Capitaland Stock Pitch

#Stock Summary

Date: 07 April 2018
Rating: BUY
Price: SGD3.61
Target Price: SGD4.42 (22%)
52-Week Price Range: SGD3.42 – 3.88
Market Cap: SGD15.05B

We recommend going long on Capitaland stock, which we believe to have a minimum upside of 20%. As you will see below, the company has a great business model, strong catalysts for growth, and a cheap valuation.

#Company Background

Capitaland is a Singapore based real estate company. Its core businesses are property management, property development, and investment management. It manages a range of properties such as serviced residences, offices, and shopping malls. It is heavily involved in building residences, office buildings, and integrated developments. Last but not least, the investment business comprises 5 real estate investment trusts (REITs) and 15 private funds.

Capitaland’s current market cap is around SGD15 billion. The company has a presence in more than 150 cities in over 30 countries, with Singapore and China as its core markets. Currently it is expanding at a significant pace in regional markets such as Malaysia, Vietnam and Indonesia.

The Singapore property market (office, retail, residential, logistics) has been on the decline for the past few years, but statistics are generally pointing to a gradual recovery in 2018. Singapore’s above-expected GDP growth of 3.6% in 2017, and the Government’s focus on digitisation and transformation of Singapore’s economy, bode well for the property market too.

#Investment Thesis

Capitaland is one of the dominant property developers in Singapore, with its business model being able to generate a stable and recurring income. It’s current share price of $3.61 makes it a significantly underpriced investment. The company’s recent series of aggressive share buybacks suggests that the management thinks likewise. We believe that the stock has 20% upside at minimum. The stock is priced imperfectly for the following reasons:

Significant Upside Due to Portfolio Expansion
There is significantly more upside to the group’s active portfolio expansion than the market has priced in. Recently, CapitaLand acquired the Pearl Bank Apartments in Outram for $728m. In 2017, Capitaland invested approximately S$5.7 billion in new properties. These include Asia Square Tower 2 in Singapore, Innov Center Phase 1 & 2 in Shanghai, Rock Square in Guangzhou, Gallileo office tower in Frankfurt, and Yokohama Blue Avenue, Sun Hamada, Kokugikan Front and Seiyu & Sundrug in Greater Tokyo. In addition, the group opened six integrated developments in China: Raffles City (Hangzhou), Changning (Shanghai and Shenzhen), Capital Square (Shanghai), CapitaMall Westgate (Wuhan) and CapitaLand’s largest mall (Suzhou). The group also expanded its serviced residence business through acquisitions of two prominent hotels in the New York Manhattan district.

Healthy Capital Structure
Based on the 2017 financial statement, Capitaland has good financial ratios with net debt to equity, interest coverage and interest service ratios at 0.49 times, 8.1 times and 6.7 times respectively. This allows the company to respond quickly to any new investment opportunities.

Business Diversification and Transformation
Even though Capitaland’s business model allows it to have a stable recurring income base, the group clearly recognises the importance of transforming and diversifying its business so as to generate new income streams. Below are some examples.

In 2017, the group signed seven mall management contracts (six in China and one in Singapore). This expands the company’s operating network and build a separate source of stable recurring income through management fees.

In light of the expanding millennial traveller segment, Capitaland has come up with a new millennial-focused “live-your- freedom” (lyf) brand that enables the group to directly address the specific preferences of this rapidly growing market. In 2017, Capitaland secured four contracts: lyf Wu Tong Island Shenzhen (2018), lyf DDA Dalian (2019), lyf Funan Singapore (2020) and lyf Farrer Park Singapore (2020).

To compete with the online retail platform preferred by savvy shoppers nowadays, Capitaland is accelerating its online-to-offline (O2O) strategy to enhance consumers’ offline shopping experiences. In 2017, the group signed an agreement to launch an online mall on Lazada Singapore. This is a significant move that highlights Capitaland’s effort to become Singapore’s first omni-channel retail landlord and compete effectively with pure online retailers.

In April 2018,  Capitaland announced the launching of its e-payment service “Starpay” for both retailers and consumers. The terminals will be rolled out in over 2,500 stores in 17 CapitaLand malls in Singapore by the end of the year. This smart all-in-one e-payment service will operate across multiparty systems such as American Express, Grab, NETS, DBS, and Alipay.

