Stock market has been a lackluster as S&P dropped 16.5% since the start of the year. No matter if you are invested into growth stocks or value stocks, it has been a painful year so far.
The cryptocurrency market is now under immerse pressure as stablecoin UST crashed to zero bringing the whole cryptocurrency market with it. People are now reconsidering if cryptocurrency is a true hedge towards traditional equity market.
If you have already forgotten, we still have the Russia-Ukraine conflict, the dealing with post COVID-19 and Johnny Depp-Amber Heard trial ongoing. It is one perfect long storm.
Coming back to wealth management, it always interest me to see what the experts in the field are doing. In this case, one question that fascinates me is what would Warren Buffett do?
What Would Warren Buffett Do?
What would Warren Buffett do?
In 2020, COVID19 brought about a new trend. A trend on investing in high growth companies. Cathie Wood became an instant celebrity with her ARKK fund performing being up 300% from the bottom of March 2020 at one time. Warren Buffett hit the news around the same time. However, it was one where people thought he was losing his magic as his fund was underperforming the ARKK drastically.
As time passes, you can see from the chart above that there was a huge reversal and value investing is now respected again.
Disclaimer: The below discussion will be on the actions of Berkshire Hathaway (BRK) or Warren Buffett. This does not constitute any investment advice.
What is Warren Buffett doing now?
What would Warren Buffett do
Warren Buffett invest with a mindset called value investing. In the very simplest form, it means investing into a wonderful business at a sensible price. The challenge is always to find out what is a wonderful business and what is a sensible price.
In the first quarter of 2022, BRK increase their exposure to Chevron (4th biggest position in BRK). This is a timely position as the world reconsiders to purchase oil from Russia.
Personally, I think Warren Buffett has a good grasp of business flow in the United States. Since Biden took office, one of the things he did was to revoke the permit for the Keystone XL pipeline. I read with great interest but have no idea on the implication. Perhaps, this might be a reason why he started investing into oil.
The investment into ATVI was probably a value buy. In an interview Buffett said “It is my purchases, not the manager, who bought it some months ago. And if the deal goes through we make some money, and if the deal doesn’t go through who knows what happens.” Buffett said his decision came down to the fact that Microsoft’s purchase values Activision Blizzard at $95 per share. Activision Blizzard was trading at $75.60 per share as of the close of markets on Friday. Perhaps, he was buying for a good arbitrage opportunity.
Lastly, it is about investing in yourself. Buffett spend his time investing into himself. He reads at least 80% a day. During times of uncertainty, it’s more important than ever to be as valuable as ever, and as Buffett said, the best thing we can do is “be exceptionally good at something.”
Final Thoughts
What will you do?
Personally, I will be reviewing my own portfolio. I believe this is a good time to add new positions even in this current situation. Valuation has been depressed and perhaps a good time to dollar cost average now.
What will you do?
Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.
The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.
That being said, Jack Ma has spoken wisdom on life, business and relationship. I have compiled Top 5 quotes which I particularly enjoy.
Hope that Chinese stocks turn around soon.
Jack Ma’s 5 Best Quotes On Life, Business and Relationship (Photo Source)
#1: On the path to success, you will notice the successful ones are not whiners, nor do they complain often.
After thinking for a long time, I personally felt that this should be the first one on the list (or on any list). If you ask someone what are the ingredients of success, you might get answers like family background, intelligence, the amount of money they have, the school they come from or being hardworking.
I believe that one point stands above all of those listed above. I’m not undermining any of them but without this one point, the rest might fall short.
The Right Positive Attitude.
In my industry and in the previous companies that I worked for, I noticed a similar pattern. The top performers are usually silent (of course they will be loud performers too) and they do what they are suppose to do diligently. Most of them look at the bright side and are often grateful for what they receive or accomplish in their work. Don’t be mistaken though. They do complaint (they are not saints). After releasing the negative energy, they will pick themselves up again and continue preserving in what they do. In time, most of them find success.
Observe the “more successful” colleagues that you have. Are they like what I have described? Do you want to be like that too?
#2: You need the right people, not the best people.
I was inspired by this book called Good To Great by Jim Collins. Jim Collins put together 5 years of research to explain how a company can grow from good to great. In one of the chapter, Jim Collins writes about “getting the right people on the bus“. He didn’t say the best people, but the right people.
The right people or team will figure out how to drive the bus to the direction they want. I believe that everyone gives out a different kind of energy and it is your job (as a leader) to manage that energy. In the world, there are really smart people/best people out there. But if they won’t be able to have the right resonance with the team, they are not right at all. The bus might be driven in a different direction or be broken down entirely.
