Monday, May 25, 2009


There were no surprises in the Reader’s Digest Trusted Brands Awards 2009. The survey was carried out by research firm The Nielsen Co, with respondents voting for their most trusted brands in 43 categories of products and services.

The brands were assessed and ranked quantitatively and qualitatively based on six determining factors: trustworthiness and credibility, quality, value, understanding of customer needs, innovation and social responsibility. The winners of the awards were the top choices of consumers. The ultimate measure of success for any brand was the level of consumer trust and confidence it enjoyed

Malayan Banking (Maybank) and Public Bank won top honours in the bank category. Amanah Saham Nasional Bhd and Public Mutual were the winners in the category of most trusted investment fund companies.

Other notable winners - a) Car - Honda, Toyota & Proton (surprise!) b) Insurance - AIA, Great Eastern. Prudential c) Family tourist attraction - Genting Highland, Langkawi d) Phone services - Maxis

Friday, May 22, 2009

Ice Breaker - Me Myself & I

Chee Wee is a very common name. Few years back, when I was purchasing an electrical item at SenHeng Electrical, the sales consultant did a search and voila, there were 5 Tan Chee Wee in the database! You can also call me Sumana. That’s my Buddhist name.

Should I tell you more on Buddhism? Of course not. My madam mentor cajoled me to talk about myself – nothing else otherwise the ice will not be broken!

Anyway we should not split hair over religion matter. Instead we should adopt the common values, the universal values instead of fighting over the various differences.

This attitude makes me proud to be a Malaysian. I identify myself as having the Malaysian features and can speak fluent Bahasa Malaysia. ‘Tak Percaya?’ Don’t you believe?

Let me relate this incident, in the 80s when I was a teenager, I traveled to school by public bus. One evening, while waiting for the bus at LA, that’s Leboh Ampang, not Los Angeles, a thug approached me. He cajoled me to part with my money! I was this tall & thinner than today – that’s make me an easy prey. I was scared. Damn scared! Well, but not to the extent of wetting my pants, though! Out of the blues, somehow I uttered ‘Apa kau nak’. What do you want? That thug was taken aback! Lu bukan Cina ka? You are not Chinese? Sorry ha! He walked away. Whoosh what a relief! I have many more funny and embarrassing encounters. Embarrassment not to me but to the other parties.

I joined Toastmasters Club in 2007. I remember taking part in Table Topics twice and then went missing in action for 2 years. Yeah that is also the age of my son, Jo Ven! Raising a baby was no easy task. I have to live up to my billing as the doting father! Not a missing father! So I have to sacrifice some of my activities and unfortunately rendezvous with Toastmasters was one of the victims.

I also have an eight years old daughter, Li Ven. There she is – bringing her along as a visual aid. Seeing is believing!

I am a local lad, born and bred in Kuala Lumpur. I spent 7 growing pain but character building years in Victoria Institution, recently proclaimed a heritage school. I was taught to be an all rounder, to excel in all fields. I was actively involved in scouting movement and sports. Among the highlights were leading an expedition to scale the highest peak in West Malaysia i.e. Mount Tahan in 1989 and representing KL Under 23 and Under 20 Cricket team in national age-group tournaments in 1988 to 1990.

From boy to man in the 4 great years spent in Kedah, 1991 to 1995. Initially I was not too happy to leave KL as I have everything in KL. It turned out to be blessing in disguise as the bright lights big city lifestyle was abandoned in favour of the slowdown culture. Came back to KL armed with an Accounting degree in 1995 to start another phase of my life.

As the feet were starting to get wet in the corporate world, Bang! Disaster struck! Asian currency crisis unfolded before our eyes. It was hard time. I got a pay cut. However I survived as I was not exposed to bank loans.

Fast forward to present day. Bang! Global financial crisis. Mother of all crisis. Greater than great depression. No pay cut but with more mouths to feed, I need no cajolement to be prudent in spending. Cash is king – so they said and I need no cajolement in being friendly to this king.

I work in a local IT firm, based in PJ. Accountant by training, Jack of all trades by choice!

However all work and no play make Jack a dull boy. At this stage of life, I do want a work life balance. Every Thursday, I will be in the badminton court, trying to be the next Lee Chong Wei. Every Sunday, I will volunteer my services, trying to be role model to a bunch of 7-8 years old kids in Sunday School. I do maintain a healthy lifestyle and always make sure I am mentally and physically fit at all times.

I end this talk with this motto – Do Good, Avoid Evil, Purify the Mind!

* my maiden speech presented on Saturday 16 May 09 at MIM Toastmasters Club!

