Saturday, July 29, 2017

John McAfee on Security, Privacy, Cryptocurrency and Education

This is an interview by John McAfee.

Who is he? He's the anti-virus guy, yup.

He is also the guy that said he would eat his d*ck if bitcoin doesn't go to $50,000.

Hah, he's a funny and smart guy. Here's the interview.


GMGH notes:
- phones are all spying devices
- however, the risk is based on who is doing the spying and what is the spied data used for
- the paradigm of security has shifted and the focus on AV is outdated
- instead of facing the by-product of hackers, the focus should be on the hackers
- "If you have nothing to hide, you have nothing to fear" BULLSHIT
- privacy is fundamental to the workings of society
- hackers don't hack small fries as opportunities appear because it would reveal their exploit
- zero-day exploits are run simultaneously at a specific time to maximize their profit
- don't store anything of value on a cloud not managed by you
- if you do store anything on a cloud, be sure to encrypt it
- Bitcoin came out of Pandora's Box - the technology has been released and cannot be supressed
- a lot of coins are SCAMS
- if you are going to be involved in any cryptocurrency, you need to educate yourself
- hardware wallets / offline wallets are the best way to secure your crypto wallets
- to create good security, you need to work with good security exploiters
- in 10 or 15 years, colleges or universities will not exist (I beg to differ)
- why store things in the human brain when you can use technology instead?
- education and the transfer of knowledge in its current form should be questioned if it will persist
- S7 cannot be remotely rooted (as of Mar 2017)
- iPhones are the most hackable phones


This interview is a culmination of many of my most passionate topics: cyber-security, privacy, cryptocurrency and education (hence, the title). I love it.

Cyber Security


I truly and honestly believe that most people have extremely weak and poor cyber security. I have made a series of posts on cyber security, but I've been too busy to finish the series.

#1 The security-convenience continuum
#2 "Safer than your neighbour" Theory

It's going to be a long while until I can go back to writing more, but the single, best tip and advice that I can give is for you to use a password manager. I recommend Dashlane and I use it myself for 95% of all my passwords. My referral link gets you 6 months free premium if you want to give it a shot. I strongly, strongly, strongly recommend a password manager. Use LassPass, 1Password, Keepass or whatever. Even a freaking paper and pencil notebook will do, as long as you don't re-use passwords. But by golly, have a system in place to manage your passwords.

Next, keep all your devices and software up to date. Security updates are pushed out for a reason.

Privacy

I'm not paranoid... I'm just worried the MRT breaksdown

McAfee explained privacy really well given that he had to just pump it out and squeeze it into this short interview. I believe that privacy is a basic human right for everyone to have. If you decide to waive all rights to your privacy and live in the Google or Apple ecosystem, well congratulations to you, but don't drag me down with you.

Just because you decide to waive that right to privacy DOES NOT mean that others should have to waive their rights as well.

Likewise if you decide to go on a diet, be vegan, not eat a specific type of meat or food... hey, good for you, all right? But you have no right to force your dietary preferences on me. I WILL NOT BE DENIED.

Question: Why should I waive my rights to privacy just because you have?
Answer: I shouldn't and I will not. What I do is none of your damn business.

Allowing SOME people a certain magical power to decide who will have or will not have privacy is god-like powers to give anyone. It is a slippery slope that sets the precedence for power and abuse.

Imagine if someone can dictate what we can eat and how much. At first it's pretty legit stuff - banning the consumption poisonous things,and live human infants. Then it goes on to maybe.. GM food? Or maybe dog meat and cat meat? Then hamster meat? Then pig meat? Then chicken meat? Then McDonalds? Then pizza and hamburgers? Then then then.

Now imagine if someone can dictate who gets privacy and how much of it. At first it's pretty legit stuff - no privacy for known terrorists and criminals. Then it goes on to maybe... suspected criminals? Or the family and friends of those people? Then to all emails? Then to everyone on everything that they do. Then then then.

I hate and loathe the "but criminals use will it" argument. Hey, criminals breathe air, drink water, sleep on beds, use cars to travel around and telephones and the internet to communicate as well. OMG let's stop everyone from using all of them? NO SHOES FOR EVERYONE BECAUSE CRIMINALS ALSO WEAR SHOES. Hmmm, or maybe instead of a blanket ban we can control who is allowed to and not allowed to use certain things or do certain actions? Well it won't work. Guess who are the first people not to give a rat's ass about any official rules (laws)? That's right. Criminals don't give a shit if they are allowed to do something or not, that's the reason why they are criminals, jeez.

"Sir here is your new phone"
"Thanks. Can you teach me how to lock it?"
"Lock it? What do you mean?"
"I mean, how do I prevent people from accessing my phone"
"LOL sir, since the law changed in 2018, no phones are allowed to have passwords anymore! Only criminals need to restrict access from others because they have criminal activity they need to hide!"
"Aha that makes so much sense. Yeah, luckily I have no nudes or porn activity or private information to hide. Thank you!"

Cryptocurrency

I won't say much here, except that you really need to understand ANYTHING that you are investing in, regardless of it being a cryptocurrency or an endowment plan from the cute xmm agent. Not knowing what you're doing is a guaranteed way to be unsatisfied with the outcome.

Store your crypto in a hardware wallet if you don't want to have it stolen. I use a Ledger Nano S.

Crypto is unregulated. It's the wild wild west. There are plenty of scams. A lot. So many. Beware.

Education

I actually appreciate his random points of education that he brought up.

I find that the value of my education is NOT about acquiring and remembering knowledge and experience in doing various things.

I find that the value of my education is from learning how to learn to do things.

Don't know how to invest? Do you sign up for a business degree, take a module on finance and suddenly become Warren Buffet's Asian respawn? No. Fire up the internet and read until your eyes bleed and you get a headache.

At the end of the day, what is more important - having a piece of paper that SAYS you can do it? Or actually being able to do it?

I wouldn't say that our education system is shit. I'm a complete product of it. I think I turned out pretty okay. But I feel a lot of my educational journey was me trying to apply what I learnt to real life, through lots of trial and error.

No school teaches you how to buy cheap airline tickets. How to select an accommodation that suits both your budget and itinerary. A good way to track your investments. If buying a car makes financial sense. Which credit card you should use. No school will teach you that. No school can teach you that.