The right culture takes time to build up and seconds to be broken down. You might have friends who “overstayed” in a role because they enjoyed their colleagues company too much. You probably might have heard of friends who quit their jobs immediately because of a bad manager.
The book Good To Great will give a different dimension in explaining this.
#3: When people think too highly of you, you have the responsibility to calm down and be yourself.
One word can summarise this entire sentence: Ego. This comes as a bad joke because I felt that ego might have gotten better of Jack in the last few years.
As we become more successful and people start looking up to you, I believe it is important to remember our roots and how we get there. I have met people who got successful very quickly and (very quickly as well) became arrogant. I like this quote from Will Smith: Money and success don’t change who we are; they merely amplify what is already there. People will see how you treat people and that is an indication on who you are as a person whether successful or not.
The price of ego could be a heavy one and it is up to us to have humility whether successful or not.
What kind of person do you want to be?
#4: When doing sales, the first people who will trust you will be strangers. Friends will be shielding against you, fair weather friends will distance from you. Family will look down upon you. The day you finally succeeded, paying the bills for every get-together dinner, entertainment, you will realised: everyone else is present except strangers.
I don’t blame them. As Walter Bradford Cannon once said fight or flight is a physiological reaction that occurs in response to a perceived harmful event, attack, or threat to survival. A sale may seem like a harmful attack to their wallets (whether or not the product/service is useful for them or not). Any and every exposure to a sale person might seem daunting for some.
I know of some friends who put down everything to start a business. It isn’t as glamorous as it seems. Behind the nice Facebook post lies hard work, sweat and tears (not exaggerating). There are also countless heart aches that they (myself inclusive) have experienced in the course of running a business.
Working well beyond 9am to 5pm. Some quit their jobs and suddenly they are working 24/7
Some might face discouragement from family or their close ones. Some very hurtful sentences include “You have a degree, why do you want to do this?”, “Why don’t you find a proper job?”, “Why are you not setting aside time for the family, is money that important?”, “Why are you not working hard enough (when things are not going well), do you know we have a family to support?”, “I can get this cheaper from Taobao”, “I can do this myself by reading up” etc
Yet, the day you succeeded in the world eyes. Suddenly, the applause comes in. Comments like “I knew you could do it all this time”. I heard this first hand from a friend who successful sold away his business for millions of dollar. However, I would have to say it is not easy. It is hard to suddenly trust someone to buy something straight away. It is even harder to refer them to someone that you know. But for those of you who did, a big thank you.
Do you know someone who is running a business or a practice? Lend them a helping hand. Here are some from I know run great business and I would like to extend to them a helping hand.
Disclaimer: I do not get any referral fees for promoting them. I personally feel that their products and services are great.
#5: Buying Life Insurance cannot change your life; instead it prevents your lifestyle from being changed. After tolling for decades, an illness can wipe out an entire family’s saving by medical bills incurred.
You will not turn bankrupt because of buying insurance but you will cause your loved ones to turn bankrupt if you don’t.
There are certain things we want to happen and certain things we don’t want to happen. In the 21st century, humanity is facing one of the greatest war ever: the war against critical illness. Mortality has improved over the years because of medical innovation. At the very same time, the cost of medical provision has also increase. What seems to be like a death sentence decades ago can now be cured.. but you need money to have access to that treatment.
After chatting with past critical illness survivors, I realised that concern of falling ill runs deeper than just the cost. At the end, affording the treatment is the start. Recovering from the illness is the end game. Give yourself a chance to win this game by having the adequate insurance.
Final Thoughts
Let’s all thrive in our lives, business and relationships.
The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.
Drawing, gardening, home-based baking. These are some of the emerging trends where passion meets profit. To most people, this could be a dream come true. A dream where you are paid for things you enjoy doing. You could even supplement your wealth management journey through your passion.
You might have received an invitation to a limited time entrepreneur webinar or click through a Facebook advertisement asking you to “BE YOUR OWN BOSS”. In any case, I believe that it is definitely possible to profit from your passion.
In my journey to talk to my readers on their experience profiting from passion, I noticed some key trends that emerged. I realised that most people fail because they did not ask themselves these 3 important questions early on. To help you save your time and effort, I have dedicated time to write this so that you will not fail in this journey on profiting from passion. I have also interviewed a few entrepreneurs who are willing to share their valuable experiences at the end of the article.
