Rejoicing the Rescue of the Chilean Miners

2010 Copiapó mining accident

Bravo and well done ........

	Miner	Age[68]	Rescue time (CLDT)[5][6]	Transit time
1.	Florencio Ávalos	31	13 October 00:10	0:51
2.	Mario Sepúlveda	40	13 October 01:10	1:00
3.	Juan Illanes	52	13 October 02:07	0:57
4.	Carlos Mamani	23	13 October 03:11	1:04
5.	Jimmy Sánchez	19	13 October 04:11	1:00
6.	Osmán Araya	30	13 October 05:35	1:24
7.	José Ojeda	46	13 October 06:22	0:47
8.	Claudio Yáñez	34	13 October 07:04	0:42
9.	Mario Gómez	64	13 October 08:00	0:56
10.	Alex Vega	31	13 October 08:53	0:53
11.	Jorge Galleguillos	56	13 October 09:31	0:38
12.	Edison Peña	34	13 October 10:13	0:42
13.	Carlos Barrios	27	13 October 10:55	0:42
14.	Víctor Zamora	33	13 October 11:32	0:37
15.	Víctor Segovia	48	13 October 12:08	0:36
16.	Daniel Herrera	27	13 October 12:50	0:42
17.	Omar Reygadas	56	13 October 13:39	0:49
18.	Esteban Rojas	44	13 October 14:49	1:10
19.	Pablo Rojas	45	13 October 15:28	0:39
20.	Darío Segovia	48	13 October 15:59	0:31
21.	Yonni Barrios	52	13 October 16:31	0:32
22.	Samuel Ávalos	43	13 October 17:04	0:33
23.	Carlos Bugueño	27	13 October 17:33	0:29
24.	José Henríquez	54	13 October 17:59	0:26
25.	Renán Ávalos	29	13 October 18:24	0:25
26.	Claudio Acuña	44	13 October 18:51	0:27
27.	Franklin Lobos	53	13 October 19:18	0:27
28.	Richard Villarroel	27	13 October 19:45	0:27
29.	Juan Carlos Aguilar	49	13 October 20:13	0:28
30.	Raúl Bustos	40	13 October 20:37	0:24
31.	Pedro Cortez	26	13 October 21:02	0:25
32.	Ariel Ticona Yáñes	29	13 October 21:30	0:26
33.	Luis Urzúa	54	13 October 21:55	0:27

	Rescue worker	Age	Descent time (CLDT)	Extraction time (CLDT)	Transit time
1.	Pedro Gomez[69]		13 October, after 14:05	13 October 22:30	0:31
2.	Roberto Ríos[69]		13 October 00:16	14 October 00:05	0:23
3.	Patricio Robledo[69]		13 October 01:18	13 October 23:42	0:25
4.	Jorge Bustamante[69]		13 October 10:22	13 October 23:17	0:24
5.	Patricio Sepúlveda[69]		13 October 12:14	13 October 22:53	0:23
6.	Manuel González[70]		12 October 23:18	14 October 00:32	0:27

Note: The recovery times for several of the rescuers do not necessarily match with the correct names although the names and times are correct.

http://en.wikipedia.org/wiki/2010_Copiap%C3%B3_mining_accident

The Top 5 Ways to Lose Money Investing

The Top 5 Ways to Lose Money Investing

By Dan Dzombak
October 11, 2010


It is heart-wrenching when you hear stories of investors losing their life savings for avoidable reasons. A recent story in Bloomberg BusinessWeek about Leona Miller, an 84-year-old retired beautician who invested in derivatives, got me thinking of ways people lose money in stocks and how to avoid them.

1. Investing in a product or business you don't understand

Leona Miller bought a structured note called a "reverse convertible note with a knock-in put option tied to Merck stock." Even I was unsure what this meant, and this is one of the more basic structured notes.

Leona collected a 9% coupon and the right to receive her initial capital back at maturity. However, if at any time Merck fell below a certain level (called the "knock-in" level), instead of giving Leona her money back, the bank could give her a predetermined number of shares of Merck. As long as Merck's stock didn't fall, Leona collected her 9%.

If Merck did fall, she would lose huge amounts of money. As you might expect, Merck's price fell below the "knock-in" price, and Leona was left holding stock worth 30% less than her initial investment. I am hard-pressed to believe any amateur investor could fully understand exactly what a "reverse convertible note with a knock-in put option" is. By investing in products you don't understand, you are setting yourself up for disaster.

Peter Lynch has said to invest in businesses and products you understand. Leona's broker wrote that she was familiar with Merck as they manufactured one of her medications. Baloney!

Many people own mortgages and are having trouble paying them off, but that doesn't mean they should go out and invest in Annaly Capital Management (NYSE: NLY) or Chimera Investments (NYSE: CIM), which are real-estate investment trusts (REITs) that specialize in buying up mortgage-backed securities and assessing the risk inherent in residential real estate.

If you don't have an understanding of how a business truly works, don't invest in it! There are many simple businesses out there that anyone can understand.

Two examples: Netflix (Nasdaq: NFLX) has warehouses with DVDs and mail them to people that pay a monthly fee. Waste Management (NYSE: WM) collects trash and recycling. It's that simple.

2. Speculating

If the price of a stock you own drops by 50% tomorrow, do you like the stock more? If not, you are speculating. For example, if Philip Morris (NYSE: PM) drops by half tomorrow, Godsend! It's a financially sound business, recurring revenues, and a strong brand. I would love to be able to buy shares at $25 compared to the $50 per share you can get them for today.

3. Ignoring incentives

If you give someone incentives they will game them, meaning: Do what is in their best interest.

Regular investors, you would never ask a used car salesman if you need another car, or a life insurance salesman if you need more life insurance, so why would you ask a stock broker for advice on stocks? They don't have a professional obligation to put your interests before theirs, what's known as a fiduciary responsibility. If you are looking for advice, seek out a reputable financial advisor and double check they aren't merely brokers under a different name. Make sure they put your interests first and aren't being paid extra based on what funds and products you choose.

Stock pickers, if management is paid and incentivized based on revenue goals or share price goals, management will game them. Be wary of investing in companies with perverse management incentives, and recognize how management will likely game their incentives. Invest in companies in which management owns a considerable stake and how your interests and managements interests are aligned. The best example is Berkshire Hathaway (NYSE: BRK-B), whose management of Warren Buffett and Charlie Munger own a combined 24% of the company's stock.

4. Ignoring valuation

Buying outrageously priced companies is setting yourself up for disaster. Investors' memories are very short; does anyone remember the tech stock crash? Baidu (Nasdaq: BIDU) is trading at 100 times earnings. If you want to earn 10% on your money annually, the company must grow its earnings 30% a year for 10 years! One misstep and Baidu will be crushed. Buying a stock hoping to sell it to the next sucker that comes along is a fool's game; buy undervalued companies.

5. Putting all your eggs in one basket

When I meet people who have 50% or more of their portfolio in their company's stock I shudder. While they may "know" their company will do well, if something goes wrong they can be walloped by losing their jobs at the same time their portfolios take a dive. Anyone who worked at Lehman, Enron, etc., can attest to this.

