Quora Answer: Why Would Someone Invest in Hedge Funds Considering Their Negative Reputation?

The following is my answer to a Quora question: “Why would someone invest in hedge funds considering their negative reputation?” 

People who understand finance do not have a negative impression of hedge funds.  A hedge fund is a type of actively managed investment pool.  In this case, they fund managers are known to utilise a variety of strategies and leverage, trading a variety of assets and their derivatives, with the sole intent of beating the average investment returns of the index.  In effect, because hedge funds end up competing against each other, they have to offer significantly high returns over and extended period to get those clients. 

The nature of hedge funds is high risk, commensurate with the high returns they work for,  Just as the gains are multiplied due to leveraging, so are the losses.  As such, hedge funds are vehicles for accredited investors with a high risk tolerance and high tolerance for potential loss.  They are not meant for retail investors.  Hedge funds tend to make the news when there is a spectacular loss, or collapse due to the leverage.  When they make money the rest of the time, it is not newsworthy.  This could be the impression of people who are neither in finance, nor accredited investors.

Quora Answer: How Can African Leaders Make Their Countries Better?

The following is my answer to a Quora question: “What are some of the things that African leaders should be doing to make their countries better?”

The very first thing that the leaders of African nations need to do is to thing wider.  The problem with African nations is that most of its leaders think of themselves first, and then their family, and then their tribe, and maybe, just maybe, they think of the rest of the nation.   They think small.  They think wealth is what they can accumulate now, by any means, no matter how foul, selling their land, its resources, its future, so that they can have more now. 

How wealthy is a man, when he lives in an opulent palace, surrounded by plenty, when people just outside live in squalor, with no proper infrastructure?  No matter how beautiful the garden, the streets outside are ugly, and it reflects the ugliness of their thinking.  This is why many African nations have no future.  As long as there is obvious inequality and corruption, as long as leaders and those who empower them, only think of themselves, there will always be more conflicts, more instability.  People see no future in supporting a society that has disenfranchised them, and when they come to power, they continue that cycle of disenfranchisement. 

The moment one man can think beyond that, and gather together a group of leaders of like mind, and convince one generation to make sacrifices for future generations.  The moment that one man can sell his people a coherent vision of being part of something greater than themselves, we will see an African nation that rises from this, and be an example for others in the continent to emulate.  This means thinking in terms of a people, not tribes, not ethnic groups, not religion.

Quora Answer: Is Singapore Shirking Its International Responsibilities by Refusing to Take in Refugees?

The following is my answer to a Quora question: “Singapore is shirking its international responsibilities by refusing to take in a single refugee, people who are in dire need of protection and refuge.  What does this say about Singapore?” 

Nothing.  Firstly, we need to consider the facts.  Singapore has a population of around 6 million, including transients.  Singapore has a land area of around 730 km².  That means a population density of almost 8,000 per square kilometre.  This makes Singapore one of the most densely populated nations in the world.  There is not a lot of space to simply take in refugees, and facilities to put them up while they are processed. 

Secondly, Singapore is not obliged to take in refugees from faraway nations, when it was not party to the unfortunate circumstances that made them refugees.  The last time Singapore did take in refugees, was at the end of the Vietnam War.  Saigon fell the North Vietnamese in 1975.  Boat people were still coming in 1984, and by then, we had economic refugees, not political refugees.  Countries that had claimed they would take in those refugees, such as the US and Australia, who actually fought in that war, eventually reneged on that promise.  There were riots, criminal activities, hunger strikes and other unsavoury events.  It was 1996 before the last refugee camp was closed, 21 years after the end of the Vietnam War. 

Considering the cost, the administrative nightmare of dealing with various nations and the UNHCR, the human suffering we were inadvertently party to, and some of the moral compromises that had to be made in those unfortunate circumstances, no on in the Singapore government, familiar with this, will want to go through that again.  This is one reason why we did not take in any Arakanese refugees from Myanmar. 

Thirdly, the unfortunate fact about the refugee business that no one wants to really acknowledge is that not all refugees are equal.  Refugees who are wealthy can buy their way out.  Refugees who have professional skills such as doctors, engineers and accountants, are first pick by settler nations.  That is what the Germany and Denmark were looking for when they opened up to Syrian refugees.  By the time a conflict has dragged on, the majority of the people who are displaced, those who had to take the slow route out, are the lower socioeconomic classes of little economic value. 

