Houses

"I've been married and divorced so many times, I should just find a woman I don't like and give her a house."  -Rod Stewart

Morality

Not every turd floats. Sometimes it sinks to the bottom quickly. But in general, don't be a turd.

On Decisions

When I got married, I told my wife that I knew the key to a happy marriage: I will handle the hard decisions and she will handle all the easy ones.

To this day, 20 years later, we haven't had a hard decision to make.

(Bill Engvall)

Thoughts on Emerging markets investing

I have been monitoring the domestic public equity market -- the Indonesia Stock Exchange (IDX) -- for most of my 12-year career.   I can't help but notice some stark differences when compared to, say the NYSE -- things that would matter to investors accustomed to the setting in developed markets.

Below I try to summarize some key differences, and other tidbits EM investors should take heed:

Shareholding is concentrated
As an investor, it's important to understand who the shareholders are and their motives.  Are they intent on expanding their "empire", or are they conservatives or value-minded?  Private equity shareholders typically intend on maximizing share price, but the fact that they typically hold many (10-30%) shares means there may be downward pressure at the time that they sell.  Don't forget that....

Incentives are not always aligned
Transactions happen between principals.  When the deal size is significant, there's typically a separate deals "on the side" of the listed companies (e.g. separate payments outside of the listed structure), and more often than not it's intended to minimize "leakages" at the expense of minority shareholders.

Many listed companies may be part of a larger business group.  This is a good indication of "unfair", less-than-arms-length affiliated party transactions.  Although local SEC protections are typically quite stringent, these transactions may still pass, as there are workarounds and shareholdings are concentrated (e.g. different shareholder groups may work in concert).

Management and board members are not what you expect
In developed markets, management usually consists of longtime professionals, while board members consist of former CEOs and industry experts.  In emerging markets, don't be surprised that management and board members may include founding family members, politicians, (usually retired) army generals or police chiefs, or strongmen that are in the payroll.

Liquidity can be limited
Because the shareholding is concentrated and often controlled by the founding family or strategic owners, only a small number of free float are traded (e.g. can be less than 5%).  Pay attention to daily trading volumes.  An investor of any size needs to be aware that accumulating and divesting a substantial investment value can take weeks or more, if indeed possible at all.

Market corrections can be brutal
Emerging markets suffer from both equity market and FX Market corrections.  When fear sets in, it hits both markets, brutally pounding stocks with a double-whammy.  There are no "safe haven" stocks in emerging markets; cyclicals and non-cyclicals all get hammered in a market correction.  Keep in mind that such market corrections may also provide good buy-in opportunity if you have the wherewithal and patience to go against the grain.

Contagion also happens quite often.  When the Russian market was hammered due to the Ukraine conflicts, you know what international investors do?  Flee all EM stocks, including Indonesia.  Is there really a direct link between the Russian and Indonesian markets? Probably not.

Beware of initial public offerings (IPOs)
IPOs have lock up periods, during which principals are not allowed to sell down their shares.  Underwriters are often tasked to support the share price.  Some do it to an extreme, propping up the shares into unreasonable territory.  Once the 6-month (actual period may vary -- check the offering prospectus) lockup ends, the principals summarily dump their shares, leaving small shareholders in the lurch.  Be wary of stocks that have rallied post-IPO, and pay attention to lockup periods.

Insider trading does not pay (most of the time)
It is very difficult to enforce insider trading rules in these markets.  Meaning: there is no such thing as insider info, because everybody trades on them.  Not only that, but insider tips from "people in the know" are often wrong, so consider yourself warned.

History and reputation are worth reviewing
Fundamentals are not the most important thing.  Some business groups may have reputation for pump-and-dump scenarios (cough, Bakrie, cough).  Others have better reputations.  Read about the history of the principals, of the company, especially during any crises.  Because reputation matters especially for foreign investors -- and they drive prices.  Astra Group and its founders have good reputation for making whole with their debts.  Sinarmas Group can't say the same.  Lippo is notorious for building things they can quickly flip to the market (or to strategic investors), then starting the same business from scratch -- competing head-to-head with the old business they'd sold.

