Sunday, 29 May 2016

Gold and Silver – A peek into history to understand its impact on the world monetary system (Part 2)

In the financial blogosphere in Singapore, there are many articles on the gold and silver that I read before. Normally topics are quite similar. It revolves around, reasons to own gold and silver to hedge against inflation, as insurance for our stock portfolio in case market collapse, returns of the precious metals and various instructions how to buy the precious metals directly or indirectly.

In Part 1 (Refer here), I also spoke about my experience of owning gold and silver as well as what Warren Buffett and Ray Dalio think about the precious metals.

The blog article I have not read thus far is the history of the gold and silver. In this post, I shall peek into the history of precious metals (predominantly gold) and its impact on the world monetary system. But before that, perhaps it is necessary for us to know some interesting facts and definitions of currency, money, gold standard and fiat currency.

Do you know?

Do you know that Gold today on the Earth’s crust is thought to be created by asteroid impacts about 4 billion years ago.

Gold is known to the one of the least reactive chemical elements and highly anti-corrosive. It is dense, soft, malleable and ductile metal. The symbol Au is from the Latin: aurum which believed to be interpreted as “glow” or “shining dawn”.

As from wikipedia, “a total of 183,600 tonnes of gold is in existence above ground, as of 2014. This is equivalent to 9513 m3 of gold. The world consumption of new gold produced is about 50% in jewelry, 40% in investments, and 10% in industry – mainly electronics.”

Do you know that according to the World Gold council, a typical cell phone may contain 50 mg of gold, worth about 50 cents.

Difference between Currency and Money

Many people mistaken the dollar bills in our wallet or numbers printed on our bank statement as money. It is not. They are currencies. 

Currency is a medium of exchange use to represent money. It is a unit of account, portable, durable, divisible and fungible (interchangeable – in other words, same amount of $ can buy same amount of goods and services).

Money has the same properties as currency but on top of that, it is a store of value and supply cannot be increased indefinitely, so that it maintains its purchasing power over a long period of time.

For this reason, you cannot really print money (or gold/silver), but you can print currency.
Gold and silver stores value and cannot increase its quantity easily in oppose to currency where supply can be manipulated and does not store value. Therefore Gold and silver have stable purchasing power compared to currency.

What is gold standard?

A gold standard is one type of monetary system in which the standard economic unit of account is backed by a fixed quantity of gold. For more than a century before 1971, the world monetary policy within and between nations is largely based on Gold standard.  There are various types of gold standard in the history, Gold specie standard, Classical Gold standard, Gold bullion standard, Gold exchange standard etc

Fiat currency

Since 1971 up to today, we are in Fiat Currency standard. This means that currency is not backed by money (such as gold or silver) that stores value. Fiat in Latin means “let it be done” “it shall be”. We also refer it as paper money that is legal tender declared by the Federal government.

Fiat currency has no intrinsic value and will eventually lose its value when the central bank lose ability or refuse to guarantee its value. The oversupply of Fiat currency will then result in hyperinflation before the value of the currency drops to zero. This happened in Zimbawee in late 2000s, Yugoslavia 1990s, China 1940s and Germany Weimar Republic 1920s.

In modern times, there are more than 600 currencies that are no longer in circulation. Of these more than 150 currencies are destroyed due to hyperinflation resulted from the oversupply of currencies. The rest are revalued, or destroyed by military occupation/liberation, renamed due to political reasons or converted to another currency.

History of Monetary Policy

First Hyperinflation – Athens
For 4000-5000 years since the Egyptian and Chinese era, gold has been widely accepted as money. In ancient times, it is however more difficult to effective apportioned gold and silver due to the lack of standard of measure.

It wasn’t until around 600 BC, when many historians believe that the first gold coin of equal weighting was invented for trade somewhere in Lydia. This means that it becomes fungible. In other words, interchangeable such that goods and services can be priced in gold or silver coin.