But you can learn how to learn. You can learn what's the best way to do all these things. And as McAfee says, the information is sitting behind the screen of whatever device you're holding. Unless you operate in a job that forbids internet access, there is no reason to handicap yourself and limit your knowledge to your brain space.

One of the biggest upgrades that I have done in my life is to have an Evernote premium account. It sounds stupid and weird, but it is my virtual brain. I type in and store anything that I think I might need to recall in the future. Mostly it is just smatterings of rudimentary instructions, or a short after-activity report about something which I think is important to know.

It's insanely refreshing not to have to remember ridiculous and trivial pieces of information in your brain and instead outsource it to this virtual brain. Just like how the address book have completely outsourced remember phone numbers, and Facebook have outsourced remembering birthdays, Evernote is helping me outsource the rest of the things I need to remember.

Anyway, this is a lot of ranting, but it's just some thoughts I had over the weekend. I spent a lot of time thinking about it, a bit hesitant to post it because it's bits of things here and there but oh well. I strongly urge you, dear reader, to take a few minutes and think about cyber security and privacy. You may realize that you are uncomfortable with your lax system and bad practices. The good news is that being self-aware is the first step to fixing your problems.

GMGH out.

Friday, July 28, 2017

[SGX Portfolio] Viva La RĂ©sistance!

Is P/B really too simplistic?

I'm struggling to try and structure my defense on something more complicated and sophisticated to make seem like I am a savvy investor, but alas, I am but a simple commoner with a simple commoner brain.

P/NAV is 1.17, based on their NAV of 79c and current price of 92.5c.

Occupancy is normal. Debt ratio is normal. Actually everything to me feels very normal.

They are holding a premium because they have business parks? Meh, someone else can take that risk. I'm fine exiting at these prices. Don't get me wrong, I don't think that they are outright over-valued. I just think that these levels are above fair valuation, and I'm willing to de-risk at these levels.

Sell price: $0.925
Total dividends collected: $0.12373
Average price: $0.795

Capital Gains: 15.5%
Yield Gains: 16.4%
Total Gains: 31.9%

After taking into account transaction costs, total nett returns would be about 31% over the past 2 years. About 14% annualized, nothing too much to toot my horn about. Nothing like the fat 75% gainz in Croesus. Similar to CDLHT at 38%, though the annualized rate of CDLHT is much higher.

Personally, after buying into Viva, I've always kind of second guessed my decision-making back then. Letting go of them now with these returns is really good for me mentally. I have exited a position that I have less confidence about, but at a higher price than I paid.

As you might have noticed, I have been pruning down my SGX portfolio as of late, especially recent stocks that have made huge gains. On a cost basis, I have pulled out 10% of my initial capital.

As always, I remain skeptical of most asset classes. The US stock markets still defy logic and gravity, but I doubt that it can continue to do so for long. But as I wait for things to get attractive, I am spending my time focusing on other investment opportunities and ideas. That said, even while waiting I still make my money across all asset classes work for me, though my emphasis is focused on minimizing risk while seeking returns as a secondary objective, not the other way around.

In times of ever levitating markets, I think it is prudent to be more conservative than risk-taking. When (not if) the markets are crashing, you can be rest assured that your GMGH is gonna be busting down the doors with both guns blazing away. For now, playing in the cryptomarkets is definitely honing my knife catching skills.

Thursday, July 27, 2017

Bitcoin and Blockchain for Babies

Aye, I know it's not really for babies, but I really wanted a catchy and an alliterated title, haha.

As most of you guys know, I am probably one of the handful of financial bloggers in Singapore that talks about and writes about blockchain and cryptos.

I had an interesting talk with some university friends the other day. Like I said, I know genius level people operating on a whole different level. Yet my genius friend had issues grappling with cryptocurrencies. I would say this is more of a failing of my explanation and of watered down mainstream media news reporting than the lack of intellect from my friend.

While thinking about how I could better help him understand the massive paradigm shift in blockchain techologies (speculation, making tons of money put aside), I came across these 2 videos which I think explained things very well.

The first video is comparing Bitcoin vs normal currency.
The second video is about the underlying technology of blockchain.

Why do I choose to present the first video first? Most people easily understand the context and application of Bitcoin used as money, and I think it is better to work backwards from that understanding.


GMGH Notes for the 1st video:
- Bitcoin has a capped, finite supply -> More money cannot be magically added into the system
- Normal currency is unchecked and it is never known how much is circulating in the system
- Central banks follow Keynesian economics where inflation is good
- GMGH follows Austrian economics and believe bitcoins follow that line of thinking better
- *Trust is embedded in the system*
- No one needs special permission or hardware to own a bitcoin bank account (bitcoin wallet address)
- Bitcoin itself, as of now, is "unhackable"
- All hacks related to Bitcoin has been at individual parties losing control of their bitcoin bank account
- Bitcoin can be used without government's or bank's permission, especially when permission is usually denied
- Transactions takes minutes, not days to occur
- Transactions costs are in the dollars and cents
- Bitcoin is NOT untraceable, in fact, it is even more transparent than normal currency
- *This traceability actually hurts it as money because it is not fungible*
- ColdFusion AND GMGH are both skeptical of the idea of a government-backed cryptocurrency
- "Investing" in bitcoin or any cryptocurrency comes with huge risks
- Not knowing what you're buying is a great way to lose money, regardless of the underlying investment
- Not knowing when to buy or sell is another great way to lose money, regardless of the underlying investment

GMGH Bonus Notes:

Why did I highlight that trust is embedded in the system? Because this is actually what blockchain technology is all about and it will be explained in the 2nd video.

Why is fungibility an issue? Fungibility is a key property of money (meaning every unit is interchangeable with each other, and holds no history of its previous usage and owners) and without it, bitcoin or any other cryptocurrency cannot be used without making a devil's pact and surrendering and forever putting data of their transactions on the blockchain. Oops, you "accidentally" went to a transgender bar in Thailand? That $100 bitcoin transaction for drinks and whatnots from your known wallet to the known wallet of that bar is going to look awfully suspicious to your wife, family, friends and co-workers. GREAT SHAME AND DISHONOR. That is one of the reasons why money HAS to be fungible and why bitcoin is still lacking in that department. Privacy should not be taken lightly, and everyone should have the right to privacy (in my opinion).