Is it possible to profit from passion
Identify Your Passion
For most people, this comes intuitively. For others, it may take time.
Personally, it took some time for me to “identify” my passion. Reading good financial articles (like this one.. haha) and sharing about financial knowledge has been a great pleasure for me. Initially, I do it very sub-consciously. I started off sharing about the best credit cards, simple wealth management tips and also the lessons I learnt from books. It was just something that I enjoyed doing. Though, I did not profit from any of them. I enjoyed the process.
This was “invisible” to me until one of my friends pointed it out to me. He asked me why not look for a career in the financial services space where you can make full use of your passion. It took me 4 years just to “identify” my passion. While it certainly took a long time, I enjoy every moment of my career now.
Coming back to the original topic, one of the most popular question that I hear from my readers is this: “How can I profit from my passion?”
After spending some time to discuss with them, I realised most of them cannot identify or admit truthfully that they have a certain passion. Most of the time, it is because the “passion” appears to be profitable. Their minds were thinking about profitability rather than passion. I think this is very normal. We do have real priorities like improving our standard of living, saving for retirement etc.
In the midst of finding our passion, we lost our way.
I believe the first step is to identify your passion. This will take time. I believe that passion are met to be a net positive in life. Even if it is not profitable or not yet profitable, it has to give you an intangible benefit like happiness.
For Vivian from Platter With Love, she “accidentally” discovered her passion. One faithful evening, she designed a platter (out of pure fun) and brought it home. She witnessed how her family was amazed and delighted at the beauty of the platter arrangement, the food, and also the taste. That was the start of her venturing into the platter business.
Step #1: What is your passion?
Does Time Permits?
You will need time. It is very frustrating if your passion now becomes a time burden to indulge in along with the other responsibilities you have in life. I asked a passionate hobbyist Plantssg his biggest challenge. This is what he mentioned.
“One of the biggest challenge is to make sure your assets don’t die. It must grow well and thrive”.
While he did not mention about the amount of time he spend in his garden, I personally believe he would have spend a lot of time there.
Before I scare any of you away, I would like to add another dimension to this. I believe that Time is about Consistency. It is okay not to make any money it your passion yet. It is okay to spend time on it. The most important is to consistently schedule it and commit to your passion. For now, forget about the profit and just doing it consistently will make you better and better. You will hit gold sooner or later.
Even for Liling from Ola.bakess, she had to schedule time outside of her full time job to plan for her business. Her weekends were spend baking while weekday nights were spent in business planning.
Step #2: Schedule your passion
Be Honest
Do you really need this passion to be profitable? Sometimes, your passion will turn to become a frustration. Just imagine while preparing your bread for your next customer, you receive a ridiculous bad review. This will definitely put a damper on your mood for the rest of your day.
Is it possible to profit from passion ridiculous bad reviews
Honestly ask yourself if this passion needs to be profitable for it to bring happiness to the lives of yourself and others? I would rather you love the process. Not all passion has to be profitable although it can.
Step #3: Are you mentally prepared?
Final Thoughts
I believe that it is definitely possible to profit from passion. It is a journey of exploring, having fun consistently and if it makes you happy, profit from it! If you have a story when you tried to profit from passion, I would love to connect with you. Do email me or text me. I look forward to some of your stories.
Continue scrolling to read the interviews with fellow entrepreneurs. Wishing you the best in your passion =)
Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.
The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.
Special Interviews
Disclaimer: I’m a great supporter of these businesses. I do not collect any forms of remuneration by featuring them.
What made u decide to venture into selling platter with love ?
The business is very much an extension of me as a person; my love for gastronomical fare, my love for quality time spent with family and friends, my love for variety and options, and my belief in contributing back to the community. I have worked as a school teacher before this. Despite years of teaching in schools; in primary schools, secondary schools and junior colleges, I still feel inadequate. I was missing life lessons. Though I am still a teacher at heart, I had wished to be better myself as a person before heading back to the classroom (possibly in my retirement years). One evening, I designed a platter, out of pure fun and enjoyment, and brought it back to my maiden home. I witnessed how delighted my family was as they marveled at the beauty of the platter arrangement, like that of a piece of valuable art work. After digging in, the platter sparked many conversations, my family was curious as it was not a conventional fare. They enjoyed the liberty to try out different food combinations. Not only that, the platter provided something for the whole family, from my niece who was one to my grandmother who was 91 years old. Everyone huddled around the platter and delighted in the meal, it was a precious sight. That was when I resolved to turn it into a business.
Before you started selling your products, how long have you been practicing making platter with love?
