Travails and thoughts of a Malaysian deep tech investor

1. Numerous books and finance courses are within reach on investments into the equity markets - be it fundamental analysis, technical analysis - or other capital market instruments.
2. The risk/return portfolio theory be it CAPM or Markowitz sells the hypothesis that these risky investments can be managed and de-risked with the right behaviours.
3. But what of private assets where there are no financial history to work off? The risk profiles enter into a different realm when discussing private equity investments and the corresponding structures to deal with the risks, and it enters into a different realm altogether when assessing venture capital.
4. The theory is that by structuring terms which provides enhanced returns is a sufficient workaround for the thigh risks venture investors absorb. But that also assumes a venture investor fully understands the value of the idea in a future world when they invest, be it at an early stage or when a trickle of a pathway into commercialisation and revenue begins to take shape.
5. Without that capability of forming an opinion of what a future market will look like, on the trajectory of the market adoption of a product or a technology platform and how it competes with existing technology pathways now, means that assumption of risk diversification is rudimentary or theoretical at best. The best form of risk diversification is into the different technology pathways into a market we believe will turn out to grow into a meaningful size that a miss, even by a wide margin, may still mean that a hook on creating a new market, or replacing an incumbent's market share, no matter how small a portion provides a form of validation on the initial investment.
6. Yet, that has been the repeated mistakes we have seen. Just a rudimentary understanding of technology, market and product seems to be sufficient to trigger an investment when a substantial deep dive into each of these distinct dimensions are needed to obtain a clear view of whether an investment thesis could be built that is robust enough to be reviewed and stress-tested. We are not stress-testing on the here and now. We are stress-testing for the adoption of a product in a future market that we have no clear view on.
7. Having said all that, the ancillary patterns to look for are good, if not sufficient enough for a discerning and sophisticated venture investor with the ability to actually enable the tide to align itself to the potential investment. It has worked with a great deal of success before, though perhaps that is also serendipitious that there wasn't an exercise to play the information asymmetry on a novice investment partner that is not deemed to have the right credentials to be playing the big boys game.
8. In a way, selection of a priority market to play in appears to be a good starting point, and one that will continuously need to be iterated or reviewed frequently as new technology pathways are discovered or developed.     
9. It is not an easy risk management game to play when a right decision framework entails getting to a point where the investment thesis points to a confluence of a technology pathway providing a clear, differentiated advantage to a present incumbent within an acceptable commercialisation timeframe and the ability to protect that advantage either through IPs or trade secrets, while at the same time ensuring that the industry regulators, incumbents and market players are not unnecessarily preventing the entry of a new enhanced competition at the very least, but all the more advantageous when we consider entry into markets with a high degree of - and proven history of embracing - innovation.
10. There has been occasions too when business cycle turns within the anticipated timeframe, leaving the investment only with a sense of "only" furthering half-baked scientific and technological effort without getting the returns.
11. That high bar itself is enough to turn people off from going into deep tech investments. But the alternative of not doing it is an even more unacceptable position. 
12. For a society that values economic growth as an indicator of maturity, sophistication and civility, but unwilling to place bets on a scientific endeavour that colours society's adoption of objectivity, experimentation and data-driven decision-making, not putting in place enabling policies or initating innovation efforts, sometimes with the feeble excuse of we can't find people to do this, is extremely frustrating and counter-productive. 
13. There is no other way, but to embrace innovation and the risks associated with doing that. 

FLEXIT Strategy (or not)

1. The tottering and the flip-flopping is entering the final 96 hours on the back of 2 major reset programs called Ramadhan and a Covided-MCO.
2. Personal priorities are clearer, the next steps are not. The trading of security and stability to risk and instability has not been adequately resolved. But isn't that the case with hindsight and being in the moment versus projecting to a very unformed future?
3. Rightfully said that the future at least needs to be formed, at least partially, before an informed decision could be made. Anything less is just inadequate preparation. And this after thinking about things for 3 years.
4. The lack of a 100 day plan that is executable is worrying. If anything, it invites the question of preparedness. At the very least, the 100 day plan should have substantial revenues being generated. To point to savings and pension plans as the backups are good, but insufficient. The need is to work on the investable opportunities now. And it should be less fluffy than to point to the unit trust and equity investments which are just too volatile in the recession period at the moment.
5. The moment is ripe for an investment. To start with, it should be a small allocation into a lucrative growth opportunity. To understand how the market works and what the demand will look like will give greater comfort to make the jump. A vidcall to Shereen should be done.
6. I should be less instinctive as I am now for decision making when using own money for this venture. A more structured way of moving and taking tentative forward steps, and being ready for all the heart-aches. Being prepared for all eventualities. Being thoughtful and being persistent. All qualities being eroded by the toxic enmities I carry in Xeraya.
7. Not easy to rely on own capabilities when the environment isn't really conducive. The political upheaval doesn't signal too much hope, but more of trying to work through private interests. 
8. Balancing is next to impossible.
9. Timing is everything. But willpower to bend outside drivers and conditions are more than that.
10. Question is - am I the one? Or am I too racked by self-doubt?

