Archive for the ‘ Capitalism ’ Category

Going on A Tangent

Something a little more tangible for today. I’m about to start in my new group on Monday. Should be fun and challenging considering it’s a completely new area to me and the people there are smart and well-connected. It’s one of the slightly different areas than FP&A which makes up the core of any corp fin department, especially in a F500, so at least I have some variety on my plate — I count my blessings.

I’d like to leave some honest thoughts about finance and working in industry as well as a large corporation. I’ll start with the last portion because that’s the low hanging fruit here.

Corporation — there’s the stereotype about people being cogs in the machine in a large corporation, and I can certainly see one being stuck/pigeon-holed into such a position very easily. But at the same time, I think one can always be proactive and aggressive in their approach to achieve their as well as their bosses goals. If one does that enough, with a good dose of interpersonal skills of course, I don’t see how you can’t get your way, or at least a way out of the current situation you’re in. In other words, keep moving and don’t be lazy/complacent. If you have to complain so much about your job, up and leave to somewhere better already. The only question is do you have the courage and the tenacity to do so? No excuses.

One more thing to help alleviate the ‘cog situation’ — talk to people. Happy hours mean a lot here to people, and people take mental notes of who comes and who doesn’t unfortunately. Going to all the happy hours certainly isn’t a substitute for crappy work ethic and production, but it helps you connect with your peers and get insight into/feedback on information you may never have thought to seek out outside of the 3 walls of your cube. Alcohol is afterall a social lubricant, and in a corporation, it certainly oils up the gears and cogs and gives a chance for them to really speak to each other, as people and not as cogs.

But at the same time… some people just aren’t a fit for the corporate culture. I happen to like having less personal relationships with my colleagues, so for now it doesn’t feel suffocating.

Industry

In the pre/post-MBA world (ja… classist undertones unfortunately), when one mentions ‘industry’, it usually (don’t take my word for it) means anything outside of consulting, banking, high finance (PE/HF/AM), and some other examples that I can’t think of right now or am currently unaware of. Working in a bank for example, can qualify you for industry if you are not on the front office selling anything; e.g. working in IT in a bank. ‘Industry’ as a vague term, means ‘an operational role’ for lack of a better explanation.

A lot of middle/back office roles qualify as ‘industry’ roles such as HR, IT, Finance, Operations etc. Your role is to add value to the operations of the company; this could be for example, strategy or expense related, systems or processes related etc. C-suite executives are also operational roles because they don’t bring in any business, but they add value to the corporation/industry through making strategic decisions. So as you can see, ‘working in industry’ doesn’t quite equate to working back/middle office. It means more in the sense of adding operational value to the company instead of production value (creating/selling products) to outside clients.

For me, I do like working in an operational role when I can see the larger picture and I understand why I’m doing what I do — in essence, when I understand how I am adding value. Instead of just doing whatever my boss tells me to do, I like and want to know how my work is helping the company save money or make more money in the future. It makes me feel like I am part and parcel of building something larger than myself, and it’s the sort of feeling one seeks out in starting own’s own venture. The down side occurs when you don’t really feel like you add value, or you’re not seeing the larger picture here. Maybe one feels like they are always supporting executive decisions but never really calling the shots and understanding how the business works.

I have been very fortunate to have been placed in a rotational program.. and my first rotation has given some insight into the business that we work in, so I am very grateful for that.

Finance & the ‘Ecosystem’

Finance is an interesting function to be in. I think a lot of what we do is similar to what the Operations people do at times, but we have an extra focus on reporting — both external SEC as well as management reporting. That is why people often label internal corporate finance folks as glorified accountants. Is it true? Somewhat. Is it interesting? Yes. But it’s only interesting to the extent that you have taken at least a basic accounting class and want to see the real life implications of those rules, because now one can understand how 10Qs and 10Ks are produced for the outside world.

Of course, Finance is a large and diverse function and another important role besides reporting is the financing of the company. Finance helps look for sources of money and makes sure that our expenditures and investing needs can be financed appropriately without bleeding the company dry of cash/assets. Thus, whether it be through the reporting or the financing function, one begins to understand the metrics and ratios of the industry and how the financial statements really flow and feed into each other. In short, one begins to understand how to evaluate the ‘personal health’ of a company through its financials and commentary.