During that time Athens was one of the leading centres of trade and prosperity in the region and soon the Athenians were the first to monopolise the currency supply by converting gold and silver into coins of equal weightings. Athens hence became the first free market society where money were commonly used for trade.

Around 429 BC, Athenians then got into the Peloponnesian war with Sparta. Due to the War, Athens lost access to many of their gold and silver mines being invaded by their enemy. Athenians also had to pay their armies who were on foot and miles away from Athens. To fund these armies on foreign territories, gold coinage was transferring out of Athens to pay the local populations.

A deflation soon occurs in Athens. 

As a consequence, Athenians started debasing their currency. Gold was mixed with copper to mint more coins. For instance the Athenian government will receive tax of 100 gold coins but because of the mixing of copper into gold and silver, they can spend 200 coins.

That is DEFICIT SPENDING, meaning spending more than what one can produce.

Initially people are ok with the debased currency but until there are so many of these coins that people starts to worry. People tend to save the things that are rare and spend the things that are common in the circulation first. This phenomenon is known as Gresham’s Law where “bad money drives out good money”. So gold and silver becomes rare and copper coins everywhere and it will take several copper-mixed coins to buy a gold coin. Eventually the copper coins become worthless and hyperinflation took place.

This is the first known case of hyperinflation in the human history.

Up to 1914
In modern times, The British West Indies was one of the first regions to implement a gold specie standard. This standard simply means circulation of gold specie coins or other valuable metal with a monetary unit attached to it.

From 1880 to 1914 (WW1), United States was on the classical gold standard. All US dollars printed were backed by gold i.e. a 20 US dollar bill is backed by 20 dollar worth of gold or silver. For example if you refer to the below $20 US bill, it clearly stated that “in gold coin payable to the bearer in demand”. Effectively, currency then was similar to a "claim check" representing $20 of money in gold / silver payable on demand. 


1905 – US20 Dollar Note backed by 1 Oz of Gold Coin

During this period, inflation averaged only 0.1 percent per year for US. Towards the end of 1913, the world economy was not in the best shape. Federal Reserve was set up in US then with the authority to issue Federal Reserve Notes (now commonly known as the U.S. Dollar) and currency was not backed by gold for a certain period of time. 


1914 – US20 Federal Reserve Dollar Note not back by Gold or Silver

1914 to 1944 (Between WW1 and WW2)
In periods between the wars, many variations of Gold Exchange Standards were used. This means that each unit currency is backed partially by gold.

In 1914 during WW1 in order to finance the War, many European countries were in deficit spending and have to abandon or suspend the gold standard. Price levels doubled in Britain and US, tripled in France and quadrupled in Italy.

It was only until 1925 that Britain repealed the gold specie standard and created the British Gold Standard Act 1925 i.e. Gold Bullion Standard. Under this standard, gold bullion is sold on demand at a fixed price exchange for the circulating currency. Many countries followed Britain and return to gold standard. The subsequent years were relatively stable but in deflation.

The gold bullion standard ended in 1930s, when the Great Depression hit during 1929-1939. Sterlings were devalued by speculative attacks then and forced Britain to abandon gold standard, so that they can employ Monetary Policy to stimulate their economy. Essentially this means increasing money supply and lower interest rate.

US flooded with gold
US participation of the two wars was minimal in comparison to Europe. In WW1, USA did not participate in the war until the last 6 months. During the WW2, USA real participation only came in 1941 when Pearl Harbour was attacked.

In contrast Europe took young men to become soldiers. Factory were used for producing machines and weapons for the war. Basically the entire economy was geared into war. As a result, Europe had to purchase consumer goods from USA with gold and silver leading to flow of precious metals into USA.

In 1943, USA national income was 142 billion double that of 1939 (71 billion). It was triple that of 1933 (46 billion). By the end of WW2, USA has 2/3 of the world’s gold and rest of world has 1/3 and Europe almost has none. USA had also loaned huge amount of US$ to Europe and Europe countries were flooded with dollars.

