My Suggestion to Improve Postal Services in Singapore

When I was a child, I am always excited when my parents open the letter box, only to be disappointed that none of the letters belonged to me. Once in a while, my cousins and I exchanged seasonal greeting cards and receiving letters was fun.

Nowadays, with advancement of technologies, shopping online is made possible. I have made several purchases that were delivered into my mailbox. Although the hype of receiving stuff in the mailbox has died down pretty much, I still find it cool to be receiving items other than letters through post.

Recently on 28 October 2015, Singapore Post announced that they will transform the concourse in front of their Singapore Post Center at Paya Lebar into a 5 storey, 25,000 sqm retail mall that will be completed by mid 2017. What is so special about this mall is that shoppers who bought from the retailer can have their purchases delivered to their homes.

While this is an exciting development for a lazy shopper like myself, I do have a few bones to pick with the postage service in Singapore.

No doubt, one can arguably agree that the postage service in Singapore is world class. But with the development of technology, I am sure it is about time we see some upgrades to how mails are delivered.

For those who are not familiar with what SingPost has to offer, you can visit their website to have a look: https://www.singpost.com/.

BONES TO PICK
I would like to touch on the plain old delivery of letters. It is not uncommon to find letters that belong to a neighbour in your letter box. If I am in a good mood, I will personally go their front door and leave the wrongly delivered letter there. Otherwise, I'll just chuck it somewhere at the letter box area for all to see.

If I am receiving letters delivered to the wrong address, it brings to mind the possibility that MY letters could have fallen into the wrong hands as well. What if that letter contains important or extremely sensitive information and the person who got it did not have the integrity to return it? Or it is an actionable item that has dire consequences if ignored?

I am not criticising the postman for making mistakes time to time. I understand that it is human nature to make mistakes some times. What I am going to propose is a possible fix with the help of technology.

Another issue that I have a problem with is the delivery timing of tracked parcels. The most plausible reason why one would opt for parcels to be delivered to the doorstep instead of those self-retrieval boxes is because one does not have the time to go and pick up the items at a specific location. However, the delivery date of the tracked parcels is usually unknown, making it difficult to anticipate when one would need to have someone at home to receive the parcel.

Then comes the problem of delivery timing, which is on weekdays and during working hours, which contradicted the very reason why someone needs an item to be delivered to the doorstep. If the recipient is so free to be at home the entire time waiting for the parcel, why would the service still be required? The end result is a slip of a paper asking the recipient to collect it at the nearest post office. What was the point of paying for the service if I have to collect it myself again?

THE FIX

The solution I am going to propose will not only increases the accuracy with which letters can be retrieved, it can revolutionise the way how our posts are delivered, opening up more possibilities with improved convenience. This solution also changes the role of postman, which will resolve manpower issues and make their job a whole lot easier.

Instead of having one letter box to each household, which limits the size of the mail box and takes up too much dead space. A new-age mailbox can allow automatic retrieval of postage without requiring the post man to sort and deliver. The entire delivery process is mechanised and the sorting is done by a machine via scanning of barcodes/QR codes.

All that the postman needs to do is to deliver a automation-enabled container full of items to be delivered, plug it into the new-age mailbox located at every void deck, key in some verification code and ensure that the system recognises the container, retrieve the container from the day before, and be on his way. The returned container can contain items that users wish to deliver, eliminating the need for letterboxes around the island that their sole purpose is to collect lett
ers to be posted. Sending and receiving postage can be done at the void deck!

The new-age mailbox will then do its sorting internally and scans the barcode on every item to get an inventory of the items delivered. The scanned items can be feedback to headquarters for tracking purposes to confirm that items' status and location. This method of tracking can allow all users to purchase information on the location of their items without actually opting for tracking services before delivery.

Everyone who wants to retrieve their posts need to register for an account. Each account will need to maintain a balance for deduction of postage fees. Postage fees can now be transferred from the sender to the receiver where applicable and additional costs can be charged for any special services incurred.

Imagine a counter at your void deck with maybe 3 mailboxes that looks like microwave ovens. The user punches in a verification code or taps a key card at any of the mailboxes and the system does a search for the user's items. If there are items for the user, the system will transfer the item from its storage into the mailbox where the user can retrieve it.

With the new-age mailbox, the size of the mailbox is no longer limited to the cumulative space needed for all the household. The bulk of space needed will be for holding the inventories in the storage. Users can now have bigger items delivered to their void decks with the assurance that it is accurately delivered and if need be, track the delivery status online.

One other possibility of the new-age mailbox is for users to purchase daily non-perishables necessities. The storage can hold items such as batteries, bandages, adhesive tapes, etc for emergency uses. E-commerce would be upgraded and merchants who wish to advertise can forget about flyers and go through the media player on the mailbox to broadcast their advertisement to users while they wait for their items to be retrieved. This will become a new targeted advertising since the profile of the user is tagged to the account and is known to the system.

