The Wind, the Current and the Sailor of the business.

If you ask any Singaporean elderly their opinion about working for the Government, they will use the word: Iron Rice Bowl. It means that your salary is good and steady, free from disruption. As other materials like porcelain or ceramic can be dropped and smashed.

Hence, they will be proud if their children are the Government’s employees.

But…

Sign-on in the Navy is not a guarantee of a rank promotion.

Once I finished my Basic Military Training and my Navy training in RSS Panglima (aka Changi Naval Training Base), served on board a ship for a few years. They sent me for a Petty Officer Course (POC) for training, to qualify for the next phase of my career and First Sergent rank onwards.

And Navy’s POC had an interesting challenge for my batch boys and me back then.

My Master Sergent, who was my trainer, challenged us to row our boats from Changi Navy Base to a distant location up north, within a day, camped overnight, and then row our boat back.

Our boats will have no propeller engine or sails. 

(the closest I can find the boat we used)

The challenge was not easy. We will be rowing against nature’s elements and the only thing we can rely on will be our own brute strength. If we row in the daytime, we will face the hot sun. If we row in the night, we cannot easily see where we are going, not to mention we will be sleepy. We are also concern about the weather turning foul (rain and heavy wind). If our boat capsized, we would be seriously in trouble. The boat is made of solid wood, flipping it back upright and gathering our equipment will finish us off.

As our team discussed how to manage this without mechanical assistance, our Master Sergent hinted to us, “Try to make your life easy, what will help you to row easier?”

XXXX

On the date we selected, the morning sun was yet to touch our faces. We made our final preparation to sail off.

My friends who are well versed in navigation data had checked the weather forecast, the tide data, the current, and the wind data.

I am clueless in this area, so I leave my trip in their good hands. They too, must row the boat. So, I am sure it was in their best interest to plan it well.

The rest of us will do our part in ensuring the logistics are well taken care of.

When the sun’s rays shined over the horizon, we pushed our boats into the sea, dipped our oars into the sea, and took off.

The rowing was not that tough. Our boats were going in the direction of the current, which was the same direction as our designation. The wind, we cannot tell for sure, but we do not have a sail up so even if it was against us, it was not that bad. The sun was unforgiving still, we poured iced water on our head in an effort to prevent heat-stroke. How effective was we cannot be sure. But at least we tried.

XXX

You might be wondering, what does this have to do with value investing?

Like my boat back then, a business can ‘sail’ with economical winds and currents in their favor.

Doing a business is never easy, it will always be competitive, full of pitfalls, regulations, and unforeseen challenges.

Sometimes, an experienced manager can guide the existing management on how to navigate the economic winds and how to ‘sail the boat.’ How to position the business to capture the economic winds in favor of the business (tailwind), or even know how to guide the business despite the winds are against it (headwind).

However, as a value investor, having such an experienced management is highly helpful. Knowing which direction, the economic winds are blowing helps a lot too. It should make the business ‘sail’ easier. It does not eliminate all problems, but it does help.

Then the next important question will be “How do I know whether there is a tailwind or headwind for the business?”

XXX

After one night in the campsite, we packed and restocked our water and placed it into our boats, we waited for the high tide.

And this time, the officers were joining us.

We rowed again, back to Changi Naval Base. The current did its job again, making our journey smooth. The officers sat at the back, and seemed to be enjoying the sea breeze while we rotated rowing among ourselves.

While we sailed out late in the morning, we reached the Changi Naval Base in the late afternoon.

After we moored our boats and offloaded our gears, we managed to get lunch in the cookhouse.

The officers did not make any comments or remarks and let us mind our business.

XXX

Googling for economic winds is still my method of researching.

Let us take Banking as an example.

I will google ‘Banking trends’ or ‘Banking outlook’ to find out more.

However, like my sailing journey, there were bound to face some challenges, and I like to know more about it.

So I will google ‘Banking challenges’ to find out more too.

I can put the year, for e.g.: ‘Banking trends 2024’ in hopes of finding better results. The same goes for challenges.

If I am interested in the trends and challenges of a particular country, I can google “USA banking trends 2024” or “Singapore banking trends 2024”

As much as I can, I try to read the research publications or any credible source I can find.
Hence, the keywords I used matter a lot.

For your convenience, you can copy and paste this with your investment notes, just replace the ‘industry’ with something you want to research:

·      ‘industry’ challenges
·         ‘industry’ threats
·         ‘industry’ trends

You may come across some economy research reports that will cost quite a decent amount of money to buy. I didn’t pay for any of these reports, though I may be interested in them, but they are really pricey.

Hence, you can try to search using these keywords:

·         filetype:PDF ‘industry’ challenges

·         filetype:PDF ‘industry’ threats

·         filetype:PDF ‘industry’ trends

And sometimes, you may find quality PDF research reports that will explain in detail… for free…

Credits go to Fifth Person for teaching me this.

Finally, AI chatbots may help.

https://gemini.google.com/app is one of those Chatbots that is useful for me.

You can type in your question, and it gives you a concise answer with links to support.

XXX

In my experience of military life, if we can have extra time for ourselves is considered a privilege. Unlike businesses where rewards are given in terms of pay raises or higher bonuses, employees are willing to sacrifice time to earn more money.

We value not going back to work more, as we do not get overtime pay and extra bonuses are akin to lottery. Only a very few handfuls know how to get bigger bonuses in the Navy, and this is closely guarded information among us.

The officers know that and give us a day off from our training after our expedition.

Now I think back, I feel that they appreciated how we planned and executed our sailing. There was no accident, no loss of equipment, we did not get to row like slaves, and most important of all…

Our officers can go home on time. They too, are not paid overtime to sail with us in the event we must sail late into the night.

They have, skin in the game too, but in this case, they did not put in any effort and the challenge was a success, and… on time.

XXX

My reward from my mission was a day off from training.

Investing is a different story; good and proper research does not necessarily yield a good return.

But it does provide some insights into the business challenges and what helps them prosper.

Gives us a good chance to avoid those which having a headwind while riding those who are having a tailwind.

I wished I had known this before I bought Prime US REIT back in 2023…

*in Uncle Roger’s voice* Haiya…