Therefore the world was flooded with US$ while USA was so rich flooded with gold and silver.

1944 - 1971 (Post WWII)
After the war in 1944, due to the inadequate of gold supply for reserve purposes, almost all major countries in the world (United States, Canada, Western Europe, Australia and Japan etc) with the exception of few met at New Hampshire to establish the Bretton Woods system.

The Bretton Woods System is a “Gold Exchange Standard” that most global countries’ currencies will be backed by US$ and US$ in turn will be backed by Gold at $35 per ounce.

Essentially since the establishment of this system, there is nothing known as Forex which gives the world stability and low inflation. 

Fiat Currency – 1971 and later
There is however a flaw in the Bretton Woods system. No reserve ratio was established. So over the years that followed, USA keeps printing money. This is almost inherent to human nature of greed.

USA was in huge DEFICIT spending during periods of 1960-70 when they were involved in Korea and Vietnam Wars, as well as the launched of President Johnson Great Society programs. As a result, the Americans expanded currency supply. During this time, USA has created 12 times more dollars than they ever created before. US dollars loss its value and there were insufficient receipts for gold. In other words, USA spent at the expense of countries who were receiving the dollars in exchange of the goods and services they sold to USA. This is truly a fraud.

In the late 1960s, France President Charles de Gaulle soon realized that USA do not have gold to back the dollars. France asked for their gold and from USA in exchange of the dollars back to USA. Soon other countries follow suit. This resulted in a bank run on gold for USA in which she lost 50% of its gold from 1959 to 1971.

Fearing that US will eventually run out of gold and go bankrupt, U.S. President Richard Nixon ended international convertibility of the U.S. dollar to gold on 15 Aug 1971.

Since 1971, international monetary system was made of pure FIAT money which means currency not backed by the value of gold, silver or other commodity. US hit double digit (13.5%) inflation in the 1980, something that had not happened during gold standard which average on 0-1% per year over long term.


Today – US20 FIAT Dollar Note not back by Gold or Silver

Since 2000
We can also see that since the millennium, Gold has increased from around $280/oz to a peak of $1,800/oz in 2011 before it settles around $1,200/oz today. This is an indication of how much Fiat Money has lost its value since the depegged from the gold standard. 


Objection to Gold Standard

A common objection to the Gold or Silver standard is that there can be random demand and supply curves shocks to the precious metals, thereby making the purchasing power of the metallic money unstable. Nonetheless history proves otherwise. In 1849 during the California goldrush, there were oversupply of gold globally, but the inflation rise in about 8 years thereafter is only 1.5%. In fact later the supply of gold contracted as the world output increase faster than the supply of gold. This is known as “market self-correcting mechanism”.

Some blamed the Great Depression as caused by the gold standard because of the lack of flexibility of central banks to expand money supply! However there are other school of thoughts saying that because of Britain abandoning the gold standard, credit or debts which were already heavy in the 1920s went exploded in the 1930s and causes the eventual collapse of the economy.

Many avid gold standard supporters believe that the objection of gold standard was almost always because Federal government were in deficit spending and needed to print more currencies to cover their short-all.

Rolf’s thoughts

Sorry for the very long article here. History can be boring if you are not interested. 

However, often if a person can look further into the past, the further he or she can look into the future.

This is also because history of mankind often repeats itself, as human nature is inherent since our evolution.

To summarize the world monetary system went through several changes:

1880 - 1914 (30-40 years Classical gold standard)
1914 - 1944 (30 yrs Partial gold standard)
1944 - 1971 (28 yrs Gold exchange standard)
1971 - current (44 yrs Fiat currency standard …)

What will be next?


Friday, 27 May 2016

Gold and Silver – Things you need to know before investing (Part 1)

George Soros piled up gold

Gold has been one of the best investment assets since the start of the year increasing by more than 20%.

Recently, Billionaire investor George Soros cuts US stocks by 37% and buying gold. Soros bought 1.05 million shares in SPDR Gold Trust, which tracks the price of bullion and took a stake in Barrick Gold Corp, which is the world’s biggest producer of gold, amounted to $264 million.

