Developing the Proper Mind-Set for Profitable Sales
The hold decision often results from an investor's bias toward a positive outlook on the future. This subtle bias can persuade investors to take enormous personal, career and financial risks in pursuit of reward.
Investing in the equity market certainly requires a degree of optimism, but that upward bias must be supported by the fundamentals of the situation, by thoughtful personal judgement and by the judgement of suitable advisors.
It is appropriate for an investor to take some risks in search of the stock that doubles, if that risk is not too high relative to his personal tolerance.
Unfortunately, however, an investment broker makes a living by catering to this investor optimism, which supports the buy bias described above. So investors lose billions of dollars every year because of the optimism they bring to daily living. Money is lost not only to fraudulent too-good-to-be-true, get-rich schemes, but also on the buying and holding sides of legitimate securities transactions.
To offset that tendency, proper buy timing and pricing can help reduce the pressure that inevitably surrounds the selling decision. There is a natural tendency to fall victim to excitement and buy a stock when it is already hot. Only the most disciplined of traders and investors consistently refuse to buy stocks on good news, on stories, or on excited rallies. Instead they demonstrate the self-control to stay with their buy decisions based on their predetermined criteria.
So buying too high on a burst of optimism is the first source of optimism-induced losses for traders and investors. But even greater damage results from holding onto positions because of excessive or unjustified optimism. One major difficulty in overcoming this problem is that declining stocks occasionally do rally. But an occasional burst of countertrend strength in a weak stock does its die-hard owners more harm than good.
The declining stock, by rallying - sometimes for several days in succession and occasionally by a nice point or more - provides positive feedback more recently and certainly more often. Each time the stock turns up, a flicker of hope is kindled. The major problem here is that even bad (declining) stocks have their good days (or weeks).
Not only does the daily price action in the market sometimes renew hope, there can be positive fundamental news as well. A good quarterly earnings report or an optimistic brokerage recommendation can generate the renewal of optimism in the heart of an investor. Every plus wiggle in the stock price, every time the price holds steady against a 15-point drop in the Dow and every good piece of news is a source of positive psychological feedback. Anything that goes right is a vindication of personal judgement.
If the dominant path of the stock is downward, each and every cause for renewed optimism is actually a false signal. In reality, those false signals should be viewed as uninvited distractions from the truth rather than as rays of hope.
When hope springs eternal, the investor must separate the facts of the situation from the fiction. The separation process must include not only the real news background - what is actually true about the company and its industry versus what is rumour and hope - but also the psychological environment in which the investor has linked his state of mind with the company and its stock. Guard against being trapped by a personal, renewed sense of optimism when hope springs eternal.
Using Charts
The best way for an investor to calibrate his state of mind against the market is to rely on stock price charts. Aside from the great debate about the viability of technical analysis, a chart can be useful as an accurate road map of price movement history.
Without any experience in charting techniques, an investor can spot whether the stock is still in a downtrend or whether its price action has overcome negative momentum for the better. Only rarely will it be true to say, "I am not sure, it seems to be right at the point of reversing." If that is true, resolve to look again in a week and make a yes/no decision, refusing to take another time extension.
Above all, do not back into a non-decision by default through the insidious process that consultants called "analysis-paralysis." The market keeps moving with or without an investor. So do not wait open-endedly for just a little more news or technical confirmation. There is never going to be a final answer or a point of total closure. So exercise discipline: make an evaluation and take action accordingly.
If a stock declines and then rallies, take note of a change in personal optimism level. (How do you feel?) Keep a daily notebook in which to write down the stock's price and the feelings that arise about it; then decide whether the revival of optimism for the stock is justified by the facts. Bear in mind that when a declining stock has rallied back to a given price level, it feels better to the owner than when it had earlier fallen to that same price. The more recent feedback creates hope while the earlier move produced fear. Watch the emotional difference, even at the same price.
The price an investor pays for a stock can get in the way of prudent selling because it influences the willingness to sell in terms of both timing and price. So buying well is important but only half of the transaction. The investor also must exit skillfully. Failure to buy well not only puts all the burden on possible net success on the exit execution, but it also colours the holder's thinking in ways that are damaging.
A change of mind soon after a buy is an ego embarrassment because it is an admission of error. Taking a loss is a second ego blow. So it is evident how the time and price of a badly made by render the selling decision more painful and difficult than it is on a big gainer. So both the timing aspect of having bought late (recently) and the price aspect of having suffered a loss are dangers to the investor's financial health.
(The truth is that when it is time to sell before the price goes down, it is time for everyone to sell, no matter what the timing is or what the cost at entry. But human nature seemingly demands that investors factor into the sell decision the stock's initial price. And the less time the stock has been held, the less the investor is willing to switch mental gears and say "sell.")
What should determine the decision is whether the stock seems likely to go down from here and now; if it does, it should be sold as soon as possible. The central question that should decide the hold/sell dilemma is "Would I buy this stock today?" Many investors fail to ask that question at all.
There is no denying that buying better helps most investors cash in more effectively when the right time comes. Most buying mistakes (aside from acquiring inflated "hot" new issues and penny stocks) occur not in buying bad stocks but in buying mediocre stocks too late - again, because investors tend to be crowd followers. They wait for confirmation because they need courage. They are most ready to jump in when the market has already become overbought.
If a stock is held only because of perceived positive potentials for the whole market, it should be sold. "Would I buy today?" A similarly revealing question is whether an investor would sell it here if he had bought better. If there is even a hint of an affirmative answer, he must recognise that cashing in is the right thing to do.
Wednesday 16 June 2010
Tuesday 15 June 2010
What if BP is unsuccessful in stopping the oil flow?
This mud flow in Indonesia continues unabated 4 years on.
Sidoarjo mud flow
JaveMud Volcano Still Gushing Four Years On (May 28, 2010)
Sidoarjo mud flow
JaveMud Volcano Still Gushing Four Years On (May 28, 2010)
Thinking of property redevelopment? Here's a checklist
What’s the commercial gain?
Need for an air-tight agreement
What are the tax implications?
“Before you negotiate with a developer, you need to establish the market value of the property you will receive on completion of redevelopment.
This is a better approach than quoting a random figure to the builder that would make them feel short changed or the high amount would make the builder shy on the new project,” says Ashutosh Limaye, associate director (strategic consulting), Jones Lang LaSalle Meghraj.
“Once the builder gives a detailed plan, the society members should consult real estate consultants and the developer about the likely future price. Based on this, the society members have to do some calculations to check on the commercial gains.
This is a better approach than quoting a random figure to the builder that would make them feel short changed or the high amount would make the builder shy on the new project,” says Ashutosh Limaye, associate director (strategic consulting), Jones Lang LaSalle Meghraj.
“Once the builder gives a detailed plan, the society members should consult real estate consultants and the developer about the likely future price. Based on this, the society members have to do some calculations to check on the commercial gains.
Need for an air-tight agreement
You should appoint a lawyer before signing a contract with the builder. The contract should clearly mention the obligations of the builder and the society members and the penalty or consequences of any breach of the contract by either of the parties.
The housing society should insist on a bank guarantee, which would take care of monetary compensation because of a delay in the project.