#Catalysts

There are numerous catalysts in the pipeline for Capitaland! Below are some highlights:

Jewel Changi Airport – this exciting joint venture between Changi Airport Group (CAG) and Capitaland is an integrated lifestyle development located at Changi Airport Terminal 1. It will feature a lush indoor garden with a 40m-high central waterfall, a wide range of retail and dining offerings, facilities for airport operations, a hotel and car park. This development is slated for completion in 2019.

Funan mall – this mall is slated for exciting futuristic developments next year. It was recently closed this year and is expected to reopen in the fourth quarter of 2019. The mall is preparing to digitise customer analytics within its premises, deploy automated guided vehicles (AGV), attach a robotic arm in its retail setting, and implement a 24-hour click-and-collect drive-thru. Shoppers can self-collect their purchases with a QR code sent to their phone at their own convenience, or utilise the 24-hour drive-thru collection service, which is fitted with a state-of-the-art robotic arm that can retrieve their merchandise.

Pearl Bank Apartments – Capitaland has recently acquired Pearl Bank Apartments for $728M. At a land price of $1,515 psf, this is an attractive rate for a prime location site. With an estimated breakeven at $1,900 psf, it is highly likely that the group will launch a lucrative luxury project with a selling price of around $3,000psf and above.

China – 2017 saw the opening of six integrated developments in China: Raffles City (Hangzhou), Changning (Shanghai and Shenzhen), Capital Square (Shanghai), CapitaMall Westgate (Wuhan) and CapitaLand’s largest mall (Suzhou). Such integrated malls benefit from the stable pool of residents, officer workers and tourists who live, work and play in one central location. Suzhou mall, in particular, opened with a high commitment of more than 90%, and attracted over 400,000 shoppers on its first day.

Indonesia –  CapitaLand’s first integrated development in Indonesia, The Stature Jakarta, begun works in 4Q 2017 and is slated for completion in 2020.

Vietnam – In January 2017, CapitaLand acquired a prime site in the Central Business District of Ho Chi Minh City to develop an international Grade A office tower which will be connected to an upcoming metro station. The development is expected to be completed in 2020.

#Valuation

Valuation 1
Valuation 2
Valuation 3

We have valued Capitaland using the unlevered DCF analysis. Click here to see our calculations. Based on our conservative estimate, the stock is underpriced and we have valued the stock at $4.42 instead.

Assumptions
Yearly revenue growth: 5.0%
Perpetual growth rate: 1.0%
Yearly EBIT margin: 35%
Calculated WACC: 5.9%

Key Takeaway
Even at our very conservative estimate of 5% annual revenue growth and 1% perpetual growth rate, the company is still valued at more than 20% above its current stock price. Based on our research, we believe that it is extremely likely that actual revenue growth will meet or exceed these estimated numbers. This is due to Capitaland’s deep presence in the core markets of China and Singapore, and emerging strength in markets like Malaysia, Vietnam and Indonesia.

#Risks

Decrease in Revenue of 12.2% in FY2017
The Group’s revenue decreased 12.2% to S$4.6 billion in FY2017, mainly due to lower completion and handover of units from development projects in China. This highlights possible risks in the China business. However, the group bounced back in its first quarter 2018 results, with revenue increasing 53.3% to S$1.38 billion from S$898 million over the same period last year.

Downtown in Property Market
Capitaland’s has a global diversified portfolio that consists of residences, hotels, office buildings, malls and integrated developments. The diversification of the portfolio across different property types should help to hedge against a downturn. In addition, the group has a diversified geographical split across various countries, and therefore a downturn in any particular country’s property market should be mitigated by the portfolio in other countries.

(Update 01 Jun 18) Retirement of Group CEO Mr Lim Ming Yan
The announcement of the retirement of Group CEO Mr Lim Ming Yan was unexpected to many. Mr Lim’s last day in office will be on 31 Dec 2018. This sudden change in management may present a risk to Capitaland if transition of duties is not smooth. As of now, no successor has been named. And so far, the company has not offered any official explanation for Mr Lim’s sudden resignation, who is only 55 years old and has been a Capitaland employee for over 20 years.

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Is the US economy improving? (Update as of April 2015)

The Bad

1. Less Jobs Created in March 2015
On 3rd April 2015, the U.S. Bureau of Labor Statistics released its Non Farm Payrolls data. The US job creation machine did not continue its strong trend of the past five years of producing more than 200 thousand jobs a month. Instead, for the month of March 2015, Non Farm Payrolls in the United States increased by just 126 thousand. This break in trend has caused investors to lose some confidence in the strength of the US economy’s recovery. And it may cause the FED to consider further delaying monetary policy tightening during the next FOMC meeting later this month.