Why? What exactly is gold and silver? How are the economic conditions going to affect the prices of gold and silver?

Ultimately, you want to know if you should own some of the precious metals and if you are going to make money when you buy gold / silver for investment reason?

I shall leave you with diverging views from two experts below.

Warren Buffett criticism on gold

Quote 1: “Today the world’s gold stock is about 170,000 metric tons (year 2012). If all of this gold were melded together, its...value would be about $9.6 trillion. Call this cube pile A. Let’s create a pile B costing an equal amount. For that, we could buy all U.S. cropland...plus 16 ExxonMobils...After these purchases, we would have about $1 trillion left over…”

“A century from now the 400 million acres of farmland will have produced staggering amounts of corn, wheat, cotton, and other crops...ExxonMobil (s) will probably have delivered trillions of dollar in dividends to its owners and will also hold assets worth many more trillions...The 170,000 tons of gold will be unchanged in size and still incapable of producing anything. You can fondle the cube, but it will not respond.”

Quote 2: “This type of investment requires an expanding pool of buyers, who, in turn, are enticed because they believe the buying pool will expand still further. Owners are not inspired by what the asset itself can produce -- it will remain lifeless forever -- but rather by the belief that others will desire it more avidly in the future.”

-- Warren Buffett

Ray Dalio saying Warren Buffett is making a huge mistake by not owning gold

Another legendary investor Ray Dalio (one of my favorites) said this about gold, counterintuitive to Warren Buffett’s theory. Dalio advocates investors to have 5% to 10% of their assets in gold. Maybe 5% in gold stocks and 5% in bullion and then rebalance every year. Refer to his interview here.

'If you don’t own gold, you know neither history nor economics'

“I would say that we are in an environment where it is very important to have a well-diversified portfolio, and that'll include assets gold.  In other words, what could I tell investors, try to achieve balance in various ways.  That's a whole subject about how to do it.

And also I think that gold at 5 percent of your portfolio, 5 percent or 10 percent of your portfolio, under the circumstances, would be also a prudent thing to do.  Prudence is the important thing to do.  The reason I'm also referring to that is we have a situation where a debt is money. In other words, we have a fiat monetary system, too.  And so we are having problems as these central banks operate.  And so  think of it as another form of cash and when cash now has zero or 0 percent interest rates or less, think of it as one of those possibilities in terms of how do you create diversification

-- Ray Dalio


Who is correct?

Anyway, this article will be the first of Gold and Silver series articles.

In this first article, it will basically be an introduction about things you need to know when investing in physical gold and opening a UOB silver account.

In the next article (in progress now), I will delve into the history of precious metals and its impact to the global monetary system.

My own experiences at UOB bank buying physical gold and opening UOB silver account

By the way, I went to UOB Main Branch at Raffles Place. I assume it is the easiest. Otherwise just call up UOB bank hotline to ask how to buy physical gold and open silver account. Pretty much “idiot proof”.

For now, I will like to bring you “additional uncommonly known info” you may need to know when you buy physical gold with UOB bank in Singapore and when you opened a UOB Silver account.

Unit for gold
First, get the buy and sell UNIT of gold correct. Gold price is calculated in troy ounce and not in ounce.

1 troy ounce = 31.103 g
1 ounce = 28.349 g

So troy ounce is about 10% heavier.

UOB gold and silver prices
Visit UOB website here, and then click tab -> Rates and Fees -> check our indicative gold and silver prices! Below is a table showing indicative pricing. You see the prices of different types of gold.


Loss Spreads
Always note the buy and sell prices for the loss spread. The smaller the loss spread during buy and sell, the better it is.