The agreement should also mention the time of completion of the project, the size of the new houses, the mode and the nature of monetary compensation, if it’s a one-time payment, reimbursement of rent or a mix of both. “It usually takes a year for a builder to convince the society members and take an in-principal approval.
But society members should ensure the timely completion of the project, which is the most important detail to be mentioned in the agreement,” Mr Narain adds. Secondly, it should clearly state the nature of temporary alternate accommodation and mode of rental payment/reimbursement. Finally, it should include member’s choice of new flat, parking, entitled area, etc
The housing society should insist on a bank guarantee, which would take care of monetary compensation because of a delay in the project.
The agreement should also mention the time of completion of the project, the size of the new houses, the mode and the nature of monetary compensation, if it’s a one-time payment, reimbursement of rent or a mix of both. “It usually takes a year for a builder to convince the society members and take an in-principal approval.
But society members should ensure the timely completion of the project, which is the most important detail to be mentioned in the agreement,” Mr Narain adds. Secondly, it should clearly state the nature of temporary alternate accommodation and mode of rental payment/reimbursement. Finally, it should include member’s choice of new flat, parking, entitled area, etc
What are the tax implications?
Unlike buying a home, there are no standard tax guidelines for redevelopment cases. “It depends on the agreement. Ideally, the members of the housing society should show a copy of the agreement to a chartered accountant before preparing the final draft,” says Vaibhav Sankla, executive director, Adroit.
Broadly, there are three main tax issues. One is capital gains tax, which could arise out of exchanging the old house for the new one although the house is built on the same piece of land. Under Section 54, you have to invest the amount of capital gains in a residential house within two years from the date of sale.
Second is the tax treatment of the upfront lump-sum payment. “If that payment is treated as capital receipt, it’s exempted from tax. On the other hand, if it’s treated as revenue receipt, then the amount is taxable in the hands of society members. This again depends on how the compensation is worded in the agreement,” Mr Sankla adds.
Thirdly, there is no clarity on the tax treatment of the rent reimbursed to society members by developers. “There are a number of litigations lying in courts with respect to taxability of monetary compensation and capital gains arising out of redevelopment. Hence, clarity is still awaited as it’s an evolving issue,” he adds.
Broadly, there are three main tax issues. One is capital gains tax, which could arise out of exchanging the old house for the new one although the house is built on the same piece of land. Under Section 54, you have to invest the amount of capital gains in a residential house within two years from the date of sale.
Second is the tax treatment of the upfront lump-sum payment. “If that payment is treated as capital receipt, it’s exempted from tax. On the other hand, if it’s treated as revenue receipt, then the amount is taxable in the hands of society members. This again depends on how the compensation is worded in the agreement,” Mr Sankla adds.
Thirdly, there is no clarity on the tax treatment of the rent reimbursed to society members by developers. “There are a number of litigations lying in courts with respect to taxability of monetary compensation and capital gains arising out of redevelopment. Hence, clarity is still awaited as it’s an evolving issue,” he adds.
Investors are betting on a Black Monday-style collapse, BoE warns
Investors are betting on a Black Monday-style collapse, BoE warns
Investors are placing bets on a Black Monday-style crash in the British stock market at the fastest rate since the collapse of Lehman Brothers bank in 2008, the Bank of England has warned.
By Edmund Conway, Economics Editor
Published: 7:48AM BST 14 Jun 2010
A trader despairs as the market crashes on Black Monday in October 1987 - investors are placing bets on a similar crash in the UK stock market.
In a survey of markets, the Bank warned that widespread fear over the possible collapse of a sovereign debtor, including Greece and Portugal, had sparked a mass of bets on a 20 per cent fall in the FTSE 100.
The warning coincides with calculations from the Bank for International Settlements (BIS) showing that Britain has major exposure to the Irish and Spanish banking systems, which many fear could be at risk in the next round of the financial crisis.
The Bank of England used its Quarterly Bulletin to warn that markets were under increased strain following the International Monetary Fund and European Commission's bail-out of Greece.
It said that investors had fled into safe haven assets, including Treasury bonds, gold and, to some surprise, UK government bonds.
However, it pointed out that the number of investors betting on a 20 per cent fall in the FTSE 100 index, based on their purchase of options connected to such a scenario, had risen from below 5 per cent to about 13 per cent in the past month alone.
Although this is below the 25 per cent level around the time of the Lehman implosion, the rate of increase is similar.
Share prices have been hit by the fears surrounding sovereign debt in recent weeks.
Some analysts fear problems surrounding government bonds could trigger a repeat of Lehman-style events.
The BIS used its own Quarterly Report to point out that, although the strain had worsened throughout the international banking system, banks' balance sheets were slightly healthier than in the early stages of the subprime mortgage crisis that led to the Lehman collapse.
However, it also pointed out that various countries in the euro area were particularly exposed to each other – both in terms of sovereign and private debt. Banks headquartered in Britain had larger claims on Ireland ($230 billion, £158 billion) than banks based in any other country. Britain has a $150 billion (£103 billion) exposure to Spain.
Investors are placing bets on a Black Monday-style crash in the British stock market at the fastest rate since the collapse of Lehman Brothers bank in 2008, the Bank of England has warned.
By Edmund Conway, Economics Editor
Published: 7:48AM BST 14 Jun 2010
A trader despairs as the market crashes on Black Monday in October 1987 - investors are placing bets on a similar crash in the UK stock market.
In a survey of markets, the Bank warned that widespread fear over the possible collapse of a sovereign debtor, including Greece and Portugal, had sparked a mass of bets on a 20 per cent fall in the FTSE 100.
The warning coincides with calculations from the Bank for International Settlements (BIS) showing that Britain has major exposure to the Irish and Spanish banking systems, which many fear could be at risk in the next round of the financial crisis.
The Bank of England used its Quarterly Bulletin to warn that markets were under increased strain following the International Monetary Fund and European Commission's bail-out of Greece.
It said that investors had fled into safe haven assets, including Treasury bonds, gold and, to some surprise, UK government bonds.
However, it pointed out that the number of investors betting on a 20 per cent fall in the FTSE 100 index, based on their purchase of options connected to such a scenario, had risen from below 5 per cent to about 13 per cent in the past month alone.
Although this is below the 25 per cent level around the time of the Lehman implosion, the rate of increase is similar.
Share prices have been hit by the fears surrounding sovereign debt in recent weeks.
Some analysts fear problems surrounding government bonds could trigger a repeat of Lehman-style events.
The BIS used its own Quarterly Report to point out that, although the strain had worsened throughout the international banking system, banks' balance sheets were slightly healthier than in the early stages of the subprime mortgage crisis that led to the Lehman collapse.
However, it also pointed out that various countries in the euro area were particularly exposed to each other – both in terms of sovereign and private debt. Banks headquartered in Britain had larger claims on Ireland ($230 billion, £158 billion) than banks based in any other country. Britain has a $150 billion (£103 billion) exposure to Spain.
Sideway Trends
When the price of an asset, e.g. a stock moves sideways, it is difficult to trade on momentum and apply the trend-following techniques because a trend reverses shortly after it is established.