GMGH Notes on 2nd video:
- The internet started with almost zero adoption as well
- Every paradigm shift solved a major gap in how society functioned
- The printing press solved the (distribution of) knowledge gap
- The engine solved the (man)power gap
- The internet solved the distance (and communication) gap
- Blockchain was NOT designed to solve the gaps of money
- *Blockchain is a way to solve the TRUST gap*
- Cryptocurrencies is an application of blockchain in an experiment to use it as money
- Blockchain ledgers are superior to normal ledgers because they are tamper-proof
- Blockchain ledgers are superior to normal ledgers because they are decentralized
- That is why for normal ledgers, we must always "Trust, but verify"
- He sees strong applications for protecting personal identities and also for building reputation

GMGH Bonus Notes:

Trust, trust, trust. Why does it always appear? We all live by and transact based on trust.

How can you trust that your bank didn't overcharge your credit card? You check and verify
How can you trust that your employer paid your wages correctly? You check and verify

How can you trust xxxxxxx that yyyyyyyy was done? You check and verify.

This is a bonus bonus video that explains why trust and DISTRUST is important and how blockchain fits in. But since it's a bonus bonus video, there's no notes for this one.


Every time I hear talks like these, it gets me all riled up about how crazily and mindblowing radical and awesome blockchain technology is.

Really, put aside the obvious questions about making money regarding this and consider it more of an after thought. Do you not see how this technology is going to change plenty of things?

Before you jump onto the hype train, you might want to consider my thoughts on cryptos from an investing point of view, and also read the things that you REALLY need to know before buying cryptos.

Let me very explicit: I am not encouraging anyone to invest in cryptos. This shit is both volatile and risky af (note: volatility and risk are two VERY different things). What I am doing is encouraging people to read up more about it and get interested in it. It is going to be massively disruptive, both in terms of business and in our own futures moving forward. If you eventually do decide to jump down the rabbit hole after me, be my guest. But as always, GMGH is NOT a financial advisor, your investments are your own responsibility, not the responsibility of the anonymous 27 year old blogger (or so he/she claims) that you follow.

Monday, July 24, 2017

When the Obvious is not really that Obvious

 I was just browsing the interwebs lately and I stumbled upon this interesting quote:

Talent is hitting a target that no one else can hit.

Genius is hitting a target that no one else can see.

Now, that got me thinking.

I have quite a lot of smart friends. In fact, I feel that compared to some of them, they are operating on a whole different level of intelligence and brain processing speed. Like seriously.

I could understand each individual action. I could also understand how the sequence of each action relates to the other actions.

However, what I couldn't understand was how he was executing actions, updating the sequences, and re-calibrating all in real-time to optimize the output. What looked like a problem that would require of me at least minutes, if not hours of thought, was being done by him as just another everyday thought process and action, almost effortlessly. It was unreal. But it was real.

I had always thought of myself as a smart person, but after this experience that I had in university, I realized that there are plenty of people that exist in this world who are way smarter than me, operating on a whole different level.

I would never be about to beat these people outright. They could get things done faster and better than me. How could I beat someone with such talent? And most of them also have more resources too.

--------------------------------

Ever since I became a gold bug a few years ago, I have struggled to understand why no one else can see what I see.

Am I wrong? Delusional? Is this really stupid? Am I dumb or something? 

But what I have come to realize is that nobody bothers to even look at it to form an opinion for themselves.

To reach the conclusion doesn't require years of studying. Probably just a few weeks at most, or within a day if you realize the importance and urgency of such knowledge and hit the most important points first and work your way down. If anybody bothered to take a look and understand it for themselves, the conclusion is blatantly obvious. Slap-in-your-face obvious. But no one looks and no one cares.

The global monetary system is broken. Period. Any argument defending that always precipitates to "the government won't allow it". You know, kind of like how the French government didn't allow the revolution.

Oh wait, hold on. Nobody gave a shit about that government? They all got beheaded? Oh yeah. Well, I guess you can trust every government except the French government then. /sarc

My point: If your only argument is "faith" in your government, or worse, in the governments of other countries, then that is not a very strong argument, in my humble opinion.

As long as this shell/shill game continues and fiat money is still useful as a currency, I will keep on playing this game. What am I to do? Buy food at the hawker centre with silver coins? 

--------------------------------

After stumbling back into cryptos for the 3rd time, it finally stuck with me this time.

A system that not only operates on distrusts, but is stronger and more robust when people distrust each other. Every distrust requires more proof and verification and it makes the system that much stronger and tamper proof.

A system that is so distributed that no single party can exert authority on the rest of the participants. 

A system where holding nothing means you hold nothing, holding part of the system gives you utility, but holding everything makes it worthless. Where value comes from distribution and usage, not from hoarding and scarcity. What's the point of money if no one has else has it or is willing to use it as a medium of exchange?

It is a system that survives on mutual distrust and decentralization. Where all the players agree to be bounded by certain rules.

Not happy? Want to create your own rules? Fork from bitcoin and make AnyhowCoin. But unless you get other participants to join your game and agree by your rules, it is worthless.

Cryptos can survive because people have decided that they rather be bounded by these fixed rules, rather than the ever changing goalposts and standards set up by governments and central banks that could turn on a dime. 

--------------------------------

Things are slowly changing. You CAN buy goods and services with precious metals. You also CAN purchase things with cryptocurrencies as well. Technology has bridged the gap to make these kind of things possible.

There are a few companies that issue precious metals backed debit cards (not credit). There are now a variety of companies coming up with ways to have crypto-backed debit cards as well. I've mentioned TenX before, but there is also Monaco, Tokencard, Metal and Plutus. 

The next possible big thing is paying with precious-metals backed cryptocurrencies through debit cards. It sounds almost ridiculous to say, but I believe that this mix and the final outcome is a better solution to fiat money.

A lot of people are confused and skeptical by gold-backed crypto or currency. Yet they don't see the hypocrisy of faith-backed fiat.

Of the few things that I can realistically see happening in the near future, a gigantic financial shit storm regarding the reduced value of government and faith-backed money and a need to find a better currency is something that I am quite certain of.

It is definitely not going to be a single moment where people just flip on a switch and everyone starts using the new system. It will happen in waves, as more and more people realize that having big stacks of monopoly money doesn't mean much.

People should not be forced to use shitty money where some unknown party can expand or contract the money supply with no oversight and no punishment. We're basically ending the beta testing phase of this new form of money soon, with 0.01% of the world's population already giving it a go for the past 9 years. 