Personally for me, working in Finance and studying the CFA at the same time has been a very self-reinforcing process because they are entirely complementary to each other. One shows you the real life workings of producing the financials of a company, while the other shows you a bit of that and a lot more about the entire ‘finance ecosystem’ altogether. What I mean by this ecosystem is the financial services industry, which pertains to the relationships between the internal corporate finance folks (me), the bankers/equity research folks (sell-side), PE/HF/AM (buy-side/investors) and all the sales people & traders working on either side. Let’s also not forget the auditors that scrutinize the financial statements that corporate finance produces so both the buy and sell side can rest assured that the reporting has been done somewhat truthfully. This is the ecosystem that I understand as of today; consultants to me don’t quite fit in the financial ecosystem because they usually sit on the more operational side of it (though there are investment consultants etc.) and advise on the company’s operations directly.

This has been a fairly long post so I’ll leave it as such. To whomever reads this, hope this was truly tangible and educational.

2015
03/01
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Capitalism
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Voluntary Slave

I’m disappointed to find that at the end of my expensive and tedious “education”, that it all boils down to finding a job and a career path. At the university, we all pretend that we want to get a good holistic education and learn for learning’s sake. But at the end of the day, the only worry on every student’s mind is “how am I going to pay back this loan?” or “how will I pay my bills in the future?” and nobody can blame us.

It’s not that I did not enjoy my education at the university, for I know that the often “impractical” knowledge I carry with me will fuel the dreams and aspirations of my entire lifetime. But I feel like a hypocrite to sell myself out to a corporation that does not share the same lofty and imaginative thoughts that drive me. Maybe my generation has been spoiled with promises of “following your dreams” and “pursuing your passions”, which in all odds is probably a bunch of hogwash sold to the masses to try and get them excited about life. Maybe I need time to purge myself of the idea of the noble and idealistic pursuit of “passions” and learn to be content with what I have, which is not bad at all.
Or perhaps, it’s that at the end of the day I am just too damn conscious of the chains of modernity that have been imposed on us all. To work, to produce, to spend, to consume. I am at this moment, a reluctant capitalist and I fear that one day I will love to learn my chains just as much as the next person.
2014
01/21
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CATEGORY
Capitalism
feelings
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we’re all just junkies.

It isn’t just the drug addicts that are addicted to the “high”. Our society has created a “high” culture alright. This is a time when “highs” are celebrated and outright encouraged by our friends and family. Raves, concerts, parties, sexual escapades, Hollywood blockbusters, Romcoms — they all capitalize on our need for this “high”; they make tons of money out of our need to be “high” by time and time again, managing to make us addicted to these things. So in retrospect our whole society has become a bunch of pathetic junkies. Or perhaps society has always wanted to be this way, and capitalism has just managed to find that opportunity to capitalize on our human nature. Capitalism is in a way, the perfectly natural manifestation of our human nature — the good, the bad, the whatever. So, how are we to judge what we just naturally are, as morally wrong? Can what is natural be wrong/bad? Or as Hamlet says, “for there is nothing either good or bad, but thinking makes it so. To me it is a prison.” 

I mean, where in the world did this “morality” come from? How were humans even able to invent this “morality” and the conception of “sin” is what amazes me. These are human inventions that have come to trap us in this mental prison. We create these — our own trappings, our own imaginary boundaries of what or what not to do in life; we also create our own “needs” — how many decently well-fed people in the world can say they do not need the Internet and/or machines?

Man is born free, but he is everywhere in chains. -Rousseau

But we have no choice but to choose this “freedom” entrenched with slavery towards our “needs”, can’t we? For we are already addicted to it, and cannot imagine a world without it. Oddly enough, a previous version of myself would have squirmed very uncomfortably in her seat to see and understand this truth; but the me I am today is acknowledging the truth, just as it is, with no moral conviction. “It is what it is” is probably the best way to describe reality for it is nothing more or less than that.

2013
12/06
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Capitalism
people
reflections
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On Equality

In my previous post, was a YouTube clip on Milton Friedman giving his argument for capitalism based on a very basic tenet — capitalism does not aim for equality but can naturally drive man closer to it, but on the other hand socialism will only dream of equality but cannot achieve anything tangible in reality. Basically, he is holding a practical stance on “achieving [economic] equality”.

I’d personally like to take a step back and question the basic assumptions behind the idea of equality.

1)  Is equality a value? Why is it valued?

2) Is equality just man’s fantasy? Can it be achieved?

3) Is every individual man similar in value to another? In other words, is man born equal?

4)  What does “equal” mean? Equal in talents? Equal in capabilities to produce value? Equal just in terms of the value of their lives? Is the value of a murderer’s life equal to the value of an average man’s life or a doctor’s life? How does this translate to economic equality?

4) Should we try to achieve equality even in the case where man is not born equal?

