Sunday 19 September 2010

Buffettologism and Malaysia


Save yourself from BN economic failure - embrace Buffettologism


The Minister Mentor may be dictatorial, but he uses it for the good of his citizens and transformed the country into a modern state and he will be loved more. You can always use your horse sense like what the Minister Mentor does but you didn't.  

By 2partysystem 
If you're poor and you think it is because of BN economic policy, you should consider Buffettologism seriously. I've had enough of living from hand to mouth since I started working 20 years ago. Then I embraced Buffettologism and it changed my life for good - richer, happier, and healthier. It works for me and I'm sad I came to know about it a bit late but I'm glad I can still share it with my fellow Malaysians. 
I've never made any profit in the stock market in Malaysia even during a bull run; I only see my money grow in overseas stocks after embracing Buffettologism. When Bill Gates met Warren Buffett for the first time, the meeting lasted for ten hours and Bill Gates became his devotee. That's right, even Bill Gates became a devotee! Now that the price of essential items and cost of living have gone up, let's see this Sage of Omaha's philosophy and what we should do to save ourselves. 
His advice to young people: Stay away from credit cards (bank loan) and invest in yourself and remember:
1) Money doesn't create man but it is the man who created money.
2) Live your life as simple as possible.
3) Don't do what others say, just listen to them, but do what you feel good.
4) Don't go on brand name; just wear those things in which you feel comfortable.
5) Don't waste your money on unnecessary things; just spend on them who really in need rather.
6) After all it's your life then why give chance to others to rule your life. 
Warren Buffett has never borrowed a significant amount to invest or for a mortgage because living on credit cards and loans won't make you rich. To prevent yourself from servicing a bank loan, be careful when buying cars and houses. There are always arguments for and against owning a house in terms of investment. Unless you have lots of money to spare, buying an expensive home is not worthwhile for a wage earner because you will be overwelmed by debt. I started asking why should I give a chance to others to rule my life. Just see who gets richer and it is definitely not you.  
From my experience of owning a low cost flat applied (I'm qualified) through the Penang State Government under BN and all the way to the High Court which I won due to a delay in completion, I'll never again buy any house or new cars even if I'm a millionaire. Winning is nothing because the developer knows how to go about the system to make you lose even more. There was hanky-panky going on and I've nothing good to say about our judicial system. You also need to deal with liquidators and the Insolvency Department. The poor Malay and Indian buyers have to suffer too and no thanks to the Penang State Government under BN for doing a lousy job - not supervising the project properly. You never hear this type of nonsense in Singapore. My self nature is quite similar to what he advices but because of listening too much to other people, I suffered financial loss. 
Have you ever wondered why Warren Buffett didn't make quick bucks through property speculations? This is because he lives his life as simple as possible, avoiding endless migraines. One late tycoon in Penang who became famous for his motorbike business lived a life of unceasing litigations, according to one of his lawyers. Instead of enjoying his rich lifestyle, he was engaged with his lawyers going through legal matters and madness. Your land can be taken away by the Government at a low price on the pretext of building a school or hospital but later sold to commercial property developers at a high price to pocket the money. These bastards make a profit out of your land and all these freehold and leasehold tags are all bullshit. You can sue but you lose not only your money but also the case itself. Of course some can still argue that real property is a good investment because property appreciates but against the huge mortgage to pay off, house that cracks, legal fees and tenants who don't pay up, consider yourself lucky if they didn't pour cement into your toilet bowl.  
Warren Buffett has gotten many heart-rending letters from people who thought their borrowing was manageable but became overwhelmed by debt. His advice is, negotiate with creditors to pay what you can, then when you're debt-free, work on saving some money that you can use to invest. Poor people frying goreng pisang or char koay teow can stop these corrupt politicians from spending on expensive goods from rich countries by embracing Buffettologism and investing rightly on the pittance they make and don't give chances to others to rule your life. The best defense in a tough economy is to add the most you can to society because your money can be inflated away but your knowledge and talent cannot. No matter the external circumstances, you are always in control of your talent, learning and passion for life and there will always be opportunities for talent. 
His stand on integrity: Lose money and I will forgive you, but lose even a shred of reputation and I will be ruthless.
