Happy Chinese New Year ! The time of the Fire Horse is here !

 

The year of the Horse has finally arrived with all its fiery glory, and already I've been experiencing the forces of tumultuous change occurring in my life.

The first change is that I've already completed 10 music lessons, and my singing has improved a little bit. But there have been many new initiatives and changes to my course materials, so I have to stop singing lessons for a while and instead hunt for a voice-confidence course that's more applicable to a trainer. My goal of competing at Golden Age Talentime is still there, but I want to explore this field more randomly and don't really want to pursue it the same way as my other initiatives. I think I've earned the right to be a little frivolous with this.

The second change is that financial markets have already exceeded my expectations for the entire year of 2026. One of the things I've promised myself during the pandemic crash of 2020 is that I will begin treating a market melt-up like a market melt-down, and I will make seriously drastic changes to the portfolios I have with the same urgency as during a market crash. Expect these moves to occur when STI hits PE x16 or 5,200, whichever comes first. I will likely close all my ERM portfolios and re-establish positions in extremely low-volatility large caps. I will also increase the allocation to my All-Weather Portfolio, which is designed to have an extremely low standard deviation in trying times. 

You heard it here first: At 5,200 or x16 PE, my Early Retirement Masterclass may come to an end.

I will take some profit off the table. Take an extended break, and go do some travelling. And I will return with a different kind of program for a different market regime that emphasizes bottom up investigation of local stocks and concentrated stock holdings. I assure my community that the FB group will undergo slight changes, a new course will be born, and the current alumni privileges will not be affected.

The third change is simply that AI is happening too fast for me or anyone to catch on, so further changes are already transforming my program into something that is different even from previous runs. I'm already studying how to compile all my investing wisdom into a Markdown file so my student can analyse stocks with just one prompt instead of many. In a matter of months, I might even have to build a Clawbot to do fundamental backtesting for me on Quants Cafe. If the authorities can build an AI proficiency ladder, I might have to stop everything to climb it later this year. 

Maybe there is a silver lining to all this Chaos in the Year of the Fire Horse.

The silver lining is that as changes accelerate, no one can claim to be an AI expert; there is no competitive advantage. The video I have put up using Grok is already yesterday's news, as folks become enamoured with Seedance 2.0. 

If FIRE is a trap, then why am I so happy with my life?

This weekend, the Business Times launched a new column entitled Switching Lanes. This column is after the hearts of many folks who read this blog because it focuses on the realities of life after a full-time career. I encourage blog readers to support this column, as I expect my own blog to issue rebuttals and support for such articles in the future.

And this is why I enjoyed Kenneth Goh's article, titled "The best investment in your 20s isn't your portfolio." This article, in my opinion, is rife with logical fallacies, and even though the author has disclaimed that his opinions are his own, I can't help but feel that the views expressed also coincidentally align with those of financial institutions.

First of all, the article proposes that the best investment in your 20s isn't your portfolio. That's hard to disagree with even for the stanchest FIRE advocate. Health is probably a much better investment of your time. Even some relationships are worth investing in. 

But the author does not mention health and relationships at all.

Instead, the authors begin by discussing the FIRE movement, and credit goes to him for referring to Jacob Lund Fisker, whom I consider a real father of the FIRE movement, rather than to Vicki Robins, who is very much a free spirit and an inheritor of wealth.

At this point in the article, the logical flaws begin to surface as the author constructs a strawman of the FIRE movement. A strawman is an exaggerated illustration that can be easily toppled by a simple argument. This strawman is a troglodyte, a caricature that saves so much money that he forgets to network with other people and build up his human capital, which the author deftly channels by invoking Nobel prize-winning economist Gary Becker. 

I've been into FIRE for 25+ years, and if you follow my blog and observe my LinkedIn, I suspect I've been building my human capital way longer than the author. I've also had personal correspondence with Jacob Lund Fisker, who is a very friendly guy and a brilliant Renaissance man, a Physics PhD and a handyman. In our private conversation, I remember admiring Jacob for his handyman skills, but told him that in Singapore, these skills can be outsourced for a low fee, and I can afford to build other competencies. 

Therefore, I don't think you can position people in the FIRE movement as antisocial troglodytes who sacrifice career networking for their investment portfolios.

This is a false dichotomy. There is no tradeoff. 

I can be frugal and also have coffee sessions with businessmen I admire (many as frugal as me!) . 

However, this article does have the benefit of prompting us to reflect on why people think financial capital comes at the expense of human capital.

A majority of the FIRE movement are INTJs; they are naturally introverted. So I can argue that even if they do not engage in portfolio building, INTJs can do many other things to keep themselves intellectually satisfied, like watch anime endlessly and argue with people on Reddit, learn Klingon, build AI bots, play Dungeons and Dragons, or anything but build their human capital through relentless networking.

Finally, the author and the financial institutions need to really do some soul searching on the people in their 50s today who CAN NOT RETIRE.

There are plenty of Singaporeans who spend their 20s building networks, playing office politics, and getting ahead. Not all of them succeed; some gain minor advantages and become addicted to a high-status lifestyle, but all of us eventually get older, and at 45, many Singaporeans see their salaries plateau. Soon enough, how can the author explain the many pre-sales consultant types retrenched in their 50s and forced to draw down on their assets?

At this stage, someone who read Gary Becker can argue that a significant amount of human capital has already been transformed into financial capital. 

So does it make sense to continue the endless circle jerk of professional networking and looking for a Patron in the office?

Beyond a particular point, you need real skills to manage your financial capital. 

It starts with a small VWRA or IWDA position with a custodian broker limiting your expense ratio to less than 0.5% a year. Then it evolves into a full-fledged portfolio spanning real estate, dividend stocks, and, yes, algorithmic advisors in Python to get sky-high Sharpe ratios. The human capital required to code, invest and reap your rewards is, in fact, quite immense.

But we need to ask ourselves this: Why do financial institutions genuinely hate the FIRE movement?

It is because we are so good that we prefer to invest our money ourselves. Wrap fees and expensive commissions are something for other people. 

So, why park my funds with you when I can buy shares in your bank? 

 ( Apologies, I gave a nice title to this article, but actually did not answer the question. LOL ! )