This list could be much longer, but five is good enough for now (No. 6 would be paying high fees). As Warren Buffett once said, "An investor needs to do very little right as long as he or she avoids big mistakes." Avoid these mistakes and prosper.



http://www.fool.com/investing/general/2010/10/11/the-top-5-ways-to-lose-money-investing.aspx

Behavioural Finance: Irrational Behaviour and Stock Market Investing

"You have great skill with your bow, but little control of your mind", said the master to his young archer.

This is also applicable in investing.  You can know everything about valuing companies, but it'll come to nothing if you can't apply it rationally when the heat is on.

Human behaviour is directed by a combination of evolutionary hardwiring and development programming, and you can see both in everything we do.

The trouble is that in stock market investing, a very recent phenomenon in human evolution, we haven't developed behaviours appropriate to it.

The usual range of other behaviour responses that we picked up in our early life are often completely inappropriate.

The greatest enemy in investing is actually yourself.  Beware of your irrational and yet human behaviour jeorpadising your investing.

Warren Buffett fund illustrates 'rip off' management charges

Warren Buffett fund illustrates 'rip off' management charges


By Ian Cowie Your Money
Last updated: September 29th, 2010

If you think the row about fund management charges is a tedious technicality then prepare for a rude awakening. Terry Smith is the latest outspoken multi-millionaire to lob a hand grenade into this debate which will shake the City to its foundations and could bring several institutions crashing down.

He claims investors are left with less than a tenth of the total returns some fund managers receive – and uses Warren Buffett’s famous Berkshire Hathaway fund to illustrate the impact charges can have on long-term returns. Mr Smith says he is “not so much shocked as flabbergasted by the number of people who do not realise the impact of these performance fee structures”.

Taking typical hedge fund fees as an example – but widening his attack to performance fees charged by rising numbers of unit trusts and open-ended investment companies (OEICs) – Mr Smith said: “”As you are aware, Warren Buffett has produced a stellar investment performance over the past 45 years, compounding returns at 20.46 per cent per annum. If you had invested $1,000 in the shares of Berkshire Hathaway when Buffett began running it in 1965, by the end of 2009 your investment would have been worth $4.8m.

“However, if instead of running Berkshire Hathaway as a company in which he co-invests with you, Buffett had set it up as a hedge fund and charged 2 per cent of the value of the funds as an annual fee plus 20 per cent of any gains, of that $4.8m, $4.4m would belong to him as manager and only $400,000 would belong to you, the investor. And this is the result you would get if your hedge fund manager had equalled Warren Buffett’s performance. Believe me, he or she won’t.

“Two and twenty does not work. That does not mean that 1.5 per cent and 15 per cent is OK, or even 1 per cent and 10 per cent. Performance fees do not work. They extract too much of the return and encourage risky behaviour.”

Mr Smith, who was rated the best banking analyst in Britain for five consecutive years in the 1980s before going on to become chief executive of brokers Collins Stewart since 1996 is the latest City gamekeeper to turn poacher by blowing the whistle on established practice in the Square Mile. Like Alan Miller, a former senior fund manager at New Star, Mr Smith plans to launch his own fund management company, offering lower costs and higher returns to investors.

Whether either or both can pull off that double remains to be seen. But, here and now, there is growing resentment among investors about high charges and low returns. Earlier this year, The Daily Telegraph revealed how fund managers pocket more than £7bn a year from charges despite a decade of falling share prices. Mr Miller, a founder of Spencer Churchill Miller Private said: “The time is right for exposure of various elements of the industry.

“It is riddled with blatant self-interest and conflicts of interest that would never be tolerated elsewhere. Investors have become victims as the charges they have to pay have risen and risen while the returns they get have been consistently below par and the actual cost of managing their money has continued to fall.”

Data from Morningstar, a research company, shows the average investment fund has an annual charge of 1.25 per cent. But lesser known administrative fees amount to 0.45 per cent. And trading costs total another 1.35 per cent, according to the Financial Services Authority and Financial Express. When this 1.8 per cent is deducted from the total £406 billion invested, that amounts to £7.3bn being “skimmed off” each year.

Some fund managers have consistently delivered investor returns that more than justified their charges; Neil Woodford at Invesco, Evy Hambro at BlackRock, Robin Geffen at Neptune, Tom Dobell at M&G, Ian Henderson at JP Morgan and Job Curtis at Henderson are six that spring to mind. But many others have failed to do so and while investment returns remain low, interest in charges is likely to increase.

Few investors cared if annual management fees were 1 per cent or 2 per cent back in the 1990s when total returns often ran into double digits. Now they are glad to be grossing 6 per cent or 7 per cent, many more investors are much keener to keep costs to a minimum. Regulatory changes that take effect in 2012 will force further disclosure of costs and accelerate this trend. However much their former colleagues may hate them, Messrs Miller and Smith know which way the wind is blowing and are, as usual, ahead of the game.



http://blogs.telegraph.co.uk/finance/ianmcowie/100007842/warren-buffett-fund-illustrates-rip-off-management-charges/

Act in investors' interests

John Collett

September 22, 2010

Financial advice reforms under new minister Bill Shorten will benefit consumers.  
Photo: Glen McCurtayne

The new minority government may not last three years but if it can last at least two, there's a good chance the key reforms to financial advice will become law. The new minister responsible for financial services and superannuation, Bill Shorten, was a union official and trustee of an industry super fund. He should need only a short time to get across his portfolio responsibilities. That's good, because there's much to be implemented from the raft of reforms the previous government proposed in an effort to protect investors seeking financial advice.

The two big reforms - a ban on commissions and other kickbacks and putting planners under a legal obligation to act in their clients' best interest - are badly needed to enhance consumer protection. The reforms will be too late for those hundreds of thousands of retirees who have lost billions of dollars over the past decade with the collapse of Westpoint, Storm Financial, Fincorp, Basis Capital, Great Southern, Timbercorp, Australian Capital Reserve, Opes Prime and dozens of others.

These schemes invested in all sorts of things but the payment of generous commissions to advisers and accountants was a common thread running through them.

Ask yourself this: if it's such a good investment scheme, why would it be offering commissions to incentivise advisers and accountants to sell those products?

Placing planners under a legal obligation to put their clients' interests first should also strengthen the hand of the regulator, the Australian Securities and Investments Commission, in policing its beat, which it has not done effectively.

Just about all of the financial services industry, except industry funds, was hoping for a Coalition victory, as the Coalition was against most of the reforms and noncommittal on others. The Greens will hold the balance of power in the Senate from July next year, and will probably support the reforms.

The planning industry needs to get on with moving its businesses away from commissions and to a fee-based model. The collapse last week of yet another forestry scheme, the Melbourne-based Willmott Forests, has renewed criticism of planners and tax accountants who received commissions for recommending it to clients. These schemes were mostly tax rorts for high-income earners, with the investment merits less clear.

Salespeople should be working in sales, not financial planning. The minority Labor government has a plan that will help ensure sales are removed from the advice process. It is a plan that has taken about two years to formulate. At some point there has to be an end to consultation with the financial services industry and adoption of the reforms.

