Across multiple literature, its been stated privacy versus health will be one of the primary dichotomy societies around the world will need to juggle with as technological advances are made in the fields of artificial intelligence, communications (surveillance) and medical science (genetic research).
What is surprising was the rate at which the Corona pandemic catalyzed this change. In light of this, it is fascinating to observe how different societies position along the spectrum. Some societies has opted for surveillance to the maximum extend possible with current technology while others opted for its polar opposite going to the extend of staging mass protests against it use.
The AI Economy, Roger Bootler
To Be a Machine, Mark O’Connell
Irrational Exuberance, Shiller, Robert J.
Life 3.0: Being Human in the Age of Artificial Intelligence, Max Tegmark
The basis we use for interpreting what is happening our world is through the understanding of our history. History heavily relies on narrative constructs.
The critical flaw with using narration as a tool to understand, encode and communicate what has transpired is it can only support data in a chronological order while reality is inherently chaotic, multi-linear, on occasions non-linear and confounds understanding thus narration. To tell a coherent tale of what has transpired, authors are forced to decide what to include and leave out of the narrative they weave. This phenomena is commonly labelled as the narrative fallacy.
Compound narrative fallacy with a collection of common human cognitive bias such as the framing bias, survivor bias, confirmation bias and consistency bias and you get a recipe for a fragmented society. This is especially more so when you have multiple equally plausible narratives that are diametrically opposed but draw evidences from the same chaotic sample space to reinforce their positions.
The task of deciphering what has transpired becomes even more daunting to the everyday individual with the reintermediation of social platforms as our primary news source. In the days prior, individuals need only rely on one official news source on how to understanding what is happening, usually from their government. Now, individuals are bombard on a daily basis with news sources sponsored by multiple parties with varying interest and agendas. In this day and age, it has become crucial for individuals to exercise critical thinking.
Some final food for thoughts:
Iran is portrayed as an evil country in American media
America is portrayed as the devils incarnate in Iranian media
China is portrayed as an evil country in American media
America is portrayed as an evil country in Chinese media
Why is it that the winners are always as good and righteous in any battle?
“If God’s on our side, who the hell could be on theirs?” Private Reiben in Saving Private Ryan.
no matter how much research you done regarding a stock you don’t have a contract what the future price should be
with high yield bond there is a contract for a certain price in a future, if you are correct about the calculation, you will be correct about your yield
bargain price: liquidation price 75cents on the dollar buy at 20 cents
when you are not a big established investment firm like Lehmen brothers, you have no franchise to protect. You are free to go the unconventional route for potential outsized returns
great ideas are born bad. Its easy to make your way to a great idea from crazy outrageous ones than cautious and sensible ones. Investment bankers by default filter out the crazy outrageous ones.
Contrarian thinkers need to train themselves to see things via unconventional routes
ways to structure a bond
give money back sooner
give higher interest rates
give more stock
give stocks cheap
It is easier for corporation to pay interest which is tax deductible than dividends which are not
Bonds offer process
first tier high rollers offer liquidity get to buy at cheaper price and exit earlier
second tier payers, with franchise to protect, who want to avoid stigma of being junk bond buyers will come in later at more expensive price and exit later.
Successful leverage buyout scenario: after buy out use cashflow from business to pay off the junk bonds thus deleverage the business
Mutual fund arbitrage: compare value of underlying portfolio and stock price
If you are right about a company being undervalued and it is willing to put itself up for sale, there will be buyers
Poison pill: defense mechanism against corporate take overs. When would be acquirers crosses threshold of ownership, existing shareholders are given extravagant rights rights making it less desirable as take over target
perception versus reality, see what the world could not.
Vision is Strength.
capital is abundant, vision is scarce.
excess capital is not strength but opportunity for weakness
capital put in the hands of someone with vision will result in drastically different results.
return of the owner manager as opposed to the corporate manager
by-pass the China wall principle where companies try to isolate the deal making and arbitrage departments
herd instincts: investors are constrained by appearance. A manager of a respectable financial institution will shun “fallen angels” so as to avoid appearing imprudent to his colleagues
forces wishing to keep a large company afloat are far greater than those that wish to see it perish
credit rating systems are flawed. It focuses on the past instead of the future. Ignore large fortune 500 companies in favor of ones with no credit standings to find a good deal.
The market which may be quick to digest earnings data was grossly inefficient in valuing everything.
Lessons from Solomon brother traders
I don’t pat myself in the back, because the next sensation is a sharp kick lower down
those who say don’t know, those who know don’t say
Despite the valuable lessons history can offer us, its shown that man does not learn any of these valuable lessons.
Benjamin Graham: The more elaborate the mathematics, the more uncertain and speculative the outcome. Avoid substituting experience with theory.
Key historic events:
1933 Glass Steagall act: separation of investment banking and retail banking
July 1944 Bretton wood systems: World currencies agree to a fix exchange rate against the USD, USD agree to fix exchange rate with Gold.
1971 Collapse of the Bretton Wood systems: US, faced with increasing pressure to maintain the USD gold exchange rates as its foreign reserves were depleted by a extended Vietnam war, went off the gold standard to prevent a run.