2. Low Wages
The US average hourly earnings are growing at a rate of just 2%, which is roughly the same as 5 years ago. This current rate is nowhere near pre-crisis rates. This may indicate that there is a slack in the labour market, meaning that there are more employees available than required by companies. For the US economy recovery to gain credibility, wages must start improving soon.

3. Weak Bottom Line of US Companies
The recent trend has been for companies to engage in major cost-cutting and cheap financing for share buy-backs and dividends in order to boost their bottom line. However, a strong economy requires an increase in actual revenues from an improved business environment.

The Good

1. The US Job Creation Machine is back


source: tradingeconomics.com

Despite the dismal March jobs data report, it is still important to note that there have been more than 200 thousand jobs created per month for the past five years. This is a strong indication that the US economy is going back on track and the slight falter in March may not be a strong cause for concern.

2. Decreasing Unemployment Rate


source: tradingeconomics.com

The United States Unemployment Rate has been decreasing at a steady rate for the past 5 years. This is a healthy trend. For the month of March 2015, the US unemployment rate was just 5.5%.

3. Increasing Wages According to NFIB Compensation Measure
According to The National Federation of Independent Business (NFIB) Compensation Measure, small businesses have been raising wages for workers. This indicator correlates closely with the US government’s quarterly employment cost index, which is generally considered a better gauge of wage growth.

The Unknown

US Corporate Earnings for 1st Quarter of 2015
Another important indicator is US corporate earnings. The earning seasons kick off on Monday, and investors will be looking to see how US corporates did for the 1st quarter of 2015. However, estimates have not been optimistic. The strengthening US dollar, coupled with falling oil prices, have taken a toil on US earnings. For US multinationals, the stronger dollar weakens their foreign-based earnings. Falling oil prices lead to lower prices which further weaken earnings.

With all the above factors in mind, it will be interesting to see how the US economy fares for the rest of 2015.

 

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Who Really Invented The Mouse?

Who really invented the mouse? Many people think that Xerox came up with the original device, before the idea was “stolen” by Steve Jobs and Apple.

That is only part of the story.

In actual fact, the modern mouse as we know it was invented by Douglas Engelbart, a brilliant computer scientist who lived between 1925 and 2013. It was then further developed by Xerox, Apple and Microsoft.

Below is a short history of the modern computer mouse, enjoy!

Douglas Engelbart – The True Inventor of the Mouse

It is 1950 and Douglas Engelbart, a young PhD student from UC Berkeley, is having a quarter-life crisis. At 25, he realizes that he has no aspirations in life other “than a steady job, getting married and living happily ever after”.

Therefore, instead of settling for a mundane job with a comfortable paycheck, he comes up with a vision to make the world a better place through computer technology.

And the rest is history.

Birthplace of the Mouse – The Augmentation Research Center (ARC)

In 1960, after going through various endeavours which were not clearly aligned with his vision, a determined Engelbart set up the Augmentation Research Center (ARC) at the Stanford Research Institute (SRI), a research facility based in Stanford University.

This was the turning point for him.

Over here, he conceived some of the most cutting-edge computer technology of his time, such as object-based programming and computer networking.

And amongst these inventions, was the mouse.

In 1964, Engelbart came up with the idea of the computer mouse while attending a computer graphics conference. He was mulling about how to move the cursor on the computer screen. William “Bill” English, his colleague at Stanford, helped to build the first prototype of the mouse.

The prototype consisted of 2 wheels within a bulky pine box, with just one red button on the top corner of the box. Click here to see how the original mouse looked like.

Who Came Up with The Term “Mouse”?

The origin of the term “mouse” is unknown, but according to an interview with Engelbart, no one could remember and it “just looked like a mouse with a tail, and we all called it that in the lab.”

A small part of science history which will never truly be known. 🙂

The Mother of All Demos – The Mouse is Introduced To The World 

The date is 9th of December, 1968. 18 years after his quarter-life crisis, Engelbart is about to fulfil his vision of making the world a better place.

At the Fall Joint Computer Conference in San Francisco, Engelbart demonstrated the never-before-seen “mouse” technology to an awestruck audience.

This legendary presentation is now known as “The Mother of All Demos”.

The Telefunken – A German Version of The Mouse

Independently, a German company had also came up with a mouse device. But instead of using two perpendicular wheels to navigate, it used a rolling-ball system which was a more efficient design than the two-wheel system.