Platters are a relatively new concept, especially in the Singapore market. The concept started in 2016, in Australia/New Zealand, when it was done as a grazing table at a wedding reception. The grazing table offers a variety of food options, primarily cheeses, charcuterie, fruits, and just about anything else you like. Unlike conventional buffet lines where you queue for your food, the concept allows for a freestyle selection, according to your preference. When Covid-19 hit last year, I read about many who have lost their jobs. The job market did not look promising. Instead of viewing that as a crisis, I started to do extensive research and reading up on my passion: gastronomy. I have always enjoyed experimenting and cooking. It was after months of experimentation and research, rounds of feedback from family and close friends, that we arrive at the menu we have today. At the same time, I underwent officially training as a private chef and went for food hygiene certification. I have run this business for over a year now.
How much time a week do you put into running this business?
I do not stipulate hours when it comes to running Platter With Love. As an entrepreneur, I learnt that we not only possess the ability to dream, but we need to be willing to put in the hours to set our dream into motion. Apart from customer service, fulfilling customers’ order, hours need to be put aside into creation of content for the website, maintaining customer relations, inventory checks/replenishment, licensing, etc. At the end of the day, the raving reviews from my customers are an acknowledge of my efforts. It gives my great satisfaction to know that I have done my best in ensuring happiness and bliss, (apart from a delectable food platter) are safety delivered to my customers. More importantly, the true reward comes in how this business is serving as a vehicle to donate meals to the needy in Singapore, and that makes everything is worthwhile.
What made u decide to venture into selling Ola.Bakess?
I just like to bake and eat macarons (Hahaha)! Macarons are very delicate almond cookies and require a lot of attention. The recipes are very challenging but I get a sense of excitement and happiness especially when it becomes perfect. It is my dream to make perfect macarons
Before you started selling your products, how long have you been practicing making Macarons? It took me almost 1 year for my macarons to be at the level of my satisfaction. I took various courses such as macarons class to have a deeper understanding on the basic foundation. There were also a lot of try and error practice to be satisfied with the recipe.
How much time a week did you put into running this business? This is difficult to quantify. I have a full time job. I usually do business planning during weekday evenings. My weekends are reserved for baking.
It is official. Tesla just invested/bought (it is hard to tell the difference today) USD$1.5B in Bitcoin and plans to accept it as payment. Just a few days ago, CEO Elon Musk tweeted positive messages around digital currency especially for Bitcoin and Dogecoin. While the intention of his Dogecoin tweet is still unclear, his tweet has send Dogecoin’s prices through the roof/moon/mars (it is hard to keep up with the terms anymore).
How Tesla and Bitcoin are forming the new economy Dogecoin
Disclaimer: No vested interest in Bitcoin/Dogecoin/Tesla.
In this article, I will attempt to explain what good and what not good will happen from this move and potential series of events that might unfold. If you are new to Tesla and Bitcoin, I would encourage you to read about my previous Bitcoin article: Is it too late to invest in Bitcoin?
Tesla’s Current Brilliant Capital Moves
One thing for sure. Elon Musk sure knows how to raise capital or get his hands on money. Previously, Tesla raised USD$5 billion from stock offering. The question had that time was do they really need the cash? It turns out that his timing was excellent. By selling shares at an expensive price, Tesla’s existing shareholder was not affected much by dilution. Effectively, he is raising capital from the equity market and still “protecting” his existing shareholder. I feel that it was a wonderful move.
Secondly, Tesla’s income comes from selling regulatory zero emission credits to other carmakers. Tesla would have noted a net loss for 2020 if it had not relied on this USD$1.6billion sale. To help build a sustainable economy, carmakers have to manage their pollution levels and have to buy green credits or face hefty fines or have their business licenses revoked. Selling of the zero emission credits is probably a 100% profit margin (there is no COGS). I feel this is pretty smart too as Tesla is selling something that is technically “free”. This will impact them once the other carmakers are more serious about their carbon emission.
Tesla Next Capital Move: Bitcoin
As of 27 Jan 2021 Motley Fool’s article, Tesla ended the year with a cash war chest of USD$19.4B. This already includes the $10B raised through stocks offering in 2020. With the purchase of USD$1.5B worth of Bitcoin, around 7% of the Balance Sheet (cash and equivalent) has been converted into Bitcoin. When you are investing in Tesla, you are now “investing” in Bitcoin.
How Tesla and Bitcoin are forming the new economy
Of course, Bitcoin surge > 20% to reach a new highs of USD$44,000.