Of course, the people who dared to get in early will be the ones who benefit the most. Fortune favours the brave, not the risk-adverse. The early adopters, not the herd of sheep. The hardworking who bother to learn, to understand and to try and to fail, not the lazy who want to be spoon-fed a the perfect, bug-free, government-approved product that is "safe" for all.

The fundamental movement into crypto is not a f-you to the government merely because it is a government. It is an f-you to any and every government for being shitty fiduciaries of people's money.

If they can't do it properly, then the people will.

But fine, I'll play this game as long as fiat money is worth something. It is not my preferred choice, but that's the best course of action at this point of time. I already have my exit strategies all planned out.

--------------------------------

Now back to my story about all those super intelligent people that I've met. To big banks with prop trading departments and millions of dollars of that their disposal. To hedge funds with insider connections. To everyone smarter than me and with more resources than me.

I don't have to beat them by competing with them to hit their targets.

I get to beat them by hitting the target that they didn't even bother to look for or understand.

Yes I realize that it seems like I am implying that I am a genius, but I can assure you that I am not. I am just a lot more skeptical and contrarian than most. So far, that has been my only edge in the market and it has served me well. This is just the extended application of it outside the tiny world of SGX stocks.

Disclaimer, in case it was not obvious enough, I have positions in both precious metals and cryptocurrencies. Why both? Well, why not?

Thursday, July 20, 2017

Why do I not invest with robo-advisors

By the way, I was inspired by this post from Finance Smiths.

Wow, shocking title, isn't it?

From the same shill that peddled why robos are so awesome? What has changed? Why the sell out?

Let me assure you, it has nothing to do with robos themselves per se. I have been watching both Smartly and StashAway come to market (StashAway is doing a way better job at marketing and acquisition imo).

I think both of them look great and it is definitely a step-up from the shitty offers that traditional financial institutes offer.

And I still stand by my entire article that robos are excellent.

But.

But what?

But I think the timing is off. The product is great, but the timing is off.

I know that DCA is supposed to remove time from the equation, but for me diversifying and deploying capital into the markets even through a smart way like robos is still not good enough for me.

Perhaps it is because I am in the camp that every single freaking thing is bloody expensive, or because I walk around with a tinfoil hat warning about financial armegeddon, but I really don't think that anything in particular is a good buy.

And this isn't me just being contrarian for fun. This is me looking at the context of where asset prices are and what are the risks and rewards in all these trades.

Unfortunately, I don't really see much upside to almost anything.

Pfft, even with my pretty decent track record (my SGX portfolio's money weighted return has outperfomed the STI by almost 7.85% in absolute returns, and yes I included the dividends), I am very suspect about the future returns of a lot of stocks in Singapore.

So pray tell, what does GMGH invest in then?

Honestly?

Plenty of cash. This is my war chest to help relieve desperate sellers of firesale assets, hopefully sometime in the near future. Over-exposed to risk assets? We might trade in the future!

Gold, silver and cryptos. These are my low-beta investments, invested on the basis that they are going to be worth a lot, a lot more in the future. Sure, they have no cash flow. But hey, I heard people can flip Taylor Swift tickets for some good profits. Next greater fool theory still, isn't it? My time horizon just happens to be longer and the asset that I'm hoarding is different.

Sometimes I wonder why I've wandered so far out to the fringes. But once you've seen the Matrix, you know just how deep the rabbit hole goes.

Tuesday, July 18, 2017

$7,600,000 Crypto Scammed

I was out tonight when I read that the CoinDash ICO got hijacked and scammers managed to switch the real address with their fake address.

The result? $7.6m scammed over 3 hours.

Well done. Very well done, I must say.

Instead of launching scam coins and sham ICOs, I think a lot of scammers and hackers have realized that it is just more profitable to outright scam people.

Why come up with a huge elaborate ICO scam idea when simple scams work out so well?

Creating fake twitter accounts and slack accounts with admin-sounding names are all free too.

I think the loophole of slackbots and slack DMs were also quite effective.

After watching the evolution of scamming go, I really have to say that this takes the cake.

What these hackers did was freaking ingenius.

1) They managed to access the website
2) They posted their own address instead of the real address during the actual start of the ICO

Boom.

$7.6m worth of Ethereum in the bank.

Honestly, it was a very smart scam because they took full advantage of the FOMO and rush of a popular ICO and just did a simple switch.

Unlike other silly ICOs that got compromised whose hackers tried to "launch early" and basically gave away that they were compromised, this tactic managed to trick a lot a lot of people.

They did not make the mistake of showing their hand too quickly.

I believe that this really sets the precedence for best practices for future ICOs. Part of the actual ICO address should be released beforehand. The address should be resolved to an ENS name which is also publicly known to have been legitimately acquired beforehand. Also, the address should be published slightly before the start of the ICO, so people can quickly look through the code and also verify the address. Finally, the smart contract should just be able to bounce all incoming early transactions.

To those points, I must say that TenX that launched last month did a perfect play that effectively would have rendered a similar hacking situation like this to not even be able to go through.

For hopeful ICO participants, I have some tips to share. Why trust me? I've successfully taken part in more than 1 ICO. Have you?

Tip #1: Only send from wallets which you own the private key. Don't have one? Generate one at myetherwallet. It's free and it takes like 2 minutes.

Tip #2: Double and triple check the ICO details and address from a few of their official channels: website, twitter, facebook, reddit, youtube, slack.

Tip #3: Etherscan an address before you send to it

Tip #4: Don't set gas limit too low, transaction will fail

Tip #5: Don't set gas price too low, transaction might take a very, very low time to go through

With these 5 tips, I hope that you guys can stay safe and will be able to participate in future ICOs safely and successfully.

Remember, Ethereum itself launched as an ICO for $0.30 an ETH. Even after ridiculous declines in recent weeks, it is still worth $175 (at time of writing). 500+ times returns investment? You tell me a stock that can give you that over the past few years and I will clap for you. In case my point flew over your head, "all ICOs are scams" is not a true statement.

Stay safe, remember, cryptos is the wild wild west. Anything goes. Like making away with $7.6m.

Sunday, July 16, 2017

Weekend Crypto Bloodbath Aftermath


Bitcoin went down 20% just this weekend.
Ethereum went down 35% during the same time too.

I hope you managed to bunker down and dodge the massive shit storm in the crypto markets that happened over the weekend.


Well, you really can't say that I didn't warn you, right?