Opportunity lies for well-connected investors
This is probably more of a conjecture than an observation.  But the sheer breadth of the market, with many small-cap stocks and new IPOs, make it difficult for some analyst dude in Morgan Stanley Hong Kong to really know what's going on.  A well-connected investor on the ground, one who speaks to competitors and actual industry experts, would have a leg up to identify those companies with an upside.

--

Despite my disclaimers above, the market still tends to correct itself automatically.  If you're an undisciplined investor, like I am, and don't follow the market every day, do yourself a favor and just follow the herd.  Generally I find that the most reliable strategy is passive investing.  If you're lazy, like I am, put half of your portfolio in a low-cost index fund; the rest is for your playtime discretion --.

The world ain't fair...

"Fair is the place where they judge pigs. "
- Stephen A. Smith

My Tracks (Android) - App Review

I tried to find a review of this relatively old software, but there isn't much available online. It's one of Google's lesser-known app in the Play Store.  Which is a bit unfortunate because the multipurpose GPS tracker works well; it is intuitive and simple (the basic interface is just 2 buttons: start and stop), and unlike similar apps it doesn't try too hard, doesn't try to sell you things, or bombard you with ads before you even hit start.  I'm talking about software like Nike Running, Endomondo, or Strava. Some of these apps are more "social" than others, allowing you to easily share (brag) about your time and route on Facebook.  (If I was a 3-hour marathoner, I would be more "social")

My Tracks is more focused than that, and this is why I like it best.

The Good

• Statistics include calories, speed, distance, time, and elevation -- basically everything an athlete may care about.
• You can track your jogs (or runs, walks, hikes, skis, cycles, drives) in a real-time map.  Most similar apps do this, I know, but some make it more difficult than it needs to.  This is important if you're hiking, or in unfamiliar territory, so you can find your way back.
• It's made by Google, which gives me bit of comfort that it's somewhat optimized for Android.  Battery usage is OK. My normal 1.5-hour jog would run down ~5% of battery life, which is reasonable.
• It syncs with Google Drive, so even if you change devices (or if you brick your phone), you won't lose your workout history.  In the past 2 months I have ran 45km -- which isn't much to brag about, but at least it's there for me to see.  In Drive, the workout history is saved as a .KMZ file which you can open in Google Earth.
• You can set route markers on demand, or opt to set them automatically. I set mine for every single km, so I can see my pace broken down by km.
• There's even a homescreen widget you can use.  If you're an avid daily runner, this is for you.

The Bad

• When you press Start, the timer starts even before GPS locks on, which is fine, except my phone (2013 LG G Pro running Kit Kat 4.4.2) takes about 5 minutes to lock on.
• Sometimes during my runs, the app seems unresponsive.  I don't know if it's busy trying to lock GPS or what. But it always comes back to life after a couple minutes.  

The Ugly

• Since the timer/log starts before the GPS locks on, the chart looks funny in the beginning of runs.  Every single time, it shows my run's maximum speed at 35km/h.  Right.

Update: It's rainy season and I've been having problems fixing in to GPS -- I've gone whole 1.5hr jogs without My Tracks locking and recording anything.  Based on some forum suggestions I've downloaded an app "GPS Status & Toolbox" by MobiWIA in the Play Store, it seems to help but I'll test it some more.

How to be a good boss

I've been an employee for 10+ years.  That is almost too long, and face it, nobody wants to be an employee forever; someday I want to be boss -- I'm sure you would too.  Maybe I'd start small -- acting as supervisor to a number of trainees, until such time that I can lead my own division, department, and eventually companies.  Having worked for a number of bosses, I'd like to identify what characteristics I look for in a boss-- what I would aspire to be like in that spacious corner office.