The other consideration is the settlement period.  Consider this: when East and West Germany reunited again, after the fall of the Berlin Wall, there was more than a decade of conflict because in that half a century, the two sets of Germans had different cultures, different enough that there was discrimination and prejudice.  Imagine the challenge of having an entire neighbourhood of poor foreigners in parts of a city state like Singapore.  Singapore practices a form of ethnic quota to prevent the formation of racial enclaves.  That is not possible immediately were we to take in hundreds or thousands of refugees.  The logistics of housing and feeding that many would preclude it.  There will inevitably be law and order problems.  Singapore has not been around long enough to survive that sort of racial conflict. 

Considering security, it should be noted that many of these refugees come from places where they are known to practice a form of Wahhabi-influenced Islam, or a exclusivist cultural interpretation of the religion.  They are not going to fit in a cosmopolitan nation state.  The last thing we would tolerate is a Taliban-lite enclave anywhere in this city state.  We are in a neighbourhood where groups such as Jemaah Islamiyya operate, where there were the Bali bombings and other recent acts of terror.  I would not dare imagine if such an attack were to happen in Orchard Road, or worse, in the fourth largest oil refinery complex in the world. 

In light of all these factors, it would make more sense for us to support other nations, and help them deal with the refugee problem closer to home.  This is why Singapore sends doctors, food, medicine and supplies to refugee camps near the war zone.  In the case of Myanmar, severe diplomatic pressure was exerted across a broad front.  The intent is to contain the problem closer to the source.  None of these measures are as newsworthy as opening our border to refugees, but it equally important to help people go home.

Quora Answer: How Long Does It Take to Set Up a Blind Trust?

The following is my answer to a Quora question: “How long does it take to set up a blind trust?” 

The process of setting up a trust, revocable, irrevocable, blind or otherwise, is a relatively simple process.  If you know what you are doing, have a clear idea what you want in the letter of wishes, you have the details and agreement of the trustees, and beneficiaries, and have a lawyer on hand, it takes a few minutes.  A lot of time is spent working on the letter of wishes. 

Trusts take time to set up when the would be settlor is still deciding on who to be the trustee, is unclear of legal requirements, and has trouble getting the required information, such as the trustee details.  The set up itself is merely keying in details into the system and ratifying that letter of wishes. 

Now, the process of transferring assets to a trust on the other hand, especially a blind trust, which is an irrevocable trust, may take a few weeks, depending on the nature of the asset, and where it is.  Signing over cash and bank accounts is straightforward.  Transferring property requires changes to the deed, which involves the authorities.  Transferring ownership of assets based overseas, may require more time to verify a lot of documents across jurisdictions.  Done efficiently, this may take a two or three months.

Quora Answer: Should Startups Hire Both a Chairman & a Chief Executive Officer?

The following is my answer to a Quora question: “Should startups hire both a chairman and a chief executive officer?” 

Putting aside all these fancy titles, what are their roles?  A chairman or president of the board is responsible for overseeing the strategic direction of the business.  In terms of managing the board itself, he is responsible for corporate governance, controlling the meeting, addressing long-term shareholder and investor concerns, and mentoring the managing director or chief executive officer. 

The chief executive officer, on the other hand, is directly responsible for the immediate goals of the business, and manages the executive team.  He gives the direction to meet milestones to achieve board targets, and he deals with major customers.  His concern is quarterly and annually.  Different companies may have slightly different titles for chairman and chief executive officer, but their roles do not vary much.  Neither of these roles come cheap. 

For a startup to be able to afford both means that they have managed to secure sufficient funding to start generating their own revenue, and that revenue is significant enough that they can justify the cost of either, let alone both.  This is at a period when the business has started to scale, and preliminary preparations are made for a major exit, such as a listing or SPAC merger.  This also means that the scope of work has expanded, or the funding secured is so large, to the extent that the role of chairman of the board and chief executive officer has to be split for better corporate governance.  If your startup is no where near this, there is no basis to justify such a major hire.

Quora Answer: What Do You Think of the Passing of the Foreign Interference Countermeasures Act (FICA) in Singapore?

The following is my answer to a Quora question: “What do you think of the passing of the Foreign Interference Countermeasures Act (FICA) in Singapore?” 

The Foreign Interference (Countermeasures) Act 2021 is a statute of the Parliament of Singapore.  The intent is to provide the Ministry of Home Affairs with the powers required to investigate politically significant persons, defined as political parties; political office holders; all Members of Parliament, including the Non-Constituency MPs and Nominated MPs; the Leader of the House; the Leader of the Opposition; and election candidates, and their election agents.  It is not limited to them, and may be expanded.  The criticism that the powers granted are broad, but this is the first bill of its kind, to address an unprecedented situation, and we need to start somewhere.  I expect that the act will be refined over time, and amended.  That being said, it is necessary. 

