Saturday, 22 August 2015

Investment Banking in Bear Markets

A couple days ago, amidst the rout in the global stock markets that have been plaguing us through the summer, one of the Managing Directors walked around the banking floor, and announced: "This is it boys, the summer of 2008 is repeating itself. Embrace the fun times, for you wouldn't know how long it lasts".

For the uninitiated, 2008 saw the closing down of bulge bracket investment banks Bear Stearns (bought over by JP Morgan) and Lehman Brothers as global markets were brought to their knees. Countless bankers were laid off in several rounds across the industry globally as the contagion spread. I remember the mood on the floor was quiet and sombre, bags were packed, desks were kept tidy. folks hung out hoping for the best, but fearing any phone calls, especially those whose caller ID displayed something along the lines of "meeting room [1]". That probably meant goodbye . I remember the some banker's desk line would ring, that banker would pick up, put down, suit up, take his bag and then send all of us an email via his personal mail to gather for drinks at 1200 at the nearby bar to commiserate and say farewell. That was hardly a fun introduction to a noob-cake in the scene.

Fast forward 7 years. Is this really 2008 all over again?

Fair enough, Southeast Asia capital markets and M&A have had what I would call, a really lean year so far. That would probably be an understatement, but potential IPOs have totally gone off the radar. At least you don't see elephant transactions happening in the near future. Malaysia market is suffering from an overhang of the 1MDB fiasco, Indonesian markets are reeling from wayward commodity prices. The Singapore market has poor volumes and lack-lustre listings. Thailand ain't doing well themselves, and the recent terrorist attacks have enhanced its negative bearing.

From a work perspective, things haven't actually eased up (at least not that much compared to 2008 where most things ground to a halt). Lower prices bode well for buyers flush with cash, aiming to take advantage of over-leveraged targets. That means more buy-side and less sell-side M&A work, which I particularly like (or at least prefer on some days given "like" might be too strong a word here) given you actually have to run certain valuations / returns analysis as compared to packaging sell-side marketing materials (like an info memo and teaser). On a side note, it would probably be worthwhile to give an introductory write up to the M&A process from a process of a practitioner one of these days... Put on the shelf are those countless pre-emptive banking committee memos for block trades, which I feel are a fucking waste of my time. I have seen more pitching as restless senior bankers stalk their prey to edge in on whatever deals they can get their hands on. So it hasn't exactly been a quiet summer. I have had some fucking hard weeks recently as well, but as summer goes, it is definitely quieter for sure, but not quiet per se.

But things can change in a jifty. Back in 2009 where the summer was slow, the last couple of months saw a flurry of activity on the capital markets front. That period was fucking insane - 100 hour weeks for a couple of months aren't a joke. So it can be just a couple of weeks before things turn. Yes, it is that fluid in this industry. One minute you're counting the days left to the unavoidable cull, the next minute you're inundated with more than you can feast on. Ahhh the extremes of life, isn't that what we live for? :)

From a personal perspective, I am fucking overjoyed that the markets are taking a beating. Nobody ever made their fortune betting towards in a bull market. People make their fortunes taking advantage of lower prices. Just from a general valuation perspective, STI and HSI indexes are trading close to their 5 year lows, and I do feel this warrants putting the dry powder to use :) Please do not be a fucking fool and sell your stocks. But if you prefer comfort to growing your money, sure go ahead and follow the herd to perceived safety. This is a opportune time to double down, and make the best of the opportunity. Career wise, sure it this malaise goes on, there is a chance I'll get laid off too. But yeah I don't give two shits actually, given I'm not leveraged on anything, but living life itself. :)

I guess these are some of the advantages of having fuck you money. So you don't have to worry like the rest of your peers on whether there is a layoff coming or not, and you can actually use it to make money in these types of situations.

Ahhh, the life. Time for a solid cuppa coffee :)

Saturday, 15 August 2015

The 30 days teetotaler challenge

This week, albeit a short one, has just been insane. Getting hit on many fronts, plus executing current transactions, made for a pretty intense work week. Not to mention the day trip a couple of days ago. Day trip meant getting up at 0500 to catch the first flight out, and taking the last flight back, getting home only at 0130, and hit the restart button less than 6 hours later. A couple of times I felt like Gimli fighting against the hordes of orcs that were threatening to encircle and crush my soul, rendering my very own existence worthless.