Once a sideways trend is identified, one can profit by investing long or short once a stock price touches the lower or upper trend line.
(Another strategy is also to write/sell options to collect premiums.)
Sideways trends can persist for a long time. Nevertheless, it is also important to know how to stop such a short-term trading technique when longer-term trends return.
Those with long-term goals may or may not wish to incorporate the above short-term trading techniques for a small portion of their selected good quality stocks which are in obvious sideway trends. However, always remember to buy low, that is, at prices that are closer to the lower price boundary.
Ishak no longer substantial shareholder of Kenmark
Tuesday June 15, 2010
Ishak no longer substantial shareholder of Kenmark
He pares down Kenmark stake
PETALING JAYA: Datuk Ishak Ismail has netted an estimated RM5mil from selling shares in Kenmark Industrial Co (M) Bhd, a company that he had started buying into slightly over a week ago.
Then, Kenmark’s shares had collapsed following the absence of its top officials and what seemed like a cessation of its business.
It is estimated that Ishak paid around 8 sen per Kenmark share and had emerged with around 57 million shares in Kenmark through his vehicles Unioncity Enterprises Ltd and BHLB Trustee Bhd.
In a filing with Bursa Malaysia yesterday, Kenmark said Ishak had ceased to be substantial shareholder of the company as of June 9.
The shares were disposed into the open market on June 9 and June 11. The average share price of Kenmark on those days was 17 sen per share, giving Ishak an estimated gain of 9 sen per share for his 57 million shares.
A senior analyst from a local brokerage said investors were unable to see clear leadership in the running of Kenmark to improve its financial performance. “When the single largest shareholder of a company starts to sell down nearly all of his shares, it does not promote confidence in the company’s future. This turn of events has left many questions unanswered,” he said.
It was earlier reported that Ishak wanted to take the financially distressed furniture maker out of its PN17 classification and restart its operations as soon as possible.
Kenmark’s share price hit a high of 16.5 sen in early morning trade yesterday before dipping gradually to close at 13 sen with 36.5 million shares traded.
----
Ishak makes exit from Kenmark
By Francis Fernandez
Published: 2010/06/15
Datuk Ishak Ismail appears to have sold out of Kenmark Industrial Co (M) Bhd, (7030) a financially troubled furniture maker, in about 10 days, which was also when the stock surged by more than 600 per cent.
As early as June 1, Kenmark was trading as low as 3.5 sen a share, after it emerged that its chief was missing and it was late with its financial results.
But by June 4, Kenmark was trading at 26 sen a share, powered by news that Ishak had bought a 32 per cent stake.
Kenmark told the stock exchange yesterday that it received verbal confirmation from Ishak and BHLB Trustee Bhd, a trust for his family, that nearly 60 million shares linked to him were sold on June 9 and 11.
Unioncity Enterprises Ltd, in which Ishak has an indirect stake, informed Bursa Malaysia that it sold some 27.69 million Kenmark shares on the open market.
With the sale, Unioncity ceases to be a substantial shareholder.
BHLB Trustee owned 30 million shares, or 16.83 per cent, in Kenmark as at June 2, filings to the stock exchange show.
"A representative of BHLB for a discretionary trust for the family of Ishak has verbally confirmed to the company that the trust on June 10 acquired one million Kenmark shares and on June 11 disposed of a total of 31 million Kenmark shares," Kenmark said in a statement yesterday.
Ishak, when asked about the share sale by Business Times, merely answered with a question himself: "Are you sure?"
As at press time, there was no filing to the stock exchange on BHLB selling Kenmark shares.
It is not clear who bought the shares from Ishak. Kenmark also did not mention it in its short statement to Bursa Malaysia yesterday.
Meanwhile, Kenmark executive chairman Datuk Abd Gani Yusof told Business Times that he was still the chairman of the company.
"I was appointed by the company," Abd Gani said when asked if he was representing Ishak or Taiwanese shareholder James Hwang Ding Kuo, who owns 8.41 per cent of Kenmark.
Abd Gani, who is the major shareholder and executive vice-chairman of Metronic Global Bhd, said he did not know who bought the shares from Ishak.
----
Comment:
It's another way of expressing the "Greater Fool Theory." "I may be a fool to buy this stock at this price; but I'll find another fool to buy it from me at a higher price."
Ishak no longer substantial shareholder of Kenmark
He pares down Kenmark stake
PETALING JAYA: Datuk Ishak Ismail has netted an estimated RM5mil from selling shares in Kenmark Industrial Co (M) Bhd, a company that he had started buying into slightly over a week ago.
Then, Kenmark’s shares had collapsed following the absence of its top officials and what seemed like a cessation of its business.
It is estimated that Ishak paid around 8 sen per Kenmark share and had emerged with around 57 million shares in Kenmark through his vehicles Unioncity Enterprises Ltd and BHLB Trustee Bhd.
In a filing with Bursa Malaysia yesterday, Kenmark said Ishak had ceased to be substantial shareholder of the company as of June 9.
The shares were disposed into the open market on June 9 and June 11. The average share price of Kenmark on those days was 17 sen per share, giving Ishak an estimated gain of 9 sen per share for his 57 million shares.
A senior analyst from a local brokerage said investors were unable to see clear leadership in the running of Kenmark to improve its financial performance. “When the single largest shareholder of a company starts to sell down nearly all of his shares, it does not promote confidence in the company’s future. This turn of events has left many questions unanswered,” he said.
It was earlier reported that Ishak wanted to take the financially distressed furniture maker out of its PN17 classification and restart its operations as soon as possible.
Kenmark’s share price hit a high of 16.5 sen in early morning trade yesterday before dipping gradually to close at 13 sen with 36.5 million shares traded.
----
Ishak makes exit from Kenmark
By Francis Fernandez
Published: 2010/06/15
Datuk Ishak Ismail appears to have sold out of Kenmark Industrial Co (M) Bhd, (7030) a financially troubled furniture maker, in about 10 days, which was also when the stock surged by more than 600 per cent.
As early as June 1, Kenmark was trading as low as 3.5 sen a share, after it emerged that its chief was missing and it was late with its financial results.
But by June 4, Kenmark was trading at 26 sen a share, powered by news that Ishak had bought a 32 per cent stake.
Kenmark told the stock exchange yesterday that it received verbal confirmation from Ishak and BHLB Trustee Bhd, a trust for his family, that nearly 60 million shares linked to him were sold on June 9 and 11.
Unioncity Enterprises Ltd, in which Ishak has an indirect stake, informed Bursa Malaysia that it sold some 27.69 million Kenmark shares on the open market.
With the sale, Unioncity ceases to be a substantial shareholder.
BHLB Trustee owned 30 million shares, or 16.83 per cent, in Kenmark as at June 2, filings to the stock exchange show.
"A representative of BHLB for a discretionary trust for the family of Ishak has verbally confirmed to the company that the trust on June 10 acquired one million Kenmark shares and on June 11 disposed of a total of 31 million Kenmark shares," Kenmark said in a statement yesterday.
Ishak, when asked about the share sale by Business Times, merely answered with a question himself: "Are you sure?"
