Wednesday, July 8, 2020

Jul 2020 - Portfolio & Transaction Updates

No. of Shares
Market Price (SGD)
Total Value (SGD) based on market price
Allocation %
Baba (HK)
GA Pack (HK)
Ho Bee Land



I wanted to do a quick update this week as I have been extremely busy with work and other engagement that's on my plate in the past few weeks that I don't have much time to write and update on the blog.

With the long weekend coming due to election day (public holiday) tomorrow, I am really looking forward to a much needful rest.

After a strong run up which we've seen in the past couple of months, the portfolio has taken a dip this month due to the recent volatility of a potential second wave hitting various grounds which has also impacted the portfolio components.

The biggest change to the portfolio was the divestment of both Lendlease and CDL Hospitality Trust. After the shares surged strongly on the opening news of phases 1 and 2, I managed to offload them to lock in some profits as I feel that the market may have priced them too optimistically at this point. I split my divestment for both the Reits into two tranches and ended up divesting them at an average price of 73 cents for Lendlease and $1.10 for CDLHT. Since then, Lendlease, in particular, has gone further up to its high of 76 cents before retreating to where it is now somewhere at 66 cents. I may be interested to look at this again should it drops in the 63 to 64 cents range.

On the purchase side, I managed to purchase Wilmar on two tranches with an average price of $4.16 after it announces the filing of YKA IPO in SZH market. The Chinese market has been on a strong bullish run this year and with sentiments high, they might be able to fetch a good valuation to unlock the value in China's plantation side of the business. With Wilmar also to announce its 2nd quarter results sometime in August, I am confident that this will be a bountiful year for the company with its post strong results and the unlocking of the business.

On the other purchase, I also added Comfortdelgro with an average price of $1.61 which the investment is currently underwater due to the company issuing profit guidance on its next quarterly result earnings in August. Still, I like the fact that the company is finally doing some M&A partnership with its other two France counterparts on the tender bid for the rail project in France. This is a good diversification away from their core taxi business which is concentrated mainly in Singapore and looks to struggle in the near term.

Last, but not least, I have been wanting to add a bit of e-commerce and tech plays into the portfolio so I bought in a small bit of Baba at an average price of HKD213. Baba had a strong surge in today's trading due to the announcement of a potential listing of its financial arm.

On my speculative plays, I have divested all my holdings including Wirecard at 20% loss, DSS at 25% gain, and SED at 75% gains. These are all small speculative positions so monies are easy to come and easy to go, plenty of speculative derivative nature inside.

2020 Networth Update

The portfolio has gone down from the previous month of $216,155 to $201,556 this month due to the number of factors.

Apart from the general weakness of the market which has impacted some of the companies in the portfolio, I have also made a few bad trades which resulted in realized losses like Wirecard and DSS and unrealized loss such as CDG.

Second, Jun is the start of the month where I have received a 30% pay cut from my income due to the tightening of the cashflow so this has resulted in negative cash flow for the month for me after netting all expenses. In addition, we have to also top up our children's education fees for Q3 plus a couple of other expenses here and there which makes up what to be a really tough month in Jun and likely the next 2 to 3 months ahead.

Things should look much better from Q4 onwards, so I am really hoping to survive this quarter and hope for a good restart from Q4 onwards. On the goal front, I am still targetting to achieve a net worth portfolio of $250k by the end of the year so I think we'll likely see a strong upsurge back with a couple of luck behind me.

So that's a quick update from my end.

I hope everyone stays safe and vigilant in the midst of all the reopening and be also vigilant of what's to come in the next couple of months as we brave a new world ahead.

Back to work now and c ya!

Thanks for reading.

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Wednesday, July 1, 2020

Revision of Terms and Interest Rates - DBS Multiplier Account (w.e.f 1 Aug 2020)

You might recall that the last update (Link Here) I made with regards to the DBS Multiplier was in May 2019 last year.

Back then, they've enlarged the proportion of the categories and interest rates, making the maximum effective interest rates on applicable transactions up to 3.65% on the first $100k.

Since then, we've seen central banks around the world cutting interest rates back close to zero and this resulted in banks having to follow suit to making revised changes to their savings account and fixed deposits issuance.