Shorten is ambitious and will probably be keen to push through reforms. It is always a balancing act between competing interests but for too long the interests of the powerful financial services lobby have been put before the interests of consumers.

http://www.smh.com.au/money/investing/act-in-investors-interests-20100922-15m3v.html

Dive back into the market

By Michael Laurence from smartcompany.com.au

It's not too late! That's the key message for cashed-up investors who feel like a deer caught in the headlights and cannot make up their minds whether to re-enter the sharemarket.

On the surface, this may seem a tough call given the S&P/ASX200 has risen more than 60% from its bear market low almost exactly 12 months ago to reach its highest point for 18 months.

And yesterday, the market burst through the 5,000-point barrier – a key psychological marker in its extraordinary comeback.

The bottom-line is that investors have powerful reasons to believe the market will keep rising for some years, and they shouldn't overly focus on returns forfeited to date if they were out of the market.

As Prasad Patkar, portfolio manager for Platypus Asset Management, realistically says: "The quick bucks have been made". No longer are "companies priced to fail which we knew weren't going to fail."

But Patkar believes there is a solid case for cashed-up investors to re-enter the market now – provided they are investing for the long-term and not chasing quick, easy money.

The strongest corporate reporting season for years and expectations for rising profits on the back of improving local and global economies suggest to many market professionals that shares are in the early stages of an extended bull market. Further, companies are enjoying the rewards of sharp cost-cutting during the GFC.

David Cassidy, chief equity strategist for UBS, has a simple message for cashed-up investors who are thinking about re-entering the market: "Equities are still moderately undervalued. Valuations still look quite reasonable – particularly on forward earnings."

Cassidy expects the market to reach 5,500 by the end of the 2010 calendar year. And he believes that inevitable market dips in this volatile market will produce good buying opportunities for investors who are ready to jump.

Shane Oliver, head of investment strategy and chief economist for AMP Capital Investors, says to cashed-up investors who can't make up their minds whether to now re-enter the market: "My view is that the market is still heading higher [but] with more moderate gains." His year-end target for the S&P/ASX200 is 5,600.

"If history is any guide, there is much more upside to come and we are nowhere near the peaks," Oliver adds. He points out that the average cyclical bull market in Australian shares lasts four years and produces gains of 132%. "But so far we have only seen a portion of that."

While Oliver says shares are no longer trading at "dirt cheap" prices, they are not expensive. Their price/earnings multiples (P/E) are still below their long-term average of 14 times. And he expects that corporate earnings will rise by 20% over the next 12 months.

Oliver says AMP Capital Investor's figures for its investors show that there are "lots and lots" of people who moved into cash during the bear market and are still in cash today.

Prasad Patkar's "gut feeling" is that the market will be higher in 12 months time. But over the next two months, he expects the market to move between 4,500 and 5,000 until the world economic outlook becomes clear.

Ideally, the best time to buy would have been 13 months ago before the market sprung back into life. But investors rarely manage to correctly time the market – picking the best time to buy or sell – and attempting to do so usually results in losing money.

Perhaps keep in the back of your mind for the next market downturn that you will pay a high price for missing the sharpest rebound in share prices which usually occurs in first year of a market's recovery.

Here are five tips for moving cash back into the market:

1. Drip-feed your purchases: Don't put all of your cash back into the market at one time – invest progressively in equal proportions every month or quarter, over perhaps 12 months. This will reduce the possibility of investing shortly before an abrupt fall in prices. And you will average-out your buying costs.

2. Buy in market dips: This volatile market will inevitably produce dips in prices. Cassidy and Oliver say this is a time to buy.

Oliver suggests that a strategy is for investors who are drip-feeding their way back into the market – as discussed in strategy one – is to progressively buy more stock during market dips.

3. Keep gearing at cautious levels: Reserve Bank statistics show the outstanding debt on margin share loans is on the rise again – after falling from a record high to a long-time low in the GFC fallout.

A particular danger now is getting carried away with market optimism and taking excessive debt, which caught out numerous investors during the bear market.

4. Consider mixing an index fund and direct-share strategy: Among the biggest beneficiaries of the market rebound to date, have been investors in low-cost, market-tracking index funds.

But with the highest gains from this recovery surely behind us, more investors may decide to use the strategy of investing in both index funds to replicate a chosen market and carefully-selected direct shares and/or actively-managed share funds.

In Patkar's view, this a stockpicker's market after the extraordinary gains with particular opportunities for investors who are highly selective. (Platypus Asset Management is an active funds manager.)

One of the risks with stockpicking of course is selecting duds yourself – or not having a professional adviser or fund which succeeds in its stockpicking.

Cashed-up investors wanting to re-enter this market could consider using an index fund as the core of their share portfolios and direct shares/and or actively-managed funds as "satellites". The performance of your widely-diversified core portfolio should mirror the market.

This core/satellite approach is a safer way of re-entering the market than relying on a small number of selected shares. This would be particularly the case for inexperienced investors who are uncertain about where to invest.

Many more investors are turning to low-cost exchange traded funds (ETFs) that track a chosen market such as the S&P/ASX300 as the core of their portfolios. ASX figures show the market capitalisation of exchange traded funds listed on the local market rose by 150% in the 12 months to March 31.

5. Look to potentially winning sectors for direct-share component of your portfolio: Market professionals believe that certain sharemarket sectors will standout at this stage of the recovery. Here are a few suggestions of Cassidy, Patkar and Oliver.

Oliver: "We are very positive in resources given the China growth story." He expects resource company earnings to rapidly increase. And he also points to the consumer discretionary sector such as electronic retailers (which should benefit from increasing employment and household wealth); airlines (with the stronger Australian dollar keeping fuel prices down and rising passenger numbers); and telcos (given share prices have fallen so much).

Cassidy: Sectors that he is "comfortable" with include mining, mining services, banking and media.

Patkar: "Health care is an outstanding source of out-performance, depending on the dollar." He specifically includes Sonic Healthcare, Cochlear and ResMed. Patkar also points to consumer discretionary (naming JB HiFi and David Jones, praising their business models); and banks ("powered through crisis" and should reverse bad-debt position over next 18 months or so).

http://money.ninemsn.com.au/article.aspx?id=1043390

Share clubs: learning together

By Gillian Bullock, ninemsn Money

The lessons learnt from a share market correction can prove invaluable for the many investment clubs around Australia. Those that can ride market volatility are the survivors.

But that's the point — share clubs are in the main all about learning … and there's a lot to learn from market downturns.

As Kerrie Brown of LIPS (Ladies Investment Portfolio Syndicate), which has been running for 11 years, says, "An investment club is for learning, not for making huge amounts of money."

But of course you can make money. Indeed, Brown says her club has enjoyed an annualised return of 14 percent [prior to this year's market correction] and that was "despite making some doozie mistakes".

Another long-running investment club is Sheba Investment Network. Frances Beck says her club has posted returns of up to 30 to 35 percent a year following a range of basic investment techniques, including willingness to sell when the investment reaches a predetermined amount and reinvesting all profits and dividends.

Beck and three of her fellow club members have just launched their book The Money Club, which provides information on establishing and running a club.

A key to success is for members of the club to have common goals. According to the Australian Stock Exchange, clubs that fail within 18 months are those that have disagreement among members on an investment strategy.