But alas, I've passed through yet another week on the job battle scarred and weary, but more experienced and hopefully wiser. The best thing about this week so far is that I've actually managed to avoid taking in any forms of alcoholic substances, which was in line with the goal of going 30 days alcohol free. A bit of history of my alcoholic imbibing tendencies, I believe that ever since the summer of 2008, I've never gone more than a couple of days where I did not chug down a drink of sorts.

Since the summer of 2008, the most number of days where I've cut the booze out of my diet stands at hmm yeah probably a grand total of 5 days. This intensified when I started banking right out of school, with a bunch of colleagues hitting the last call at the office bar mid week to hang loose, unwind and de-stress, which frankly wasn't a great idea, because.... it solidified the habit of boozing. And you know, calories pile up and you start putting on the wrong kind of weight.

Mid week drinks soon turned into going all out partying on Friday night, where shit would get real with hard liquor such as vodka and whiskey. Pretty ashamed to say that I don't remember the conclusion of some nights. Granted, that was a few years past, and I've mostly cut out the weekday and going all out hard drinking on the weekends, I do indulge in social drinks at least once or twice during the weekend. Red wine, white wine, dessert wine, whiskey, vodka, craft beers, shit beers, gin, liquor (Campari, Pimms, Choya, Baileys, Amarula etc), you name it, I love it, and there seems to always be an occasion on the weekends to indulge in them.

I've noticed over the last couple of months a general retardation in my mental capacity. A dulling of the senses. Could my brain cells be dying? Alas, might it be a result of the sustained drinking through the years? Alcohol, after all is a depressant and I do notice the feeling of general retardation occurs when the week kick offs, after a weekend of taking in drinks. Perhaps it might be because work is a non-callable non-redeemable perpetual bond that pays suck all in interest, but yeah there should only be one way to find out - to undertake a challenge to reboot the system. That meant that I mindfully decided to cut out the drinking from Monday (10 August) for next 30 calendar days. This experiment would end on Tuesday (8 Sep).

Some quick thoughts over the last couple of days. It felt strange not indulging in a beer on the flight back home and during dinner last night. Instead, I had hot chocolate and a coconut during those occasions respectively. Strangely, I'm beginning to feel more aware of my senses and focused as I bang this piece out before heading for my next activity during the weekend. It did feel, and will probably feel a bit strange over the weekends (at least the first two or three I think) not taking in at least a couple of beers or glasses of wine, but I do hope that I'll get some good feedback from under-taking this challenge, and perhaps develop some of my lost mental acuity and resilience levels at the same time.

 Wish me luck!

Monday, 10 August 2015

What does it mean to possess the "pioneering" spirit?

This year's NDP was a remarkable and momentus event. With Singapore celebrating its 50th year of independence, all stops and expense caps were lifted, and the festivities were launched in full flow.  The propaganda machine was cranking overtime, with celebrations (rightly so, in my humble opinion) focused on the development and progress of our island nation since its humble inception, the efforts of the pioneer generation in establishing and contributing to Singapore's progress.

Much has been said about the spirit of the pioneer generation, and how it has enabled Singapore to notch its laudable achievements in a relatively short span of time. So what exactly is the this "pioneering spirit" that the foundations of this country was constructed with?

Like any other concept, I do feel that there are many facets to this "pioneering spirit", but my interpretation is that this spirit revolves around the fundamental premise of "daring to fail". No doubt lots of determination, hard work, blood, sweat and tears ensued from our pioneers, the striking thing is that the leaders of that generation dared to pursue their vision for our country. Essentially, they went forth with a "nothing to lose" spirit, so why not go full steam ahead, do your best and see what happens. If it doesn't work, then let's head back to the drawing board and let's see what we can do to solve the issue.

(Look, obviously there was something to be lost then, it's not as if Singapore was a new settlement in your version of Sid Meir's Civilization 1965, but when you are pretty much a somewhat nascent political party that has been through massive political upheavals and turmoil during those times, I would think that might make for a rather qualified opinion as a party with "nothing to lose".)

