ALL THINGS BIG AND SMALL 2.0

FOR THOSE DREAMING OF SPENDING THEIR RETIREMENT IN A CHEAPER COUNTRY THAN SINGAPORE: A comparison of living costs in selected cities. The website  https://www.numbeo.com/cost-of-living/  has a fairly comprehensive and reasonably accurate database on monthly living expenses in cities around the world. And a fairly accurate Cost of Living Estimator where you fill in your personal details and they come up with a monthly estimate of your monthly expenses. I obtained the results be low after filling in my estimated requirements in many items from groceries to Internet bills, to gym membership, eating out and public transport cost. For a household of two. This estimate excludes domestic help, and health insurance. *You can judge for yourself, the degree of accuracy of sample items for Singapore in the second and third images below. My estimated cost of living is S$1,367.00 monthly. ***Please note that I am not typical: I don't have an interest in clothes, electronic ...

A BIG PICTURE EXPLANATION OF WHAT AFFECTS THE DIRECTION OF A COUNTRY'S STOCK MARKET. Investors can choose to earn returns through yields (interest payment) from bonds or dividends from stocks. Bonds (which are like loans) pay out a coupon (interest) on their principle. Stocks (not all) pay out dividends. But dividend payouts are not a certainty, and depends on the company's performance. The bond yield of a country is usually measured by the yield on its 10-tear bond. The dividend yield of a country is the dividend yield of its dominant stock market Index e.g. the SP500 or Singapore's STI. One measure of whether a country's stock market is still attractive is the difference (spread) between the dividend yield of its stock market and the yield on its 10 year bonds. Sovereign bonds are risk-free investments (theoretically) and so a choice between bonds and stocks is a choice between no risk and some risk but potentially higher gain. The bigger (on the positive side) th...

THE HUMANIZATION OF ROBOTS AND ARTIFICIAL INTELLIGENCE As robots and artificial intelligence (AI) become increasingly prevalent in human society, there is a trend to make them look , talk, think and behave more like us i.e. make them unto our image.  AI software already show some  human traits. Here are a few examples: ROBOTS DO DREAM One of the latest techniques in AI called Deep Learning Neural Networks [DLNN] (commonly used in machine vision, speech recognition and search) is actually capable of dreaming. While other AI has to be fed data for input, DLNN is also capable of generating some of its own input data and has its own ideas of what an object should look like. This it does by entering into a dream-like state. You can view some artistic/hallucinatory/horror/Salvador Dali-like dreams of DPNN contributed by Google’s AI Group at http://thenewstack.io/deep-learning-neural-networks-google-deep-dream/  ROBOTS LEARN LIKE YOUNG CHILDREN A...

A Common Sense Valuation Comparison of Global Equity Markets * and the relevance for quantitative (algorithmic) Mean Reversion startegies # click on image to see bigger Table Table 1: Worksheet Table 2: Earnings-based Table 3: Dividends-based ·          Each country’s financial markets have their own characteristics and peculiarities so comparing them with a global average of Price/Earnings, Price/Book etc  is meaningful. ·          Because of the loose money policy (Quantitative Easing) by the major economies (Eurozone, USA, Japan, even China in some ways) in the recent years, leading to low interest rates, there is a tendency for financial asset bubbles to arise, caused by excess funds chasing yields. ·          The interplay between the Bond market and Equity market is an often underrated  factor in determining the directi...

ON MACHINE LEARNING Most of the knowledge in the world in the future is going to be extracted by machines and will reside in machines. – Yann Le Cun, Director of AI Research, Facebook MACHINE LEARNING is the automated discovery of Knowledge. With the Internet and sensors everywhere flooding the world with data, the ground for machine learning is extremely fertile. Machine Learning is done by learning algorithms. Pedro Domingos’ book is a discourse on the quest for the Master Algorithm which is able to learn anything and everything anytime. However, the quest for a Master Algorithm is by default a quest to know the nature of the learning process, and there are five schools of thought here on just what happens when we are learning so that machines can emulate them. (Dominos call’s them the five tribes of machine learning).  Each of the tribes have their strong and valid points and any master algorithm would have to take a bit from each tribe.  them. Bel...

SUPERINTELLIGENCE by NICK BOSTROM (non-fiction): This book posts the various scenarios on the topic of an Artificial Intelligence (AI) machine turning into a Superintelligence and taking over the human race. Not science fiction but based on current technology's projected development into the future. Scary and chilling when you consider that great minds like Bill Gates, Stephen Hawking and Elon Musk have already given warnings on the dangers that can happen when an AI gets out of control. We have already experienced the great improvement in the intelligence of search engines, translation software, speech recognition and image recognition in recent years. This is just the beginning The author shows the the various technical scenarios where a machine AI becomes powerful enough to break free from its human programmers, command resources to exponentially improve its own capabilities, destroy other competing AI and go on to plot a takeover of the human race. In this boo...

EVOLUTION IN NATURE: LESSONS FOR YOUR LIFE. Nature did not have a plan to make a tiger, a horse or Man. It just happened along the way. Everything in this space-time Universe evolves; including your Life. Evolution is survival of the fittest. But it is not strength or intelligence that determines fitness for survival. It is the ability to adapt to the ever-changing environment. Those who are able to constantly adapt, survive. Because Evolution has no pre-determined plan n or a targeted path. Evolution is open-ended. It meanders along adapting to its ever-changing environment. It is affected by, and in turn affects the environment (and its inhabitants). [Coevolution and Feedback Loops]. In the same way, your Life is not pre-determined but meanders along, affected by events and people, and in turn affecting events and people in a feedback loop. What you will be tomorrow depends on what you do today. And what you do tomorrow makes you what you will be the day after tomorrow. ...