Given on the same time you buy and sell, the spread you LOSE for 1 KG will be as follows using the above indicative pricing:

1 KG Cast Bar : 54,252 – 53,983
= Loss S$269.00

100 GM Argor Cast Bar : 5,474 – 5,396 = S$78.00. To get 1 KG, you multiply by 10 and that will be = Loss S$780.00

100 GM PAMP Gold Bar : 5,520 – 5,396 = S$124.00. To get 1 KG, you multiply by 10 and that will be = Loss S$1,240.00

1 OZ Gold Bullion Coin : 1,759 – 1,678 = S$81.00. To get 1 KG, you multiply by 32.1507 from troy ounce, and that will be
= Loss S$2,604.00

During my purchase of physical gold, I was advised by the UOB staff that for investment purposes, 1 KG of Cast Bars is the cheapest to trade with UOB as you can also see above. In other words, the loss on spreads is much lower if you happen to buy and sell on the same time! However it costs ~>50KSGD per Kg with little divisibility. Imagine you misplace your 1 KG of gold….woooohoooo heartache!

Therefore, if you are afraid to misplace it or wanted more divisibility with a reasonable investment amount of >5KSGD and a reasonable loss spread, then 100 GM Argor cast bar is a good choice!

Further smaller divisibility, then you can buy Bullion coins at 1 OZ each but loss spread is higher. 
However the advantage is that it comes with many different designs suitable for gifts. Likewise, PAMP Gold Bars comes with different designs.

Do not open the seal
Below is a typical 100 GM Argor Cast Bar I own. Another thing to note is “DO NOT OPEN THE SEAL!” Once seal is opened, UOB will not buy back the gold at all. There is also a unique code for each gold bar.


Invoice costs money

The invoice itself does not cost additional money. What I am saying is if we lost the invoice per 100gm of gold we bought, UOB will charge S$100 deduct from the buy back price. 

This means that if we bought 200gm of gold from UOB, lost the invoice and if we are selling it back to UOB later, they will deduct S$200 from our sell price. 

Open UOB Silver account
Again, it is more or less idiot proof when you are at the Main UOB Branch. Just tell them that you need to open a Silver account and the staff will guide you through.

One thing to note is the charges of gold or silver account per annum!  It is slightly more difficult to comprehend. Imagine that you are owning 200g of Gold and 500 oz of Silver in UOB account, then the charges per annum will be ~S$76 and S$55 respectively.

Also note that there is a minimum amount or deposits to set up the accounts but it is refundable in cash once you close the account. The deposits cannot be used for trading, and to ensure the account is active, the minimum deposit amount must be there.

For more info on rates, refer UOB website here.


Other ways: Gold ETF (SGX) and Silver

Two other ways to own the precious metals in a more direct manner is to buy Gold ETF on SGX and Ishares Silver Trust on NYSE i.e. GLD US$ (O87: SGX) and ISH Silver (SLV.P : NYS)! Both is traded in US$!

Alternatively in Singapore, you can also buy and store physical gold or open account with BullionStar. Refer webpage here.

Of course you can visit gold jewellery shop as well. Read : When is it a Good Time to Buy Gold?

There are other precious metals ETF or related stocks that you can buy too. I will not elaborate it here though. 

Other bloggers spoke about it

Big Fat Purse

ASSI

My 15HWW

Simply Jesme

Foolish Chamelon

Rolf’s thoughts

Disclaimer: I own physical gold, UOB silver account and Gold trust.

In the Singapore finance blogosphere, there are so many analysis on stocks, but not many on gold and silver. Even if there is, there is little explanation on the fundamentals of the precious metals and the role it plays in the history of mankind.

Instead, there are more articles related to instructions how and where we can buy precious metals in Singapore OR using gold as an hedge against inflation or as insurance OR basically showing the charts of pricings/returns over the year!

Understand the history of gold will give you a better perception of the future impact it is likely to have in the world monetary system.  

Stay tuned for Part 2.



Tuesday, 24 May 2016

Crisis and retrenchment – What if it is me? (Part 2)

This article continues from previous post (refer here) where I discussed how to stay financially and mentally resilient during a crisis resulting in a retrenchment. The discussion apparently did not include the type of resilience such as acquisition of work skill-sets which can easily be transited from one company/ industry to another.