Perhaps the circumstances at that time allowed for that motto to be widely adopted. After all, if you possess neither riches nor reputation, chances are you'll be more open to attempt and scale new challenges, to grasp issues by the neck, in order to progress. I guess with the advent of politics and the overall progress we have seen over the last 50 years, there's much more to lose than if you try something and fail miserably. The labels that Singapore has been accorded (first world country, high education standards, etc) have not made it easy for business, political and societal innovation as well. What if our leaders try out something new and it fails? It doesn't help that the incentive system makes sense for folks to adopt a "don't rock the boat" mentality, but that's another topic for another day...

Yes, I do acknowledge that there have been new policies that have not worked out so well, but what I'm attempting to convey is my sense that our country has become either more afraid, or apathetic towards the notion of developing themselves, for the sake of maintaining a facade, that you know says, "look, we've solid, we've not failed before". You can see pervasive examples all around you. Why choose a neighborhood school instead of a brand name school? Why try your luck at launching your business instead of being a corporate lawyer? Take the safe route that has proven to yield success at the end of the day. Conform to societal expectations. Don't end up a failure by trying out this new path, These are the messages that have been instilled in the younger generation of Singaporeans these days.

It's hard to change the way society has been programmed. You can't change the societal fabric and culture, you have to set the right incentives and punishments in order for the culture to evolve naturally over a couple of generations. And how should one do so? Well I'm not paid S$2 -3 million dollars a year, so let our top dollar ministers figure it out. :p that's a common rebuttal from any political critic, and is very much an easy route out to take, but hey, seriously when you get paid that kind of money, you expect top drawer results and things not to mess up. Like when you buy Robin Van Persie for GBP20m, you expect him to produce the goods, which he did. The problems of incentives, expectations, and the natural selection of executable actions - we'll come to that some other day. Anyhow I digress.

I don't have readily available answers on how to effect change towards a more "daring to fail" spirit that our pioneer generation possessed. What I do have are some possible solutions on effecting change as a personal level.

One is to constantly develop your thoughts on how you would react if you happen to lose everything overnight - yes, everything. Your capital, your family, your friends, your little luxuries. How would you react and feel in that situation?  It's tough and calls for what may seem like a ludicrous fantasial thought process, but one would eventually start to live more simply, which would allow you to take massive chances whilst protecting your downside (which would be way less expensive to maintain. Hey, a man who could live on beans would be able to have explore much more opportunities than a man that needs to live on a diet of grass fed michelin starred steak no?). The other side benefit is that one would be more grateful for what he currently possesses, which may increase his standard of living.

Another is to adopt more of a growth oriented mindset, instead of a fixed mindset, towards living. Instead of the natural focus to protect ones ego and keep your reputation intact (at least to your own self in most cases), developing a growth oriented mindset calls for the focus on the process and development of ones skills through undertaking challenging tasks, instead of just focusing on the end results. By doing so, you'll end up leveling up different facets of your character and personality and gain satisfaction from doing the work that allows you to get there, instead of a more binary satisfaction granting process when you either get the result you want or don't. Ever hear of the phrase that says "the process is always more important than the result" - yes, that's the hallmark of the growth mindset. With this mindset, failure is just one more rung up the levels of development, instead of an attack to your current status.

I don't endeavour to change our society. My only drive is to be a better person when I go to sleep each night, hopefully through learning something new each day, from every interaction and every chance that I have. That, itself, is a big enough task for any individual to undertake. And with that, I do hope to be able to instill some of the "daring to fail" spirit the pioneer generation possessed in my character, to push my boundaries and live life more fully.

Thursday, 6 August 2015

Thoughts on the SAF's new IPPT system

Recently I had the "privilege", given forth to me as a Singaporean son, of undertaking my yearly pilgrimage to a SAF fitness conditioning centre to test my physical mettle in the mandatory individual proficiency fitness test. Now this test has gone through a major revamp over the last 12 months.

It used to comprise of four static stations plus a 2.4km run. Four static stations being pull ups, sit ups, shuttle run and a standing jump. Now it's just sit ups, pull ups, and a 2.4km run. The change was widely applauded by the mainstream media as being realistic, and providing full time national servicemen and reservist personnel with the incentive to push themselves physically, given that these stations are noted as "easier to train for".