Monday, May 18, 2009

Economics for Dummies II

Saving is sin, and spending is virtue.

Japanese save a lot. They do not spend much. Also Japan exports far more than it imports. Has an annual trade surplus of over 100 billions. Yet Japanese economy is considered weak, even collapsing.

Americans spend, save little. Also US imports more than it exports. Has an annual trade deficit of over $400 billion. Yet, the American economy is considered strong and is due to get stronger.

But where from do Americans get money to spend? They borrow from Japan, China and even India. Virtually others save for the US to spend. Global savings are mostly invested in US, in dollars.

India itself keeps its foreign currency assets of over $50 billions in US securities. China has sunk over $160 billion in US securities.. Japan's stakes in US securities is in trillions.

The US has taken over $5 trillion from the world. So, as the world saves for the US, Americans spend freely. Today, to keep the US consumption going, that is for the US economy to work, other countries have to remit $180 billion every quarter, which is $2 billion a day, to the US!

Who has invested more, US in China, or China in US? The US has invested in China less than half of what China has invested in US.

India have invested in US over $50 billion. But the US has invested less than $20 billion in India. Why is the world after US?

The secret lies in the American spending, that they hardly save. In fact they use their credit cards to spend their future income. That the US spends is what makes it attractive to export to the US. So US imports more than what it exports year after year.

The world is dependent on US consumption for its growth. By its deepening culture of consumption, the US has habituated the world to feed on US consumption. But as the US needs money to finance its consumption, the world provides the money.

It's like a shopkeeper providing the money to a customer so that the customer keeps buying from the shop. If the customer will not buy, the shop won't have business, unless the shopkeeper funds him. The US is the lucky customer. And the world is like the helpless shopkeeper financier.

Who is America's biggest shopkeeper financier? Japan of course. Yet it's Japan which is regarded as weak. Modern economists complain that Japanese do not spend, so they do not grow. To force the Japanese to spend, the Japanese government exerted itself, reduced the savings rates, even charged the savers. Even then the Japanese did not spend. Their traditional postal savings alone is over $1.2 trillions, about three times the Indian GDP. Thus, savings, far from being the strength of Japan, has become its pain.

Hence, what is the lesson?

That is, a nation cannot grow unless the people spend, not save. Not just spend, but borrow and spend. "Saving is sin, and spending is virtue."

*another forwarded mail!

Thursday, May 14, 2009

Economics For Dummies

In a small town on the South Coast of France, holiday season is in full swing, but it is raining so there is not too much business happening. Everyone is heavily in debt.

Luckily, a rich Russian tourist arrives in the foyer of the small local hotel. He asks for a room and puts a Euro100 note on the reception counter, takes a key and goes to inspect the room located up the stairs on the third floor.

The hotel owner takes the banknote in a hurry and rushes to his meat supplier to whom he owes Euro100. The butcher takes the money and races to his supplier to pay his debt. The wholesaler rushes to the farmer to pay Euro100 for pigs he purchased some time ago.

The farmer triumphantly gives the Euro100 note to an escort who gave him her services on credit. The escort goes quickly to the hotel, as she was owing the hotel for her room use.

At that moment, the rich Russian is coming down to reception and informs the hotel owner that the proposed room is unsatisfactory and takes his Euro100 back and departs.

There was no profit or income. But everyone no longer has any debt and the people at the small town look optimistically towards their future. ???????

* forwarded mail from a buddy!

Monday, May 11, 2009

Have Fun & Fund When Investing!

When investing in stocks control your greed and fear. We need to know who we are in order to do well in stock market investing - Ooi Kok Hwa, investment adviser

The recent strong market rally caught many investors by surprise again. Most investors predicted that it was just a bear market rally. They have been hoping the market will turn down again. Unfortunately, it has been moving up strong without looking back.

For investors who have not invested during the recent low in March 2009, they are getting very worried as they are not benefiting from the recent rally. They may even wonder whether they should jump in now in order not to miss the boat.

Another group of investors, who have managed to catch some stocks at cheap prices during the previous market low, are also facing the dilemma of whether to lock in their gains now or continue to hold on to their gains. Some even regretted selling their stocks too early last month.

We all know that it is very difficult, in fact impossible, to predict stock market movement. Most investment gurus will refuse to time the market.

Howard Kahn and Cary Cooper published a book titled “Stress in the Dealing Room” in 1993. According to their surveys done on 225 dealers, 73.8% of them suffered from fear of “misreading the market.” Most dealers have the same problem of acquiring and handling information.