1) We will not trade reputation for money.
2) It takes 20 years to build a reputation and five minuted to ruin it. If you think about that you'll do things differently.
3) The most important thing to do if you find yourself in a hole is to stop digging.
4) In looking for people to hire, look for three qualities: integrity, intelligence, and energy. If you don't have the first, the other two will kill you. If you hire somebody without integrity, you really want them to be dumb and lazy.
5) Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.
6) We celebrate wealth only when it's been fairly won and wisely used. 
Wealth can always be recreated but reputation takes a lifetime to build and often only a moment to destroy. One Defence Minister said something nonsensical like if you damage the country's image, then you are a traitor. What kind of image and whose image was he talking about and why don't Pakistan's or India's nuclear warhead get stolen by a low ranking officer? In Altantuya's case, if it's true she died because of the USD500k commission, then who's going to trust Malaysia in business dealings involving bigger sums of money? The Government should honour its agreements with Chin Peng to allow him to return home and with the company that was not being paid for printing election posters. If you do think about your reputation, you would have done everything differently.  
MACC was not aware that some people will not be easily turned around even when they are threatened. Teoh Beng Hock's martyrdom proved that he won't trade reputation and principle for money or threat. His death signifies that he is a man of honour and would never stoop to any form of deceit. If those who helm these institutions don't have integrity, according to Warren Buffett, you can expect them to be dumb and lazy. Just see what kind of stupid things they have done at the coroner's inquest and they still talk about "image" not to mention how many deaths in custody, the Perak putsch, etc. 
In Anwar's sodomy II case, the powers that be is treating all Malaysians like stupid fools, not knowing what anal sex is all about. The powers that be is sending this message to whole world, "Look, we can treat our citizens as idiots". If you have the passion to learn, you can actually educate yourself about anal sex (see "Guide to Anal Sex by Marilyn Chambers" etc) and make a fair and logical judgment whether Anwar really committed the act. I strongly oppose censorship of the internet because it helps me obtain vital information and statistics to the case, like age and libido, sex process, tools and lube used, penetrating evidence, the anatomy etc to develop my belief systems.  
Singapore placed integrity as an important criteria that eventually allow one of our casino companies to operate there. This company had been observed by Singapore for a very long time in terms of integrity, management, performance etc, otherwise they won't have to even dream of opening one there. And if this company finds Singapore a better environment to do business, decides to move their HQ there and pay their group corporate taxes to the island republic, with its tax incentives and effective tax rates as one of the lowest in the world, who is going to gain and who is going to lose from the DTA? Why didn't Singapore allow the opening of casinos in 70's and 80's to compete with us and why now? You know the answers. 
Warren Buffett: Chains of habit are too light to be felt until they are too heavy to be broken.  
Besides smoking, drinking, gambling and womanising, the worst of them all is the clinging to NEP, "Ketuanan" and "Hak Istimewa" addiction even when it is already empty and essenceless. Some people will still be shouting while grasping for air to soothe their souls. Of course it is a lucrative business for the kingpins, selling these drugs to the Malays and so they get hooked. Take away the drugs and there will be riots. The truth is the non Malays have nothing to lose if the addiction continues but will put the country in peril of bankruptcy. Why don't you just ask the rich non Malays to hide away their wealth so that it won't create so much jealousy and problems here? Rich people like Warren Buffett don't need status symbols, they would like to keep a low profile and enjoy their private life. So, instead of expensive fancy cars that most of us would like to pursue, rich people should have normal cars to prevent anyone knowing that a billionaire is inside. Our lives would be more peaceful if we follow Warren Buffett. 
You can become a billionaire by saving RM5000 every month, invest your savings that give 15% or more return annually and compounded and do that for 55-60 years. In fact, everybody can become a millionare, just by reducing your savings to RM50 every month. By considering inflation, increases in amount saved and percentage return fluctuations and luck, there is nothing to be jealous about the non Malays having more money, because the Malays already have a good investment vehicle, the ASN to do that for them. When you first make money, you may be tempted to spend it. Don't. Instead, reinvest the profits. There is a legend that Albert Einstein once said that compounding interest is the the most powerful force in the universe.    