That's not to say a strategy cannot evolve over time. For instance, Beck says, "Our strategy has changed over the years, with a consolidation of our investment portfolio to fewer, larger stocks. We have sold out of our non-performing shares and now concentrate on stocks which deliver earnings and dividends." The club's portfolio includes AMP, Argo, BHP, Rio, Alesco and Bank of Queensland.

Similarly, LIPS changed its strategy over the years and now no longer invests in speculative stocks. "Our best purchase was the small Queensland company Campbell Bros that we bought at $4 to $5 and it's now trading around $29," says Brown. Most investment clubs have a partnership structure. You cannot have more than 20 partners otherwise the club would be classified as a managed investment scheme and you would need to issue a prospectus. And all members need to be actively involved in the club otherwise the non-active partners may be deemed to be receiving advice from the active partners who would then need an advisory licence to operate.

According to Beck, the best number of members is fewer than 12. Sheba Investment Network at one stage had 15 members but that proved unwieldy. The club now has six members.

LIPS, meanwhile has eight members, five original while the other three joined a long time ago.

Half the point of an investment club is the social aspect, but you should still pay meticulous attention to taking minutes at every meeting so that there are no arguments down the track about which shares you buy and how much you pay for them. And you need to keep records for tax purposes. Most clubs meet monthly — any less frequently and you could miss buying opportunities.

Success lies in buying at the right time. Brown says she and her partners were "rubbing our hands together when the market recently dropped as we hadn't been buying for a while".

Most clubs require a contribution of $50 or $100 a month.

Before you set up a club, get advice. The Australian Stock Exchange (http://www.asx.com.au/investor/education/investment_clubs/) has some good guidelines but you can also check out The Money Club website (www.themoneyclub.com.au).

Given you are buying and selling shares, you need to register your club, acquire a tax file number, open a bank account and file an annual tax return. But with the legalities out of the way, a share investment club can be a lot of fun.

http://money.ninemsn.com.au/article.aspx?id=304466

Applying to US colleges

Star Education Fair
Sunday October 10, 2010

Applying to US colleges

By TAN SHIOW CHIN
educate@thestar.com.my

The application process to American universities requires much research, preparation and hard work.

IT IS not an easy process to apply to a university in the United States.

For one thing, there is no centralised admissions agency like our UPU (Universities Admission Unit) or the United Kingdom’s UCAS (Universities and Colleges Admissions Service).
JOHN: Do a self-assessment and identify your passions and goals.

For another, applicants have to take specific tests like the SAT (Scholastic Aptitude Test), TOEFL (Test of English as a Foreign Language) and GRE (Graduate Record Examination), on their own as part of the entry requirements for undergraduate and postgraduate degrees.

Each US university — or college, as they are called there — also has its own application fee, and requires essays on certain topics as part of the admissions process.

While the Malaysian-American Commission on Educational Exchange (Macee) in Kuala Lumpur does offer educational counselling services to those intending to apply for US universities, much of the process relies on the applicant’s own initiative, research and organisational skills.

In a recent workshop called “Navigating Your Way through the University Selection Process” at the commission, Macee Educational Advising Centre coordinator Doreen John advised applicants to determine their priorities.

“Who are you? What do you want to study? Do a self-assessment and identify your passions and goals.

“Think about your personality. Are you a reserved person? Which, for example, might make it difficult for you to connect with people on a large campus. Or are you an extrovert, who mixes around easily?” she asked the audience.

John pointed out that one big advantage of the US tertiary system is that students have to take subjects unrelated to their major across different faculties.

“If you’re not sure what you want to do, it’s okay, because you have to take courses from different departments, as well as your own department.

“So you have the opportunity to explore what you want to major in.”

She added that the system enables students to obtain a more well-rounded education.

Factors like accreditation, recognition by professional bodies, location, climate, cost of living and competitiveness also need to be considered by students when selecting the colleges to apply to.

In terms of ranking and competitiveness, John advised: “You may get into MIT (Massachusetts Institute of Technology) or Stanford (University), but will you do well there?

“Think about yourself — you want to have a good education, but not a nervous breakdown!”

She shared that the type of college life one has will vary depending on campus size, from the close-knit communities of about 700-1,000 students to the large campuses of around 55,000 people.

After taking all these factors into consideration, students should have a shortlist of about five to 10 institutions to apply to.

In a later workshop called “Rock-Hard Apps: Building Solid Applications to US Universities”, John said that there were three important sections in the application package.

They are: the application form, which is usually submitted online through the university website; hard copy documents, including educational transcripts and recommendation letters; and test scores like the SAT and TOEFL that are sent straight to the various institutions by the agencies that conduct them.

“Take note of the deadlines, that’s very important!” she reminded the audience, adding that there are different deadlines for different parts of the package.

She was joined at the workshop by American expatriate Jay Getz, whose younger son recently applied for US universities, as well as international admissions officers from Bryant University, Rhode Island, and Messiah College, Pennsylvania, who were in town for an education fair.

Getz ran through the application procedures using the Common Application form, which is used by 414 universities in the US for undergraduate admissions.

He said that although the thousands of other institutions in the US have their own individual application forms and processes, most would have similar requirements to the Common Application.

This includes information about the applicant’s personal and family details, academics, extra-curricular activities, as well as essays by the applicant.

“Two questions that often come up in the application are: what can you contribute to the university as an individual, and what can this university do for you?” said Getz.

John F. Eriksen from Bryant University also advised the audience: “The essays are the time to talk about something other than the numbers (test scores and academic results).

“Show your passion, or that you are trying to find one.

“Even if you have a diverse group of interests and are not an expert in any, it can show that you like to take risks and try new things.

“Your application is not the time to be humble. We want to see that you are involved and participate in the community around you.”

He added that the essays are also judged for the applicant’s writing skills.

Cindy Blount from Messiah College added that the essays really have to be well-written.

“Not only should you spell check it, you should have at least three people read through it for content, grammar and spelling — preferably, people who know you well and can tell if the essay reflects you as a person.”

She added that common mistakes include writing the wrong college name and writing something that is not consistent with the rest of the application.

She also reminded students that they need to send a hard copy of their documents to the institutions they are applying to, even if they have already emailed in soft copies of the documents.

“And send them via FedEx or DHL or any courier service that can track your package. Local mail may not always be the most reliable (method),” she said.

Getz also advised applicants to have an application matrix where they can list down important information related to their applications.

“You can make up your own, using Microsoft Excel or any spreadsheet programme.

“This is to help you keep track of all the things you need to do in the applications process.”

Among information that should be included in the matrix are the various deadlines for the application package, the items that need to be submitted for the application, and a contact in the admissions office to follow up on the application.

As he said early in his presentation: “Luck is opportunity and preparation.”


http://thestar.com.my/education/story.asp?file=/2010/10/10/education/7136299&sec=education

Australia's 10 best businesses

Greg Hoffman

October 5, 2010 - 2:59PM

Computershare is one of the five businesses to make it onto The Intelligent Investor's 10 Best Businesses list two years running. It's produced impressive figures; 40 per cent annual dividend growth over the past decade, a return on capital in the mid-teens and a return on incremental capital (the additional capital that's been put in over the past decade) of more than 20 per cent.