4) Is economic inequality inherently perverse? What if every man had all their basic needs met, despite there being a tremendous amount of economic disparity between the rich and the poor — would this still pose a problem for society?

Friedman argues in a lot of his videos/lectures that capitalism has done more good for all of mankind than any other system put in place. He argues that despite the terrible working conditions in London, say during Charles Dickin’s time, one needs to compare the economic state of the people before and after the industrial revolution to see if those people were better off or not after the introduction of machines to propel capitalism forward. One contemporary example would be the exploitation of cheap labor in China. In this case, the question we should ask ourselves is: were these people better or worse off with this new employment? If they are not currently exploited for cheap labor, would they be employed in the first place? In my opinion, I think cheap labor is better than no labor. But of course, I have not done much research on this issue so I’m not sure what these people would have been doing otherwise. I do not think that they were physically forced to take on these jobs, and that this was probably their best option at the time.

One also cannot deny the kind of economic prosperity capitalism has provided for countries like America, Britain etc. and the BRIC countries nowadays. With economic prosperity, global standards of living have increased tremendously over the years and the increasing longevity of people in developed nations are a testament to that. And yes, it is inherent in the case of capitalism that this economic progress comes at a cost where standards of living increase for every socio-economic level, however the economic disparity increases (exponentially?) as well. If huge economic disparity is the cost society must endure in exchange for lifting the general population out of poverty, then is it not morally right to utilize capitalism this way? What does it matter if one is rich and the other is poor if both people are better off than before capitalism had its way? In other words, what is it about the idea of equality that really stirs us up despite us being relatively better off than before? Would we be happy if the whole country was equally as poor? Are we willing to give up higher standards of living in the name of equality?

> I will post another post on being happy in a more equal but poorer society, some other time.

2013
11/29
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Capitalism
ideologies
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Milton Friedman

Wow, I have been watching some YouTube clips on interviews with Milton Friedman, and they have completely blown me away. Despite the fact that he is not a libertarian, hearing his thoughts at first made me assume that he was one, simply because he detracts from what a stereotypical Republican is in contemporary American society (or maybe I just need to read up more to understand contemporary/past American politics). There seems to be a sense of morality that goes hand in hand with his economic reasoning that steers the middle way for reconciling the debate between [economic] equality and freedom.

Kind of reminds me of Kant, who is said to steer the middle path between the Enlightenment rationalists and the believers in pure faith, through the co-existence of the phenomenal and the noumenal world.

I am looking forward to reading some of his classic texts such as Capitalism and Freedom.

2013
11/26
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Capitalism
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On the Majority (in Democracy)

In this post I have already mentioned my general thoughts on democracy. And it seems that I am not the only one who thinks this way: I saw that a contemporary version of Henrik Ibsen’s Enemy of the People was playing in BAM this weekend, and I felt compelled to go and watch it live (YouTube videos of the English version available here). This was my second European avant-garde play I have watched at BAM (the first one was Nosferatu). I must say I have never quite seen any play like this (in style and presentation), so it was an overall positive fresh experience for me. The play also happened to weave in quotes from The Coming Insurrection and touched upon the various strands of discontents voiced (a la global Occupy movements) post-2007 recession and US government bailout.

Thought of the day:

With a majority always comes a minority. That means social exclusion, period.

I must say that when the Occupy movements first started, I didn’t think much of them. I pitied these people who I thought were probably involuntarily unemployed and frustrated, or drew a bad hand of cards at birth, or were too lazy to work hard and find better work. Hence, why they had the time and were willing to camp out in the middle of the day (or for days even) to protest over something (the system) that a majority of people think will never change. Some of my classmates (especially in the business school) thought them too idle and shouldn’t waste their time fighting the system, but instead go out and try to make ends of meet instead of wasting their time loitering in a park.

But coming from a developing country and having seen poverty in abundance first hand, I knew better than to believe these people were living bad or poor lives because they were just lazy. For some of them, that might be the case; for the other lot who work hard or try for years to grow out of poverty yet cannot because of their personal circumstances, because of low minimum wages, because of bad education, because our society often only values test results as a measure of intelligence, and almost requires us to acquire an oftentimes expensive formal education in order to be deemed useful to society, and then tell us that a degree is not enough to acquire a good job when you’ve already taken out $200,000 worth of loans to get that piece of paper — you start to really wonder how you can truly be successful in life, and more importantly why we need to be “successful” this way and not measured in other ways.