I mean, I even had a full length blog post with Hyuna bouncing around singing "Bubble Pop". If that wasn't enough, frankly, nothing would be.

 aiguuu, y u no listen to oppa GMGH~?

Bitcoin went down a whooping 40% from its high.
Ethereum, the new kid on the block, went down a massive 70%.

The entire crypto market is now at a more sane 60b instead of the 110b that it was at. This pretty much means that almost everything has had it's value cut by about half. (Didn't I say "60b" just a few days ago? Damn son, that's some good levels I've got targetted.)

I hope anyone heavily gambling on cryptos on margin was wearing pampers when they saw it crashing over the weekend. Cos they would've definitely shit their pants. Leverage with cryptos is a very, very bad idea. (pro tip #4)

That said, my crypto portfolio has finally turned negative. *booooooooooooo*

However, you know what they say about blood on the streets right?

Buy when there's blood on the streets, even when some of that blood is yours.


Personally, I don't invest in cryptocurrencies to flip them for a quick buck. I know many people do, and that has been a very, very profitable strategy.... until the last month.

I'm invested because I believe that cryptos are going to be a large part of the future, whether or not you care about the economics of it. Just the technological possibilities it opens and businesses that it disrupts is good reason enough. Add the fact that they can and are be used as an alternative currency, untainted by profit-hungry banks (can't blame them, but can't say that I like them either), shitty governments and stupid central banks and you've got 2 birds with 1 stone.

I honestly wouldn't be able to tell you if cryptos will be bottoming in the next month or so and if we take off from there (which we very well could, once we shake out all those weak hands), but alas what I hope for has nothing to do with the outcome in reality.

If cryptos drop another 50% from here, you can be rest assured that I will be buying even MORE.

For those who have reached maximum allocation, all I can say is to make sure that you aren't holding some shitcoin. As long as you've got something somewhat decent, once the killings are done and the recovery starts to happen, your coins would be the ones taking part in the recovery, not staying at zero valuation.

If you guys are here, you should know that huge market sell offs are a time to be buying, not selling. As a gentle reminder, the ONLY way to make money is to buy low and sell high.

Stay safe guys, it's crazy out there.

Thursday, July 13, 2017

Things you REALLY need to know before buying Cryptocurrencies

This post is inspired by the IG-sponsored post on D&S.

1. You own the underlying asset when you trade

When you buy cryptocurrencies, once the coins are in a wallet which you have the private key to, you are the owner of the coins.

2. There is no counterparty

Unless you are leaving your coins within a centralized exchange to make trades, all the coins that you can access with your private key are yours and you don't have any counterparty. You directly interact with the blockchain to send your coins, or receive more coins directly to your ownership

3. There will be volatility

In a market with plenty of speculators, the volatility is high. Even for the "large cap" coins, it isn't strange to see swings of 20% within a day.

4. Don't use leverage

Related to #3, with the huge amount of volatility in the cryptomarkets, you don't need to use leverage. With a leverage ratio of 5:1, a 20% move is all it would take to wipe out your account.

5. Know your fees

There are a bevy of fees everywhere in crypto. There is the exchange rate "fee" for pricing the coins in a specific currency, there are exchange fees for using the exchange. There are payment processing fees for different types of payments. There are withdrawal / transfer fees for moving the coins out of exchanges. There are also transfer fees when moving coins to different wallets. There are deposit fees when sending coins to be traded on exchanges. There are exchange fees on those coin exchanges as well.

The good news is that there are plenty of people offering a wide range of fees. It is possible to buy coins and have them in your private wallet for less than 1%, after taking into consideration all the fees involved. It varies widely, so be careful.

6. Ownership has possible benefits (and downsides)

Some coins generate interest for owners. Most coins just sit around and do nothing. A rare minority of coins have a holding cost. Understand the benefits of having ownership of coins and what you would have to do to make them work for you.

7. After the fiat conversion portion, there are almost no regulations

From the point that you have coins transferred out of an exchange, you are on your own. There are no regulations. The decentralized nature of most blockchains make them extremely hard to be regulated.

8. You are trading a currency that is immune to central bank's policy

No country or central bank control's cryptocurrencies (unless they make one themselves), so they cannot influence how it works. This gives transparency and consistency to cryptos.

9. Risk management is key

With such crazy volatility and new technology, there are bound to be failures. Don't risk more than you can afford.

My 2 cents:

If you are buying because of the hype, the fear of missing out and stupid ads and articles saying "If you had bought $5 of Bitcoin 5 years ago you would have $5 million", you should definitely NOT be buying any cryptocurrencies.

However, if you:
1) Understand the technology and how it works
2) Understand why a particular crypto can be successful
3) Have money that you are prepared to lose

then, by all means, welcome to the wild wild west.

Tuesday, July 11, 2017

Crypto Bubble Pop


Presenting to you... Bubble Pop! (pro tip: pause at 0.27)


Wow, I'm impressed. It took the market this long to realize that it was in a bubble. But hey, it might obvious to you and to me, but look at all the people still in the S&P500, amirite? Hur hur.

As history as my evidence, on 13th June 2017, I did call out the ridiculous bubbly nature of the crypto market.

Anyway, I'm fairly certain that this is indeed mania. Will ETH be $380 still next week? I seriously don't know about that.... Drop back to $10 and let me get in, will ya?
Just a heads up, with such a massive pump, it is probably prudent to be on your toes and watch out for the possible massive dump that comes after. - GMGH, 17 Jun 2017

Hey, $114b compared to the $116b when it peaked is pretty darn good imo, less than 2% off!

Will crypto prices go down in the future? Actually, I really hope that it does. To me, it is a bubble for the current participants and the froth is still in the midst of settling. I wouldn't be surprised if cryptos continue to lose value over the next few months.  - GMGH, 6 Jul 2017

Another way that I could tell that this was absolutely coming was the fact that some shitcoin called Digibyte made it into the crypto Top 12 in June. Bytecoin was more fantastic and managed to get into top 6 in May. There were PLENTY more than have surged from dead projects and they are all going back to fair value now - zero. When people are just buying whatever for no good reasons, I think it's a pretty good sign of bad things to come.

Now that the market is down to under $80b (30% drawdown), I think it's safe to say that I am validated in my call that it was ridiculous just a few weeks ago, that and also for everyone to stop kidding themselves to HODL and that coin and that coin is going TO THE MOON. A lot of coins are NOT going to participate in the next bull market.