Singapore, and its government, have been targetted by foreign interests for some time, particularly from China, and elements of the American political class, to advance their agenda.  In an age of extensive social media penetration, the manipulation of news, the proliferation of fake news, and attempts to manipulate the electorate has been noted in many places.  An example of this is the election of Donald John Trump, and the subversion of the American electoral process at every level for partisan political agendas.  Less public incidences, many of them difficult to prove include the foreign funds that poured into Indonesia at the last presidential election, which may have subverted the vote.  This included manipulation of the voting computers, and ballots.  There is also the concerted Russian campaign in Europe and the Middles East, using hacks, bots, fake social media accounts, and more. 

Closer to our doorstep, Singapore’s concern is China.  We are not going to say it explicitly, but China has cultivated academics, reporters, and persons of influence in Singapore and the region.  We paid close attention to how the Chinese helped the Rajapaksa brothers to power, in return for control of Hambantota International Port, giving them a deep water port in the Indian Ocean, and inflaming tensions with India.  Sri Lanka was once thought to the fastest growing economy in South Asia.  Now, it has regressed.  Unchecked growth of Chinese influence on our population is detrimental to Singapore.  The Chinese consider the island a “Chinese” island due to its Chinese majority, discounting the significant non-Chinese minority. 

There is further concern that several so-called independent media outlets are funded by interests that are contrary to Singapore’s.  These independent media, including the Online Citizen, were funded by foreign interests, to fulfill a specific agenda, while masquerading as independent critics of Singapore.  Specific political parties and Opposition politicians are also thought to be clandestinely funded by foreign organisations and individuals such as George Soros’ Open Society Foundations.  These include individuals who are largely based overseas, and only come back to contest elections.  They are not the sort of people we want in our Parliament. 

The Foreign Interference Countermeasures Act (FICA) is a necessary tool to protect the independence of Singapore, and maintain the integrity of our political and judicial processes.  The average Singaporean is not aware of the extent of the counterespionage campaign that is fought in the shadows as we balance differing national interests and maintain our neutrality.

Quora Answer: What Comes to Mind When You Hear “Visionary Entrepreneur”

The following is my answer to a Quora question: “What is the first question that comes to your mind when you hear the words ‘visionary entrepreneur’?”

If he is visionary, then what are other entrepreneurs?  This is merely presumption or ignorance.  An entrepreneur is any individual who, by himself, or part of a team, creates a new business, bearing most of the risks associated with starting it, seeking to enjoy most of the rewards, if the business succeeds.  The process of entrepreneurship requires a vision, an over the horizon goal, to seize market share, and engineer a profitable exit for the business, whether cash cow, listing, merger or otherwise.  Every entrepreneur is a visionary.  Calling yourself a visionary entrepreneur does not make you special.

Quora Answer: What if I am Unwilling to Share Personal Information with a Financial Advisor?

The following is my answer to a Quora question: “Are you inherently wary about sharing your personal financial information with a financial advisor?  What would it take to win your confidence?” 

A financial consultant needs to go through a financial health review with the client before an adequate recommendation can be made for anything.  The accuracy of this review is dependent on the information provided.  If you are not comfortable providing even the most basic information with any financial consultant, then you should not have a financial consultant.  Like any professional relationship, whether doctor, lawyer, tax consultant, financial consultant, accountant, or anything similar, this only works when you have some confidence in the integrity of the people you are working with.  If you do not trust a specific individual, find someone else.  If you do not trust the entire profession, then do it yourself.

Quora Answer: Will Malaysia Go Back to Being an Economic Powerhouse with its Original Ruling Party Back in Power?

The following is my answer to a Quora question: “Will Malaysia go back to being an economic powerhouse now that its original ruling party is back in power?” 

Malaysia was never an economic powerhouse.  From data easily available online, when we consider per capita GDP since independence, Malaysia’s per capita income is higher than that of all other ASEAN members except Singapore.  However, in terms of growth rates Malaysia’s performance is similar to Indonesia but lower than Thailand over the period from 1960 to 2010.  The primary reason why Malaysia had a higher per capita income than Thailand and Indonesia in that period despite similar growth rates, is thanks to the British.  Unlike the Dutch, the British actually left Malaya with significant infrastructure development, and a sound administration system.  Malaysia started, after independence, from a higher per capita income base than Thailand and Indonesia.  So, in comparison of the leading economies of Southeast Asia, barring Singapore, Malaysia began with a significant advantage, and then lost it.  Any comparison with Singapore would be embarrassing for Malaysia. 