The Xerox Mouse – Where Two Wheels Were Replaced By a Ball

This German design might have influenced English, Engelbart’s colleague who as mentioned earlier built the first mouse prototype. He went to work at Xerox in 1971, where he developed a mouse that similarly utilized a rolling-ball system. This mouse was used with early Xerox PCs: the Xerox ALTO and the Xerox 8010 STAR. However, the Xerox mouse was bulky and extremely expensive at $300 apiece – an exorbitant figure if you take into account inflation.

The (in)famous Xerox Heist by Apple

It was during this period that one of the most famous heists in computer history took place.

Apple had an agreement with the Xerox venture capital division for Xerox to purchase 100,000 pre-IPO Apple shares. In exchange, PARC (Palo Alto Research Center Incorporated), the research wing of Xerox, would need to unveil its highly-classified computer technology to Apple.

Therefore, in the winter of 1979, an Apple team led by a young Steve Jobs headed to Xerox PARC.

Steve Jobs, along with the Apple team, was completely blown away by the technology that Xerox possessed. These included network computing, object-based programming, a revolutionary Graphical User Interface (GUI), and of course, the mouse.

Steve Jobs is famously known for exclaiming to the Xerox staff, “you’re sitting on a gold mine. I can’t believe Xerox is not taking advantage of this!

The APPLE LISA Mouse – Good Artists Copy, Great Artists Steal

Back at Apple, the mouse was further developed for use with the Apple LISA computer. Steve Jobs also bought the mouse patent from SRI (where the mouse had been invented by Engelbart) for a steal of around USD 40,000.

However, instead of merely “copying” the mouse technology, Steve Jobs “stole” it and made it much better.

He wanted the mouse to go from a $300 bulky and expensive device to a small $30 device which could endure everyday use. The task was given to a young start-up formed by Stanford graduates.

Eventually, this formidable goal was achieved, and the mouse that was developed was the earliest mouse that most closely resembled the modern mouse we use today.

The Windows 1.0 Mouse – Microsoft “Steals” from Apple

There was a problem with the Apple mouse though – it only had one button (Engelbart had proposed up to ten buttons). Microsoft came up with a mouse that had two buttons, a design that we are more familiar with, and a design that was more efficient than the Apple one-button mouse.

In addition, Microsoft also copied the GUI design from Apple LISA and both the GUI and two-button mouse was used with Windows 1.0.

This enraged Steve Jobs, whom for years after accused Microsoft of ripping off their idea. It was the start of bitter animosity between the two giants of technology.

Conclusion

In summary, the invention of the original mouse can be attributed to Douglas Engelbart, who was the undisputed first person to conceive the idea. However, having a brilliant idea is only part of the equation. Good execution is equally important in creating a great product. Xerox, Apple and Microsoft completed this part of the equation. Xerox created the first mouse that could be used for commercial purposes. Apple “stole” the idea and developed a mouse that was much more efficient by dramatically reducing its size and cost. Microsoft further improved the mouse by designing a two-button system.

As Picasso said, “Good artists copy, great artists steal”. And this was especially true in the development of the mouse.

 

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Angelina Jolie Heralds A New Direction in Cancer Prevention

“MY MOTHER fought cancer for almost a decade and died at 56. She held out long enough to meet the first of her grandchildren and to hold them in her arms. But my other children will never have the chance to know her and experience how loving and gracious she was.”

Angelina Jolie starts her op-ed in The New York Times with the above poignant recollection of her Mother’s passing. It was published on 14 May 2013, and in the article Jolie detailed her decision to undergo a preventive double mastectomy, sparking off global interest and discussion on the topic of breast cancer. The op-ed is entitled “My Medical Choice”.

Angelina Jolie’s brave decision is emblematic of a new direction in cancer prevention: by understanding the disease, she was able to take informed and appropriate preemptive measures to significantly reduce her risk of cancer.

What are the BRCA1 and BRCA2 genes?

BRCA1 and BRCA2 are genes that are classified as tumor suppressors.

In normal cells, BRCA1 and BRCA2 are useful genes that produce proteins responsible for repairing DNA. They also have a very important task of preventing uncontrolled cell growth (hence the term ‘tumor suppressors’).

Mutation of the two genes impairs this important function of suppressing cell growth, leading to uncontrolled proliferation of cancerous cells. BRCA gene mutations have been linked to the development of breast and ovarian cancer. According to the NCI website, a woman with an inherited BRCA1 or BRCA2 mutation has about 60 percent chance of getting breast cancer. This is about five times the normal risk!

