Sunday, 31 March 2019

Investing in our Career (Taking care of the goose)

  Posted at  March 31, 2019 4 comments


There was once a farmer who owned a prized asset: Le' Goose!  This was no ordinary Goose. The farmer took care of the Goose, feeding it and tending to its needs daily. Behold, each morning when he checked the Goose pen, inside was a shimmering, shiny Golden Egg!

Each afternoon, the farmer went to town and sold the egg. The consistent money received from the sales of the golden eggs soon allowed the farmer to live comfortably. However, the farmer started to get annoyed that the goose only laid ONE EGG per day.


"It's far too slow! I need to get more golden eggs to get rich faster!" 



He devised a plan to finally kill the goose to harvest all the golden eggs at once by cutting its belly open. However, when he did kill and cut open his goose, there was not a single egg to be found.

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tl:dr (too long didn't read version):

  • Expect the unexpected in our careers (it might not always be smooth sailing)
  • Take care of our golden goose (Plan A), make plans and also backup plans (Plan B).
  • Don't do things that are dealbreakers (kill your golden goose prematurely)
  • Upgrade yourself, invest in "fattening" our golden goose. (Skillsfuture can be an option)
  • Keep your desires in check (the farmer inside us)

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This is a famous story from Aesop's fables that warns against the perils of Greed and incredible short-sightedness. In the above story, the farmer made an irreversible loss by taking an action that seemed logical but was actually myopic in his hindsight.

We each actually have a goose that lays golden eggs. Most lay a golden egg a month. Some do better and lay eggs more than just once a month. Some people get small eggs while others get big eggs.

When we analyse the parable, there are 3 important things.


  • Goose: Our asset that generates consistent income.
  • Farmer: Our desires/wants in life that consumes the income.
  • Golden Egg(s): The consistent income (reward) for taking care of our asset.

Having a job is different from having a Career. A Job simply gives us money in exchange for our time. A Career, on top of giving us money in exchange for time would require more planning and thought out process to grow, improve, "fatten" up the goose. And in time, the Goose aka. our main asset in earning an income grows to give a greater output and satisfaction in life.


Why is keeping the delicate relationship of the 3 important?

  • Having a stable income generated leads to the ability to save.
  • The ability to save in a disciplined way leads to the possibility of gaining more assets.
  • Taking care of the goose increases the output(s).
  • Keeping the desires of our internal "farmer" in check ensures that we do not kill the goose prematurely.
  • Putting the Golden eggs earned to good use is a must because it is a limited resource.


Recently, there were two main events that happened around me that crystallised the importance of planning ahead. (Stories have been slightly altered but retains the essence)

1. Retrenchment at workplace
2. Misfortune of a close friend

Story #1: Retrenchment at workplace.

This is a story of how a "natural disaster" can kill our golden goose like how Thanos decides to snap his fingers.
Sarang Hae~ *snaps*
Two of my colleagues were asked told to leave without any warning whatsoever with only about 2 hours notice. This event hit me and my colleagues hard. We were always told our company was doing well. Suddenly, we realised the fragility of our jobs and how we could not take them for granted. In the fast moving globalised world, we could be replaced any minute and have nothing to fall back on.

There were some lucky ones who might go through a similar ordeal which turns out to be a blessing in disguise and ended with a better paying job but many others will not be as lucky and still remain jobless.

Nonetheless, it must have a great mental torture and stress through the ordeal of loosing the goose.

Question: Do I (we) have a backup plan?

Story #2: Misfortune of a close friend

I have a friend who works himself very hard to find more avenues of earning money. So he did a part time delivery in his spare time. However, he lacked sleep and was burning candles on either side to squeeze more golden eggs from his goose. He started to turn up late often at work and turned in work with poor quality.

Life is not a game. You can't just save and restart again.

One evening, he went out on that part time after his day job as usual.

Unfortunately, this time, his concentration lapsed and in a split second, he got into an accident. He suffered injury and loss time which affected his main work and instead of earning money, had to pay for his medical bills. Worse, his employers were not thrilled about his moonlighting.

It was of course easy to make hindsight comments but it is probably fair to say it probably wasn't worth it and my friend has to shoulder part of the blame for his situation.