So why has the company's share price lagged the All Ordinaries index over the past 10 years?
In a word, ``expectations''. A decade ago, after a staggering 36-fold increase over the prior five years, investors were paying a price-to-earnings ratio (PER) of more than 100 for Computershare.

A PER much above 20 requires decent profit growth in order to justify it; at over 100 it had become extremely stretched. That fact that investors who paid those tech boom prices have been able to achieve positive returns at all is remarkable enough.

Finest businesses

In what's now an annual, post-reporting season ritual, our team has recently crunched the numbers and arrived at a list of the finest businesses listed on the Australian sharemarket.

It's a subjective exercise, of course, but the process we think is quite robust. Starting with all of the stocks in the ASX 200 index, we passed them through analytical filters such as

• 5- and 10-year dividend growth, 
• 10-year average return on capital employed and 
• return on incremental capital employed.

Share price performance is not one of the measures: if a business performs well on the measures we've selected, its share price is bound to take care of itself.

Computershare is perhaps the exception that proves this rule. It's the only one of the 10 businesses to make our final list whose total shareholder returns have failed to beat the market over the past decade. As renowned investor Ben Graham put it, in the short run the market is a voting machine, in the long run it's a weighing machine.

Competitive advantage

In analysing the final list of Australia's 10 Best Businesses, a number of themes emerged. The most important is that the key to great long-term investment returns is some form of sustainable competitive advantage.

This might be in the form of a strong brand like David Jones, a powerful distribution network of the likes of Woolworths and Metcash, or patented technology from a company like Cochlear. Yes, all these stocks made it onto the list of Australia's 10 best businesses.

Sometimes a competitive advantage can be built by reliably delivering results to clients over a long period, as is the case with Leighton and Monadelphous. But this is potentially a weaker type of advantage and one that could be lost more readily than other kinds.

Also, over a short period (say one to three years), it's difficult to distinguish between profits that are the result of a strong competitive advantage and profits that are the result of a powerful industry upswing.
Another point to consider is that a strong competitive advantage often doesn't last. Recently, shareholders of Tattersalls and Tabcorp have learned this the hard way. Exclusive government licences provide a strong advantage but they have a finite life and most of the `excess value' they generate will probably be competed away in the new licence bidding process.

Each year we find it useful to survey the investing landscape from this long-term, numbers-driven perspective. And, if you're keen to work through such calculations yourself, I'm currently recording a `how to' online video series, using Telstra as a case study. The first two videos are available now, and I'll be posting the others later in the week.

This article contains general investment advice only (under AFSL 282288).

Greg Hoffman is research director of The Intelligent Investor. BusinessDay

 http://www.brisbanetimes.com.au/business/australias-10-best-businesses-20101005-165i0.html

Warren Buffett says in future Wall Street chiefs should go broke - and their wives

Warren Buffett, the billionaire investor, has hit out at pay practices on Wall Street, attacking the lack of reform despite two years passing since the financial crisis struck.

By Richard Blackden, US Business Editor
Published: 8:59PM BST 05 Oct 2010

The 80-year old billionaire said: 'Wall Street does a lot of good things and then it has this casino.'

 

"People have a propensity to gamble, and it gets made easier and easier for them," Mr Buffett told a conference in Washington DC yesterday. "One of the problems we still have is we have unbalanced incentives for managers of huge financial institutions." 
 

In future, chief executives of banks who need government assistance should "go broke", said Mr Buffett. Their wives "should go broke, too", he added.

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The prospect of another round of bank bonuses is likely to inflame public opinion in the US, where the broader economic recovery is flagging.

Banks have been forced to split off some of their riskier trading activities because of the Dodd-Frank law - the financial reform act signed into law in the summer - but critics say it does little to remove the incentives to pursue short-term profits. 

Mr Buffett's company, Berkshire Hathaway, is a major investor in American banks, with a stake in Goldman Sachs and Wells Fargo.

The 80-year old billionaire, who runs the company out of Omaha, Nebraska, with his long-term colleague Charlie Munger, said "Wall Street does a lot of good things and then it has this casino. It's like a church that's running raffles on the weekend." 

As in Britain, banks are keen to counter an impression that they are failing to do enough for the recovery. Goldman Sachs, for example, last week began an advertising campaign designed to show its role in helping create jobs.

Despite the difference in the fortunes of those on Wall Street and many Americans in other industries, analysts have said that banks may decide to cut jobs in coming months as trading revenues decline. Meredith Whitney, for example, has forecast that up to 80,000 finance jobs could go over the next 18 months.

Mr Buffett also told Fortune magazine's Most Powerful Women conference that investors are "making a mistake" if they chase a rally in bonds. The price of US two-year government bonds has raced to a record high this week as investors see little to spark a more robust recovery. 

"It's quite clear that stocks are cheaper than bonds," Mr Buffett said. "I can't imagine anyone having bonds in their portfolio when they can own equities." 

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8044789/Warren-Buffett-says-in-future-Wall-Street-chiefs-should-go-broke-and-their-wives.html

KLCI highest Dividend Yielding Stocks

FTSE Bursa Malaysia KLCI 30 (Malaysia) highest dividend yielding stocks top 30

Making money in a downturn

By Allison Tait, ninemsn Money
February, 2009

By now we’re all aware that the financial world has gone pear-shaped. Words such as recession, unemployment, and credit crunch being thrown about with monotonous regularity. It seems that money news these days is all bad.

But what if it’s not? What if it’s actually possible to profit from the world’s economic woes? A fairytale? Perhaps. But with a little nous (and a bit of luck) it could be that the global financial crisis could deliver you a happy ending.

First up, however, the disclaimer. Most of the people who do well in unsteady financial times know what they’re doing. “There’s no substitute for doing the hard work and research,” says Matthew Walker of Sydney’s WLM Financial Services. “You don’t get anything for free. Share trading, for instance, is not as easy as it looks – you can fudge a bit in good times because everything’s going up anyway, but it’s much more difficult to get it right when things aren’t so good.”

To market, to market

When all news of the Dow Jones is about its downward motion, and some of Australia’s staunchest shares have taken a dive (Westfield anyone?) it’s hard to see where the money is. US shares guru Warren Buffet is all about buying smart and buying low – he’s also about looking forward to falling share prices because it simply means you can buy more of a good thing. The trick is to pick the good thing.

“The price of a share is not where the bargain is,” says Walker. After all, you can pick up shares at any time worth 6 or 7 cents each. What you need to look at is how expensive a share is relative to its performance criteria. Walker explains: “You need to look at the Price-Earnings Multiple (or Ratio) – the higher that is, the more expensive a share is deemed to be because it takes longer to earn back its purchase price.”

O-kay. The P/E Ratio is defined as the valuation ratio of a company’s current share price compared to its per share earnings. It’s calculated by dividing the share’s market value by its earnings. So if a company is currently trading at $40 a share and earnings over the past 12 months were $2 a share, then the P/E Ratio for the stock would be 20. If you’re looking at a company, you can compare its P/E Ratio to other companies in the same industry to help you work out how much of a ‘bargain’ it is.

But it’s not the only indicator.

“Today, you have to look at how robust the company’s balance sheet is – debt levels, quality of management, do they have cash flow, sales of product (what’s the market doing),” says Walker. “Consumer discretionary stocks, for instance, are being hit today because nobody’s buying anything, but the big picture is that long term they’ll pick up again.”

