Is wealth money?  Or something else?  I reckon wealth is a function of fulfilment, relationships, knowledge and money.  Money in this equation is a mean to facilitate knowledge gathering and fulfilment.

Money is a subset of wealth, and the purpose of money is a tool, a tool to facilitate learning.  To make learning more interesting.  And the learning will in turn make one a better human being.  In my case, to be a better father, and to learn to understand myself better and to remove the biases wired in my character.  Money accumulation, if done properly, is a 修練 (training for logical thinking, rationality, discipline and self realisation).

Reference: Maslow's Hierarchy, HKEJ article

Book list

I never had a good reading habit until i started reading Buffett's letters.  The book that drawn out my reading bug was Tap Dancing to Work (2013?).  The book that helped me to let go and quit Morgan Stanley was The Education of a Value Investor.  These 2 books are worthy of special mention here.

This particular blog is a working document, part of my filing system.

This is my book list, sectioned into
1) WIP - Books I am reading right now
2) Books queued to be read (and prioritised)
3) Books that I've read since 6/2015 after i became a full time dad (hopefully i'll start writing a blog on each book when i complete)

1) WIP - What I am reading right now
- John Neff on Investing (Audio Book)
-

2) Books in the queue to be read (this list is important as it is how books are prioritised to be read)
- The Base Rate Book 
- Quality of Earnings
- Value Investing - from Graham Buffett & Beyond (Greewald)
- anything i can find on Schloss
- Peter Cundill - as he got into Value Investing in his 40's
- 投資中最簡單的事

3) Books that I've read since 6/2015
- 用心於不交易
- 我的職業是股東 5/9
- Randy Kwei bio (7/8)
- 平民資本家 (16/8)
- 證券分析實踐 31/8
- 羅健昌-價值投資大時代
- Paris Value Investing - What they don't teach in Uni
- Snowball
- Party Man, Company Man: Is China State Capitalism Doomed?
- Shadow Banking in China - Joe Zhang
- The Most Important Thing - Howard Marks
- 香港經典并購
- 百年利豐
- 與CEO對話 2006
- Benjamin Franklin Biography (audiobook)
- Munger - the complete investor (audiobook)
- Fooled by Randomness (audiobook)
- 香港股史 1841-1997
- 居安思危
- Influence (Audiobook) 30/4/16
- The Aggressive Conservative Investor 11/5/16 - Martin Whitman
- Thinking fast and slow
- MOATS
- The Little book that still beats the market
- Manual of Ideas
- 黃國英
- A Conversation with Money - Tony Choi
- The Money Master
- The Money Master - II
- Business Adventure
- Vincent Lam - small cap stocks selection 捕捉細價股：市場分析實戰
- 價值捍衛戰 - Vincent Lam
- 步上一億元財富之道 - Vincent Lam
- One Man's View of the World - LKY
- 計論明星股 （16/9/16）
- the intelligent investor - audio book (24/9/16)
- 財經報導實戰手冊 (楊生華)
- *** 破解上市公司易容術 (黃玲)
- Quantitative Value
- What's behind the numbers (audio book)
- More than you know (Moubourssin)
- Why Moats Matter (Audio Book)

- Deep Value

- 郝承林 - 致富新世代二 科綱君臨天下

- Outsiders (Audiobook)

Never too late to start doing the right thing!

This is gonna be my first blog. I am finally pulling myself together to start this blog as a result of Paris-sir's good example.  I don't really have the intention for it to be read by the mass, but just a convenient way for me to jog down my thoughts over time, on a more structured and disciplined manner.  Perhaps one day, my kids will read it, and if i can leave them a trace of my thinking, and that they can find me online, that might have unintended good consequences.

"Chains of habit are too light to be felt until they're too heavy to be broken" - Buffett

I think the habit of writing blogs is a good one, in fact, it's like taking note on things that i've learnt.  Moreover, the ability to write down an idea or concept that i've learnt will in itself, consolidate that learning.  This is the main reason for this blog.  It should be a pre-requisite for me to write a blog on every investing decision. Let that be the self-imposed rule from now on.

Another good use of the blog is to add links to it.  So i have a centralised location for all the good articles and research for my easy access.

I wanna thank Paris-sir for his time over lunch, his sharing and kind comments.

I am gonna start slow and easy on myself.  So this is it for now.  Like my swimming, I know i can only carry on at my own (slow) pace. Most of the time, i don't push myself fast and far enough, but i think (at this stage) sustainability is more important.  If i over exert myself, then it becomes a barrier and disincentive to continue this effort.