Question: Are we getting more than we bargained for in a bid to rush the golden eggs?

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What are we planning/doing so that we can take care of our Golden Goose better? 

Story #1 was probably a good example of how we could lose our goose without our fault. Story #2 was probably an example of how wanting to earn more can backfire when we pushed ourselves to our human limits (there are just 24 hours each day and we can't trade rest time without suffering consequences).

Events like these make K.C. think. Barring actions that shoot ourselves in the foot, of course ideally, we would want to plan for our careers in such a way that we grow our income and achieve advancement/promotions at work. But to do this requires us to plan ahead to know what we want. This would be best if we already know what we want to do in the future.

If what is going on around the world is a good yardstick, my take is that our diplomas and degrees will be worth lesser in the future. This is because more people are getting them, this "cheapens" the worth of our degrees despite us having paid a handsome sum to get them. There are now many graduates around the world who have been taught this age old method of: Study hard, get a job and be set for life. The only thing is that many are not getting employed because companies don't need their skills and they are out of luck.

In my opinion, the degrees are still likely useful as an entry point, but thereafter accumulating experience and professional certification become much more useful.

In an ideal world situation:

Education >  Work/Career > Experience + Professional Certs > Advancements.

However, most of us might not have crystal balls and don't have an inkling of what we want in life early on. By the time we work, we might already be doing what we do not like. Commitments in life also make it tough to go for career switch and events like retrenchment would be doubly painful.

The next best possible thing we could do is probably to plan realistically based on our current situation.

What could one do to minimise the impacts of unforeseen circumstances? 

For circumstances like retrenchment, one can practically:


  • Cut down on unnecessary expenses. e.g subscriptions
  • Downgrade lifestyle if possible (but not burning another side of candle)
  • Keep an emergency fund of at least 6-9 months of living expenses in the bank
  • Start thinking of Plan A: Building a career advancement (so you are not easily replaceable)
  • Start thinking of a Plan B: In case you are retrenched.


What could one do to increase employability/advancements?

Well, the next better thing we could do is to upgrade/diversify our skill sets so that they contribute to our careers or act as backup plans. Maybe the recent happenings were a wakeup call to not be complacent. Either way, it beats staying in comfort zone.

Skillsfuture (This is not a sponsored post)

Source: https://www.skillsfuture.sg/Newsroom
In 2016, Skillsfuture was set up in Singapore to encourage Singaporeans to have a "lifelong learning" attitude. Singaporeans aged 25 and above were given a one time $500 credit and are eligible for subsidy if they sign up for courses that improve themselves. SkillsFuture also pour $1billion a year of our taxpayer money on initiatives such as career guidance for students, enhanced internships, and subsidies for mid-career learning, among others.

I was considering taking masters/ recognised courses especially in the wake of the company's retrenchment exercise and it was honestly one of the first time I took a look in detail at the courses offered. The amount of subsidy was quite high for certain courses and one receives more subsidies if he /she was older than 40.

As it stands, barring the scandal that cheated the government of $40million, many Singaporeans like myself still have not utilised them for a variety of reasons.

I would personally encourage our fellow Singaporeans to take a detailed look to see if any course would help in your career. If you are already doing well in your career, you might want to use it to take a course that improves a hobby (e.g. photography). There is nothing to lose here, well, maybe some time commitment.

Recently, some of my friends also started to take IT classes in Singapore polytechnic as a plan B as well as to keep relevant.

K.C. recently went to NTUC training hub to sign up for a one year course.
A wide variety of courses available to choose from.
The well-built Devan Nair institute at Jurong East (Employment and Employability Institute) speaks volumes of how much funds our government has poured into creating all the Skillsfuture ecosystem.

Singaporeans like myself are a bunch that likes to complain. The question is after complaining, what are some actionable steps we have taken to improve ourselves? Will your future self be grateful to you?

Until Next Time, 

K.C.
If you like this post, you might like our facebook page as well. I'm also on Investing Note.