With effect from 1 August 2020, the multiplier interests for the Income + 1 and 2 categories are going to come down (as expected) and quite a bit too from the last revision.

The changes from the 1 category are in variance of 0.7% difference for transactions that are above $2k.

That means if you've been previously earning 1.40% from the 1 category, you will be earning only at 0.70% from Aug 2020 onwards. That is equivalent to a 50% drop from the current interests that you are earning.

The higher your transactions the lesser the drop from a percentage point of view, though in absolute the variance is still at 0.70%.

For the 2 categories, the changes are in variance of 0.5% for transactions that are above $2k and it goes lower to 0.4% variance when you hit a transaction of above $5k. The message they are trying to portray is to transact more with DBS and with DBS NAV Planner in place now, it makes sense to consolidate all your accounts into one.

All other qualifying conditions including the 3 plus categories remain unchanged.

However, not everyone is able to transact such a big sum each month.

Thankfully, they've made it more lenient with regards to dividend crediting, which can add up quite a bit each month for those who are dividend lovers.

From 1 August 2020 onwards, eligible dividends now include dividends received from all markets that are transacted via DBS Vickers and also other platform such as unit trusts and Invest-Saver.

It also includes dividends that goes into the SRS and CPFIA accounts, which was not an alternative previously.


I'm going to stick with DBS Multiplier for now because all the other changes such as OCBC 360 and UOB One Savings account have also made drastic changes in the past months so you won't really get to "save" much by moving your funds here and there each month.

I think what is possible is perhaps to take advantage of the expanded servings from DBS such as taking advantage of the NAV budgeting planner and also the expanded crediting of the dividends. With this in place, I think it makes more sense to increase the amount of transactions as well as the number of categories in each transactions as you deem fit.

Thanks for reading.

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Wednesday, June 24, 2020

A Speculative Story of Three Potential "Multi-Bagger" Positions

In the past recent days, I've taken three small speculative positions and have kept them relatively small as an overall percentage of the portfolio.

These are positions which I've taken without doing too much due diligence and reading too much of its fundamentals due to the nature of the companies (but yes I've weighed in the risk reward probability) and both have announced big news in the past week.


I've written an article recently about the company (Link Here) after its scandal news were splattered all across the Internet.

After 5 consecutive days of the stock dropping from $100 to $14, my itchy hands decided to buy in a little at 200 shares @ $16.7 and I added another 80 shares @ $13.2.

My average price is now at around $15.8, and I am close to 20% down.

My thesis for buying was mainly betting on the company's solvency, hoping that a white knight might come in to restart the company all over again. They had done so by removing their incumbent CEO and installing hard man Dr James Freis into the helm. They have also began talking to investment banks to start convincing them on extending the credit facility under the new management guidance though it is likely a tough fight until the forensic audit is concluded.

Nevertheless, I believe their business model remains intact and relevant and it is poor corporate governance that is dragging the whole system down.

At the moment, it doesn't appear that the selling has not abated so like many other investors out there, we are all screwed in it for now.

Singapore Edevelopment Limited (SED) and Document Security Systems INC (DSS)

This was another company which I managed to slip in to buy by joining in the crowd.

I was having my lunch at 12.55pm while browsing through the sgx website announcement (this has been my habit since I started WFH) and chanced upon the Press Release that was released during lunch time. 

Based on the news that were announced, (the previous week they came up with another press release that involves some research study with the Harvard lab house), it was announced that Impact Biomedical has achieved some further success with Equivir and 3F Biofragrance on reducing the impact of Covid-19.

You can read that Press Release link here.

I bought a small position of 150,000 shares at about 1pm-ish at market price, but only to see it shot up to over 6.9 cents by the time I get mine.

I was pretty surprised to be honest to see it close at 9.2 cents at closing, which translates into market cap of 112m after today's run.

I took the time to do further reading after that and realize that the company will host an EGM this Friday on the 26th Jun to conclude the $50m shares swap deal agreement with Document Security Systems Inc (listed in Nasdaq).

What was interesting was to find out that Impact Biomedical was a 100% owned subsidiary of SED whose CEO and largest shareholder Chan Heng Fai holds a 72% stake in the company, and he happens to also be the Chairman board and largest shareholder of DSS.