As at press time, there was no filing to the stock exchange on BHLB selling Kenmark shares.
It is not clear who bought the shares from Ishak. Kenmark also did not mention it in its short statement to Bursa Malaysia yesterday.
Meanwhile, Kenmark executive chairman Datuk Abd Gani Yusof told Business Times that he was still the chairman of the company.
"I was appointed by the company," Abd Gani said when asked if he was representing Ishak or Taiwanese shareholder James Hwang Ding Kuo, who owns 8.41 per cent of Kenmark.
Abd Gani, who is the major shareholder and executive vice-chairman of Metronic Global Bhd, said he did not know who bought the shares from Ishak.
----
Comment:
It's another way of expressing the "Greater Fool Theory." "I may be a fool to buy this stock at this price; but I'll find another fool to buy it from me at a higher price."
Monday 14 June 2010
Another look at AhYap's concern over the performance fees of i Capital Global Fund & i Capital International Value Fund
Capital Dynamics aka Tan Teng Boo wrote in his latest newsletter on the performance fees charged for his managed funds. He elaborated on the 20% performance fee structure of the i Capital global funds.
To earn the performance fee, Capital Dynamics must deliver net returns of 6% on (1) a single year and (2) on a compound bases. The 2nd hurdle rate is actually on a COMPOUNDED basis. He pointed out how tough it is to compound 6% per annum PERPETUALLY.
He lamented how some supposedly smart investors do not even know that this 6% compound hurdle rate is a high water mark and that it is the toughest high water mark anywhere in the world. In his newsletter: "Any investor who scoffs at 6% compounding is either dangerous gambler or a conman."
There was a recent write-up in AhYap's blog stating his concern over the hurdles used by Capital Dynamics and how these severely impaired the returns of those who are invested in their funds; particularly during periods of high volatilities.
Perhaps, there should be added: 1 further hurdle and 1 extra condition.
(1) A third hurdle that the performance fee is only charged when the NAV per unit of the fund exceeds the highest reached in previous years.
(2) Another condition is on how the 20% performance fee is calculated. This calculation should not be solely based on last year's NAV. The 20% performance fee can be based on either the excess return above the 1st hurdle, the 2nd hurdle or the 3rd hurdle; always using the lowest excess value of these 3 hurdles in calculating the performance return.
In my opinion, AhYap's argument is sound, reasonable and his concern is valid. Capital Dynamics has not addressed this concern adequately. Hopefully, they will. Will they?
An example using the 3 hurdles approach and calculating the performance fee based on the lowest excess value of these 3 hurdles.
https://spreadsheets.google.com/pub?key=0AuRRzs61sKqRdFZFTkRqUU1HYWpOeXNaam42OWp2TFE&hl=en&output=html
Also read:
To earn the performance fee, Capital Dynamics must deliver net returns of 6% on (1) a single year and (2) on a compound bases. The 2nd hurdle rate is actually on a COMPOUNDED basis. He pointed out how tough it is to compound 6% per annum PERPETUALLY.
He lamented how some supposedly smart investors do not even know that this 6% compound hurdle rate is a high water mark and that it is the toughest high water mark anywhere in the world. In his newsletter: "Any investor who scoffs at 6% compounding is either dangerous gambler or a conman."
There was a recent write-up in AhYap's blog stating his concern over the hurdles used by Capital Dynamics and how these severely impaired the returns of those who are invested in their funds; particularly during periods of high volatilities.
Perhaps, there should be added: 1 further hurdle and 1 extra condition.
(1) A third hurdle that the performance fee is only charged when the NAV per unit of the fund exceeds the highest reached in previous years.
(2) Another condition is on how the 20% performance fee is calculated. This calculation should not be solely based on last year's NAV. The 20% performance fee can be based on either the excess return above the 1st hurdle, the 2nd hurdle or the 3rd hurdle; always using the lowest excess value of these 3 hurdles in calculating the performance return.
In my opinion, AhYap's argument is sound, reasonable and his concern is valid. Capital Dynamics has not addressed this concern adequately. Hopefully, they will. Will they?
An example using the 3 hurdles approach and calculating the performance fee based on the lowest excess value of these 3 hurdles.
https://spreadsheets.google.com/pub?key=0AuRRzs61sKqRdFZFTkRqUU1HYWpOeXNaam42OWp2TFE&hl=en&output=html
Also read:
Performance fees warning
Sunday 13 June 2010
Financial Planners Say BP Is a Gamble
BUSINESS
JUNE 10, 2010, 10:52 A.M. ET
Financial Planners Say BP Is a Gamble
By IAN SALISBURY
Some advisers are concluding that BP PLC, which just a few months ago seemed like a blue chip, is just too risky for their clients.
The giant British oil company, with a 100-year history and a $10.5 billion annual dividend, has seen its shares plunge by roughly half in a matter of weeks as oil from a well deep underwater gushes into the Gulf of Mexico. No one seems able to say for sure when it will stop, much less what the cleanup will ultimately cost.
"Before the oil spill, BP was a good long-term holding," said Keith Amburgey, a financial planner in Cresskill, N.J. "After the spill, the stock became a short-term speculative play."
Mr. Amburgey said his firm began selling BP stock in early May, about two weeks after the rig explosion, eliminating BP holdings some clients had owned for years. By that point, he said, it had started to become clear that questions about the incident were going to influence the price of the stock for a very long time. Although he personally suspects the market has overreacted, BP's legal and political jeopardy changed the risks and rewards of owning its shares for his buy-and-hold clients.
He likened the crisis to ones that have engulfed other seemingly impregnable companies recently, like Toyota Motor Corp., with its headline-making recall because of faulty brakes, and Goldman Sachs Group Inc., tarred by government charges over its business practices.
"This event served as a reminder of the benefits of diversification," he added.
BP's U.S.-listed shares rebounded sharply on Thursday after plunging nearly 16% on Wednesday as investors speculated that the company may suspend its dividend amid strong pressure from the Obama administration. BP is listed in the U.K. -- where it is extremely widely held by investors including large pension funds -- and in the U.S.
Some large brokerage firms have made moves too. Wells Fargo Advisors said it removed BP from its Diversified Stock Income Plan, a list of stocks with attractive yields and good prospects for hiking dividends that it provides to clients. Meanwhile, Wells's sector analyst also advised conservative investors to consider other, less volatile energy stocks, according to a spokeswoman.
UBS AG said it helped arrange a recent discussion between its clients and BP investor relations officials. UBS's United Kingdom research department, which covers BP, published its seventh update on the spill situation Monday. Although UBS still rates BP a buy, the note warned investors should be prepared for BP not to make its July dividend payment if U.S. political pressure intensifies.
For some, the BP debacle is a chance to make lemonade out of lemons. Bryan Wisda, a financial planner with offices in Scottsdale, Ariz., said he has several clients with big positions in BP, such as one accumulated by a longtime employee of Amoco, the U.S. oil company BP acquired in 1998.
While the BP positions never fit well with Mr. Wisda's passive-oriented investment philosophy, he had been afraid that selling the holdings would generate an unnecessary capital gain for tax purposes. Now Mr. Wisda has been laboriously searching through the clients' accounts for lots of stocks that were purchased at prices equivalent to BP's current one and therefore can be unloaded without a tax hit.