Disclaimer: The views expressed, opinion and information in this article are strictly for informational purposes to encourage educational discussions only. It is important to conduct your own analysis before making any investment decisions based on your own personal circumstances. You should take reasonable measures such as seeking independent financial advice from professionals and/or independently research and verify the information that you find on "30 Year Old Investor" before undertaking any important investment decisions. No content on this site constitutes - or should be understood as constituting - a recommendation to enter any securities transactions or to engage in any of the investment strategies presented in our site content. We do not provide personalised recommendations or views as to whether a particular stock or investment approach is suitable to the financial needs of a specific individual. No representation or warranty expressed or implied is made as to, and no reliance shall be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained on this website. "30 Year Old Investor" shall not be liable whatsoever for loss or damages of any kind arising from the result of any use, reliance or distribution of the articles or its contents from information contained on this website. 

Sunday, 10 March 2019

Creative: My (un)biased analysis on Sxfi and Shares

  Posted at  March 10, 2019 3 comments
In this review I will mainly analyse 2 things:
1. Creative's new S-XFi tech
2. Creative technology's C76 stock.

Creative: 
The company that survived transitions.

Creative is a brand-name that rings a bell for many Singaporeans. Set up in 1981, it has seen its fair share of success in its Sound Blaster cards to its "challenges" in fighting Apple over patents (its Zen Touch vs the Apple Ipod.) How has Creative managed to survive it all is no simple feat and as K.C. researched into its history, one cannot help but be inspired by its story. It has now survived long enough to launch its next big thing: The Super X-Fi range of personalised audio holography.

He that fights and runs away, May turn and fight another day; But he that is in battle slain, Will never rise to fight again. - Tacitus

OKAY. So, K.C. saw extensive reviews online since last year on Creative's new Super XFi technology and fellow users at Investing Note have been recommending it as well, especially its new Super xfi Air headphones. K.C. therefore decided that he had to go to the IT fair on 8/3/2019 to see and hear the hype for myself.... and ended up going home with a pair of new Super xfi Air headphones.

K.C. would like to say that he is un-biased but having bought the technology and its shares before K.C. will leave you as the reader to decide for yourselves if his analysis is indeed biased.

First off, K.C. would just like to say that Creative (SGX:C76) is one of those stocks that he burnt almost $1,000 in trading as a newbie investor and he will share a little more of how that came to be and the lessons learnt from it. So in fact, K.C. has a reason to post negative reviews (but of course I'm not going to la)! 😂😂😂

Anyway, don't take my word for it! Go to the IT fair and hear it for yourselves!

tl;dr (too long, didn't read) version:

I'm probably very excited about the tech as an end user, but not so much from an investor point of view about its shares. This company will probably still continue to survive the next 10-15 years.

1. Creative's new S-XFi technology is indeed a value for money product that targets the mass market. The survivability of the business has been centered around constant innovation, patenting new technology arising from its R&D and moving into higher end consumer market. As an end user of its holographic audio series of product, I have to say, I'm honestly impressed and am enjoying the joy it brings to my late night entertainment without having to disturb my family.

2. Interest in Creative technology's C76 stock price has been more or less highly speculative because as of now we have not seen the new technology bring in consistent profits for Creative (yet). From a business point of view, the company is likely to survive the next 10-15 years given its direction in constant R&D and how it smartly patent its technology. From an investing point of view, the company's financials have not been doing so well for some time since its fall many years ago. Revenue has been constantly dropping over the last few years with challenges in the consumer market. It remains to be seen whether the award winning technology can indeed breathe new life into the company's financials and share price. Holographic audio is perhaps a new area but the headphone market is dominated by big players that Creative have to navigate and overcome to establish itself.

Below are some of K.C.'s thoughts on why this is so.

Long version:

HEADPHONES/SXFI TECH

Tucked away on the 6th floor of the IT show at Suntec Convention Hall 601, from 7-10 March, the IT show pulled in crowds while some other stores beside had only a few customers (pictures will prove my point later). As of posting of this article, you still have a few hours to hear it for yourselves at the IT fair.

The IT show really tells us why the new products are such a success.

Why is it such a hit? (The Pros & Cons)

1. Affordability:

At around $200, the products fall within the affordable range for most consumers. Good move.