I do agree that it has provided me with more incentives to go hard, especially during the 2.4km run. The standing broad jump has been an obstacle for me since secondary school, one that I have failed to hack ever since, and the format was set up such that if you do not clear a certain distance, you'll end up being limited to a certain award. I.E. if you do not clear more than [220]cm, you'll be limited to silver award and a S$400 cash reward.

My recent experience was such that post clearing the two static stations, all I had to do was to run a 11.30 or below for the 2.4km run to obtain a gold award and a S$500 cash reward. Wow, all that glitters is gold huh. I've never actually obtained a gold award for an IPPT test before, despite having what I would like to think of as a reasonable level of physical fitness. So I went all out during the 2.4km run and achieved a time of just below 11 minutes, giving a holla back to my JC years and pocketing the S$500 cash reward, which if you think about it, is a pretty sweet deal. Then again, if you do not pass your IPPT, you'll have to attend freaking time consuming remedial physical training sessions, which would be a pain in the ass. Anyhow, I digress.

Training for the IPPT

To be honest, I've actually not done much IPPT specific training. I used to do a bit of the swim bike run thing and some longer distances back in the day, but since starting banking, I've not had the time to pursue those time consuming events.

What I do recommend for folks who are pretty time strapped is to focus on high intensity interval exercises. Such high intensity exercises typically do not take up more than 20 to 30 minutes of your time from warm up to cool down, but be warned, they'll cause you so much pain that at the end of each training session, you'll literally be dripping sweat all over your floor, even if the fan switched on at full blast. No pain... no growth... no gain right?

You can start off with a plethora of body weight only exercises and then move on to either do free weights / gym / or the use of my favourite instrument, the kettlebells. Check out YouTube, it's literally a live gym session with lots of variety of different high intensity interval training sessions. Just mimic the instructors, but do take a lot of care in trying to obtain the perfect form, especially when dealing with weighs. One of the channels I do frequent quite a bit is FitnessBlender. They have got some really good instructive videos in there.

Do this once or twice a week, and throw in a 5km run every other week or so and you should be golden. It does feel quite good to ahem, get hard (no puns intended) at the same time. Not hard in that sense, but hard in the right sense. ;)

To my readers, what kind of physical training plan do you embark on, and how do you train for the IPPT, if applicable?

Hope this article is of some use to all IPPT warriors out there.

Tuesday, 4 August 2015

Is [Facebook] the new TV?

I've grown to become aware that I do spend a substantial amount of my time daily checking in on various social media platform. Facebook, Instagram, Twitter, you name it, I probably have it. When reality gets dull, one could always use a distraction no? When work piles up, what better antidote than to perform a quick swipe down to refresh the Facebook news feed, or check out the latest Instagram posts? You'll get an immediate rush of endorphins to the brain as the latest, bestest and sweetest posts come up. Yay! 

In the age of super connectivity, one is really never truly solitary is he? Or is he not? I do find that mindless inter-netting and social media is fast becoming the new television. Only more dangerous, since it takes a tremendous amount of willpower and discipline to limit access given increased accessibility across the age spectrum.

Social media is truly a double aged sword. It allows people to be connected and up to date on what's happening to their social circle, providing one with increased access to new materials and ideas, which could be useful from an exposure standpoint. The problem arises when one spends too much time on a particular platform, just absorbing these materials passively instead of curating ones thoughts and carving out what's useful and what's not. 

I find that the most dangerous thing about using social media as time fillers and an antidote to boredom in life is that you are never truly present and focused on the present moment. You don't maximal rewards from the tasks you're executing as you're not all in, all the time with your efforts. It's a bit like doing your homework with the televisions streaming LOST (no puns intended) in the background. Through continual immersion, you'll gradually lose the ability to develop yourself and lose the focus on continuous improvement. 

Look I would suppose that putting a temporary pause of one social medium would invariably lead to another taking its place. Perhaps the best antidote to it is to develop your awareness and be mindful of what you're doing to obtain the most benefits. To be conscious of what ideas / media / material you're exposing yourself to and to seek to curate and develop your brain and personality. 

All in order to be a better man, [banker], [brother], [son], [friend] and [insert role of your life] at the end of each day, every day. 

Readers, what do you think of social media? Boon or bane? How has it been helpful in your lives? Or how has it impacted your lives negatively?