In her op-ed, Angelina Jolie reveals that her inherited BRCA 1 mutation gave her an 87 percent risk of breast cancer and a 50 percent risk of ovarian cancer. This was according to her doctors. In light of these risks, Jolie bravely chose to undergo a prophylactic bilateral mastectomy, which vastly reduces her risk of developing breast cancer.

A New Direction: Understanding Cancer So We Can Prevent It.

In his definitive book on the history of cancer treatment and research, entitled “The Emperor of All Maladies: A Biography of Cancer”, Siddhartha Mukherjee describes new directions in our battle against cancer. One of these new directions is to understand cancer better so that we can try to prevent it.

In recent years, we have managed to improve our understanding of cancer through developments in cancer research. For example, Bert Vogelstein and his team at The Johns Hopkins Medical Institutions have made extensive progress in cancer genetics by identifying gene mutations in cancerous cells. To date, the Vogelstein team has managed to sequence the genomes of ovarian cancer, pancreatic cancer, lung cancer and several forms of leukemia (among others). This is a colossal task due to the multitude of mutations.

Consequently, we have been able to integrate these new insights in oncology with cancer prevention efforts. Angelina Jolie’s prophylactic mastectomy is emblematic of this new direction. Progress in cancer genetics has helped scientists to identify the BRCA gene mutations as high risk factors for breast/ovarian cancer. Therefore, women with such mutations can then choose to undergo more intensive MRI to screen for traces of cancerous cells, and/or take the anti-estrogen drug Tamoxifen. As a last resort, they can also choose to undergo radical surgery to remove their breast tissues, as Jolie did.

Angelina Jolie’s brave action helps to raise awareness of this new direction in Cancer Prevention 

In my opinion, it is important that awareness of this new direction is passed into public consciousness. People need to know that they have options when it comes to cancer treatment and prevention.

Hence, it is commendable that Angelina Jolie helped to spread the message. Her action may have saved many lives: according to Mukherjee’s book, “BRCA1 can be found in up to 1 percent of women in selected populations, making it one of the most common cancer-linked genes found in humans”. Jolie’s story also transcends inherited BRCA mutations and breast cancer: by choosing to make her decision public, she has raised public awareness of this new direction in cancer prevention, which can be applied to other forms of cancer as well.

Angelia Jolie may have removed the superficial part of her body that was symbolic of her sexuality, but her feminism is in no way diminished.

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A Summary of Education in Plato’s Republic

Introduction

I first started reading “The Republic” and other Plato’s dialogues when I was a teenager. The edition I read was the “Great Dialogues of Plato”, translated by W.H.D. Rouse. The moment I picked up the thick and wordy book, I was hooked. I remember carrying the book with me everywhere I went, and I read it from cover to cover. Some of my friends were amused that I was so interested in such a “geeky and boring” book, but I didn’t really care. I was intrigued by Plato’s thinking and philosophy, and it opened up a whole new world for me. I started looking at morals and values from an entirely different perspective. It changed my life.

One of the most useful parts in the Republic for me was the concept of education. I am a more successful and fulfilled person today because I have followed the broad principles of the Republic’s education model, and I want to share my knowledge with you.

Therefore, the purpose of this article is to provide a summary of education in the Republic, and show you how you can apply this ancient wisdom to improve your life. First, I will start with a short introduction of Plato and the Republic for those of you who are unfamiliar with ancient Western philosophy. Next, I will give a brief summary of education in the Republic. Finally, I will show you how you can use the Republic’s education model to immensely improve your life.

Who is Plato?

Let’s talk a little about this great figure. Plato was an ancient Greek philosopher who was born in 427 BC. He was only 28 when his beloved teacher Socrates was sentenced to death by the Athenian government. Saddened by this event, Plato never participated in Athenian politics again. He left Athens and traveled extensively for twelve years to learn the philosophy and science of his times. Upon his return to Athens, he founded the “Academy”, the first ever University in human history. It was also during this period that he wrote the Republic. It has been said that all universities today are directly descended from the Academy. One of his students was the great philosopher Aristotle.

Plato is famous for his philosophical dialogues, commonly known as “Dialogues of Plato”. His characters in the dialogues debate with each other over various topics and issues, with the aim of gaining philosophical insights. Plato’s dialogues are considered to be one of the greatest works of philosophy ever written and they laid the foundation of Western philosophy. Indeed, it has been said that “All Western philosophy consists of footnotes to Plato”.