DOWNSIDE?
The one biggest downside of course would be the development and implementation costs. But think about this, 20 years ago, elevators serving residents of HDB only stops at 3, at most 4 levels. Today, they stop at EVERY level! Was it costly to implement? Yes! But was it necessary to improve lives? YES! So cost should not be an inhibiting factor to improving the lives of the people.

Moreover, the possibilities that this new-age mailbox opens up is a multitude of new revenue generating segments that pays for the development itself!

All users can start selling items from their homes, increasing postage revenue, or allowing SingPost to draw a commission for the items purchased through the mailbox. The minimum balance that every account needs to have will become free float for SingPost to earn additional returns and perhaps enter into the insurance business. Each mailbox becomes a remote commercial retail center and shoppers can truly conduct a hybrid of physical and online shopping with the peace of mind! Imagine the possibilities.

Cost cutting can be execute with exponential improvement to speed and accuracy of delivery.

The only way forward, is to advance technologically.


Do let me know of your thoughts on my idea, whether you think it is feasible or whether you agree with its possibilities in the comments section.

Creating an Artificial Intelligence Investment System

When I was first exposed to the concept of quantitative value strategy and was really excited about it. Recently, I realised that such strategy is already prominently practiced in the market under the name of smart beta. Smart beta strategies basically aim to outperform the capitalization-weighted market based on factors such as value, size, momentum, and volatility. The strategies boasts superior and consistent returns based on positive back testing results on historical data.

Then there is smart alpha, a strategy that is ever evolving and proprietary to the creator. While smart beta is backward looking, transparent, methodological and predictable, smart alpha is forward looking, versatile, dynamic, and evolutionary.

I was intrigued by the possibility of building a system that can tell me when to buy or sell what investments. All I need to do is to let the system do its job while I can truly live my life.

The concept is similar to creating an Artificial Intelligence not unlike a Chess AI. For every move you make, the AI will extrapolate every single possible moves to achieve the ultimate outcome of checkmating your king.

Your "chess moves" will be akin to the movements in the market such as changes in interest rates, or the flow of money in/out of various asset classes etc. The outcome of "Checkmate" will be akin to generating the highest return possible at the highest probability rate trade off.

The best part of this AI is its ability to learn from both historical and future events and adjusts its calculations of probability and re-calibrate its strategy accordingly.

AI that can think and learn is no longer something in a science fiction but very real in our world today. There is only so much a human brain can process and we are also highly susceptible to our own biases that we allow emotions to rules over logic.

I believe this is a worthwhile pursuit and would be devoting a part of my time towards this end goal.

T T J HOLDINGS LIMITED [K1Q.SI] - 2015 Result Announcement

At the start of the year, I posted my first company analysis on this blog, which I have deemed as high quality and undervalued. With a financial year ended 31 July 2015, TTJ Holdings released their full year financial statement and announced their proposed dividend recently on 23 September 2015.

Shares of TTJ spiked from an immobile range of $0.32~$0.34 for the 1st 3/4 of the year, to a closing high of $0.385 on 28 Sept 2015. One of the most likely reason for the spike was because of the proposed dividend of $0.08, which represents a yield of 21% based on the current price of $0.37, or 24% if you have invested at the price of $0.33. This means that for every $10,000 that you have invested in TTJ, you would be getting up to more than $2,400 worth of dividend come 1st December 2015.

Not that I am showing off, but I believe in celebrating every little success just as how I have been very candid with my mistakes. In all, I have purchased close to 60,000 shares of TTJ in 2 separate purchases. My average cost was approximately $0.335 per share after commission charges. If I liquidate all of my shareholdings at the current price, I will net a gain of around $2,000 or 10% return on investment (ROI). However, I intend to continue holding these shares and earn the 24% ROI when the dividend is paid, translating to approximately $4.8k for a years of not doing any work.

The reason why I am holding on to this share is written in my article, where I indicated that the company is severely undervalued, with an intrinsic value of $0.51. Although the reported net income is lower than my forecast, its 2015 annual report still indicates that the company has strong sustainable profit and good fundamentals.

I especially like how this company operates on virtually no debt. The high dividend payout is of no surprise considering that it is sitting on a large pile of cash. Its cash and cash equivalent represents 55% of its total assets or 65% of equity. Capex this year was half of last year so I believe the company is scaling back to observe how the economy will play out. It has also liquidated more financial assets than last year without purchasing much this year. A prudent company returns cash to investors if it is unable to generate higher returns than the market. This further strengthens my confidence in TTJ's management in directing the company through this uncertainty.

As they say, in an uncertain economic environment, cash is king! Hence, I believe TTJ will be able to utilize its large cash reserves to invest in other undervalued assets or participate in many high return projects that its competitors may not be to do so without borrowing more money.