1. Well-prepared
Being a boss means you need to be well-versed in the strategic direction of your division, of your company.  Not only that, you must have razor-sharp focus on cash flows.  I've seen many businesses derailed from its long-term strategy, just because it had to deal with short-term cash straps.  Without cash flows, you won't have much ammo for incentives and motivation.  It's kinda like entering into the Battle of Stalingrad with no weapon, just waiting to pick up a rifle from the guys up front who get killed first.
PRO-TIP: If you argue about budgets, then it means you don't have a budget.

2. Focused
Highlight a limited number of tasks you will deal with at any given time.  Stop acting like you know all the answers before taking a deep dive. Spend the time to understand the problem at hand, don't be dismissive.  People will tell you bull***t, you need to look at hard data.   If you don't spend the time and go deep, you will make the wrong decisions.  Your instincts are wrong more often than not.  Don't kid yourself into thinking that you can handle so many things at once.

I've had bosses where I -- a direct report -- would tell my supervisor point [A], and s/he won't believe me.  An outsider, perhaps someone s/he meets the first time, would then say the same point [A], and s/he would trust the outsider more and drive the point back to me.  It's annoying, but I've seen it so many times that I guess it's just how people are.  Lesson learned: the first time you tell them point [A], bring a lot of evidence, hard numbers, so you can later say "I told you so".

3. Humble
Always be aware that you are bound to make mistakes, and must make course corrections along the way.  It's not always due to poor decision-making; sometimes you make the best decisions based on the known facts, then some unexpected event throws your a wrench your way.  Commit, implement, review, and reflect.

Know your limitations.  If you see an issue you can't handle, go seek help -- that's what consultants and service providers are for.

When you do make a mistake, own up to your decisions.  So many times I've heard, "if I had my way back then, I would have done [B] and we would not be in this mess."  It doesn't matter who wanted to do what back then; as a boss, it is your responsibility regardless. Leaders get credit in a success story, the flipside is be the same.  Acknowledging past mistakes is the first step in learning from them. If you point blame, you lose the opportunity to gain critical knowledge from history.

4. Just be there
This is a very simple point, but somehow seems very difficult to some bosses. You need to just *be around.  Face time shows your employees that you care.  If you show care, your employees would produce something more than half-assed work.

5. Communicative
To be a good boss you need to be open and transparent. Hiding things will only make your employees despise you.  Some bosses hide side businesses, side benefits, or side arrangements (either with the company, or with certain clients).  The fact that all of those are "on the side" means you owe your employees transparency and accountability -- you need to show that despite these things, you are still 100% committed to them.  Show them that you are open, attentive, and available.

Some bosses hide the fact when the company is having issues -- perhaps it's financial strain, legal issues, disagreements between partners, etc.  This is counterproductive.  It is important to discuss these matters in an open forum, because of three things: i) the alternative, office rumor-mongering, is an order of magnitude more destructive to morale than the actual issue, ii) sharing internal issues show your employees that you respect them as adults, instead of treating them like children, and iii) having an open discussion can generate productive discussions, perhaps somebody may have good ideas for resolving the main issue.

6. Provide a sense of ownership
This doesn't just mean giving everybody stock options.  That's important -- don't get me wrong -- but if your employees are savvy, they'd want to diversify (instead of having their steady income and wealth so highly correlated).  This also doesn't mean forcing everybody to use the company's products -- if the product is good, people will use it without instruction, plus it may be good to understand what your competitors are offering.

Providing a sense of ownership means involving your team on strategic decisions.  Bad leaders make instinctual decisions in isolation, without getting buy-in from their stakeholders.  Good leaders gather inputs and make informed decisions. If it turns out great, then everybody should get a share of the benefits.   If it turns out disastrous, then at least the whole team knows they have deliberated and considered all the costs and benefits known at the time.  If you just make everybody execute on your instinct and unilateral decision, then any unforeseen disasters would just lead to inevitable finger-pointing.

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These are some traits that I, a longtime employee, wish I could have when I am in charge.  The overarching theme is that bosses really need to be leader and motivator, in addition to solving problems and making good strategic decisions.