I hate the word HODL. What does it mean? It means to hold. Why do people type hodl? Because a lot of people that "invest" in crypto are unable to spell, that's why.

Now quite a lot of these people (not all, but a lot) who spell hold as hodl have not only been pumping shitcoins like Bytecoin, but they have been pumping up the entire market. Almost 99% of these people do not understand just exactly what they are investing in, other than that if you hodl, it goes to the moon and then you get to drive a lambo to work to resign in a week. Expected returns are 100% within a year. Well then lads, these prices ain't gonna cut it.

Blockchain technology is amazing, but I cannot stress it enough that the failure rate is astronomical.

Where we go from here, nobody knows.

We could go back to down 60b or even 45b. We could bounce around 40-60b for the next 2 years. We could go back up to 110b. Anything could happen. Personally, I'm positioned for a long, drawn out bear market to shake out all the weak hands who have just realized that the majority of their holdings are in some shitcoin peddled to them by a 16 year old kid with a crypto youtube channel who probably got paid peanuts to pump and hype coins.

All I can say is that if you invest in cryptocurrencies, be prepared for some crazy times. This is the wild wild west after all.

Cryptocurrencies are the wild wild west. You think buying shares in small caps are risky and volatile? Pfft, you've obviously haven't heard of cryptocurrency investors and speculators. - GMGH, 6 Jun 2017

Stay safe, stay level-headed and don't take risks that you don't understand.

Monday, July 10, 2017

PayNow is Released

PSA for all.

PayNow has been released as of today. ST piece is over here.

DBS landing page for it is over here. Took me 3 minutes to register my phone number. The other banks have their own pages too, but I like to use DBS to receive money because most of my friends have a DBS account and are familiar with it.

What is it? A system to link a bank account to a phone number or NRIC
Why have it? To simplify the process of sending money around
Why use it? You can designate internally which bank account to receive money while the sender still sends to the same details

Downsides: Traditionally kept private information of phone numbers and NRIC will circulate more widely.
Upsides: Maybe more spam, more phishing attacks. Possibly people will send you free money.

What you need to know: You don't HAVE to use this service if you don't want to, like if you feel that it is going to be a problem for your personal privacy. You can just not opt-in and instead just give people your long string of numbers for them to send you money. I mean, people still write and send letters these days, right?

Personally, I have registered for this service and I have linked it to my mobile phone number.

Friday, July 7, 2017

Why NOT Government-backed Cryptos


While many people are just waiting for the day that a government will back a crypto (I'm talking tokenization of a sovereign currency, not legalization as a form of payment), legitimize it and make it mainstream before they jump in on the crypto hype, I am personally not too thrilled with that idea (not thrilled with the idea of a government-backed crypto, but still thrilled about cryptos gaining mainstream traction).

In fact, this can already be EASILY be done, similar to the fashion that Tether is able to issue USDT which are supposed to be valued 1:1 with actual USD.

This is a short video clip, about 5 minutes.

At about 1.58, shit starts getting real. We can already see it happening, where governments are both openly and secretly racing to develop and push out their own STRAINS of digital currency (Project Ubin? Coming to a mainland near YOU soon!). And rest assured, your balance and activities will be watched and monitored.

Some people thought it was just crazy when China announced it is planning to monitor its citizens and grade them based on certain things. Some actions get you more points. Some actions deducts points. Points determine your standing in society. Imagine if the government has one extra way to watch you, and a massive crippling way of punishing you too. It's sounds crazy, doesn't it?

But just watch Season 3, Episode 1 of Black Mirror to see how ridiculous society can get in such a system, yet how such a system can be almost immediately adopted today if it was rolled out.

But I digress.

Personally, I do NOT see Bitcoin becoming the cryptocurrency of the future. Yes, it definitely is the cryptocurrency of today, mainly because of 2 reasons:

1) It is the main gateway from fiat into cryptocurrency
2) It is the base pair to trade into any other coin

However, will it be the cryptocurrency of the future? There are problems with its transaction cost, speed, governance, centralization and exclusivity (of mining, and hence securing the network).

Almost every new cryptocurrency out there have made changes to tweak and refine certain aspects to improve it - in their opinion. Each coin out there is working to find out the "secret sauce" to make the next global cryptocurrency and I would say that the study of this could be an entire field of its own.

Airdrop? Pre-mine? Fair start? Inflationary? Fixed supply? CPU / GPU alogrithm? Blend of hashing algorithms? Or should POW even be used? POS? Hybird POW-POS? POI? Blend of Proofs? Mining rewards? Nodes? Masternodes? Minimum stake? Staking deposits? Governance system? Foundation funds? Voting rights?

There are plenty more questions that can be debated about what would constitute the "perfect" cryptocurrency, but I think it would be a mix of perceived fairness (I feel that the current avenues of accumulation is more important that the mode of initial distribution), a store of value and real-world utility for the average user.

Maybe a globally pre-announced ICO that lasts a FEW years, that accepts all fiat, governed by a DAO? Hybrid POW-POS with multiple algorithms and see-saw rewards? I'm just thinking outloud here. Actually, it sounds a little bit like Decred. 

One of the things which Andreas does say, which I believe in, is that the initial early adopters who took massive risks in the beginning on a completely untested technology with barely any other users, should be rewarded and become rich.

Let's be honest here. If the knowledge that the government can, and will, and have been, printing ridiculous amounts of money hadn't scared you enough to move into hard assets like precious metals, this 5 minute Youtube video and my blog post certainly isn't enough to get you to move into cryptocurrencies.

Maybe it's disbelief. Maybe it really is ignorance. But the outcome is still inaction regardless of the reasons.

I am unfazed that the majority of the people are NOT in cryptocurrencies at this point of time. Just like I am unfazed that almost no one has any precious metals, yet it is my largest position. The best trades are the trades that everyone else don't even know about. You know me, I hate crowded trades. (Probably the reason why I don't really fancy BTC even as a crypto-enthusiast... but that doesn't mean I don't have any)

No doubt a government-backed cryptocurrency will have uses and be widely adopted, but that doesn't mean that unbacked ones are not worth looking into. The fact that they are not backed makes it even more attractive in my opinion.

Thursday, July 6, 2017

GMGH Crypto Thoughts Jul 17


I'm sure you guys are probably not aware, but I've been really busy lately in the crypto world.