Some of the quotes that really stood out to me in the play (I am paraphrasing because some of this stuff is not from the original play’s text):

“I feel bad telling them lies in school. We tell our children that they have equal opportunities in life, and then start grading them and separating them from each other in preparation for social exclusion in the real world.” –Katherine Stockmann (a school teacher)

“The most dangerous enemy of truth and freedom among us is the Liberal majority! The majority may have might on its side but not right.” –Dr. Stockmann (“whistle blower” warning about the dangers of the town’s new economic ‘blessing’)

” “I AM WHAT I AM,”  is not simply a lie, a simple advertising campaign, but a military campaign, a war cry directed against everything that exists between beings, against everything that circulates indistinctly, everything that invisibly links them, everything that prevents complete desolation, against everything that makes us exist, and ensures that the whole world doesn’t everywhere have the look and feel of a highway, an amusement park or a new town: pure boredom, passionless but well-ordered, empty, frozen space, where nothing moves apart from registered bodies, molecular automobiles, and ideal commodities.” –Dr. Stockmann (quoted directly from The Coming Insurrection)

Of course, they were trying to sell us that long block quote from the very beginning of the play. And despite the fact that they were sort of shoving it down our throats “here, this is the medicine to achieve the wake-up call my friend!”, I resonated with it because that is how I have felt about downtown Kuala Lumpur as well as Singapore/Hong Kong my whole life. This “passionless order” is the most painful thing to see happen in a country you love. You can educate society to adapt to a world where economic competition is of utmost importance; tell them that everything must be sacrificed in order to build a developed nation with a strong middle class; measure one of the highest GDP in the world, yet ironically still hear the haunting echoes and longing of the meaningful past in an empty nation where numbers measure unhappiness. < Sorry Singapore, that your development had to come at a price.

~~~

Going off on a tangent:

One of the characteristics of modernity (as has been discussed briefly in my college class), is that it becomes hard to pinpoint or blame who or what is causing social change or damage to our “humanity”. Is it those “greedy corporations”, those “corrupt politicians”, those “foreigners”, that are to blame for the suffocating lives we live in? Is it just a by-product of modernization through industrialization and capitalism? Is it capitalism itself? Maybe, or maybe not. The point is that there is no one face or specific object we can point to and say “you’re the culprit!” At least with a tyrannical dictator or monarch, we can focus our energies towards something specific and lay the blame directly on them. With the rise of modernity, the “enemy” seems to arise from nowhere and yet from everywhere. Maybe it is indeed, capitalism itself — if that is the case then we are screwed and revolution will be painful and will have to start from within.

 

2013
11/09
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Capitalism
musings
revolution
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On Capitalism – Preliminary Thoughts

These are my preliminary thoughts regarding capitalism. They originated about 2 months before this publish date. At the present, I am studying the works of Marx through Heilbroner’s “Teachings From The Worldly Philosophy” which includes excerpts from the primary texts in addition to his own commentary (this is in contrast to his more famous book that gives a nice summary of the “worldly philosophers” but opted to leave out the more inaccessible primary texts). Here goes my heuristic learning:

My definition of a capitalist is a person or class of people (since they are more than just a few and share many same characteristics, opinions, lifestyles etc.) that owns a lot* of capital.

*Undefined but you get the idea.

Suppose also, that there is only a fixed amount of money in a closed economy where money doesn’t flow in or out of the system/country. It is in the interest of the capitalist is to accumulate even more capital by investing in various projects or financial instruments/markets. The rest of the people in the country are primarily interested in living good, healthy lives and having enough to support their families, without the drive to earn more than they need to. Since the capitalist is interested in accumulating more and more capital, while the rest of the people are less interested in pursuing that goal, what happens in the end is an accumulation of capital and wealth in the hands of capitalists instead of the rest. This is because there is only a fixed amount of money in the economy as I have already stated above. Thus, capitalism is a zero-sum game where one person/class wins, the other party loses.

Where does this break down? Well some people want to become capitalists too and earn more money, but they are stuck in a rut. They either come from poor backgrounds and couldn’t find a decent job, or have a job that doesn’t pay enough because they didn’t realize what they would have to earn to live the lifestyle they wanted.

Should we say that a lot of average people chose a harder life for themselves because they could have picked better corporate jobs?

Should we blame them for wanting to do what they wanted instead of what would make them money?

Should we blame some for being lazy and not chasing the lifestyle they want?

Should we blame the government? Labor market? Corporations? Any business? for not paying higher wages to employees?

Should we blame profit maximization? Shouldn’t it be a right for companies to maximize profits?

Are there enough capitalist positions to be filled in this world?

2013
11/03
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Capitalism
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