Now, when we compare it to Northeast Asian, with the other three Asian Tigers, and Japan, they perform at the same growth levels as Singapore, which can be seen in their level of development today.  Hong Kong is now part of China, and its growth is expected to diminish in the face of competition from the Pearl Delta cities, especially Shanghai.  Taiwan has started to lag behind due to short-termism by its government.  South Korea and Japan are economic giants.  China based its economic growth on the Singapore system of marrying capitalism with authoritarianism, and is now the largest economy in the world by adjusted purchasing power. 

Compared to the leading economies of the period, who have all achieved developed status, or near developed, in the case of China, Malaysia is still mired in mediocrity.  In fact, over the last few years, things have only gotten worse as the rest of ASEAN have caught up, and will eventually bypass Malaysia.  Malaysia is barely keeping pace with Indonesia, Thailand and Vietnam, let alone making any claim to be an economic powerhouse.  Malaysia can make no such claim when the government is broke, and their sovereign bonds are almost junk status.

Breaking a Man

The following was culled from various sources from the Internet, although the primary source is The Atlantic’s series. 

At the start of the Cold War, Henry Alexander Murray developed a personality profiling test to crack Soviet spies with psychological warfare and select which US spies are ready to be sent out into the field.  As part of Project MK Ultra, he began experimenting on Harvard sophomores.  He set one student as the control, after he proved to be a completely predictable conformist, and named him “Lawful”.  The latter half of the experiment involved having the student prepare an essay on his core beliefs as a person for a friendly debate. 

Instead, Murray had an aggressive interrogator come in and basically tear his beliefs to pieces, mocking everything he stood for, and systematically picking apart every line in the essay to see what it took to get him to react.  But he did not, it just broke him, made him into a mess of a person and left him having to pull his whole life back together again.  He graduated, but then turned in his degree only a couple years later, and moved to the woods where he lived for decades. 

In all that time, he kept writing his essay.  And slowly, he became so sure of his beliefs, so convinced that they were right, that he thought that if the nation did not read it, we would be irreparably lost as a society.  So, he set out to make sure that everyone heard what he had to say, and sure enough, Lawful’s “Industrial Society & Its Future” has become one of the most well-known essays written in the last century.  In fact, many of us have probably read some of it, although, we probably know it better as “The Unabomber Manifesto.”  Lawful is Theodore John Kaczynski.  When you break a man, there are consequences.

Quora Answer: How Do I become a Powerful Public Speaker?

The following is my answer to a Quora question: “I want to become a powerful public speaker.  I have zero experience now.  Where do I start?” 

The very first thing you need to do is examine your motivations.  There must be a reason why you want to become a “powerful public speaker”.  Everything we do starts with our intentions.  If we are not clear with our intentions, we will not succeed.  When we do not know where we are, we will never be able to get where we imagine we want to go. 

People become public speakers as a consequence of conviction or belief in a cause.  What is the issue you feel so strongly about that you want to be a spokesman for that cause?  Conviction must be married to credibility.  What is your credibility to speak on that subject?  If you do not have that credibility, no one will listen.  We earn our voice. 

The third thing to do is actually join a programme or organisation that affords you an opportunity to master the art of rhetoric.  The most well-known such organisation is Toastmasters.  Toastmasters is also a platform where you work to gain credibility as a speaker, which addresses the first two points.

Quora Answer: Why Do Startup Founders Often Decline Venture Capital Funding?

The following is my answer to a Quora question: “Why do startup founders often decline venture capital funding?” 

Startup founders have declined venture capital funding, but it does not happen as often as venture capital rejecting startups.  There are many reasons I can think of, but the most common reason is that the terms of funding are unacceptable to the board.  Money comes with strings attached.  If those conditions are not in the interest of the board, they will reject it.  Sometimes, it is because of the unrealistic expectations of the board.  They want money, but they do not want the accountability.  They do not want to lose control.  They quibble over loss of equity. 

Another reason why founders decline funding is because they have other funders, or do not need those funds.  Just as funders meet dozens of startups a session, startups present to many different funding groups.  They will take the first one that comes along, or the one with the best deal.  Taking one funder precludes taking another at the same stage of funding if the capitalisation table cannot accommodate them. 

Another point of contention is conflict of interest.  From a funder perspective, they are hedging their bets by investing in several startups in the same space.  From a founder perspective, there is confidentiality concerns if the same funders are investing in your competitors, and the mentor is a party to a competitor.  No discerning funder would take that sort of risk. 

Finally, perhaps one of the more common reasons why startups decline to take funding is simply because it fell apart, and founders cannot get along.  This is actually quite common.  Different working styles, different expectations, different visions doom startups.  Money changes people, and when funding is on the table is often the point of the first fight.