We believe that in order to do well in stock investing, we need to know ourselves, especially in controlling our emotion on greed and fear. Due to information overloading, our emotion is highly influenced by the news that we read. Each time we feel that the market is getting bullish and time to buy stock, the overall market will collapse the moment we enter.

On the other hand, the moment we fear that it will drop further and we have decided to cut losses, we will notice the market will recover after that. Most of the time, the prices of stocks that we sold were at the lowest of the recent fall.
In order to control our greed and fear, we need to ask ourselves whether the market has discounted the news that we have received.

For example, many analysts have been bullish lately, having the opinion that the worst may be over for the market based on the recent economic indicators which showed that the overall economy may have stopped contracting or is on its way to recovery.

Nevertheless, the recent strong market rally would have discounted this bullish news. In fact, we need to ask ourselves whether the current stock prices can be supported by the fundamentals for certain listed companies.

In our experience, in most cases, the moment we feel like buying stocks is the best time to sell them while the moment that we feel like selling them is in fact the best time to buy. We can apply this contrarian theory quite successfully in most periods.

Sometimes, if we are taking in too much contradicting information and, as a result, get confused over the market direction, we feel that the best strategy is to stay away from the market until we have a better and clearer picture of the overall market or the economic situation.

We should not be influenced by other opinions. There are times that we need to follow our heart. Sometimes, our hearts try to warn us from taking hasty investment decisions. However, we refuse to follow our intuition but instead, choosing to get influenced by others or the information that we read and ending up making mistakes.
In conclusion, we need to maintain our concentration.

We should not be led by the market sentiments regardless whether it is on the way up or crashing down fast. We need to go back to the fundamental of economic situation and the companies’ performance and future prospects.

One way to minimise the feeling of regret is to stagger our purchase and selling. We will only know the peak when the market starts turning downwards and vice versa. Therefore, by staggering, we will have an averaging effect rather than taking a one-time hit, especially if it is at the wrong timing.

Friday, May 8, 2009

Happy Wesak

“Health is the highest gain. Contentment is the greatest wealth”

“Contentment is the quality of being able to do with what little we have.” ~ The Buddha ~

Contentment is the greatest possession in life. If one have everything but not able to be contented in life, one would not be able to find the real happiness.

A contented person is one who do not have excessiveness, who is self-restrain, who practices simplicity, who is easily satisfy and happy. Being able to do with whatever he has while seeking for better wealth. He would also know how to enjoy what we presently have.

Contentment doesn’t mean being passive or negative. We know we could not have everything in this life. There is no end in one effort in seeking wealth. Contentment measure not how much we have in life but rather how we perceive life.
The opposite side of contentment are greed, jealousy, dissatisfaction, obsession, excessiveness and etc.

Once there lives a simple and joyful poor fisherman. One day as he was walking on the beach, he found a treasure box that consists of 99 gold bars. He was so happy with the discovery. He became the richest and the famous man in the village. One day he became very sad. His friend asked him what make him unhappy. He said “How nice if I can have the missing gold bar to make it 100.”

We always look at what others have that we don’t. We should look at what we have that others don’t. Happiness that comes from comparison (competition) and recognition is not a true happiness. They are just “Egoism.” True happiness comes from simplicity. The more you have in life, the more problems you are expected to face. Know what you want, how much you really need and be happy with what you get.

Do not be influence with obsession. Know where you stand, your ability and capacity. Know where you stand in relation to betterment in life.

In life, there are a lot of beautiful things lying there. There is no harm if we just admire the beauty in life and just go on with life. We should not let these beauties of life create strong desire to gain more. Just walk on. Sometimes even if we could afford to buy it we should considered, is it a necessity in life or just wants to possess it?

Happy Wesak

Thursday, May 7, 2009

Happy Mistake Free Investing

"Learn from the mistakes of others. You can't live long enough to make them all yourself." - Eleanor Roosevelt.

Some mistakes are more painful than others. Followings are investing mistakes that you do not want to make and are avoidable.

#1 Don't Let Poor Asset Allocation Make You Poor

Before trying to figure out if the latest share tip is worthy of your investment dollars, you need a plan. How much should you put into shares? How much into bonds? How much should just be in an emergency savings account fund?
Four rules of thumb are:

Rule 1: If you need the money in the next year, it should be in a high interest savings account.

Rule 2: If you need the money in the next one to five (or even seven) years, choose safe, income-producing investments such as gilts or bonds.

Rule 3: Any money you don't need for more than seven years is a candidate for the stock market.