While he concedes BP could snap back, he doesn't think trying to make that risky call is in his clients' best interest.
"It's betting," he said. "Investing isn't really a bettor's game."
JUNE 10, 2010, 10:52 A.M. ET
Financial Planners Say BP Is a Gamble
By IAN SALISBURY
Some advisers are concluding that BP PLC, which just a few months ago seemed like a blue chip, is just too risky for their clients.
The giant British oil company, with a 100-year history and a $10.5 billion annual dividend, has seen its shares plunge by roughly half in a matter of weeks as oil from a well deep underwater gushes into the Gulf of Mexico. No one seems able to say for sure when it will stop, much less what the cleanup will ultimately cost.
"Before the oil spill, BP was a good long-term holding," said Keith Amburgey, a financial planner in Cresskill, N.J. "After the spill, the stock became a short-term speculative play."
Mr. Amburgey said his firm began selling BP stock in early May, about two weeks after the rig explosion, eliminating BP holdings some clients had owned for years. By that point, he said, it had started to become clear that questions about the incident were going to influence the price of the stock for a very long time. Although he personally suspects the market has overreacted, BP's legal and political jeopardy changed the risks and rewards of owning its shares for his buy-and-hold clients.
He likened the crisis to ones that have engulfed other seemingly impregnable companies recently, like Toyota Motor Corp., with its headline-making recall because of faulty brakes, and Goldman Sachs Group Inc., tarred by government charges over its business practices.
"This event served as a reminder of the benefits of diversification," he added.
BP's U.S.-listed shares rebounded sharply on Thursday after plunging nearly 16% on Wednesday as investors speculated that the company may suspend its dividend amid strong pressure from the Obama administration. BP is listed in the U.K. -- where it is extremely widely held by investors including large pension funds -- and in the U.S.
Some large brokerage firms have made moves too. Wells Fargo Advisors said it removed BP from its Diversified Stock Income Plan, a list of stocks with attractive yields and good prospects for hiking dividends that it provides to clients. Meanwhile, Wells's sector analyst also advised conservative investors to consider other, less volatile energy stocks, according to a spokeswoman.
UBS AG said it helped arrange a recent discussion between its clients and BP investor relations officials. UBS's United Kingdom research department, which covers BP, published its seventh update on the spill situation Monday. Although UBS still rates BP a buy, the note warned investors should be prepared for BP not to make its July dividend payment if U.S. political pressure intensifies.
For some, the BP debacle is a chance to make lemonade out of lemons. Bryan Wisda, a financial planner with offices in Scottsdale, Ariz., said he has several clients with big positions in BP, such as one accumulated by a longtime employee of Amoco, the U.S. oil company BP acquired in 1998.
While the BP positions never fit well with Mr. Wisda's passive-oriented investment philosophy, he had been afraid that selling the holdings would generate an unnecessary capital gain for tax purposes. Now Mr. Wisda has been laboriously searching through the clients' accounts for lots of stocks that were purchased at prices equivalent to BP's current one and therefore can be unloaded without a tax hit.
While he concedes BP could snap back, he doesn't think trying to make that risky call is in his clients' best interest.
"It's betting," he said. "Investing isn't really a bettor's game."
Learning to Love Hedge Funds
THE SATURDAY ESSAY
JUNE 12, 2010
Learning to Love Hedge Funds
![[Cover_Main]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_vfgj8CQFfIHaNB-COYh7ScOrEA_nEXCRJC__Me4TjyHCRyw4uBhAV_SUl4H7lfy6uKAIRrl3YDpL66lqCYZ_gmkQTGAPOzS78gGkW1VdZKwUQ3y4cQP6tZ0H3Q1a8yw5MZfjewL7EyiGfRSqbR6p0kSg=s0-d)
JT Morrow![[CovJump2]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_sZSsJxX-wc1stpiuzMoz8A7zpB7dDblJzm8W98ArA7SUjpnPR9g7W6QBTWnuf58spQnPd2YUAmEMqPmteH5csBprcMIZXYq-LC-IJHR95RwsgdzF6WrbY9foRSNiBdNq_9FGwTHY7JL4ACC3ysxmlW73M=s0-d)
Harvard University
![[Hedge_Soros]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_ssYjWO5qESm2H0Et7bHrb3quEAq7xOlpOzDQDLrP-PL9jL1gWzXGKgy6EpDAJG7ltR7ZQGFbIzRrpY2DptwOtMrzwgYKOIIL1PsBRkTQysx0GcgiKKtfwqV0st2wXZbZlrfycJ9yTiSYdm64YSJTbkN44=s0-d)
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JUNE 12, 2010
Learning to Love Hedge Funds
Hedge funds have been reviled as slick opportunists that fanned the flames of the collapse. Yet Sebastian Mallaby argues that they hold the key to a more stable financial system
By SEBASTIAN MALLABY
The first hedge-fund manager, Alfred Winslow Jones, did not go to business school. He did not possess a Ph.D. in quantitative finance. He did not spend his formative years at Morgan Stanley, Goldman Sachs or any other incubator for masters of the universe. Instead, he studied at the Marxist Workers School in Berlin, ran secret missions for a clandestine anti-Nazi group called the Leninist Organization and reported on the civil war in Spain, where he hitch-hiked to the front lines in the company of Dorothy Parker. It was only at the advanced age of 48 that Mr. Jones raked together $100,000 to launch a "hedged fund," setting himself up in 1949 in a shabby office on Broad Street. Almost by accident, Mr. Jones improvised an investment structure that will survive for years to come.
JT MorrowHedge funds account for a huge share of trading in financial markets, and have grown to a scale that would have astonished Mr. Jones, amassing roughly $2 trillion in assets. Success has come with notoriety: the Securities and Exchange Commission is suspicious of hedge funds' fast trading algorithms, which some blame for last month's "flash crash" in U.S. stocks. Reformers in Congress are threatening to bring hedge funds to heel by forcing them to register with the SEC and perhaps to hold more capital. Hedge-fund managers such as Raj Rajaratnam of the Galleon Group are being investigated for insider trading, and recently Art Samberg and his late firm, Pequot Capital Management, settled a complaint with the SEC, agreeing to a fine of $28 million. But although hedge funds are often blamed for excesses, Mr. Jones's investment structure holds the key to a more stable finance, to an extent that Washington's reformers fail to understand.
After the 1929 crash, investors had fled the market in droves, and the bustling brokerages had fallen quiet; it was said that you could walk the famous canyons near the stock exchange and hear only the rattle of backgammon dice through the open windows. The few obstinate souls who opted to work in money management joined firms such as Fidelity and Prudential, which behaved as conservatively as their names implied. But Mr. Jones was cut from different cloth and he reinvented capitalism on Wall Street.
Mr. Jones's hedge fund, like most later hedge funds, embraced four features. To begin with, there was a performance fee. Mr. Jones reserved 20% of the fund's investment gains for himself and his team, invoking the Phoenician sea captains who kept a fifth of the profits from successful voyages. Mr. Jones's portfolio managers hustled harder than rivals at traditional money-management firms: They called more people, crunched more numbers and made decisions faster. At the same time, the Jones men were deterred from taking crazy risks. They were required to keep their own capital in the fund, so that mistakes would cost them personally.