What is the Republic?

The Republic is a dialogue written by Plato in around 380 BC, after his return to Athens. It aims to discover the definition of justice through conceiving the ideal city (Plato termed this the “Kallipolis”, which is Greek for “beautiful city”) and the ideal individual. The idea is that once you have the ideal city/individual, you would then be able to discover the true meaning of justice within these ideal entities. The dialogues take place between Socrates and various other characters in the span of a single day, and their intellectual debates eventually lead the reader towards the true meaning of Justice.

Summary of Education in the Republic

“To get a good idea of public education, read Plato’s Republic. It is not a political treatise, as those who merely judge books by their title think, but it is the finest, most beautiful work on education ever written.” – Jean-Jacques Rousseau

To conceive the ideal city and individual, we would need to have the ideal education. The four aspects of education in the Republic are Music, Gymnastics, Mathematics and Dialectics.

There are three key components in our soul: the appetitive, the spirited, and the rational. The appetitive part of the soul desires pleasure (lust, greed, materialistic desires), the spirited part is aggressive and seeks honor, while the rational part is concerned with acquiring wisdom and knowledge.

Plato’s education of music, gymnastics, mathematics and dialectics in the Republic helps to ensure that these three components of the soul are in harmony with each other. If the appetitive component is too strong, we would have an unhealthy soul with too much greed and lust. If we were too spirited, we would become overly aggressive. Finally, if we were too concerned with gaining wisdom at the expense of developing other parts of our soul, we would not be well-balanced individuals (or as known in modern times, nerds). Therefore, having a proper education is important to keep these three components balanced.

When I first read the Republic as a teenager, I was intrigued by the ideal education outlined in the dialogue. I became deeply passionate about personal growth and improvement. Like Jean-Jacques Rousseau, I found the Republic to be one of the best and most beautiful works on education ever written. It has changed my life ever since. I became more serious about music, fitness, my college education, and reading good books. I strived to apply the broad principles of the Republic’s education in my life, and I aspired to become a well-rounded individual with the three components of appetite, spirit and rational in proper equilibrium. In the below section, I will explain each aspect of music, gymnastics, mathematics and dialectics, and show you how you can apply the Republic’s ancient knowledge to improve your life.

Music

“Music” in the Republic refers to both literary education and conventional music/melody. For literary education, children should be told stories and tales that exemplify courage, temperance, and justice. These stories would help to carve a proper moral nature from young. The stories should not reward unjust actions or encourage improper behavior. For example, the story of Achilles lamenting the loss of Patroclus in Homer’s “The Iliad” should be excluded from all tales as it shows overly excessive emotion. In this epic poem, Achilles displays an extreme outpouring of grief when his cousin Patroclus is killed in the Trojan War. This is a quote from the Republic: “…Achilles, who is the son of a goddess, first lying on his side, then on his back, and then on his face; then starting up and sailing in a frenzy along the shores of the barren sea; now taking the sooty ashes in both his hands and pouring them over his head, or weeping and wailing…rolling in the dirt, calling each man loudly by his name…” (you get the idea)

For conventional melody and song, the Republic advocates that we should only listen to sober music that expresses courage and temperance. Therefore, music should only be composed in two harmonies: the “Dorian” and the “Phrygian”. According to Plato, these two harmonies would imitate “the note or accent note or accent which a brave man utters in warlike action and in stern resolve”. Similarly, the rhythms in music should also be “good rhythms” that represent the aforementioned qualities of courage and temperance.

How Music Can Improve Your Life

At first glance, the Republic’s musical education may seem a little strange (ok maybe absurd) to some people. For example, why should we only listen to music in two harmonies? That would exclude 90% of all classical and contemporary music we have today. Restricting the rhythms of music would further limit our choices.

However, it is not necessary to follow the Republic’s musical education to a tee. We would be best served by following its broad principles. This applies to the other aspects of gymnastics, mathematics and dialectics too. So how do you apply the broad principles of the Republic’s musical education to improve your life?

With regards to literary education, we should follow Plato’s advice and read books that imbue us with good values and morals. By indulging in good books and knowledge, we enrich ourselves and engage in self-growth. When I read a good book (non-fiction or fiction), it brings me to a different place intellectually and opens up my mind to look at the world from new perspectives. I recommend reading (at the very least) one book a month. A good place to start would be Susan Bauer’s “The Well-Educated Mind: A Guide to the Classical Education You Never Had”. This is a well-written book with concise and clear explanations/histories of five literary genres (fiction, autobiography, history, drama, poetry) along with annotated lists of recommended readings. The books that Bauer recommend are definitive classics and you will not go wrong with them.