Rule 4: Always own shares.

Remember to be honest with yourself about how risk-tolerant you are. When times are good, it's easy to take too many risks with your portfolio, and vice versa.

#2 Don't Invest In Anything You Don't Understand

Buying shares in a company you don't understand is a bad move. If studying individual companies isn't your thing, there is no shame in buying and holding an index tracking fund.

Don't trust an "expert" just because they use terminology you don't understand.
If you have no clue what the risk is in the risk-reward balancing act, you're better off putting your money elsewhere. Yeah, it's possible to take an insane risk and make your fortune in a year. It's also possible to win the lottery … but I wouldn't bet my retirement on it.

#3 Never Buy On Margin

Just don't do it. Using margin (i.e., borrowing money from your broker to buy shares) is a very dangerous game. You are not in control of your own destiny – using margin transfers your financial destiny to the whims of the stock market and of your broker.

Don't Hate … Participate!

Here's a bonus tip: don't procrastinate. It's never too late to start taking control of your financial future … but it's never too early, either.

Happy, mistake–free, investing.

Wednesday, May 6, 2009

Baby Step To Financial Freedom - Comments

My mate, Kayage Class 88 commented on the article, Baby Step To Financial Freedom posted on Monday 4 May 2009. He has his points and thought it would be a waste if I did not share his thoughts. Here we go - lock stock barrel...

Whilst knowing how to invest is a good thing, I do not think it is a 'must'. Looking back at our parents' time, were there mutual funds schemes during that time? I dare say 'No' or very limited.. and even if/when there was some kind of funds being set-up, it was flawed with cheating cases where someone ends up absconding with a large portion of the investors' funds (eg. Kojadi at one point of time - my dad was part of the statistics as he invested some of his hard earned cash there)..

So, question - How in the world did our parents made it thru without needing to know how to invest, what more investing during their younger days?

BTW Chee Wee, i think your formulae lacked an important variable. I.e. our kids.. No, I am not saying that we should expect our kids to finance us when we are older. However, knowing our asian mentality, where family bonding is the root of being a family, that is the situation we, highly likely, would be in, in the future (this is provided we are married and have kids, ya?)

Anyway, sorry for the side track, yes, we need not know how to invest. However, if we do know how to invest, it would give us more buffer in our spending in our later days. Chee Wee, another factor that i think you might have missed out is the inflation factor. There is no point of placing one's cash somewhere to generate 3% while the inflation rate is above that. Thus, following your sample, if the current inflation is at 4% and the FD return is at 3%, the investor is actually losing $$$ in a long run. He is better of holding on to the cash or placing it where it can generate a higher returns.

A prudent investor does not place all his eggs in a basket and investment does not only mean FD, Shares and mutual funds alone... Properties, gold, collector's items should be considered too.

Let's take a look at gold, if you study the pricing trend, you would notice that gold is one commodity that had been steadily going up in price thru out the time, thus investment in gold makes a good option too.. Well, next question, where do I store all these gold that I had bought.will be buying? No fret.. These days, golds are sold w/o the need for physical transfer. Instead, the gold can be safeguarded in a bank with the bank issuing you a certificate. Thus, at any point of time you want to liquify your gold, all you need to do is bring along the certificate.

Price for strategically located properties will continue to appreciate. Thus, buying a bungalow for RM100k in PD hoping that the price would appreciate would be a wrong investment idea. Instead, a D-story in BU today might cost RM700k, but in 10 years time, it would probably cost more than RM1mil - Statistics had proven (from trend study), less tahan 5 years ago, the D-story house in BU only costed RM450-RM500k!. So, if you do the maths, RM300k (profit) divide by RM700k (cost of purchase) multiply by 100 gives you a return of about 40-50% for the 10 years investment - So much better than FD, no? and during that 10 years, you could possibly make some income via rental.

Lastly, collectors items (eg. proof coins, stamps, old coins & notes, antique items). These have high resale value as time goes by (provided you are collecting the 'right' set of items). Again, for that investment, you probably would make 5-10 times your cost. Again, this depends on what you foresee in the future as items in demand ;)

If you are not awared, these days there are these thing called. Collectable trading cards.. they come in the category of common, uncommon, rare and super-rare. I.e. you can collect them as a hobby, use them for leisure games or competitive games (yes, they even have world meet and superbly good price for the winners) then later on sell them off for a good price. A super-rate (out of print card) could possibly fetch USD2-3k these days.. So, imagine the opportunity for investment here.

I have a friend who collects comics (Marvel and DC).. and yes, I dare bet you read in the papers not too long ago how much an auction of the 1st ed. for Superman fetched the seller, ya?..