Mr. Jones's second distinguishing feature was a conscious avoidance of regulation. In his previous life as an anti-Nazi agent, Mr. Jones had kept a low profile. As a hedge-fund manager, likewise, Mr. Jones escaped the attention of regulators by never advertizing his fund; he raised capital by word of mouth, which sometimes meant a word between mouthfuls at his dinner table. Unhindered by the government, Mr. Jones expected no help from it either. The Jones men knew that if they mismanaged their risks, their fund would blow up—and nobody would save them.
Harvard UniversityAlfred Winslow Jones's 1919 Harvard yearbook
Thirdly, Mr. Jones embraced short selling. In the 1950s as now, speculating on the prospect of corporate failure was seen as almost un-American. But Mr. Jones described it as "a little known procedure that scares away users for no good reason." By being "short" some stocks, he hedged his "long" investment in others.
By insulating his fund from market swings, Mr. Jones cleared the way for his fourth distinctive practice, which was later to become the most controversial one. Because he had hedged out market risk, he felt free to embrace more stock-specific risk, and so he magnified, or "leveraged," his bets with borrowed money. Between 1949 and 1968, Mr. Jones's partnership earned a cumulative return of just under 5,000%.
Mr. Jones inspired a wave of imitators in the late 1960s, including the compulsive trader Michael Steinhardt, who opened a small operation in 1967, and the Hungarian philosopher-financier George Soros, who started his own Jones-style fund two years later. As the successor hedge funds grew, they ad-libbed their own variations on Mr. Jones's original model. Mr. Steinhardt started out as a long/short stock investor, but he found his niche as a gun-slinging market maker for outsized blocks of stock. He was a human version of today's fast-trading computerized hedge funds—those "flash traders" that excite the SEC's suspicion. Mr. Soros evolved too, triggering a decline in value of foreign currencies from Britain to Thailand by selling them short.
As hedge funds improvised new ways of getting rich, they didn't always need the tools that Mr. Jones had relied on. Julian Robertson's storied Tiger Fund, launched in 1980, began as a faithful imitator of Mr. Jones; but when Tiger negotiated the purchase of the Russian government's entire stock of nongold precious metals in 1998, leverage mattered less than the security around the train that was to bring the palladium from Siberia. Four years later, a swashbuckling West Coast fund named Farallon swooped into Indonesia and bought the controlling stake of the country's largest bank. The chief ingredient for this trade was neither hedging nor leverage but nerves—Indonesia had recently experienced a currency collapse and a political revolution.
Light regulation has allowed Mr. Jones's descendants to seize opportunities as they arise—when Farallon was not buying a bank in Indonesia, it was speculating on corporate mergers, distressed debt or a water project in Colorado. Equally, the freedom to go long and short has permitted hedge funds to express investment views with precision. Rather than simply buying a stock or a bond whose performance will reflect currency shifts, interest rates, trends in the broad market, and so on, a hedge fund can hedge out the risks on which it has no view, isolating the particular risk on which it has a real insight.
In the 1960s, the Jones men would show up at the office of the Securities and Exchange Commission to read key releases the moment they came out, stealing a march on sleepier rivals who waited for the information to arrive in the mail. In the 1980s, likewise, Julian Robertson maintained two giant Rolodexes; when compromised Wall Street salesmen pitched a buy recommendation his way, he would pump information out of his network to get the real story on the company. Once, when a Robertson lieutenant heard that a car maker's latest model was prone to break down, he bought two of the suspect vehicles and had them independently tested. When the mechanic confirmed there was an engine flaw, Tiger took a short position in the manufacturer.
Other hedge-fund innovations have been bracingly complicated. James Simons, who emerged as the industry's top earner in the past decade, built his fortune on mathematics, particularly the sort used in military cryptography. By discerning patterns in price movements that were invisible to others, his team constructed a black box that earns billions of dollars annually.
Getty ImagesGeorge Soros in 2001
Because they are largely free of regulatory impediments, and because their reward structure has attracted the best brains, hedge funds have continued in the Jones tradition of outperforming rivals. Whereas mutual-fund managers, as a group, do not beat the market, the best analysis suggests that hedge funds deliver value to their clients. In a series of papers, Roger Ibbotson of the Yale School of Management has examined the performance of 8,400 hedge funds between 1995 and 2009. After correcting for various biases in the data, and after subtracting hedge funds' large fees, Mr. Ibbotson and his co-authors conclude that the average fund generates positive "alpha"—that is, profits that could not be earned from exposure to a market index. In the United States, only rich individuals and institutions are allowed to reap the benefits of hedge funds. But in Europe and Asia, they are increasingly marketed to ordinary savers.
Of course, neither endowments nor individuals should put all their money in hedge funds; like any investment, they can blow up spectacularly. The most famous hedge-fund collapse came in 1998, when Long-Term Capital Management lost almost $6 billion. Eight years later, a Ferrari-driving 32-year-old trader at a fund called Amaranth lost $6 billion on disastrous gas bets; a year after that, several quantitative funds hit trouble all at once, setting off a panic known as the "quant quake."
But even these exceptions to hedge funds' generally good performance serve to underline one of their virtues. When Amaranth failed, another hedge fund named Citadel swooped in to buy the remains of its portfolio—one hedge fund had caught fire, but a second stabilized markets by acting as the fireman, and taxpayers did not have to cover any of the losses. Likewise, the quant quake of 2007 was over even before the public realized it had begun. The one partial exception was Long-Term Capital, whose failure was destabilizing enough to cause the New York Fed to broker a $3.6 billion rescue. But even in this case, public resources played no part in the bailout: The Fed convened Long-Term's bankers and told them to cough up the money to stabilize the fund.
The independent culture of hedge funds stood them in good stead during the recent mortgage bust. Spurred by the carrot of the performance fee, a then-obscure manager named John Paulson created a $2 million budget to buy the largest mortgage database in the country and hire extra analysts to figure out patterns in default rates. Meanwhile, because of the stick of having their own savings at risk, hedge funds that did not undertake similar research at least had the wit to avoid buying subprime paper. Lazier investors piled into collateralized debt obligations on the strength of their triple-A seal of approval. But most hedge funds were too careful to rely on the advice of ratings agencies.
In 2007, the year the mortgage bubble burst, hedge funds were up 10%—not bad for a crisis. Even more remarkably, the subgroup of hedge funds specializing in mortgages and other asset-backed securities was flat for the year—in other words, the hedge funds that might have been expected to get hit generally dodged the bullet. In 2008, admittedly, the turmoil following the collapse of Lehman Brothers hurt hedge funds' returns. But even then, they did better than their peers. They were down 18 % by the end of the year, a decline half as severe as that of the stock market.
The real humiliation of 2008 did not befall hedge funds. It befell banks, insurers, government-chartered housing lenders, and money market funds—and especially the mightiest of all Wall Street titans: investment banks. Until the financial crisis, the brain-power of these behemoths was presumed to be the force that made global markets work. If you were impertinent enough to ask how trillions of dollars of exotic trades could slosh across borders without risking a breakdown, the answer was that Lehman Brothers and its ilk had designed the instruments, modeled the risks, and had all bases covered.