6th October 1979 The Volcker Act : money supply will be fixed, interest rates would float
12th Nov 1999: repeal of the Glass Steagall act: banks can now take use consumer deposits for investment purposes.
A stroll through the peaceful streets of Rome. In contrast, it felt like the end of the world is here if you read news about Italy recently.
The human brain is a remarkable pattern recognition engine. When given incomplete information it will conjure up the “missing” pieces to generate a coherent whole that could be comprehended. More often than not what gets generated is the worst case imaginable scenario. In a normal time and age this is a wonderful function to have running automatically in the background to keep this primate alive.
However, this automatic function becomes problematic as three trends converge.
Trend 1 – big tech like Google and Facebook consolidated advertising revenue putting news entity under increasingly pressure to sustain themselves as their advertising revenue dwindled
Trend 2 – the proliferation of publication medium means anyone can now claim to be a news entity.
Trend 3 – Proliferation of Growth hacking techniques perfected by tech companies like Facebook that hijacks the human brain’s automatic fight or flight to generate user action that gets converted to revenue.
News entity generate revenue with hyper inflated news that drives readership and vitality by tapping into fear and anger. This drives wide spread panic. Corona is perfect catalyst.
KaoShiong is where the bulk of industrial manufacturing occurs
Taiwan is a Japan trend follower
When macro economic environment is not conducive for continued operations, stop operations to conserve resources for future opportunities.
Decision to close wooden frame manufacturing factory
Europe became more environmentally conscious
Malaysia reduced the yearly quota of timber to be harvested
These two trends reduced demand for wooden frame and increased cost of raw wooden material
On personal growth
Adversity in youth provides an opportunity to build character and gain experience.
restricting the amount of resources your offspring has access to might be a good thing but it breeds resentment
Good things come from seemingly bad experience too
on DDP policy in KaoShiong
Too radical in their actions and lacks calibration in their policies. Really good at manipulating the press
Pro resource less young
Pro taxing businesses for social welfare
Pro reducing pension to retired
Equally corrupt as the KMT but too aggressive in their policies leaving nothing for the business to continue operations
manufacturing businesses has been negatively affected with over regulation and rising administrative cost
Worker protection makes overtime illegal severely restricting the throughput volume businesses are allowed in their operations
Workers not making enough from their day job due to such restrictions are forced to take on a second job on top of their main one
30,000 to 40,000 businesses have failed within the KaoShiong area over the past 12 months at the point of writing with more set to fail if policy should persist
While GDP growth rate has been reported at 2% in 2019, shipping volume through KaoShiong has continued to drop
A more mature party with measured policies which lost leadership due to lackluster performance
Pro-protecting pension of the retired
Social security system and the aging population
Social security system is in a state of flux. Employers are required to contribute to two systems. The contribution for the old system is 5X the new system and was too much overheads for the employers.
Retirees are concerned their pension will get cut while the young are concerned their contribution to the social security system is to heavy a burden
China has imposed restrictions on independent Chinese tourist to Taiwan
Chinese tourist are easy customers who engage in indiscriminate spending
Night markets looked empty
Quite a few restaurants have closed down along the main street due to the lack of tourist spending
The bulk of Taiwan’s export has been to China it makes economic sense for both territories to become unified
noteworthy to observe Joe’s shift to a pro Chinese stance the on Chinese Taiwan relationship as compared to the high school days.
Observation of Taiwan style politics in contrast to Chinese style politics leads me to have reservation about how these two systems can be resolved.
the Taiwanese have no reservation with injecting outrageous humor into the legal framework afforded to them by their political system with candidates as outlandish as Mr Crazy Friday and Mr Fortune God
China’s one country two system need to become more robust for this undertaking
Recent HongKong riots has caused concern for Taiwanese and has lead to increased support for the DDP whose leader English Tsai is known to be a strong negotiator
On Korean Japan trade war
Huge influx of Korean tourist observed during this period of tension (Sept 2019)
Korean tourist are more discriminate in their spending, hence a lower per capita spending as compared to the Chinese tourist.
He gave the impression of being the most centered political representative during the elections. Also the most dynamic one that can drive change as well keep the hard core rightist in check.
Three years into office, he has impressed to be right leaning, concerned only with fame and money. In addition, he is perceived as a smooth talker that has delivered nothing to satisfy the left nor the right. His policies are constantly self contradictory designed only to appease to both sides while achieving nothing. He has been considered by the youth, his primary support base, to have deserted them.
The youth of France feels funding for public services are inadequate and getting more so by the day. Is fearful the hardcore rightist are getting stronger by the day. Social mobility concerns loom at the top of their mind.
There is a hard core leftist faction that is small but mainly considered communist and negligible.
The ability to implement compounding models with competitive moats and a winner takes all dynamics in our markets inevitably leads to wealth inequality.
Last century, we experimented with Liberalism (US), Communism (USSR), Facism (Germany) and Militarism (Japan) as solutions to tackle the problem. Liberalism was the model that won.
Right now, in addition to continued work on Liberalism, we explore technologism, populism, socialism and terrorism.
In worst case scenario, we should expect a system reset that is not backed by any framework when the percentage of disenfranchised crosses the critical threshold. It will be very messy when that happens.