  • S-XFi Amp Deal $199 comes with a certified Aurvana SE headphone. (Dongle)
  • The new headphones are probably worth your money at $219
    (IT show price and comes with free earpiece). Don't take my word for it. Hear it for yourself.
  • Brochures for other products can be found here.


2. Functionality, design and experience:

Sim Wong Hoo and his team have seemingly put alot of thought into the design, user experience, marketing to target the mass market, aka. People of all ages. The overall design is classy and simple. After using it for a night, I can say that the user interface is mostly intuitive. The connections for the headphone is more straightforward compared to the Dongle Amp which is surely a plus going forward. Sim Wong Hoo seems to know what he is doing and where all these is leading. The goal is clear: to provide a fuss free and clean user experience with the new holographic audio.

S-XFi Amp

S-XFi Air. The white ones have been sold out! 

  • S-XFi Amp: Some older folks loved the 3.5mm Dongle Amp because it features a 3.5mm standard ear jack which means they can connect it to their old mp3s.
  • S-XFi Air: This is no doubt the highlight of this IT show given that many young users have been asking for this. The wireless bluetooth headphone that features touch pads on the left side of its ear cup (which allows you to turn up and lower volume, change tracks or receive calls)
  • S-XFi Air-C: USB headset for gamers. 
  • Compatibility: The new range of products are widely compatible with a host of popular entertainment products such as the Sony Playstation, Nintendo Switch, Windows and Mac as well as the highly lucrative mobile devices segment. The SD card slot was supposedly insisted by Sim, but might not be a bad idea after all since one can store alot of songs on an SD card these days.

The holographic audio is indeed quite revolutionary, especially when you turn surround sound on for your computer. The difference can be immediately felt. Given that companies like Apple have manufactured phones with no more 3.5mm Jack, the bluetooth connectivity is also a plus.
Turning the surround option on worked wonders on my new S-XFi headphones.

3. After sales/support:


As can be seen in the series of pictures below, the turquoise blue shirts are the sales staff who provide very important support during the fair:

  • Payment of the products can be done via online, cutting queue times.
  • The main con here is that the headphones need manual setup with the SFXI app on playstore or on the App store to scan the user's ear profiles. This can prove a little difficult for some of the customers. But this is where the sales staff shine.

Sim Wong Hoo even came down personally to the IT show to help customers with the products today probably yesterday! (Too bad he wasn't there on Friday) I spoke to many of the sales staff and some older staff who have been with Creative for a long time and they confirmed that Sim is a really humble and down-to-earth CEO. Immense respect for him.

https://mothership.sg/2019/03/creative-sim-wong-hoo-it-show/

Sim Wong Hoo at the IT fair. Source HWZ.
K.C.'s snapshots from IT show
There were many buyers of all ages of the new Tech at the IT fair. A good sign to me.
A well-rehearsed sales speech delivered with Live demonstration to WOW the audience.
The crowd and interest is real. 
The crowd speaks for itself.

Creative Technology Stock SGX: C76

Moving on to Creative shares, I'm really impressed with the way the business is run because it survived so much over the years. From its founding in 1st July 1981, it as seen its fair share of successes mainly due to its 1989 Sound Blaster device to being publicly listed on the NASDAQ in 1992 on the back of its successes on the cards.

From 1996 to early 2007, it suffered some setbacks and also most notably known for its legal fight with Apple for infringements relating to user interface technology in its Zen touch vs Apple's Ipod. While it got $158 million from Apple as a one-time licensing rights, it lost sales, delisted and cut back on operations and jobs.

It has since continued to innovate to stay relevant with a range of other products most notably its recent Super X-Fi Technology. One good thing I like about Creative is the way it focuses on R&D and patenting its technologies to protect itself. It also has no outstanding debts, which is a huge plus for any operating company. (Look no further to Hyflux for a company who imploded itself with aggressive debt loading to expand its business)

Creative's Timeline History can be found here.

First off,  as mentioned Creative was one of those stocks I burnt a painful hole in my pocket during my first year as an investor. This was largely down to my short term trading strategies and inexperience in chasing a stock that had already run up in a FOMO (fear of missing out) manner.