Based on the proposed term sheet and closing conditions, the intention after the deal is to give a dividend of IMPACT shares to the shareholders of DSS, with the proposed bonus being for every one DSS share held, the shareholder will be entitled to a bonus of  two IMPACT shares, following which IMPACT is expected to pursue listing in the US.

Now, DSS is currently listed in the US with a market cap of only 24m but what catches the eye is the expected valuation of Impact Biomedical should they decide to list this in the market post-deal.

Based on the Independent Valuers completed recently by Destum Partners, Impact Biomedical is currently valued at $382m which is almost 15x the current market cap of DSS on the market. Should DSS be able to list this successfully at such a valuation, it is likely that it will send DSS and SED price flying.

Because of this reason, I have also put in a small order of 1000 shares when the market opened at $8.33.

Do note though that this is a speculative timeline with a probability look of risk reward so there's a lot of variables at play which could happen.

Let's revisit how all these positions are doing in a few weeks / months time.

Thanks for reading.

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Sunday, June 21, 2020

Why You Should Still Pursue Financial Independence Even If You Love Your Job

A reader contacted me recently and we chatted a little bit in exchange about her situation.

I obtained her permission to share her story since I believe someone out there may be in a similar situation as her. As promised, I will leave out certain key information which may be deemed confidential.

About Her:

She was born in the year of rat and had gone to the same college school as I did so I figured out she is probably one year my senior. I do not know who she was and we were not acquainted in any way until we spoke recently.

She had two children, aged 7 and 4 so we have a lot of common topics to exchange and perhaps because of that I could feel it for her.

She has been retrenched involuntarily from her role recently due to the company downsizing most of its operations in South East Asia due to Covid-19. 

She worked as a Customer Happiness Manager and have been in the company for close to 7 years. 

From the way she was describing her role, it seems that she loves her job a lot, up to the point where she had to sacrifice some of her personal family time to work overtime on weekends due to the nature of her role.

Up until recently, she has never thought hard and deep about her financial security because she was alluding more towards her job security for as long as she did her role well.

She felt somewhat regretful of her situation because she never really give much thought to her own financial situation until it gets too late.

Why Do We Need To Pursue Financial Security Even Though We Love Our Jobs?

I really feel for the reader above after chatting with her.

Based on our conversations, she seemed like a really hardworking worker and a nice down to earth person who's just trying to make a living for her family.

Nothing seems wrong with her personality and attitude and she just couldn't understand why she's in a dire situation today even though she has put 100% of her energy into believing what's best for her.

After hearing it from her, I can't help but think of why in my obvious biased opinion (I've clearly been brain-washed since I pursued this path from a decade ago) everyone should pursue their own financial security even though they may find joy, value and purpose in working.

1.) Black Swan Event Can Wipe Out Companies

If there's anything that the millennials of our generation can take away from a black swan event like Covid-19, it is that there's probably no companies and no roles that are immune to the impact.

Almost every companies out there, even the strongest ones, are sending mixed signals about the outlook uncertainty of the economy in the next 1 to 2 years.

There's so many variables at play for companies to make good reasonable projection forecast that we can only hope things do not get worse from here. As an employee, you want to certainly hope that you are not the pawn being a variable factor that will be sacrificed if things go downhill from here.

2.) No Job is Perfect Forever

Great jobs and roles, even if they are perfect today, might not be the case forever.

Bosses and colleagues may move on and change, management priorities may evolve or the job security you once had may no longer be valid case anymore.

You may have a new boss who micromanages your work, new colleagues who may be difficult to work with or new tasks that you may not like as much as before.

Regardless, things might be quickly change and be different from what once you used to love but not so anymore.

3.) Changing Priorities in Life

Most of us will have different priorities at different stages of life.

If you are young and single, you may dedicate more time and commit more resources to work because you can afford to do so with your vibrant health and aspirations.

Once you are married and have children, your priorities would likely shift towards a more work-life balance lifestyle. You want to avoid a situation where you have to burn midnight oil consistently to have a conference meeting with the other side of the world or worse still outside most of the time, missing precious family time together and most of your children's growth years.

When you get older, you may find yourself getting more tired or your health might just deteriorate to the point that you are not able to function as effectively as before.