It is tough for me to write a blog post about cryptos on this at length, especially since I am sure that 90% of readers will have no technical familiarity with the terms, but I'll try to keep that in mind while I write.

I am completely confident that blockchain technology is here to stay. The current form that it may be in now might be not be much, but how many technology launches perfectly in it's first iteration?

The first car was built in 1885, yet only in 1927 when Ford released the model T that cars really took off. Before that, it was just a niche thing that strange people dabbled in.

Bitcoin was developed almost a decade ago, and I must admit while blockchain technology is revolutionary, the application on it with bitcoin is very rudimentary. Since then and now, blockchain technology has come a long, long way. That's one of the reasons Bitcoin has so much internal fighting - they are arguing over the upgrades to apply to it. Ethereum is another very good example of how much blockchain tech has advanced. People are now using it as a platform to skip VCs and get funding directly from the public without any middlemen in between.

This is rocking the crypto world because something that used to be a totally privileged right for the connected and wealthy to get in on some great investments at infancy has now been unleashed to the public to invest in as well. Many companies of our time were not launched without VC funding along the way. Although I don't think that it is going to change overnight, the ramifications are obvious.

Start-ups want to raise money. VC's will only provide money with terms and agreements and basically hold them by the balls. Crowdfunding though blockchain technology not only serves as a CHEAPER way to get funding, you also have almost no strings attached to these funds. Also, it serves as pretty sweet marketing to hype up your company.

Why would anyone NOT go the ICO route and choose the VC route instead? Perhaps strategic partnership, but at the expense of founder's flexibility and decision-making? I don't see many people opting to go the VC route if they could ICO. The reason why this isn't more popular (but it is getting more so) is that because people are just unaware that this can even be done, or are not familiar with the idea enough to do it.

That said, there IS a problem with the current ICO scene. I think this has to be made very clear - just because you can put it on a blockchain, doesn't mean you should.

There are now endless streams of ridiculous things being thrown into the blockchain because they want to ride the hype. I would advice extreme caution when approaching any business that has no reason to be on the blockchain, but are just trying to do so anyway.

Blockchain tech is immensely powerful and it is going to be massively disruptive, but it is NOT going to be applicable for everything.

That said, people and businesses are going to try and try anyway. And many are going to fail. But that's just life and business. Looking at coinmarketcap, there are 956 cryptos listed. I can assure you, 90% of them are not going to be worth anything in 5 years time. The failure rate of these are high.

Let me repeat - the failure rate is ASTRONOMICAL.

You don't have to take my word for it, you can look it up yourself. Compared to 6 Jul 2014, exactly 3 years ago, only 19 of the top 100 coins are still in the top 100 today.

And of these top 100 today, I'm sure 3 years down the road not even 50 would still be in the list.

It is important to note that we are still in the very, very early stages of cryptocurrency. I wouldn't really call it outright gambling because I am certain that quite a few of these coins are going to survive and thrive. However, plenty of them will not.

Just like how many start-ups and small business ideas fail, that isn't a reason to avoid them completely. It is more about refining your approach and diversifying a bit to avoid total and complete failure.

Some people out there might be advocating putting $10 in each of the top 100 coins and your $1000 investment will be worth fortunes in the future. I really don't think so.

I think you'd be much better off by instead using really broad cuts to filter out most of the junk and trash and instead invest $100 in the best 10 ideas of the top 100 coins.

Honestly, this isn't too different for approaching stocks to buy. Use simple filters to weed out the trash, and more and more comprehensive ones until you are left with but a handful of the most promising ideas.

The crypto market is a wild and volatile one, but I can assure you that it will be extremely, extremely profitable in the medium term. With close to nobody even aware of how to get in, this is akin of already sitting in the Titanic's lifeboat with your lifevest strapped on before the iceberg hits.

We all know that in stocks, we are risking 100% of our capital when we go in. Sure, it might not be LIKELY, but it is still POSSIBLE. I would put it onto you that this is similar for cryptos. Sure, cryptos can COULD go to zero, it is not impossible, but I would place that probability as extremely UNLIKELY.

While in stocks, making 10% a year is considered a job well done, in cryptos, returns could be in the 1000s of %. I think that the risk and reward is VERY assymetrical. There is a ton more volatility that you would have to sit through and stomach, but there is also massive upsides to be reaped.

Don't get me wrong, I'm still a believer of stocks and traditional assets... for now. At least the next 10 years. But I can guarantee you that in my lifetime we will see stocks traded with blockchain technology. Trustless, no custodian, full ownership, near-instant, almost fee-less. Stocks and other securities are one of the easiest pickings for blockchain technology and I am sure that it is going to happen eventually. So will be the tokenization of sovereign currencies, but that's a different story for a different day. (For those who know crypto, imagine how easy it would be to auto implement GST into the code such that each transaction automatically sends 7% to IRAS?)

I am very happy that I have found something else to spend my time and efforts on. To be honest, the stock market these past few quarters have been mind-numbingly boring. Cryptos are pushing my brain to the limit these days. It is uncomfortably exciting. The asymmetrical risk/rewards and the 24/7 nature of cryptos has won me over as at least something to occupy my mind until the markets all crash.

It's a question of when, not if. I am patiently waiting for that to happen.

Until then, I am using all the self-control that I have to stop myself from allocating more and more into cryptos. I still need money to enter the bloodbath in stocks and real estate, don't I?

While Ethereum has dropped 40% from it's highs ($258 USD at time of writing), my portfolio is up 18%. I think I've been doing rather well for myself. Will crypto prices go down in the future? Actually, I really hope that it does. To me, it is a bubble for the current participants and the froth is still in the midst of settling. I wouldn't be surprised if cryptos continue to lose value over the next few months. That said, I'm still going to keep investing every month and I'll be swooping in on opportunities as I see them.

Anyway, this is just a vomit post of the things that are on my mind that isn't too in-depth and technical. I hope that if any of you guys get into crypto that you guys stay safe, stay level-headed and don't be taking risks that you don't understand. If you want to learn cryptos, throw in $10 and read and play around for a month. Don't throw in $10,000 and try to buy into any ol' ICO that popped up as an ad while you were surfing around. You might as well just give me $10,000 then.

Stay safe! It's a crazy world out there!