Creative shares "exploded" from $1.20s range to almost $10 back in March 2018. This was prior to the launch of its Super X-fi Amps in September. I remember buying at around $6 thinking it might just go back higher. This was a huge mistake at that point of time because the physical product had not been launched. Creative was still on the back of dropping revenues/ profits which meant that it had not overturned its years of losses despite it being debt free.

*One important point of note was that the revenue from some of these years could be from patent legal claims and not from sales of its products which we ought to be more interested in. Discounting this would probably mean a worse figure while overall cash flows are still negative.

Again, however, the good thing is that Creative has no debts despite its dropping financial statistics:

Creative's Total Revenue in millions since 2015. Source SGX.

Creative's Gross Profit in millions since 2015. Source SGX.

Creative's Net income and Cash Flows in millions since 2015. Source SGX.

Creative shares "exploded" from $1.20s range to almost $10 back in March 2018. It closed $4.90 on 8/3/2019.








Lessons learnt for K.C. :


Never ever chase stocks that have run up (for short term trading).
- Margin of safety is compromised/lesser
- Room for more increase is limited
- Others would be profit taking

Looking back, many investors/short term traders profiteered from speculation of the highly anticipated super xfi product. I'm sure many were also burnt in the process who were blindly following, late to the party and not understanding what was happening (myself included).

Indeed, at this point of time, given the financials of the company, buying Creative's shares is akin to taking a punt and gambling that it will start to show some success in its newly minted crowned jewel product - the Super X-Fi. Like I mentioned above in my summary of the tl;dr version, Creative still has a lot of ground to make in terms of establishing itself in the hotly contested headphones arena which are dominated by many other big brand names selling high-end digital audio products.

Creative as a company can definitely survive. The share price is however another matter altogether.

If there is any encouragement, the response from the IT fair looks favourable indeed.

More astute and long term investors would likely adopt a wait-and-see attitude to see if the numbers show a turnaround. And at this level, Creative shares might not seem a very enticing stock to invest in given there are other choices while waiting for it to show signs of recovery.

I for one, certainly hope that a local brand like Creative would soar again.

p.s. Vested for short term punt.

p.s. Another of my favourite local SG brand: Secretlab chairs!
Until Next Time, 

K.C.
If you like this post, you might like our facebook page as well. I'm also on Investing Note.


Disclaimer: The views expressed, opinion and information in this article are strictly for informational purposes to encourage educational discussions only. It is important to conduct your own analysis before making any investment decisions based on your own personal circumstances. You should take reasonable measures such as seeking independent financial advice from professionals and/or independently research and verify the information that you find on "30 Year Old Investor" before undertaking any important investment decisions. No content on this site constitutes - or should be understood as constituting - a recommendation to enter any securities transactions or to engage in any of the investment strategies presented in our site content. We do not provide personalised recommendations or views as to whether a particular stock or investment approach is suitable to the financial needs of a specific individual. No representation or warranty expressed or implied is made as to, and no reliance shall be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained on this website. "30 Year Old Investor" shall not be liable whatsoever for loss or damages of any kind arising from the result of any use, reliance or distribution of the articles or its contents from information contained on this website. 
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You don't need to pay anyone/company to have a plan of your own and work towards achieving Financial Independence. Only we alone have no conflict of interest with our own money. "30 Year Old Investor" is a personal blog about a Singaporean's savings and investing journey.


Being the average Singaporean, K.C. is also interested in good food, a little bit of politics and a good slice of humour.

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Disclaimer

Disclaimer: The views expressed, opinion and information in this article are strictly for informational purposes to encourage educational discussions only.

No content on this site constitutes - or should be understood as constituting - a recommendation to enter any securities transactions or to engage in any of the investment strategies presented in our site content. We do not provide personalised recommendations or views as to whether a particular stock or investment approach is suitable to the financial needs of a specific individual. No representation or warranty expressed or implied is made as to, and no reliance shall be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained on this website.

"30 Year Old Investor" shall not be liable whatsoever for loss or damages of any kind arising from the result of any use, reliance or distribution of the articles or its contents from information contained on this website.

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