Recently I saw some billings/demand for payment letters thrown in the rubbish area belonging to a few Malay civil servants in their early 20's and I was totally shocked. Their debts come to about RM50-60k and cellphone to the tune of RM500. These are cash loans, a product with an Arabic name from a local bank and they are not housing, car, study loan or credit card debts. I began to wonder how they are going to manage it and whether they need to repay the bank. Don't get me wrong, the non Malays too have debts but the impression is, what did the Government do to educate the Malays to be more prudent and thrifty? The Government is making the Malays poorer by employing them as civil servants unless there are hidden opportunities for rent seeking. Courage does not grow on its own if you did not learn how to deal with hardship in business by yourself. I've seen with my own eyes people around me who started as a rubber tapper, waiter, labourer, pump attendant, washer etc and are today multi-millionaires (some overseas based) and those who started as a civil servant retired with accumulated debts.  
For every RM50k lost without collateral, the bank needs to have about 15 - 20 good RM50k loan to cover that one lost because of interests the bank needs to pay to these 15 - 20 depositors. Unless money drops from heaven, you would like to think a thousand times before giving out loans to these borrowers. 
Warren Buffett: If I wanted to, I could hire 10,000 people to do nothing but paint my picture every day for the rest of my life. And the GNP would go up. But the utility of the product would be zilch, and I would be keeping those 10,000 people from doing AIDS research, or teaching, or nursing. I don't do that though.  
He says the GDP would go up if he hires 10,000 people to do unproductive activities and these GDP, GNP, GNI, FDI data sometimes capture our interest without knowing that they can be manipulated. You don't get paid for activities, you only get your rewards for being right. The annual report of listed companies can be deceiving too for example their RM20mil inventory may be worth only RM3mil due to depreciation, overseas operational profits may not be accurate because we can't see their operation and fixed assets plus different system of accounting, forcing or bribing reporters to write good news about the company - to name a few. The worst I heard from a horse's mouth is that "many didn't have secretive information exchange from the top thus the poor are always the suckers". How are we going to challenge or compete with the rich particularly in this country? Buffettologism is a good way out for us, the poor.   
Warren Buffett believes that in 20 years' time, all the cars on the road will be electric. He's already invested in a Chinese company working on the technology to make it happen. Buffett thought of the peak oil theory, that oil production has peaked and will only decline in the future and what he believed would replace carbon fuel. Actually, this Chinese company copied competitors' designs piece by piece. I wonder why he didn't invest in our local auto company because we also copy competitor designs car by car for some models. Seehttp://www.businessinsider.com/here-is-exactly-how-warren-buffetts-chinese-auto-company-byd-copied-competitor-designs-piece-by-piece-2010-2
Because of greed and arrogance, we damaged our reputation first then we tried to rebuilt it again.
Warren Buffett on US, China and other countries: Do not see the global economy as an "us against them" struggle: if China does well, or Russia, it won't make America any less prosperous.
1) The truth is, the Chinese will do better, because they're starting from a lower base, but they have learned a tremendous amount about business in the last 20 years, and about how to unleash the human potential, and that's something that the US learned earlier. And but they're picking it up very, very, very fast.
2) I know that 10 years from now, 20 years from now, China and India are going to be a long way ahead of where they are now. So I don't worry too much about whether there's going to be a sudden interruption or something.
3) He really believes the U.S. economy will recover and be strong for decades to come.
4) He said America has a great system and it has always worked, and it will keep working in the future. 
We used to think that the Indonesians are poor and dirty, didn't we? They may be dirty because of their work but they're not poor anymore. Just go to their villages in Java and see what kind of houses they are living in and compare to ours in slump areaa. I knew one maid who was able to sent back RM25k just to build a house on her land plus buying a new motorbike and cash for emergency uses. Their investment comes in the forms of property and agricultural products like cows, seeds or fertilizers that could generate future income. They won't buy luxury goods like cars just to show off but they will buy cars that carry goods. They would rather travel by public transportation. Their President is working very hard to eradicate corruption although it is still rampant. We are still dreaming and think that we can hire them for RM500 per month. 