Covid-19 and the new normal, and the same people more or less

1. It's week 5 of the lockdown. The world has changed at so many fundamental levels, that is the accepted datapoint, but has it really?
2. In the past 5 weeks, these happened: 
3. At a global level (i) US under Trump has been exposed like the incompetent leader that he is, the UK is not too far behind. (BoJo, sorry for your Covid-19 affliction, sir, but your country is in really bad shape now); (ii) China has taken charge of the narrative from being the source of the virus through unhygienic and questionable dietary choices; to leading the world to how to handle a crisis and extending soft power diplomacy to many developed / developing nations in dire need of help, (iii) the rise of pharmas, biotechs and VC tech companies to combat the dangerous and cunning virus (iv) healthcare delivery systems in developed worlds overwhelmed by Covid cases;
4. At a national level (i) schools / universities closed down and students intakes for next year to traditional establishments has been cast into uncertain limbo, not to mention teachers taking on additional workloads (ii) SMEs getting severely and adversely affected by the lockdown - at least 6 weeks and eating into traditionally high retail seasons (iii) businesses pausing and restrategising where the world is headed to - a digital transition where applicable, (iv) adjusting to possibility of further economic impact in a world of intermittent lockdowns (v) financial stimulus opportunities abound.
5. Nationally, any politicking is on pause. Which is a benefit.
6. At family levels, the salary earners will need to consider how to bring in the dosh. How best to adapt in this strange, unpredictable world.
7. Commentary is only there for therapeutic reasons - it is a world that appears to need to be rebuilt brick-by-brick.
8. Some thoughts, just for posterity:

• Care protocols for Covid-19 is being updated almost daily, and the US due to the sheer case volume is unfortunately, the best place to research.
• Vaccine development is just so far away - as it stands, only Moderna's first RNA solution is entering into Phase 1 in, I don't know, the first 2 patients? Even in best case, it will be 12 months away, notwithstanding potential manufacturing bottlenecks to do method transfer of its new process manufacture. And without a vaccine, the physical distancing measures is the only way to prevent continual recurrence of the outbreak that can overwhelm hospital care capacity in a matter of weeks.
• With intermittent lockdowns appearing to be a new status quo in the near to mid-term future, the economic effects will not be sparing but can only be mitigated. Without an adaptive solution, we will not be prepared.
• Obvious solution is extensive detection (rt-pcr) and immunity (serological) testing and contact tracing. Our execution capacity to do this is questionable - even in the best cases scenario as proposed by some very brash voices, I doubt we will be able to do this at scale.
• The benefits of convalescent plasma arising from serological tests appear to be lofty ideals at the moment - do we have the scale for purification and acceptance at our end at the economic costs we have? Is it still cheaper to do with primary care and ensuring our capacity is not overwhelmed at the most dangerous spikes?
• The economic impact is one where the biggest opportunities will lie. There is an abstraction of needs that will probably be filled by the Apples and Googles, but the need for a local solution I believe will be overwhelming. 
• Digitisation of verification, processes, marketing, conferencing; medical devices and solutions that enhance efficiencies of healthcare delivery systems are almost inevitable in the shortest possible timeframe. The introduction of these solutions at a freemium initiation and building up loyalty over the next difficult phase of the Covid fight will probably be the best position.

9. By the way, people won't change. There will still be brash loudmouths, spin doctors and various aggravating people, Covid or not. That part of the world won't change.
10. I should change for the better. If anything, to have a cunning, invisible, microscopic piece of single-stranded "organism" causing this much havoc on the planet is extremely humbling. If only the world takes heed.

The new(er) old Malaysia

https://www.theguardian.com/commentisfree/2020/mar/03/the-guardian-view-on-a-royal-coup-a-king-overturns-a-historic-election

Not often I read something from the Guardian I disagree at so many levels, but this is something else. This just fails to accept how the system works here in Malaysia and instead brings voice to create a deep mistrust with the King, and the larger issue of democratic practice in Malaysia.

Let me break it down -
1. The King
The situation of a reigning PM resigning (sorry - couldn't resist) in a backdrop of a realigning coalition was unprecedented and was a test of the robustness of the constitutional monarchy that the Brits exported to us. (Note: Yes you Brit yobs, thanks but on second thoughts.. why were you here in the first place?) It wasn't like Tun M was resigning and passing it to the present ruling coalition, it was a ruling coalition that was getting replaced with the expectation that Tun M was to continue as the leader of the new coalition, and he was resigning. The question then becomes - who is in charge and who has the majority support of the elected reps?

That was the question for the King to determine, and in the face of it, he did just that in a situation without historical precedence.

The fact that some parliamentarian displayed behaviours that were chameleonic, dishonest, opportunistic and corrupt (so, what's new where - US & Trump? UK & BoJo?) by saying to the King that they were supporting Person 1 and changing their choice at the drop of a hat after that meeting complicated things.

The Guardian piece failed to clarify this important piece.

2. Anwar
It sounded like the piece wanted the world to side with Anwar (again) as seemingly democratic principles were abandoned. Lest it be spun, let it be remembered in the heat of the (battle) situation, Anwar offered himself as a candidate. He was nowhere close to getting majority support, and in an embarassing about-face when it was clear he was losing, offered Tun M the candidature to lead the (Anwar's/his!) coalition when Tun M was no longer getting the support of his own party (ie party-less!).

Is the Guardian piece promoting democratic practices or a mouthpiece for Anwar?

3. Tun M
Yes, badly misjudged and miscalculated the support that he was getting as the events were unravelling beyond control. But you could see the logic in what he was doing. Yet it wasn't enough to surmount the decades of animosity and mistrust, and it ended with that internal bickering allowing a dark horse contended to steal the game.

4. UMNO and Muhyiddin
In the end, this is still a fragile coalition. What is not evident is how much of the hard-won democratic space will be retained or if there will be the walking back of the racial patriarchy and patronage culture that is so toxic. How is the mistrust caused by racial polarisation and class divide going to be bridged? Muhyiddin deserves to be given a chance. If not, the Malaysian democratic practice that is in place, and one that the King has demonstrated the robustness of, will show the present ruling coalition out the door sooner rather than later.