Other areas he suggests might be worth a look are Gold (buy shares in companies that mine gold if you don’t want to stock up on the yellow stuff itself) and bond funds – particularly if you think interest rates will fall further. “If you really want to be competitive and you don’t have the time or resources or depth of understanding to do it yourself, go through a managed fund,” he recommends.

Bricks and mortar

Of course, when the sharemarket is uncertain, investors look for other areas for their money. While real estate hasn’t exactly been what you’d call booming of late, John McGrath, CEO of McGrath Estate Agents, is enthusiastic about buying now.

“I think the next 6-9 months are a great time to buy,” he says. “Prices in most parts of Australia are 10-20 per cent down on their peak, interest rates are down – and likely to fall another 1.5-2 per cent, the First Home Buyers grant has gone up, and rents have gone up considerably – we’ll probably see more growth, not as strong but still there this year.”

When he puts it like that, why wouldn’t you? “Astute investors buy when there’s some level of fear around,” says McGrath. “They take the opportunity to act when others aren’t. We’ve been in a down cycle for 18 months to 2 years, and they usually last around three years. So it’s perfect.”

Which is not to say you can buy just anything. McGrath has the following tips:

* “Focus on capital growth more than rental return. Rental yield is important in that it helps you to buy the asset, but the real money in property is made when you can pick at area that outpaces the market in terms of capital growth.”
* “Houses generally outperform units in terms of capital growth. So if you can afford to buy a house with a garden you’re likely to get a better return.”
* “Older style apartments or apartments that are not brand new often have better capital growth than brand new. There’s often a premium attached to buying new, in much the same way as a brand new car loses value the minute you leave the showroom.”
* “Location, location, location. Where you buy is more important than anything else. Buy a prime location and it will always be a prime location. You can improve a property down the track, but never the location.”
* “With the internet, there is no excuse not to research areas and values in those areas. Treat it like a second job. If you get your buying decision right, you’ll make more from your investment than your fulltime job.”
* Don’t buy outside an area with which you’re familiar – if I’m in Sydney I wouldn’t be buying in Brisbane, for example. Stick to an area you can research and know well

A big question of when

One thing that both McGrath and Walker reiterate is this: don’t try to pick the bottom of the market. Sitting around when things are bad and waiting for them to get worse is not the way to find a bargain.

“Don’t try,” says McGrath. “The bottom of the market will be somewhere between last September and this September. I’m not convinced we haven’t seen it already. But the bottom is something you only see in hindsight. I’ve been in the market 25 years and you can never pick the top and you can never pick the bottom.”

Matthew Walker adds: “I like the quote by Jane Bryan Quinn: ‘The market timer’s Hall of Fame is an empty room’.”


http://money.ninemsn.com.au/article.aspx?id=736768

Malaysian Fashion stocks look attractive

Fashion stocks look attractive

Written by Sam Koh

Monday, 11 October 2010 14:57

KUALA LUMPUR: Not so long ago, Malaysian fashion brands were largely unknown. Those that were known, with the exception of international fashion labels such as Jimmy Choo and Zang Toi, were often scorned as backward and out-dated. But views have noticeably improved over the past few years with the rise of homegrown fashion houses like Padini Holdings Bhd, Bonia Corp Bhd and Voir Holdings Bhd. These companies have successfully created an entire range of household brand names for ladies’ wear, men’s wear, kids’ apparel, sportswear as well as accessories and home furnishings. Flagship brands for Padini include Vincci, Padini, SEED and Padini Authentics while Voir’s stable of 14 in-house brands includes VOIR, SODA and Applemints. Bonia has its namesake brand as well as Carlo Rino and Sembonia. The company is also a distributor and dealer for brands like Santa Barbara Polo & Racquet Club, Carven and Jeep. Riding high on nation’s growth A key factor for these success stories is Malaysia’s strong economic growth. The gradual shift from an agriculture- to manufacturing- and now, services-based economy has resulted in rising disposable incomes. Growing affluence and persistently low unemployment rates have, in turn, led to burgeoning consumer-driven sectors. Homegrown fashion houses like Padini, VOIR and Bonia, whose handbags and footwear are shown here, are benefiting from the country’s strong economic growth, which has resulted in rising disposable incomes. The three listed retailers have all registered rising sales over the past few years, remaining profitable even during the recent recession. Case in point, total consumption (both the private and public sectors) as a percentage of GDP rose from 54% in 2000 to 68% in 2009. The retail and wholesale trade sub-segment increased from RM39.96 billion to RM69.5 billion over the same period, accounting for 13.3% of the country’s economic activity today, up from 11.2% in 2000. In particular, the rapid rise of the middle-class is the primary driving force behind the growth in domestic consumption. It is no surprise then that most of the local fashion houses are focused on this market segment. The three retailers listed on Bursa Malaysia — Padini, Bonia and Voir — have all registered rising sales over the past few years. Sales grew even during the recent global downturn, underlining the relative resilience in domestic consumer spending. Bonia’s sales grew from RM192 million in FY June 2005 to RM315 million in FY10, which is equivalent to an annual compounded growth exceeding 13%. Over the same period, Padini expanded at an even faster pace of nearly 17% per annum. Voir, the smallest of the three, saw sales expand from RM93 million in 2004 to RM150 million last year. All three companies remained profitable through the worst of the recession. Cautiously optimistic going forward Having said that, some retailers are wary of potential speed bumps ahead. The gradual removal of subsidies has led to rising prices and the failure of wages to rise in tandem will result in lower purchasing power. Recent government proposals to curb household debt and speculation in the property sector as well as the impending imposition of the goods and services tax (GST) are likely to further dampen consumer consumption. That explains why Chan Kwai Heng, executive director of Padini, is adopting a cautious stance. “My personal feeling is that Malaysian consumers want to see if growth is sustainable before (deciding what to do with their disposable incomes),” he said. Chan added that recent announcements such as the curb on credit card availability, real estate cap on loan-to-value ratio proposal, subsidy removal and GST were sending mixed signals to consumers. Nevertheless, most analysts remain relatively upbeat on the prospects for the retail sector. Indeed, all three companies are committed to expand their businesses further, be it through organic growth or acquisitions and mergers. Expansion will continue to drive growth In its last financial year ended June 2010, Padini opened six new outlets — one Vincci, two Vincci+, a Padini Concept Store and two Brands Outlets. Going forward, the company intends to focus on the Brands Outlet line, which is targeted at value-conscious customers. There are plans to add three Brands Outlet stores this year, one of which just opened in Sunway Pyramid this week. The company expects to lay down some RM5 million for capital expenditure in FY11. Bonia too has made moves to widen its primarily middle to upper-middle class market. In the past one to two years, the company has introduced more affordable and value-for-money brands such as Valentino Rudy, CR2 and CR Xchange, in response to the global downturn. Similarly, VOIR is also keen to broaden its market reach by expanding its range of products targeting different segments of the market, in addition to new outlets. “Going forward, we see an increasing trend towards the medium-end with a slight bias towards a medium-high market,” said Ham Hon Kit, executive director of VOIR Group of companies, noting the population, improved economy and government plans as contributing factors. “In a medium market you have a fair share of the population. Recently, we launched our sub-label Noir, which delivers to the medium-high segment,” said Ham, who described VOIR largely as a medium-market brand. He expressed the hope that VOIR would offer Malaysian consumers an extended product range in the next three years. “Additional fashion and lifestyle products could be introduced through brand extensions, new, acquired or international brands,” said Ham, who stated that if VOIR moved towards the upper market it would be via these channels. The company has budgeted some RM8 million to RM10 million for expansion next year, including two to three new “VOIR Gallery” — its multi-brand store — and two to three single-brand outlets. Additionally, VOIR has diversified into the food & beverage sector, which it views as a higher margin business. The company intends to add up to eight new Garden Lifestyle Store and Cafés to its current portfolio of two, which are located in suburban malls 1-Utama and The Curve. If all goes as planned, VOIR expects the Cafés to contribute up to 10% of its revenue next year. Tapping regional markets Having cornered a slice of the local retail market, Malaysian fashion houses have turned their attention to the exports market, another driver of growth. Bonia appears to have taken the biggest stride so far. More than 28% of the company’s revenue is derived from abroad where it has 70 boutiques, including Singapore, China, Taiwan, Thailand, Vietnam, Indonesia, Japan, Saudi Arabia and Syria. It began manufacturing bags and wallets at its China plant for the country’s domestic market end-2008. Recently, Bonia announced the acquisition of a 70% stake in Singapore-based Jeco Pte Ltd for S$28 million. Jeco is the licensee for Pierre Cardin leather goods in Singapore and the master licensee for Renoma in Singapore, Malaysia and Indonesia. It is also the sole distributor of Bruno Magli products in Singapore and the owner of trademark and brand representative of Braun Buffel in Asia-Pacific. “The acquisition is quite a profitable one. It will immediately impact earnings given the size of the stake,” an analyst said. As for Padini, overseas sales account for some 10% of Padini’s revenue currently. The company’s products are sold in retail stores and counters operated by licensees and dealers in various countries. This strategy enables it to push greater volume while limiting capital commitment and risks exposure. How the stocks performed Bonia is the largest gainer with a 59% increase in share price to RM1.67 per share from RM1.05 at the start of the year. The company posted a 61% rise in net profit to RM33.23 million from RM20.61 million for the 12-month period. Four research houses have recommended a buy on the stock since September, with an average target price of RM1.91 per share. Shares for Padini rose 32% to RM4.98 from RM3.77 over the same period. In its 12-month results, Padini also announced a 23% rise in net profit to RM60.74 million from RM49.53 million in FY09. Since September, two research houses have issued buy calls on the stock, with an average target price of RM4.83. VOIR, the smallest of the three, fell slightly short of the benchmark FBM KLCI. The stock gained just 5% to 72.5 sen from 69 sen at the beginning of 2010. For the first six months of the year, VOIR posted a 109% y-o-y increase in net profit to RM1.91 million from RM900,000 in the previous corresponding period. In an August report, the sole research house covering VOIR recommended a “hold” and a target price of 61 sen. Related stories: VOIR looks to diversification and brand extension Bonia known for its quality Padini gets its concept right Retailers doing well on strengthening consumer spending This article appeared in The Edge Financial Daily, Oct 11, 2010.