Recently, I met and talked to one Indian manager attached to a US MNC based in Dubai about Indian workers. He said many penniless Indians went to Dubai to search for work door to door with the help of their fellow countrymen. Many became successful and managed to saved a lot of money. Besides money, they also gained experience and exposure, learn new things, see other parts of the world etc. When I was abroad, many Chinese nationals tried to get acquainted with me thinking that I'm their countrymen and this makes me feel that we lack acquaintedness (hopefully I had erred) which stemed from entrenched "us against them" struggle and distrust where people's views are polarized and narrowed down to racially-based perspectives.  
People throughout the world migrated to the US is because they have a great system such as total freedom to unleash the human potential unmatched by any other countries in the world. Enhancing the human potential should not be controlled or managed by anybody, it should be left to one's liberty to choose what they want to do. Here we have a very lousy system such as having difficulty in choosing the courses we like to study even with good results and those assembling peacefully to celebrate an event will get arrested. Some choose to ship out and some only stick to "special privileged" civil service jobs that one could get rich only by rent seeking. 
Today, China is developing the fifth generation stealth fighter jet the J-XX, moving and transforming away from a Third World country status of 20 years ago. What about us here? 20 years ago our engineers' starting salary is still the same as today's, with our maquiladora-like mentality and having foreigners as our cheap laborers. What have we done to improve our human potential? The whole fucking problem is I can't simply walk into our local universities to study or take courses of my choice and interest and the government failed to make high quality university education in abundance. In the words of John F. Kennedy, "A child miseducated is a child lost. Our progress as a nation can be no swifter than our progress in education. The human mind is our fundamental resource."  
Know What Success Really Means: Despite his wealth, Warren Buffett does not measure success by dollars. In 2006, he pledged to give away almost his entire fortune to charities, primarily the Bill and Melinda Gates Foundation. He's adamant about not funding monuments to himself -- no Warren Buffett buildings or halls. "I know people who have a lot of money," he says, "and they get testimonial dinners and hospital wings named after them. But the truth is that nobody in the world loves them. When you get to my age, you'll measure your success in life by how many of the people you want to have love you actually do love you. That's the ultimate test of how you've lived your life." 
I want to ask Tun Dr. Mahathir, do you love us all equally as your Malaysian children or you only love some of your "selected" Malay and non Malay children? Remember Warren Buffett said "love trumps wealth" and if we children have to struggle through each day with 34% earning less than RM700 per month while you can live and spend like kings for yourself and for your "selected children" then we are going to be very suspicious of our father.
You said "Most of the wealth of the country belongs to the Chinese. It can also be said that the Chinese control the economy of the country, the NEP is about giving the Malays a fair stake .....bla bla bla ....bla bla...." and I ask why all these jealousy? You break up your children into classes, make them quarrel among themselves, those who did well in exams did not get the proper rewards prompting them to get out of the house. Is there anything wrong if your children go to different schools, learn different languages, have different friends and get different examination results but come home to you as the unifying father and speak the same language with you? In fact there are so many ways to help everyone fairly and enough wealth to be distributed among all your children who can theoretically enjoy better life, better education and better medical facility; the most important is that we don't quarrel among ourselves.  
Or was it because you need to make all these money to overcome your inferiority complex to stand equally tall with Marcos, Suharto, Thaksin or the most "unbearable" the Minister Mentor down south when dealing with them in this region? Or was it because there might be a military intervention by the US or Chinese government in Malaysia because we have a lot of oil?
Your "selected" children will appreciate what you have given them and they can give good lip services but they actually don't love you. How can they love a leader who destroyed good governance, law and order, quality education, religious brotherhood, peace and harmony unless they themselves don't have good conscience?
If Hitler gave me tons of money or gold, I may appreciate what he had done for me but it is impossible for me to love him. I love Warren Buffett and many do so because he is willing to share his legitimate success secrets with all and get us out of financial mess. The Minister Mentor may be dictatorial, but he uses it for the good of his citizens and transformed the country into a modern state and he will be loved more. You can always use your horse sense like what the Minister Mentor does but you didn't.
We need to save ourselves from financial "doom".

http://malaysia-today.net/mtcolumns/letterssurat/34589-save-yourself-from-bn-economic-failure-embrace-buffettologism

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