4.) Keeping Discipline Over Your Personal Finance Situation

One of the greatest thing once you decide to pursue this path towards financial independence is you start to get discipline over your personal finance and be anal about everything that's going in and out of your bank account and spending.

A nicer way to put it in context is perhaps accountability.

You will want to be in charge over the spending that you can control while choosing to keep your lifestyle balance in check.


Since I started writing and working, my view towards money is relatively simple and straightforward.

While we acknowledge that money is not the solution to everything, we are cognizant to the belief that money is a tool where we can:

I.) Care enough for our family needs;
II.) Reduce our dependency on others (e.g employment) for needs;
III.) Increase our impact to the society through our beliefs.

Clearly, the reader mentioned above has full commitment to point number 1 which is to care enough for her family needs. However, she clearly lacks the coordination to look at things from the job security point of view, thinking that commitment to her employer would be the ticket to her financial security for life.

While I am glad that she wrote in to me and started to look at things from her perspective more seriously than before, I have no doubt in mind that she will pull through this with her determined positive attitude. If she had started realizing this earlier, she could have probably fared slightly better than she is today but I guess it's not too late to start anything.

Sometimes, life throws us a curve ball that doesn't go the way we planned. All that matters is how we handle it and the person we become on the other side of the changes.

P.S: If anyone has a job opportunity in Customer Happiness role and are willing to refer, I'd be more than happy to link up and refer this lady for the role.

Thanks for reading.

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Thursday, June 18, 2020

Wirecard AG - Best and Worst Case Scenario

If you have not heard by now, the latest scandal involving a blue chip payments aggregator company, Wirecard has sent its shares plunged down by nearly 62% after the company revealed that for the third time they are unable to publish its annual report for FY2019 on time.

Unlike the previous two sessions, this time round the findings are a lot more serious when its auditor EY refused to sign off the audited statement after casting doubts that up on the €1.9b of cash equivalent and security deposits they are currently reporting in the balance sheet.

The seismic shock has sent an ultimate blow to the company and also the entire Germany's financial market as it rocked over the going concern and fraudulent event that will be remembered as one of the darkest days in the Germany's financial history.

What is worse for them is they have another €2b loan covenant due by this Friday and that the banks can call up this loan if the company failed to produce a signed audited statement.

In the last reporting figure, the company revealed that they held cash equivalent of €3.3b so after taking into account the two events added together, it would put serious doubt over their liquidity position as a going concern.

Wirecard Chief Executive, Markus Braun commented in the after hours of trading that it cannot rule out the fact that Wirecard AG has become the aggrieved party in the case of a potential fraud of considerable proportions. The company has also taken decision to remove board member and COO, Jan Marsalek with immediate effect, replacing him with Dr. James Freis, who is appointed the new compliance board with immediate effect to oversee the case.

So what does this means for investors then.

I'll try to pull out some best and worst case scenarios for the company at this point given the amount of limited information the public has involving the scandal.

Best Case Scenario:

Wirecard plays victim to a fraudulent incident involving individual party/parties, pointing all fingers and incident to the person or trustees involved and seek legal protection over the loan covenants callable by this week.

By doing this, not only will the company be able to delay and potentially recover the loan covenants but also protect the reputation of the company and its board members.

After this scandal event has blown over, the company can start afresh and rebuild on its corporate governance. The company still has a good business model working with many solid companies that's still growing.

Base Case Scenario:

Wirecard still plays victim to the fraudulent incident, get through this dark event, but somewhat managed to pull off by surviving with sufficient liquidity to continue, providing auditor is willing to sign off with an emphasize matter on the corporate governance issues.

The company may have to replace its board members and management with new faces and start rebuilding its reputation again from scratch and to convince both partners and merchants that the company still has a good business model to work with.

Worst Case Scenario:

The most serious case, if this dragged on for much longer will be a total loss of confidence from both its merchants and customers who are partnering with Wirecard.

If major card partners such as Visa, Mastercard and Amex decide to withdraw their agreement with Wirecard, it would be detrimental to the company's survival as they would become redundant as an aggregators.

If financial regulator BaFin (similar to MAS) withdraws Wirecard's banking license, it would also be game over for the company.

I think both scenarios are unlikely to happen at the moment given that the ongoing case is still pending an outcome so this will likely kick in when we know the results and emphasis matter from the auditor itself.