The daily gyrations and noise of the financial markets are these days exacerbated by algorithmic machine-trading. In addition, the high inter-connectedness of global markets and availability of instantaneous information leads to high correlation between all asset classes: equities, bonds, commodities and currencies; leading to higher and higher volatility via feedback loops until it crashes (nothing goes on forever  in such Chaos theory models). Like what happens when your electric guitar's signal feedback to the amplifier turns into a howl. Taking a longer term view helps in taking away the noise to view the fundamentals. The chart below shows US interest rate changes from 1965 to the present, as represented by the yield on 10-tear Treasuries. Superimposed on it, the Dow Jones Industrial Average and Singapore's Straits Times Index. The chart scale is logarithmic and changes are in % for comparability. The second chart shows yields for 5-years so that details can be vi...

The media, analysts, fund managers and assorted pundits have been increasingly strident about China's huge debt overhang amounting to trillions of dollars; warning that it will trigger a financial and economic crisis not only for China but the world soon. We have seen the effects of the current China slowdown on everything from demand for iron ore to demand for luxury goods, as China's economy forms a larger and  larger part of the world economy. The current economic slowdown in China is the result not only of the ongoing Chinese government;s economic structural reforms but also of years of monetary quantitative easing (QE); beginning with the mega economic stimulus of late 2008 which pumped US$600 billion into the economy. This cheap money fuelled the economy, resulting in an overheated real estate sector, over-investment in manufacturing, wasteful projects, underutilised infrastructure. China's demand for commodities such as oil, coal, iron, steel and agricultural co...

COMPARING GDP AND ECONOMIC GROWTH OF COUNTRIES IN THIS REGION WITH RELATIVELY SIMILAR POPULATION SIZE* * Numbers from  www.tradingeconomics.com Attached snip of a spreadsheet compares Australia, Taiwan and Malaysia. These three countries are relatively similar in population size but their GDP, and GDP growth rate are very different because they are different types of economies at different stages of growth, impacted by different factors: 1. Australia: A mature economy, reliant on export of its natural resources and agricultural commodities. But still a force to be reckoned with. A GDP of US$1.4 trillion for a population of just 23 million- more than the GDP of Indonesia (population 250m. GDP US$889bn) Vietnam (popn 92m, GDP US$186bn) and Philippines (popn 102m GDP US$285bn) 2. Taiwan: Now a backwater because of China's rise? Its GDP of US$530bn is still larger than Malaysia's with an almost similar population size, but its growth rate is negative. Bu...

The Intelli-Menu Generator is a smart menu generator for a one-pot rice meal accompanied by soup. Style of cooking is Chinese and ingredients are mostly found in Chinese cuisine. In its current version the algorithms for combination and selection of ingredients is basic. But later versions will have memory (so as not to repeat a menu or have a big similarity in ingredients between rice dish and soup). User will also have the ability to input by a points system his/her preferences for each ingredient, and system will have output that  has a minimum score. The system is flawed because it does not have human sense of taste and balance between ingredients and it often ends up being too imaginative for human taste or output bizarre combinations like liver and flower crab soup or mud crab with slice beef and chestnut. Probably the only way to improve it is to provide feedback from its human owners via a rating at the end of each meal. Over time the neural network will learn what the ow...

Why do financial markets rise and fall with every announcement of how a country's economy fared? Why does the media consult economists for their views, and why do views invariably differ, sometimes by quite a lot? Singapore's Ministry of Trade and Industry forecasts the Singapore economy to grow between 1- 3% for 2016. Is this information useful? A 2% admission of possible margin of error is a lot. 2%  of Singapore's GDP of about US$300 billion is US$6 billion. Enough to give each of our 3.27 million citizens US$1,834.00 So what is the value of economic forecasting particularly when it is always being revised up and down as the situation changes? Rationale for still coming out with forecasts: 1. No matter how unreliable macroeconomic forecasts are policy makers still need to have forecasts for decision-making and planning. They cannot rule out the uncertainty but they can do Scenario Planning viz. if scenario A, then do this scenario B then do that. 2. At leas...

THE ZEN OF EATING salted fish pickled greens plain rice porridge slowly i savor every molecule less is more the Zen of eating my dinner.

In Ochanomizu a district of Tokyo, Japan, is a street that has probably the greatest concentration of guitar shops in the world. This is the guitar enthusiast's Heaven where the widest range of guitars are  displayed: With prices from those that cost US$50.00 to US$10,000.00 and more. Of special mention are the dozens of Japanese made brands with astonishingly high quality. The spirit of lawsuit Ibanez, Grecos and Tokais still exist. With workmanship and attention to details much more superior than even Custom Shop Fenders and Gibsons, some of these guitars are not cheap. Indeed they are even more expensive than for example American boutique brands. They have strange names like: Combat, Freedom, History, Bacchus, Momose, Moon and so on. Its a pity that such beautifully-made guitars have names that make a player cringe or hair to stand on end. And these strange names on the headstock are  obstacles to their being accepted by players. Only after decades are the vintage Grecos, T...