Why retrenchment can happen to any employed person?

Some people say “Oh retrenchment will not happen to me, because I have a stable job…Oh I am young, can find another job easily…Oh, I am highly valuable to my company...Oh my boss like me…Oh I am in civil service!”  It can be true NOW, but certainly not throughout your entire working life. 

Is it a big deal that we are young now? No! I am still young also, but everyone grows old one day with more burdens on our shoulders from family expenses. Even when you are frugal, but living in the inflationary Lion city is going to be tough.

If you think you are really valuable to your company, sometimes the ugly truth is because you are still “cheap” in salary. Your salary may go up one day and you can become an eye sore during a crisis too. Okay…you win! You prefer to be lowly paid! Counter-intuitively, lowly paid does not always mean you are on the safe side. Due to change of corporate structure, you can be made redundant by the highly-paid bosses too. The most junior staffs in my office were the first to be let go during this crisis.

Your boss likes you now, but your boss can change before you realise. For some reason, your new boss may loathe you. Even when your boss is owner of the company, he can sell the business to a new owner. This happened to me a few times.

Perhaps the only exception is probably when you are working in a civil service and has an “iron rice bowl”, so as to speak. Yet, how many in the civil service really enjoy their job? Honestly, civil service tends to provide more opportunity to “scholars” and for “farmers” the path of climbing is really long and gradual, which also mean lesser exposures and lower salary comparatively.

With all aforesaid, it is of grave importance to be financially and mentally prepared for a downturn, even if chances are slim for you to be “slashed”. Those who follow my blog will know that I had long prepared for this impending crisis, not just limited to my industry of O&G, but also extends to the general economy as a whole.

I already considered myself to be lucky up to now that I am still surviving with a comfortable income with manageable stress in my job. Many in similar category as me either already left or is so stressful and unhappy about work now.  Maybe it boils down to this…Read: Oil & Gas Crisis – Time to Take On More Work Even with No Pay Raise!

Anyway, if the unfortunate do take place on me, what would I really do next?

Have a peaceful mind! Do not rush into the next job desperately

No matter how well prepared we are, when an ill-fated dismissal actually falls upon us, emotion is bound to be stirred and feeling sad is inevitable. In situation like this, our mind is definitely not in the clearest state to make good decision. Hence, the need to have a peaceful mind before making the next decision is extremely important. 

I am suggesting to myself NEVER to rush into the next available full-time employed job desperately. In any case, since the Oil and Gas industry is so bad now, rushing from one job to another can also mean jumping from one shit to another!

The worst thing you want is to get into a new job and then get retrench within few months again. I already saw many friends entering into this kind of shitty situation now, and they are really unhappy! 

Take a well-deserved break

Ideally, go sabbatical for 6 months or more including the few months’ notice period and balance annual leave. Do NOT even search for ads on job during the first 3-4 months at least. I will try to enjoy this period on things that I could possibly miss out in my life due to work.

Spend time with my kids

Priority number one for me - more time with my kids. You simply cannot turn back the clock when they grow up later. That said, I will not be just a stay-home dad doing household chores and become a nanny to my kids! By the way, I hate doing these chores. I prefer to be a Father, a Friend and a Mentor! While I am already my children’s part-time tuition teacher outside textbooks, I endeavour to do more with a more structured way of teaching for them. Of course, I will exercise and play with them, such as swimming, jogging and do art and craft with them. Whatever it is, the thing that matters most is to spend more time with them during this period. 

 Paintings by my 5-year-old and me!

Freelance Options

Option A
Through referral, I actually started writing freelance for the O&G sector last year. I had since stopped due to my busy schedule lately. If the “brutal axe slashes”, I will like to continue.  

Option B
A friend of mine is the founder of his tech start-up business with vested interest from VC. This friend is an IT guru, but never really a sales and marketing guy. Last year he approached me if I am willing to help him strengthened this area. I declined due to my work commitment. Perhaps if I am made redundant, I will look into this option.  