Now that this answer has been exposed as a lie, the puzzle is how to erect a new scaffolding for global finance. The leading answer in Washington, expressed in the reform package emerging from Congress, is to regulate the investment banks and other traditional risk takers. This is a worthy project that must be attempted, but it would be naïve to expect too much from it. The crisis proved the fallibility of regulators from the Securities and Exchange Commission to the respected Financial Services Authority in London to the highly professional Federal Reserve. When multiple overseers fail in multiple places, one must accept that even smart reforms may not change the pattern decisively.
The crisis also demonstrated flaws in large financial firms. These start with the too-big-to-fail problem. Large banks cannot be allowed to go down; knowing that, their creditors lend without monitoring their risks; as a result, their risk-taking is undisciplined. At the same time, each trading desk within a large banking supermarket has strong reason to load up on risk. If its bets come good, huge bonuses will ensue. If they go bad, the losses will be spread across the whole institution.
Given the difficulties with financial reform, legislators should embrace a complementary approach: As well as struggling to tame financial behemoths, they should promote boutique risk takers. With only a few exceptions, hedge funds have the powerful virtue of being small enough to fail; indeed, some 5,000 went out of business in the course of the past decade, and none imposed losses on taxpayers. Mythology notwithstanding, the average hedge fund's leverage is more sober than that of banks and investment banks.
The question for policy-makers is what kind of financial institution will absorb risk most efficiently—and do so without a backstop from taxpayers. The answer awaits discovery in the story of A.W. Jones and his descendants. The future of finance lies in the history of hedge funds.
Sebastian Mallaby is the Paul A. Volcker Senior Fellow for International Economics at the Council on Foreign Relations, where he directs the Maurice R. Greenberg Center for Geoeconomic Sudies. This article is adapted from "More Money Than God: Hedge Funds and the Making of a New Elite," to be published by the Penguin Press next week.
We embrace ‘inclusive politics’, says Khairy
We embrace ‘inclusive politics’, says Khairy
UPDATED @ 10:45:05 PM 12-06-2010
By Asrul Hadi Abdullah Sani
June 12, 2010
KUALA LUMPUR, June 12 — Barisan Nasional Youth Chief Khairy Jamaluddin said today that the ruling coalition could no longer depend on racial politics.
He said that Barisan Nasional Youth understood the importance of inclusive politics.
“This rally is to show that we not only support inclusive politics but also that we no longer identify ourselves with Umno, MCA, MIC other component parties but with Barisan Nasional.
“There is no place for racial and narrow politics,” he said at a 1 Malaysia Rally here today.
BN Youth brought in the stars today as young people from across the country almost filled up the 15,OOO capacity Putra Indoor Stadium.
Earlier local artists Sasi The Don, Yise Loo, and Aizat Amdan entertained the crowd while popular TV personality, Sarimah Ibrahim, hosted the rally.
Khairy added that the recent Hulu Selangor by-election showed that young voters are returning to BN.
“Our win in Hulu Selangor has shown that young voters have returned to Barisan Nasional. We are all ready to face change to ensure that 1Malaysia becomes a reality and we pray to God that we will experience a huge win in the next general election,” he said.
In press conference held later, Khairy said that BN must change its approach and become more inclusive.
“In the past, BN youth we moved very much on our own and in those days we defined courage very differently. For Umno, you have to be an ultra-Malay champion and courage for MIC is defined as champion for Indian issues. It gradually become very extreme and community centric.
“For us, courage is different. Courage is about fighting for everybody. We have to face criticisms from within and extreme groups. They don’t understand because you have to fight for all Malaysians,” he said.
He added the importance of Prime Minister Datuk Seri Najib Razak’s message of 1 Malaysia to not be lost in translation.
“I think the time has come and we are willing to stick our necks out. I have spoken to all the component’s youth chief and said that if we are not there are the forefront then who is going to help the prime minister,” he said.
He also admitted Najib’s 1 Malaysia’s main obstacle is the racist elements within and outside the party.
“We must sure that the center is bigger than the fringe and the fringe are the extremist at the side. It is not going to be easy but we want to tell everybody that the sum is greater than its parts and that together we are stronger,” he said.
He also stressed the government to make its stand on the sports betting controversy.
“That is why we are waiting and I hope the government could provide an explanation as soon as possible because of conflicting reports from the government and the concerned company,” he said.
The Finance Ministry has recently denied in parliament that it has awarded a sports betting license to tycoon Tan Sri Vincent Tan’s Ascot Sports Sdn Bhd.
However, Berjaya Corporation confirmed that the Finance Minister has awarded the license to Ascot in its announcement to Bursa Malaysia in its acquisition of the betting group.
----
Walk the talk, Encik Khairy — The Malaysian Insider
June 12, 2010
JUNE 12 — It could be World Cup fever but Umno Youth leader Khairy Jamaluddin today declared at a 1 Malaysia youth rally that there is no place for “racial and narrow politics”.
It is of course commendable that Khairy, who is also Barisan Nasional (BN) Youth chief by virtue of his Umno post, feels that way.
The reality is otherwise.
BN Youth like its parent organisation is made up of many parties, especially the race-based ones from the Malay peninsula.
At least some like Gerakan, PPP and those from Sabah and Sarawak actually eschew race in the make-up of their membership.
But these non-racial parties are weak.
The thing is, Encik Khairy, organising a rally, giving a few soundbites doesn’t mean everything is okay. It isn’t.
Ask K. Vasanthakumar who was briefly held by police earlier today when he wanted to pass a memorandum to Prime Minister Datuk Seri Najib Razak about getting more government scholarships for high-achieving Indian students.
The ex-Hindraf leader and one-time ISA detainee felt he had no choice but approach the PM about the plight of Indian students.
And that is the reality of racial quotas in Malaysia.
See, Encik Khairy, the more skeptical among Malaysians will see your statement today as nothing more than that of an Umno youth chief trying to jump on the 1 Malaysia bandwagon and score some points with Najib.
And even the more charitable will be unwilling to accept that political parties which owe their existence to race politics have suddenly decided to be inclusive as you had said today.
“This rally is to show that we not only support inclusive politics but also that we no longer identify ourselves with Umno, MCA, MIC other component parties but with Barisan Nasional.
“There is no place for racial and narrow politics,” you said at the 1 Malaysia Rally.
Again, we applaud you for what you say. It is something the other parties have said over the years but BN has rejected saying its system is the best.
But it’s just rhetoric until Malaysians see that the reality of what you say is displayed by the BN through its socio-economic policies.
Encik Khairy, you have to walk the talk first.
Otherwise, we’ll just put it down to the idle chatter most people engage in between the FIFA World Cup 2010 games in South Africa.
UPDATED @ 10:45:05 PM 12-06-2010
By Asrul Hadi Abdullah Sani
June 12, 2010
KUALA LUMPUR, June 12 — Barisan Nasional Youth Chief Khairy Jamaluddin said today that the ruling coalition could no longer depend on racial politics.