Financial Education: Play and learn about finance

Star Education Fair
Sunday October 10, 2010

Play and learn about finance

BY ALYCIA LIM
educate@thestar.com.my

TO INSTIL the habit of savings and prudent financial management among the nation’s youth, Perbadanan Insurans Deposit Malaysia (PIDM or the Malaysia Deposit Insurance Corporation) recently launched an online competition.

Called “MoneySmart Online Game”, it is part of the corporation’s educational programme for secondary and tertiary education students.

Running for the first time this year with the support of the Education Ministry, the programme aims to reach out to students through road shows and talks in secondary schools, colleges and universities.

PIDM chief operating officer Md Khairuddin Arshad said that the competition was an initiative from PIDM to enhance public awareness on the role of PIDM through interactive activities.

He added that since the soft launch in July, roadshows have been held at over 100 secondary schools and about 25 higher education institutions. They are targeting a total of 200 schools by the end of November.

“The schools have been identified according to the ratio of urban and non-urban schools, and we make sure that this covers every state in the country.”

Education Ministry deputy director-general (general policy and educational development) Dr Khair Mohamad Yusof applauded PIDM’s efforts, saying that the ministry had always welcomed initiatives from organisations to support the education development of the young generation in this country.

He added that the teaching and learning process today required the involvement of society, and should not only be the role of an educator. Through a creative and interactive way, the project helps to enhance the knowledge and skills of all aspects of financial management to local students.

The entire programme, including the production of board games and comic books to be distributed to the schools, amounted to approximately RM1mil.

Md Khairuddin said: “I believe this investment will give good returns, and it is a part of our contribution to the country’s financial literacy growth.”

The online game competition, which depicts real-life stages beginning from the decision to pursue an education to the retirement stage will end on Nov 30.

The results will be announced early next year.

http://thestar.com.my/education/story.asp?file=/2010/10/10/education/7145680&sec=education

Kiss corporate governance goodbye when punishment meted is not commensurate with the crime

Saturday October 9, 2010
Too little punishment for too much
A QUESTION OF BUSINESS
By P. GUNASEGARAM

If directors continue to get away with a mere slap in the wrist for major offences, you can kiss corporate governance goodbye.

POOR Securities Commission! It goes to all that effort and pain to bring corporate miscreants to book and what happens, they go free – more or less. For what is a hefty fine when the amount they defrauded is many times more than that?

That is an affront to the public which sees white-collar criminals get away with far less in terms of sentences although many millions of ringgit are involved. Comparable common thefts see much more punishment.

Then, there are the corollary effects. The confidence and integrity of the market itself becomes affected when the investing public, both local and overseas, become disillusioned with standards of corporate governance here. What incentive is there to behave when you can get away with so much for so little?

For corporate crime to be seriously reduced, two things need to happen immediately. First, the courts must realise the seriousness of these crimes and mete out the necessary punishment, even when the plea is guilty.

Second, agencies responsible for enforcing legislation must do their part to investigate and bring to book those who break the law. The Securities Commission seems to be doing its part when it comes to securities laws but the same cannot be said of the Companies Commission of Malaysia when it comes to enforcing the Companies Act.

If these two things don’t come together, we can pretty much say goodbye to the attempts by some of our regulators and enforcement agencies to increase corporate governance standards and bring about a much higher standard of behaviour among our corporate chieftains, standards which are abysmally low right now.

Let’s take the latest such case. It was reported earlier this week that a former director of a de-listed company, Pancaran Ikrab, broke down and wept when a judge handed down a custodial sentence of one day (yes, that’s right) and a fine of RM2mil for fraud involving millions.

Former managing director Ngu Tieng Ung committed two counts of financial fraud involving RM15.5mil 13 years ago. Sessions Court judge S.M. Komathy Suppiah allowed Ngu, 43, to pay the fine in 12 instalments starting next month, to be paid by the fifth of each month or a 30-day jail sentence if he fails.