Option C
Another friend of mine is leading his family business in the sector which I am extremely familiar with. Many times, he had hinted to me how desperately he needed a trusted person to assist him since he is unable to cope. So this is another viable option.    

For options B,C &D, I will only consider if it is freelance and definitely not within the first 3-4 months as I wanted to have a well-deserved break.  Furthermore, I will not ask for high salary or probably even only ask for some transport allowances or commission based job. First, I do not want the unnecessary stress to achieve unrealistic good performance in a highly challenging environment now. Second, I want conflict with “friends” to be mitigated to bare minimum. Ideally, it should be treated as helping friends out, rather than them giving me a helping hand.

Option D
Helping in my sister’s business. This is least likely to happen unless I am really desperate. Working for siblings is never easy.  

Self-improvement - read more books and attend more courses

Time is something I lack to read as many books as I wanted lately. My usual book reading onboard airplane is cut down by lesser traveling due to the diminished projects and cost cutting measures. 

To do well in life, I strongly believe we will need a WISE mentor to guide us along the way. If fate does not bring you one, do not fret over it. This is because reading simply can be the best way to substitute your real life mentor. After all, a good book can enrich us with almost a lifetime worth of invaluable experiences from the author.

When it comes to reading, do not mistaken reading of newspapers, articles, magazines etc as similar to reading a book. The former provides more information rather than the much needed wisdom from a book. Anyway, people nowadays have definitely no lack of information compared to wisdom! Words are essentially one of the main building blocks of life. Our future depends on the words we believe about ourself now, whether read, listen, written or spoken. So if time is granted, I will definitely read more books for self-improvement. 

To add variety to learning, attending courses can be great as it allows “live” interaction with people that a book cannot provide. Just have to take note of the charges!

Compile my own “Gift” for my children

Inspired by legendary investor Jim Roger’s book : “A Gift to My Children - A Father’s Lessons for Life and Investing”, I will want to publish my own book for my children one day. This is also one of the reasons why I started this blog. So perhaps retrenchment will come in handy for me to start compiling my past articles. Read:


Investments

Keeping myself abreast of investment is something I will definitely do with or without a crisis. Yet, we should bear in mind that staying too fixated on the stock market and making lots of investments during your sabbatical is also not as wise. So take it easy and be patient and discipline in our investment activities even if we have all the time at home from not needing to go to work.  The last thing we want is to deplete our still healthy cash position fast and feel pressured to go back to work soon!

Six Packs

Finally six packs! A challenging one indeed. This is something that I had never have in my entire life despite that I had always been a sporty person.


No job got six packs, also not too bad an idea! Haha!

Rolf's final thoughts

The morale in the O&G industry is very low now. It is not just in Singapore, but worldwide within this sector. Most people are very free now (me included) with so few projects to speak of. The sentiment is definitely NOT:  “free and happy” but “free and worry” instead!

I am not saying that I am outright certain to be retrenched soon. In fact, I was given added responsibility lately as compared to my fellow colleagues. Besides, I am quite confident that my skillset, experiences and career track records should be able to help me leapfrog to other industry much easier than others, for as long as I manage my own expectation about the income part. In any case, “prudent man prepares”.

No need to say “heng” you are not in this sector! The truth is the economy in general for Singapore is going to really tough ahead. Many people in other sectors are going to be affected, if not already affected! Sometimes, it can be either the “nasty wind” has yet to blow in your direction or you are still ignorant about it. Perhaps because you are not in frontline, and still working on existing projects so you may not know what is really happening in the market! Even if you are dealing with figures, there will be a lag between company financial performances relative to general market conditions.    

Why do you think PAP brought forward the 2015 general election?

The above plan is a short term one. If the downturn is going to be a structural one that last more than 2 years, instead of a cyclical one, then perhaps some rethinking is needed later for me. Uber….nah! Teaching…..maybe?