Chee Wee, sorry for being so long winded, and no intention to hijack your posts :P.. Just want to share other possible investment options besides the capital market :P

BTW, do keep away from HYIS (High Yield Investment Scheme). I do advice against this mainly for 2 reasons:

#1. your returns are from fellow family and friends you hoaxed into the scheme. So, this investment scheme are only for those w/o concious as you have to have the stomach to see your friends' losses at ur benefit.

#2. if you really ust enter into a HYIS, do so only if the scheme is less than 6 months old.. entering one which is about 1 year old is shaky. Most HYIS life line is 2 years. i.e. the initiator will chao-low (run-away) before the end of 2 years!!

Happy investing ;)

Tuesday, May 5, 2009

Planning To Retire!

"If you can't make decisions in life, you're a bloody menace. You'd be better becoming an MP!" Bill Shankly

Young parents Viveka and Ananda have been putting aside a fixed sum every month into their savings accounts as part of their retirement nest egg after deducting their household expenses. The ‘journey’ taken is lauded but perhaps they need to re-examine the mode of ‘vehicle’. The common belief is that keeping our money in the bank is the best way to preserve our capital. However this instrument may not be good enough given that interest rates of bank deposits can hardly outrun inflation.

The rising cost of living and medical expenses could be a major financial burden.
According to Great Eastern Life Assurance, only 34% of Malaysians are putting aside money regularly for their retirement funds. Longer life expectancy, delayed marriage and having children later would leave the retirees in a vulnerable position as they also need to set aside medical funds for themselves and education funds for their children.

Although Employees Provident Fund savings is one of the main channels to provide for retirement, 99.9% of the contributors would withdraw these savings in one lump sum once they reach 55 years of age and 70% would use up all these savings in just three years post-retirement.

Another alarming note is that those who do save do not have a concrete plan on how to build their retirement fund. They just save as much as they can and hope they will have enough to cover their retirement needs. They do not segregate their savings for retirement and lump everything as general savings. To make matters worse, they would use the money should other needs arise.

In addition, 73% do not seek advice from financial professionals – a behaviour that compounds Malaysians’ poor retirement planning ability further.

Instead of relying solely on EPF and personal savings, Malaysians should consider early financial planning, which would save them the stress of dealing with insufficient retirement funds or seeking prolonged employment to ensure financial stability.

There are a variety of choices available when it comes to building your retirement fund.

Depending on your risk appetite, investment horizons and affordability, you can invest in properties, equities, unit trusts and investment-linked insurance to name a few. The key is to have a sound investment strategy that is the ability to balance risks and returns effectively according to the desired investment tenure.

Nevertheless, it is always advisable to contact a professional financial advisor or a wealth planner who can provide advice on how to best go about securing your retirement based on your financial circumstances, priorities and needs.

Monday, May 4, 2009

Baby Step To Financial Freedom

Assume you start investing at the age of 25 and intend to retire at 55. By saving RM100 per month and invest the money into fixed deposits (FD), assuming the FD can provide about 3% return over the next 30 years, your investment portfolio will reach RM58,274 when you reach 55.

However, if you can generate 5%, 7% and 10% returns, your investment portfolio will achieve RM83,226, RM121,997 and RM226,049 respectively.

The EPF may be able to provide us about 5% whereas unit trust investments may be able to give us 7% to 10% returns over a very long-term period.

We treat the 3% FD return as our risk-free rate. Any extra returns above this rate will be the risk premium for the additional risk that we are prepared to face. Thus, we need to understand our risk tolerance level before considering any type of risky investment. We should know if we are willing to accept the uncertainty of return that is inherent in those investments. Besides, we need to understand if we can afford to have our savings tied up for a long period before we can achieve our investment targets.

When we earn more money, we should have more money for our investments. We should save and invest more. Unfortunately, the word should seem so far away as some investors just do not have the discipline to save even though they earn high salaries.

If we can cut down on our expenses and live below our means, we should have more money to save. We should always ask ourselves whether we want to spend money on unnecessary luxury items to keep up with the Jones or spend less to achieve financial freedom earlier.

However there is no straight-forward answer to how to generate high returns. For a start, we can equip ourselves with strong financial and investing knowledge. Read up investment books. Digest the financial information and do some research in investment.

Once we have built up the knowledge, start practicing. There will be some roller-coaster rides or wave riding. The important thing is to learn along the way. All these rides will help us in making better investment decision that will eventually translate into better returns.

Happy Investing.