This is almost like a casino roulette for now.

At the current valuation, the company is trading at a price to earnings multiple of only 9x, which fares across its other competitors (E.g Adyen) in the same region who's trading at 190x.

The company can go from the current share price of €40 back to €100 or it can go straight down to €0 if the worst scenario takes place.

To think that the recent fraudulent sales allegations involving Luckin is big enough, this time round it's even larger and more serious repercussion with Wirecard being a fintech company, which would surely put an alert for more due diligence revolving the financial industry moving into digital world.

Thanks for reading.

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Monday, June 15, 2020

Thought Process On Picking Your First Stock

I've had countless queries in the past and a couple of emails recently from readers who are interested to start investing and one of the commonly asked questions is ways to pick the correct stock to invest.

The first stock purchase for an investor is always intriguing. 

The emotions when you first purchase your stock are filled with mystery, excitement, fear and then there's always the risk and reward. Many will soon get addicted to it and then will proceed with the next second and third purchase and so on.

It's incredibly difficult to answer this short question to any investors who are asking as there's legitimately no right or wrong answer. Nevertheless, I'll try to provide some framework guidance which hopefully can be productive and useful to any investors who's starting to venture out on their own.

Step 1: Organize a list of companies in your respective region that are big market cap

Your very first step as a beginner should always be looking at the bigger market cap in your respective region.

This means looking at the likes of blue chip companies such as Singtel, DBS, OCBC, Sembcorp and SIA in your STI index if you are looking at the Singapore market. In the US market, you will get a list of acquainted well-known companies such as Apple, Boeing, Facebook, Starbucks, Visa and many more.

Don't buy them yet at this point because there's many rotten apples hidden in the fundamental of these companies, even for blue chips.

At this point, all you want to do is to get a grasp understanding of:

  • What is their business model?
  • What products do they sell?
  • What competitive advantage do they have over their competitors?
  • How much market share have they acquired?
  • Management capability and their historical financial performance

Most, if not all of these information, are easily available in the annual reports or financial statement of the company where typically management would provide operational quantitative updates on how they are doing or coping with the situation.

All you really need to do at this point is just to spend some time gathering the information and writing some notes down and that's it. No action should be taken yet at this point because the information you have is public, which means anyone else will have the same information as you do so that's not really helping you to gain any advantage.

You may also want to segregate the list of companies that are appearing in your newsfeed or newspaper because not all the time they are good. The fact that you read in the newspapers that people are queueing up at McDonald's does not immediately qualify them to be a good stock. 

Always be selective when reading and takes information with a pinch of salt. This way, you will have more questions than answers which is good because it leads you to explore more on your questions.

Step 2: Areas of Competency

Your areas of competency is your competitive advantage over the next other person that you have a lead on.

This lead can be achieved through years of working in the industry and getting to know-how the inside operations of how certain things might work in detail. For example, if you are in procurement, you would know how aggressive your competitors are pricing in their bids for the tender or if you are working in supply chain logistics company, you would better understand the details on transit times, delivery performance, freight claims and customs requirement.

Thus, when you select companies that are in your areas of competency, you are able to value-add your experience to the companies you are prospecting and make better informed decisions from there.

Step 3: Consistently Strong Gross Margins

We haven't really looked at the financials of the company until this point.

Once you select the ideal companies of your choice after step 2, you have to start looking at the financials of the company.

One of the financial metrics that I usually pay close attention to is the company's gross profit margins.

Companies that are able to consistently generate strong gross margins are usually indication that the products or services the company provides are superior and highly valued by its end user which allows the company to scale up for more market share.

Consumers pay a premium for company's products and services because they are superior in many senses which may include design, quality, reliability and uniqueness. Some firms may have also competitive advantage in its supply chain and thus are able to drive increasing gross profit margins over time.

There are certain industries such as consumer staples or constructions that will be struggling with low margins because of the evolving nature of the industry itself. I would want to avoid these companies for now because the industry may be in the transition phase and may take a while to see fruition.

Step 4: Companies Are Not Loaded With Too Much Cash or Debt

While it is quite obvious that companies with too much debts are not natural selection, companies that are hoarding too much cash are not an ideal choice either because it means the company is not allocating enough to grow the business It may also be the case that the company is at saturation point thus management has no options to grow the business any further and sit on the cash.