He said that Barisan Nasional Youth understood the importance of inclusive politics.
“This rally is to show that we not only support inclusive politics but also that we no longer identify ourselves with Umno, MCA, MIC other component parties but with Barisan Nasional.
“There is no place for racial and narrow politics,” he said at a 1 Malaysia Rally here today.
BN Youth brought in the stars today as young people from across the country almost filled up the 15,OOO capacity Putra Indoor Stadium.
Earlier local artists Sasi The Don, Yise Loo, and Aizat Amdan entertained the crowd while popular TV personality, Sarimah Ibrahim, hosted the rally.
Khairy added that the recent Hulu Selangor by-election showed that young voters are returning to BN.
“Our win in Hulu Selangor has shown that young voters have returned to Barisan Nasional. We are all ready to face change to ensure that 1Malaysia becomes a reality and we pray to God that we will experience a huge win in the next general election,” he said.
In press conference held later, Khairy said that BN must change its approach and become more inclusive.
“In the past, BN youth we moved very much on our own and in those days we defined courage very differently. For Umno, you have to be an ultra-Malay champion and courage for MIC is defined as champion for Indian issues. It gradually become very extreme and community centric.
“For us, courage is different. Courage is about fighting for everybody. We have to face criticisms from within and extreme groups. They don’t understand because you have to fight for all Malaysians,” he said.
He added the importance of Prime Minister Datuk Seri Najib Razak’s message of 1 Malaysia to not be lost in translation.
“I think the time has come and we are willing to stick our necks out. I have spoken to all the component’s youth chief and said that if we are not there are the forefront then who is going to help the prime minister,” he said.
He also admitted Najib’s 1 Malaysia’s main obstacle is the racist elements within and outside the party.
“We must sure that the center is bigger than the fringe and the fringe are the extremist at the side. It is not going to be easy but we want to tell everybody that the sum is greater than its parts and that together we are stronger,” he said.
He also stressed the government to make its stand on the sports betting controversy.
“That is why we are waiting and I hope the government could provide an explanation as soon as possible because of conflicting reports from the government and the concerned company,” he said.
The Finance Ministry has recently denied in parliament that it has awarded a sports betting license to tycoon Tan Sri Vincent Tan’s Ascot Sports Sdn Bhd.
However, Berjaya Corporation confirmed that the Finance Minister has awarded the license to Ascot in its announcement to Bursa Malaysia in its acquisition of the betting group.
----
Walk the talk, Encik Khairy — The Malaysian Insider
June 12, 2010
JUNE 12 — It could be World Cup fever but Umno Youth leader Khairy Jamaluddin today declared at a 1 Malaysia youth rally that there is no place for “racial and narrow politics”.
It is of course commendable that Khairy, who is also Barisan Nasional (BN) Youth chief by virtue of his Umno post, feels that way.
The reality is otherwise.
BN Youth like its parent organisation is made up of many parties, especially the race-based ones from the Malay peninsula.
At least some like Gerakan, PPP and those from Sabah and Sarawak actually eschew race in the make-up of their membership.
But these non-racial parties are weak.
The thing is, Encik Khairy, organising a rally, giving a few soundbites doesn’t mean everything is okay. It isn’t.
Ask K. Vasanthakumar who was briefly held by police earlier today when he wanted to pass a memorandum to Prime Minister Datuk Seri Najib Razak about getting more government scholarships for high-achieving Indian students.
The ex-Hindraf leader and one-time ISA detainee felt he had no choice but approach the PM about the plight of Indian students.
And that is the reality of racial quotas in Malaysia.
See, Encik Khairy, the more skeptical among Malaysians will see your statement today as nothing more than that of an Umno youth chief trying to jump on the 1 Malaysia bandwagon and score some points with Najib.
And even the more charitable will be unwilling to accept that political parties which owe their existence to race politics have suddenly decided to be inclusive as you had said today.
“This rally is to show that we not only support inclusive politics but also that we no longer identify ourselves with Umno, MCA, MIC other component parties but with Barisan Nasional.
“There is no place for racial and narrow politics,” you said at the 1 Malaysia Rally.
Again, we applaud you for what you say. It is something the other parties have said over the years but BN has rejected saying its system is the best.
But it’s just rhetoric until Malaysians see that the reality of what you say is displayed by the BN through its socio-economic policies.
Encik Khairy, you have to walk the talk first.
Otherwise, we’ll just put it down to the idle chatter most people engage in between the FIFA World Cup 2010 games in South Africa.
Saturday 12 June 2010
Beautiful South Africa
South Africa is located on the southern tip of Africa.
South Africa has 9 provinces: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Mpumulanga, Limpopo, Northern Cape, North West, and Western Cape.
The current flag of South Africa was adopted on April 27th 1994.
* The capital of South Africa is Pretoria
* The president of South Africa is Jacob Zuma.
* The largest diamond in the world (named The Star of Africa) was found in South Africa.
* The national anthem of South Africa is a combined version of two evocative but quite different songs, Nkosi Sikelel’ iAfrika (God Bless Africa) and The Call of South Africa (Die Stem van Suid-Afrika).
* South Africa has eleven national languages.
* South Africa's population is ranked 26th from the top in the world!
* The population is 44,344,136. (2005)
Pictures denoted above:
South Africa has 9 provinces: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Mpumulanga, Limpopo, Northern Cape, North West, and Western Cape.
The current flag of South Africa was adopted on April 27th 1994.
* The capital of South Africa is Pretoria
* The president of South Africa is Jacob Zuma.
* The largest diamond in the world (named The Star of Africa) was found in South Africa.
* The national anthem of South Africa is a combined version of two evocative but quite different songs, Nkosi Sikelel’ iAfrika (God Bless Africa) and The Call of South Africa (Die Stem van Suid-Afrika).
* South Africa has eleven national languages.
* South Africa's population is ranked 26th from the top in the world!
* The population is 44,344,136. (2005)
Pictures denoted above:
- Table Mountain
- When it is cloudy, the layer of clouds over the mountain is known as it's "Table Cloth"
- The national flower of South Africa: The King Protea
- The national animal of South Africa is the Springbok
- The national bird of South Africa is the Blue Crane
- The national fish of South Africa is the Galjoen
- The national tree of South Africa is the Real Yellowwood
Is our society changing for the better?
An important plan was released in the form of the 10 MP yesterday. Yet browsing the news today in the Star, there is hardly any relevant news of note to read. There isn't any intelligent views reported. If there were views expressed, perhaps the reporting was rather inadequate or superficial.
How can Malaysians hope to improve their society and their quality of living when news that are central to their living are being suppressed or alternate opinions kept away from intelligent scrutiny? Is this the society our present PM hope to nurture? It takes a brave and great leader to initiate change in society for the better and for all. Has such a man or woman appeared in our political scene?
How can Malaysians hope to improve their society and their quality of living when news that are central to their living are being suppressed or alternate opinions kept away from intelligent scrutiny? Is this the society our present PM hope to nurture? It takes a brave and great leader to initiate change in society for the better and for all. Has such a man or woman appeared in our political scene?
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