Saturday, April 30, 2022

Picking the right Valentine. A much more difficult task than picking the right stocks

9 years ago, I wrote about choosing your Valentine from a value investing standpoint. What I wrote then still stands today,

Beauty is over-rated and is a depreciating asset. Ageing takes away the beauty from ALL beautiful women. Almost no grandmothers can compete with their granddaughters in the looks department. Beautiful women are bid up in the marriage market while the less endowed ones are neglected. Like a value investor who picks stocks that nobody wants, wooing a less endowed woman has the advantage of raising one's chance of getting a good wife successfully and thanks to lesser competition, the amount of money spent in capturing her heart is lesser compared to a beautiful woman pampered by rich suitors. You can make a good catch on the cheap.

Please do not misunderstand that I am discriminating against pretty women. Certainly not since I have a natural weakness for them that I constantly guard against. A pretty one would certainly beat a less pretty one, all things being equal. What I am saying is men should not go crazy over gorgeous babes because ultimately, physical attractiveness is not an important factor for long-lasting, happy marriages. If it is, then why is the divorce rate among Hollywood celebrities so much higher than the average couple?

Men are not designed by nature to ignore physical beauty when picking a wife. However, similar to investing, making choices that is naturally uncomfortable can lead sometimes to the best outcome.

Picking the right Valentine is much more difficult than picking the right stocks. It is much easier to manage risks with bad stock picks than with the wrong spouse choice.

I can pick 3 wrong stocks in a row and still turn out ok if my 4th stock is a good one with gains high enough to cover the losses in the first 3 bad choices. I cannot imagine the damage to a man's finances if he picked the wrong wife and divorced 3 times in a row. You cannot cut your losses and keep them small with a wife like the way you can do with stocks.

To reduce risk, I can have a diversified portfolio of 30 to 40 stocks but while many men would love to have 30 to 40 women attend to his needs at home, that is illegal and even if it is legal, it is unworkable and extremely unfair to women. When it comes to picking the right wife, it has to be a concentrated bet. One only. There are so many men and women whose lives are screwed because they make the wrong bet on their choice of spouse.

I have been lucky in meeting and marrying the right woman. Luck is something to hope for but not to count on. What advice would I give myself back then, with the benefit of experience and observing other people, to find the right one, if I couldn't count on luck?

Finding the right Valentine is about finding the right match for one's personality, interests, inclinations, strengths/weaknesses, and likes/dislikes. Before a person can do that, he needs to know himself well first. This takes brutal honesty, particularly when it comes to admitting personal weaknesses.

When a person knows his personal weaknesses, he can set the right level of expectations for the kind of partner he wants. In this context, it means not setting too high expectations to avoid being left on the shelf, even though he/she deserves better.

There are personal weaknesses that are out of our control. We cannot control the way we were born. Some are born into rich families. Some are born smart. Some are born unattractive. It is not realistic for an unattractive young woman to expect his future partner to look like a K-Drama Oppa. It is a hard truth that women who are disadvantaged in their looks will have more problems than men in a similar situation because of the way nature has designed men. When a man takes a liking to a woman, his prime motivation is almost always physical attractiveness. Women should not take it too hard if she gets rejected over a weakness which is out of their control. The fault probably lies with the man, not her. He is not the right match anyway.

There are some personal weaknesses which are too late to change. Age is a common problem. Some people had ultra-high or unrealistic expectations when they were young and missed the opportunity to get married when the timing was right. The solution would be to seek a partner in the same age group. Seek the right match.

Getting rejected is quite common. It is hard to find the right match if a person does not risk rejection. He should not feel bad over rejection as it usually does not mean he is not good enough. It just means the other party is not the right match. That is what I tell myself whenever I face rejection in many aspects of life. The important part is to be honest when interacting with the other side so that one gets rejected (or accepted) for the right reasons. Be yourself to attract the right match.

I never understood the concept of "Opposite attracts" when it comes to marriage. I feel more comfortable with people who are similar to me but I understand the need to work with people who are different in a team. For a project in the work place to succeed, it takes people of different skill-sets and strengths. However, it is harder for a marriage to work between people who are highly different from each other. Sometimes, fate has it that we meet someone who is different in race and religion. More hard work is involved in the relationship to work between these couple and their families. In multi-racial, multi-religious countries like Singapore and United States, this is a reality that we have to accept. Preferably, to minimize the risk of divorce, couples should minimize the amount of differences.