On this, a quick dirty way of checking is through analysing the company's profitability using the Dupont analysis.

The Dupont analysis is a financial ratio based on the return on equity ratio that is used to analyse a company's ability to increase its return on equity. From this breakdown, not only does an investor is able to recognize the company's profit margins, but he is also able to deduce if that profit margins are coming in from an effective way of using leverage to boost its margins.

The Dupont expression is a function of the profit margin, total asset turnover and equity multiplier.

Step 5: Valuation

The last step is probably the hardest to deduce because it is an art to be able to deduce the right valuation of the company.

The most commonly used method to value a typical company is through a price to earnings ratio, which is simply taking the share price divided by the earnings (excluding any one-off). It is usually very seldom that you see a company trading at below 10x PE ratio and if it does it is usually in an industry where it is in a very competitive space. Don't get into the trap thinking that it is a value buy just because it is trading very cheap on the market.

The higher the company's moat, the higher the market tends to price in the valuation so a good overall benchmark is to look at their historical and competitor's valuation and see where they stand at.


This is not a hard proof and only way of looking at companies.

There are probably a thousand and one ways one could have select companies that they decide to ultimately purchase into the portfolio. For example, the cashflow is another important aspect of a company's financial statement but I figured this would be a little intermediate for beginners.

Nevertheless, I hope these framework will provide the very basic guidelines that as beginners you are able to start the ball rolling.

As always, the market is and will always be there so there is no need to FOMO on companies that you think you might have missed. It is always better to err on the caution and miss the gain than having put your hard earned money and earn that loss in the long run.

Thanks for reading.

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Sunday, June 14, 2020

The Wrath of the "Non-Essential" Roles

On Sunday Times today, the newspaper came out with a controversial article that has raised a few eyebrows and backlashes from the public.

Amongst my small circle group of friends,  they were mostly grouped who comes from the line of art, engineer, lawyer, healthcare, research, human resource, financial advisors, IT, bankers, entrepreneur and self-employed.

Apart from healthcare, most belong to the group of non-essential jobs that ST has identified, yet these are jobs that most people are likely to rake in the biggest chunk of money home and are the mostly sought after courses in the university.

NMP Economist Walter Theseira said in his interview that it is hard to separate interest from compensation, as most graduates are convinced to pursue courses in the university that has the highest salary potential or lifestyle associated with the job once they graduate.

As an interviewer for student admissions, he is often amazed by the number of people who told him during the interview sincerely that they found accounting interesting and the reason for pursuing the course is pure out of passion.

Having been an accountant myself for close to 12 years, I can say that it's almost close to impossible that one would pursue an accounting course out of pure passion. While having that knowledge is nice (as with any other roles), accounting as a job itself is pure Fifty-Shades-of-Grey slavery. What comes as a big plus is the perception being an iron rice bowl with guaranteed job security and steady stream of income and benefits.

So coming back to the article itself, perhaps it's wiser to have things defined as an immediate essentials vs non-immediate essentials rather comparing it as essentials vs non-essentials.

Immediate essentials - as the name implies, are things that require immediate attention, so you have things like doctors, nurses, garbage collectors and deliverymen (during circuit breaker) providing services that attend to your immediate needs.

The non-immediate essentials role like business consultants, teachers, support teams like finance and HR, sales or pilots are also essential jobs. These people help to rebuild businesses and people to retain and retrain and their roles are not less effective than the essential jobs. What differs them is that they may not be as vital as an immediate concerns for the next 24 hours.

Perhaps the definition of essentials vs non-essentials may also be different in different times. For example, if we are in a war situation right now, you are likely to see an increase importance in army and soldiers and much lesser on garbage collectors and delivery men. So the paradigm might shift and we are all on this together to make up a good round community together.

The insensitive article from ST might also be an agenda to push for another round of minimum or universal basic income, based on the current Maslow's hierarchical of needs, which will surely be raised from the opposition during the election rally not any longer from now.

If only, things were defined better, I think we could get most of the readers to accept how the article is being written.

The next time my boss asked me to do things urgently, I will tell her that my role is non-essential, okay?

Thanks for reading.

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