As for music, I’m sure you enjoy listening to songs as a form of relaxation and enjoyment. Therefore, you should never stop seeking good music. Music enriches your soul and life. There is always time to listen to music, whether it’s when you are surfing the net, on the way to work, or when you are in the kitchen preparing food. Personally, I enjoy listening to both classical (Bach, Tchaikovsky, Schubert are some of my favorites) and contemporary music (John Mayer, Dream Theater, The Beatles, Bob Dylan, Jimi Hendrix, to name a few). However, this is a matter of personal preference, and I’m sure your musical tastes will be different from mine. If you are interested, it is good to pick up a musical instrument too. Personally, I play the guitar and it is a deep source of enjoyment for me. Learning to play an instrument teaches you the value of discipline, time management and diligence. In short, being passionate about music enriches your soul and makes your life more fulfilling.

Gymnastics

Gymnastics in the Republic refers to physical training of the body. There is also a brief note on the ideal diet. For physical training, the training regime should be simple and functional. It should not be over-complicated to the point whereby if one deviates from the usual routine, he would fall ill easily. That would be counter-productive. Instead, the training should be simple and straightforward. The main goal is to increase functional strength and create a healthy body.

As for diet, one should not indulge in lavish feasts and copious amounts of food. Instead, the ideal diet should consist of simple and healthy fare, taken in moderation.

Contrary to common interpretations, musical education is not solely for the soul nor gymnastics solely for the body. Instead, both types of education aim to improve the soul. Too much physical training causes one to become overly aggressive, while too much music and literary causes one to become overly soft. Hence, a good balance of music and gymnastics would engender a nice harmony in the soul and prevent one from being too effeminate or too savage.

How Gymnastics Can Improve Your Life

I’m sure you are already aware of the many benefits of exercise. Cardio training is good for your heart and general health. Resistance training increases strength, improves posture, and helps you maintain a youthful and attractive physique. Exercising also helps to relieve stress and makes you happier by releasing the “happy hormones” endorphins into to your body. As for diet, it is important to eat simple and healthy food. This means eating more vegetables and unprocessed food (brown rice, whole-grain food), and avoiding fried food and trans fat (no fast food please!).

Working out has improved my confidence and health immensely. I have put on about 30lbs of muscle mass since I started lifting weights. I look better physically and my clothes fit better. Recently, I went for a health checkup and all my indicators were well within the healthy levels. After looking through my results, my doctor simply shrugged his shoulders and said to me with a smile: “Well there’s nothing much for me to say except to keep up the good work!”.

Personally, I agree with the Republic’s philosophy that exercise should be simple. I have been working out for about ten years and have gone through countless resources on fitness and strength-training. After a decade of hard work, I have grown to realize that working out should be easy. At the end of the day, working out is simply about having a straightforward workout routine and a healthy diet. Most of the complicated and expensive training programs in the market are just fads with the sole aim of making profits and do not provide real benefits.

A good place to start would be www.EvansWorkout.com. At EvansWorkout, similar to the Republic, we believe that working out should be easy. The site provides tons of simple workout information gleaned from countless resources that will teach you how to exercise and eat the correct way.

Mathematics

In book seven of the Republic, Plato talks about mathematics and dialectics. “Mathematics” refers to four branches of study: Mathematics, Plane Geometry, Solid Geometry and Astronomy.

Earlier on, Plato had explained the roles of Music and Gymnastics in education. However, even though these two aspects are useful, they do not teach you about knowledge and wisdom. Instead, they only help to create a harmonious soul (one that is neither too effeminate nor too savage) through the influence of habits. In the context of my examples, they simply assist to inculcate good values and habits such as reading, listening to music, exercising, and having a proper diet.

Therefore, one would need an advanced education in mathematics to achieve true wisdom. One should first study mathematics, followed by plane geometry, solid geometry and astronomy (study in the motion of celestial objects) respectively. Studying these disciplines seriously will lead one towards the ultimate truth and wisdom. This is because music and gymnastics are mainly concerned with visible and tangible things such as health and literary education, while mathematics deals with problems that can only be solved through intellectual deduction. Therefore, since the ultimate truth can only be attained through pure reasoning, mathematics helps to develop our mind so that it will be robust enough to achieve pure wisdom and knowledge.