Wednesday, July 5, 2017

[SGX Portfolio] Sayonara Croesus Retail Trust and thanks for 75.5% Gains


Wa, how come I totally missed this big news? I only realized when I saw my portfolio value go boomz and read the post by AK.

Quick summary:
- Offer for CRT at $1.17
- CRT holders will also get approx $0.0406 dividends
- Offer price is 23% over NAV
- Yield drops to 6.8%

If you want the info, you can read yourself. The long one, the short one and the one with pictures. You know me, my brain small small so I read the picture picture one.

So, what do I think? I guess I'm in favour of selling. Blackrock can happily pay me a premium to take this hot potato off my hand (Of course, since SCB is my custodian, I'm not gonna be doing anything about it). I'm slightly on the fence since it has been a pretty good investment so far, but then again I think that letting go in these circumstances are okay as well. I am extremely pessimistic about Japan. I love travelling in Japan, I like anime and Japanese food (maybe Japanese girls too HEHE), but I think that they are on a very clear and adamant path on financial suicide.

Don't get me wrong. I love Croesus. It was the very first stock that I bought, all the way back in Mar 2014. Almost 3.25 years ago! I bought it at $0.875, I held on through the bumpy times. While I was very tempted to sell off Croesus in May 2015 after prices had recovered a bit, I decided not to and I was "rewarded" at the end of the year with Croesus rights and subsequently applied for them in excess and managed to pushed down my average investment price to just $0.787 per share.

Throughout my time as an investor in REITs, I always felt that generally most people were VERY adverse to overseas REITs. Hence, solid (in my opinion) names like Croesus, First, Lippo Malls, Saizen and Religare were all shunned as "risky" investments until recently. I felt otherwise, therefore I had invested in these companies at those prices. (Full after-action review of my Saizen play with 40.4% profits)

Offer Price = $1.17
Dividends + Final Divideds: $0.1789 + $0.0406 = $0.2195
Average Purchase Price: $0.787

Captital gains = 48.7%
Income gains = 27.9%
Total returns = 75.5%

Based on 3 years and 3 months as of now, I'm looking at annualized returns of 18.9%. That's not too shabby in my opinion. If we take by year end 2017 as the figure, then it's 16.2%, which is still pretty dope.

I'm probably not gonna do anything with Croesus and just wait for the offer to go through (and I do think that it will go through). However, if I am able to sell above $1.22 for whatever strange reason the market decides to go there, I'd sell off my stake on the exchange.

It's been a fun ride Croesus. I guess it's back to the drawing board to look for opportunities again.

Mind you, there aren't many. I've been doing a lot more selling than buying these days. The ones that I've recently gone into are Singpost and SPH. Fugly might be an understatement to describe these counters, especially SPH.

Sunday, July 2, 2017

Creating Unemployment 101: Seattle Minimum Wage Case Study


While most people think that ZeroHedge is trash news, they did report on this rather factually.

The University of Washington (located in Seattle, FYI) has been doing a study on minimum wage. They published their findings for Seattle this month, which you can read in detail if you are so inclined, or don't believe me.

Facts:
- Minimum wage per hour was increased from $9.47 to $11 in 2015
- Minimum wage per hour was increased from $11 to $13 in 2016

After the $13 wage:
- Reduction of low wage jobs by 6.8%
- Those who retained their jobs were working less hours (9.4% less)
- Low-wage workers on average saw a reduction of $125 per month (6.6% drop in income)

So summary:
Less people working for less hours and taking home less pay.

Positive intended outcome? Well, I will let you be the judge of that.

You may want to bookmark this page to re-visit at the next GE (and the next, and the next...) when certain *cough cough not saying who cough cough* politicians keep coming back to this notion of minimum wage.


Legislating a minimum wage is the same as legislating unemployment, period.

The minimum wage OBVIOUSLY does not create any prosperity. If it did, why stop at $13 an hour? Why not $20? $50? $100? $1000? Now that question is gonna keep minimum wage advocates up all night.

This is the sad reality that you don't want to hear: Some people's work are not worth $13 an hour. Heck some people's work aren't even worth $5 an hour. In fact, some people can be rather worthless.

Yeah I said it. It had to be said.

"Orh hor, GMGH so facked up, so insensitive." Well, is microwaving burgers and shaking salt on fries worth 13 USD an hour? You tell me.

I don't merely oppose the minimum wage. I detest it. It is forced unemployment and encourages discrimination.

I'm not stupid. I know the arguments for minimum wage. But that doesn't mean that they are good arguments. Every time I talk to minimum wage advocates, I feel like I'm stuck replaying the beginner's tutorial of some shitty economics game.

The idea that business owners should share profits with employees is complete nonsense to me (if businesses want to, good on them, it could be a strategic HR move, but it is by NO means an obligation). An investor gets profit sharing AS WELL as loss sharing. An employee is not an investor, but a stakeholder. Employees still get paid even if the company doesn't sell anything.

You can't be an employee and expect zero downside but all the upside. By opting for salary, you trade away profit and loss sharing in exchange for a stable salary. Not happy with it? Become an entrepreneur / investor and get both the upsides and the downsides then. You can't have everything without giving up anything.

However, from a governmental and social point of view, I understand why it is important not to have unemployment for citizens, especially given the context of a competitive and fluid global workforce. This is especially so if you have citizens that are low-skilled, have high expectations, or the dangerous combination of both. In SG, I think the the government has made very smart decisions by choosing to tackle this through quotas, levies, education subsidies and workfare. Workfare for the low income is the next best thing since kaya toast. It's basically almost like minimum wage, but paid by the government (the people who want it) and not by businesses (who would otherwise find alternatives than hiring these people). I find this a fantastic solution that solves both unemployment benefits and the minimum wage in a very elegant way.

On the topic of competition, just a heads up and friendly reminder that your competitor might not only be from overseas - undercutting your salary and working twice as hard - they might also be faceless and have the ability to work 24/7 at the cost of $0.2072 per kWh.


In case you don't believe me, please visit your local McD's or KFC when you have the time. I wonder how much this terminal costs an hour... How often do you reckon it takes MC or urgent leave on Mondays and Fridays? Last I heard, they don't get called up for reservist or give birth to babies either.

If you can't beat that "damn foreigner", what do you think are your odds against a machine?


Personally, I believe the solution to unemployment is continuous improvement. The Red Queen hypothesis. But you can do whatever you want to do, I'm not forcing my beliefs on you. Just sharing my thoughts.