In a official filing with the Securities and Exchange Commission, the company said it bought the bitcoin for “more flexibility to further diversify and maximize returns on our cash.” With the limited use of Bitcoin at the moment, I believe Bitcoin is another investment vehicle for Tesla. In this, I feel that Tesla would be able to “sell” Bitcoin when the time is right to edge up their quarterly results. However, this could impact them if Bitcoin prices fluctuate much.
Tesla and Bitcoin: The New Economy
You might be wondering why I named the article “The New Economy” by now. I would like to present a thesis of what potentially can happen and the likely impacts of it.
An Alternative Investment / Store of Value
This is the one that I like the most. Although it is known that Warren Buffett does not invest directly into Gold, he is invested into Barrick Gold, an Gold Mining company. Gold by itself doesn’t not have any utility. Barrick Gold offers a balance sheet, income sheet etc. Most people believe that it is hedge against the USD.
Similarly, what Elon Musk might be trying to do is to hedge against the USD. Think about it, 20% of all USD are printed in 2020 during the COVID-19 crisis. The value of USD might be compromised and this is where it gets exciting.
If the crisis isn’t managed well and the value of USD continues to crumble, Bitcoin might then be a good store of value. Bitcoin will then become the new worldwide accepted currency. Hence, the new economy.
Increase adoption of Bitcoin
In my previous article about Bitcoin, I questioned about the “lack of adoption” of bitcoin. There seemed to be a HODL attitude on diamond hands. As Tesla cars gets traction in the world, they could really start to accept Bitcoin for their goods or service all over the world. As the velocity of Bitcoin transaction circulates more and more around the world, people will eventually have to use Bitcoin in their everyday transaction. It will give birth to a new worldwide accepted currency.
The question remains if people would actually want to use Bitcoin for transactions with the increasing Bitcoin prices.
Final Thoughts By Wealthdojo
Elon Musk decisions usually leave people feeling awe or just confused. Certainty, he already has raving fan base to help him push prices to wherever he wants it to be via a tweet. I can only say he is a good marketer, a great business man and definitely an excellent story teller.
Till next time!
Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.
The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.
What Will Happen To My Insurance Policies If My Insurer Sells Away Their Business: Worries
Why do they want to sell away their business?
Before we explore what will happen to our insurance policies after the companies sell that business away, we need to explore why would they even want to sell that business unit away if it is profitable.
It could be any of the following reasons:
Business strategy has changed
Raise funds to divest for peripheral operations (This is AXA’s cited reason)
Concentrate on other business lines
Focusing on other geographical markets
Being offered a good price / Cashing out on business
The list goes on. Insurance companies also acts like normal businesses and they will probably consider the sale of that business unit when an opportunity arises.
Is this the first time it happened?
It happened various times in the past and I believe this will happen again in the future.
You can see that there is a fair amount of transaction that took place in Singapore shores as well.
What Will Happen To My Insurance Policies If My Insurer Sells Away Their Business?
I think that’s the key to the topic today. I have contacted the Life Insurance Association of Singapore (LIA) to confirm above. This is their response. I will bold the information that is relevant to consumers.
All insurers are licensed and are regulated by the Monetary Authority of Singapore via the Insurance Act, and its subsidiary legislation, and regulations. Due to the long term nature of life insurance policies, there are provisions* in the Insurance Act which the licensed insurer has to comply with, in an event of a voluntary transfer of business or re-structure of business or business failure, to safeguard the interests of policyholders. Refer to *Part IIIAA on Transfer of Business and Shares, Restructuring of Licensed Insurer and Winding Up.
Business Transfer (Buy-Over)
Depending on the deal agreed between the two parties, the buying insurer will generally become responsible for all policies of the selling insurer. For the individual policyholder, his policy’s terms and benefits will be unchanged, and will continue to be honored by the buying insurer.
In short, suppose you hold a policy issued by Insurer A. Insurer A is sold to Insurer B, Insurer B will become your insurance company. Your policy, now under B, will be untouched and will be made good by B.
What Will Happen To My Insurance Policies If My Insurer Sells Away Their Business: Phew
Conclusion
Your policy will still be in-force and be taken care of the new insurer. The next question will then be who will be taking care of your insurance policy from then on?
No one will care about your money as much as you do.
In Wealth Management, it is important to Pay yourself first. Beware of scams. Before you invest in any company or popular investment opportunity, be sure to do your own due diligence. If you wish to learn more about investment, I hope to nurture genuine relationships with all of my readers.