How Mathematics Can Improve Your Life

The influence of the Republic’s “mathematical education” can definitely be seen in our education system today. From young, we are taught basic arithmetic, before progressing on to algebra and geometry in the latter stages of our education. Those who are interested can opt to get a college degree in mathematics, but at the very least we are all subjected to a compulsory education in the foundation of mathematics at a young age.

Personally, I feel that the basic mathematical foundation we get as teenagers suffices in our quest to become a well-educated and well-rounded individual. I do not really think it is necessary to get the in-depth mathematical education described in the Republic.

That said, if you happen to be specializing in some mathematical-related field, it is definitely beneficial for your mind. For example, I have friends who are physicists and engineers by training, and you can tell that they are able to analyze things in a quick and logical manner.

Personally, my “mathematical education” comes from Microsoft Excel VBA Programming. According to Steve Jobs, “everyone should learn how to program a computer, because it teaches you how to think”. There is certainly truth in this statement. I only got into programming when I started my corporate job. Prior to that, I had never done any form of programming before.  Once I started learning VBA, I realized that I had to think hard about how to write the codes in a proper and logical way. If I did not do so, there would be errors and the program would not run or crash halfway while running. Hence, programming trains my mind by forcing me to think logically. As Steve Jobs puts it, it “teaches me how to think”.

Dialectics

Dialectic, the final aspect of the Republic’s education, is the culmination of the first three components of education. In the dialogue, Socrates states that everything that has been discussed thus far is simply a “preclude” to the ultimate education: dialectics. The first three aspects of music, gymnastics and mathematics simply ensure that the student is ready to engage in dialectics training.

We can only achieve absolute wisdom and truth through dialectics. This is because music and gymnastics only deal with visible and tangible things such as health and literary education, while mathematics is basically a tool to train and develop the mind. However, dialectics is the ultimate discipline that will lead us towards pure truth and wisdom.

Dialectics (known as the Socratic method in modern times) involves the asking and answering of philosophical questions between individuals. Individuals engage in debates with each other as a way of gaining philosophical insights. If the individuals have been properly educated, these insights will be the pure truths. On the other hand, if they were not well-trained in the first three aspects, they would not be able to gain such insights. For example, if an individual were not good in mathematics, how would he be able to derive the true laws of physics through dialectics?

How Dialectics Can Improve Your Life

Similar to Plato, I believe that it is important to have a good foundation in music, gymnastics and mathematics so that we can engage in dialectics effectively. “Music” helps you attain general knowledge, “gymnastics” improves your health and confidence, and “mathematics” trains you to have a sharp mind. Being a well-rounded individual, you would then be able to engage in fun and intellectual conversations with your friends (and have a higher chance of winning the argument!).

For me, I enjoy debating with my friends about various issues while chilling out at a pub over some nice cold beer. Obviously, these issues are not restricted to philosophical topics but also include politics, books, finance, and other random issues that interest us. These debates improve my understanding of the issues because I am forced to think about them on a deeper level in the debates, and very often I gain new perspectives and insights after the friendly arguments.

When I read, I try to engage in “conversations” with the book. I do not accept the book’s contents blindly, but instead I read critically and always try to analyze if the author is making a wrong statement or judgment. After I finish reading a book, I will normally write a short summary to organize my thoughts and improve my understanding of its contents. When I meet up with my friends, I will bring up some of the interesting points in the book to initiate a intellectual conversation or debate.

Conclusion

When you first read the Republic, some of the ideas in the book may seem strange or even absurd. For example, Plato states that children in the Kallipolis must be separated from their parents at birth to be raised in common nurseries, that mating can only take place at “mating festivals” once a year, and that soldiers can “kiss” anyone they desire in their hometown when they are at war, etc. I shall not discuss about the validity of these ideas because that would be beyond the scope of this article. However, even the Republic’s most ardent critics will have to admit that it is one of the greatest work of philosophy ever written. One cannot deny that Plato’s Republic laid the foundation for much of Western philosophy and politics. The fact that we are still reading and contemplating the book’s ideas more than two thousand years after it was written is testament to its timeless value.

I strongly encourage you to read the entire dialogue from start to end. It is impossible to gain a meaningful understanding of the Republic if you only rely on summaries and notes. I have read the Republic multiple times and I still gain new insights each time. You can purchase the edition I read here.

I sincerely hope you will apply the principles of Plato’s ideal education to improve your life. Thanks for reading!

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