I wrote this article because there are people around me who are not fortunate in this aspect of their life. This is a painful topic which is too sensitive to talk with them directly. I am one of the lucky ones who managed to find the right match, the right spouse. I wish the same for them and my readers.

Saturday, October 23, 2021

October 2021 electricity bill for Singaporeans on Wholesale plan may be 4 times more than previous month. Keep things in perspective.

EDIT: For people on wholesale plan, you can switch back to SP Regulated tariff price at SP online portal any time you like, with about 1 week notice. If current high prices makes you uncomfortable, switch back to SP Regulated for the time being. When prices stabilize, then switch back to Wholesale.
This is my plan of action as a wholesale customer.

If you do not have this mental flexibility, please keep to a fixed-price electricity plan. Otherwise, the high prices may do harm to you mentally and financially when energy prices go crazy. With crazy prices at the moment (Oct2021), now is obviously not the time to sign up for Wholesale plan.

I downloaded historical electricity prices for year 2021 to estimate how much I will be paying for my electricity bill in October. The average half-hourly rate from 1Oct2021 to 14Oct2021 (data not available yet for the rest of the month at the time of download) was $628/MWh. This is about 4 times more than the average half-hourly rate in September which was $156/MWh. 

In case some people are influenced by my blog post last week into signing up for Wholesale plan, please be mentally prepared for price shocks. If this makes you uncomfortable, a fixed price plan is a better fit for you. If I have to choose a fixed-price plan today, I will prefer SP regulated tariff even though it is  more expensive than the retailers because it does not come with a bond. I do not like the idea of being bonded to a fixed-price for 1-2 years at a time when prices are at very high levels.

For people who signed up for Wholesale plan, let's keep things in perspective. The average half-hourly wholesale rate in 2021 year-to-date, including the ultra-expensive October month so far, is $140/MWh based on USEP data. I was told to add another $60/MWh as an estimate to account for the miscellaneous charges charged by SP for wholesale account. $200/MWh is still cheaper than SP Group's regulated tariff rate which ranged from $207.6MWh to 241.1MWh this year. Customers who are on wholesale plan since beginning of 2021 will still enjoy some savings up to Oct14 compared to customers on regulated tariff pricing. Of course, this is no consolation if you sign up for Wholesale plan beginning in October.



Will wholesale prices continue their scary price momentum going forward? I do not know. The wholesale customer can switch to other plans any time he likes. There is no bond. For customers who have been with wholesale since beginning of the year, if they switch now, there is still chance to enjoy some cost savings compared to SP tariff rate.

If peace of mind is important, a fixed-price electricity scheme would be a good choice. I can see many Singaporeans opting for it. With electricity retailers folding one by one, the next best option for peace-of-mind seekers would be to either choose a financially strong electricity retailer, preferably backed by a parent who owns a power generation business, or SP Group.

Under the Singapore Electricity Market Rules, there is a price cap of S$4500/MWh which will not be exceeded regardless of market conditions. This is about 19 times the regulated tariff today. In the very unlikely worst-case scenario when prices are stuck limit-up at S$4500/MWh for the entire month, the typical 4-room HDB household will be seeing an estimated $1600 electricity bill for the month. 

As a wholesale customer, I will seriously consider switching back to SP Regulated Tariff price if prices hit unprecedented high levels (no need to wait for $4500/MWh) and stay near the high levels persistently for several days. This way, one can avoid paying the $1600 bill worst-case scenario.

If one is comfortable with more risk bearing in mind the worst-case scenario, then Wholesale plan is for you. Some people compare Wholesale price hikes with investment disasters like Hyflux or profitable short volatility trade gone bad. Keep things in the right perspective. The risk is capped at around $1600 for a typical HDB 4-room household in the worst-case wholesale price hike scenario, if you hold on to the plan for the whole month. You can switch back to SP Regulated Tariff price anytime, with 1 week's notice.

Picking the right Valentine. A much more difficult task than picking the right stocks

9 years ago, I wrote about choosing your Valentine from a value investing standpoint. What I wrote then still stands today, Beauty is over...