“Are you crying because you are happy or sad?” she asked a sobbing Ngu, who did not respond. At this juncture, Ngu’s counsel Ng Aik Guan went up to the dock to speak to him and later told the judge that Ngu was “too emotional”, The Star reported.

Meantime, the Securities Commission only thinly disguised its disappointment with the sentencing. It said in a statement on Oct 5: “Datuk Lybrand Ngu Tieng Ung was convicted by the Kuala Lumpur Sessions Court today for two counts of securities fraud.

“He had utilised RM15.5 million of Pancaran Ikrab Bhd’s (PIB) funds in October 1997 to finance his entry into the company. The monies financed his purchase for the controlling shareholding in PIB. PIB was then listed on the Second Board of the Kuala Lumpur Stock Exchange.

“When he resumed the post of director of PIB, he had caused in total RM37 million to be transferred out of the company. This amount was never recovered and was written off in its accounts. This resulted in PIB being financially distressed and its listing status was taken over by DCEIL International Bhd on July 19, 2004.

“The penalty for securities fraud is a minimum fine of RM1 million and imprisonment of not more than 10 years. Sessions Court judge, Puan S.M. Komathy Suppiah sentenced Ngu to 1 day imprisonment and a fine of RM1 million for each offence. The imprisonment terms to be served concurrently.”

Now, the scale of the offence becomes much clearer. Ngu used RM15.5mil to finance his purchase of shares in Pancaran Ikrab and caused RM37mil to be transferred out of the company, making in all a massive RM52.5mil.

And all he got was a day’s jail and a fine of RM2mil. Why? And there was nothing said about restitution or return of the monies.

If you think this was an isolated instance of a person committing corporate fraud receiving a light sentence, you are wrong. Just this year alone, there have been a number of light sentences given.

In March this year, the Kuala Lumpur Sessions Court convicted Chan Kok Suan, the former managing director of Granasia Corporation Bhd for submitting false statements to the Securities Commission as part of the application for an initial public offering.

Chan was convicted under section 32B(4) of the Securities Commission Act and was fined RM500,000, in default 10 months imprisonment, according to the SC.

In February, the Kuala Lumpur Sessions Court convicted Ooi Boon Leong and Tan Yeow Teck for knowingly authorising the furnishing of a misleading statement by MEMS Technology Bhd, a company listed on the then Mesdaq market, to Bursa Malaysia Securities Bhd.

The Sessions Court sentenced each accused to a fine of RM300,000 (in default two years imprisonment).

Last November, the Securities Commission secured a conviction against Datuk Tan Hooi Chong for abetting Kiara Emas Asia Industries Bhd in the misappropriation of the rights issue proceeds amounting to almost RM17mil between Dec 16 and 31, 1996.

Tan pleaded guilty to the offence under section 32(6) of the Securities Commission Act 1993 read together with Section 40 and Section 109 of the Penal Code. Tan had also admitted to misutilising the rights issue proceeds for his personal benefit. He was fined RM600,000.

The common thread through all these convictions, and many earlier higher profile convictions, is that none of them was custodial (except for the latest one-day custodial sentence) even though the offences were serious and in many cases involved millions of ringgit.

But let’s look at another case. In March, former Perbadanan Komputer Nasional Bhd chief executive officer Zulkifli Amin Mamat was sentenced to four years’ jail and three strokes of the rotan for criminal breach of trust involving RM1.61mil.

Why the anomaly? Is criminal breach of trust very different from what these other directors were doing? Obviously not.

That must mean, if we take other more sinister conclusions out of the equation, that judges don’t seem to understand the seriousness of corporate crime and the extremely deleterious effects they have on the capital markets and thousands and millions of shareholders of public-listed companies.

The only way that such lack of understanding or otherwise can be overcome is for the Chief Justice, Tun Zaki Azmi, himself to step in. Zaki has been working tirelessly to reduce backlogs and has taken strong, controversial steps in this direction. But the lack of punishment of corporate crime is one area that demands immediate attention too.

It will be no exaggeration to say that the future of the country depends on it because no country has been able to reach the pinnacles of progress and achievement without a healthy corporate sector. And you can’t have that without adequate punishment of the bad hats.

● Managing editor P. Gunasegaram does not only believe that justice delayed is justice denied. He also believes that justice denied is, well, justice denied. Period.

http://thestar.com.my/columnists/story.asp?file=/2010/10/9/columnists/aquestionofbusiness/7191225&sec=A%20Question%20Of%20Business

George Soros warns China of global 'currency war'

George Soros has warned that a global “currency war” pitting China versus the rest of the world could lead to the collapse of the world economy.

By Rupert Neate
Published: 3:01PM BST 09 Oct 2010



Mr Soros, the hedge fund manager best known as the man who broke the Bank of England” after he made a billion betting against the value of Sterling on Black Wednesday in 1992, said the China had created a “lopsided currency” system.

He criticised China for deliberately keeping the yuan - its currency -low in order to keep exports cheap, which is hurting US competitors.


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Mr Soros told BBC Radio 4’s Today programme that China had a “huge advantage” over international competitors because it can control the value of its currency.

He said China could also influence the value of other world currencies because they have a “chronic trade surplus”, which means the Chinese have a lot of foreign currencies. “They control not only their own currency but actually the entire global currency system,” he said.

Writing in the Financial Times, Mr Soros added: “Whether it realizes it or not, China has emerged as a leader of the world. If it fails to live up to the responsibilities of leadership, the global currency system is liable to break down and take the global economy with it.”

China’s central bank governor Zhou Xiaochuan defended the world’s second largest economy, however.

“We’ve already started to have exchange rates reform for quite long time...[but] it is gradual... it is good for a large economy otherwise it may be dangerous,” he told the BBC on the sidelines of this weekend’s International Monetary Fund meeting in Washington.

http://www.telegraph.co.uk/finance/8052729/George-Soros-warns-China-of-global-currency-war.html

What next for UK house prices?

What next for house prices?
Prices fell by a record amount in August, prompting fears of a crash.

By Kara Gammell
Published: 5:31PM BST 08 Oct 2010


Just when many families were digesting the news that they were to lose child benefit, have to work longer and pay more into their pensions, they were delivered the bombshell that house prices fell by a record amount.

Last month, more than £6,000 was wiped off the value of the average property as house prices dropped from £168,124 in August to £162,092, the biggest fall since 1983. A rise in the supply of property and a drop in demand fuelled by economic uncertainty pushed prices down 3.6pc.


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So what next? Is this the start of a sustained fall in house prices? Here's what the housing experts have to say.

Martin Gahbauer, chief economist, Nationwide
"Although the Halifax index showed a large drop in September, the less volatile three-month on three-month measure showed a drop of 0.9pc, the same as in the Nationwide index. This compares with three-month on three-month declines of more than 5pc in the deepest phase of the 2008 downturn in both indices. As such, the current declines are still on the modest side. None the less, market conditions have clearly loosened as more sellers have marketed their properties and buyer demand has remained weak. This may exert additional downward pressure on house prices in coming months. At this stage there is limited evidence of widespread distressed selling. Without more of this, price declines of the magnitude in 2008 are unlikely."

Paul Diggle, property economist, Capital Economics
"The hefty drop in the Halifax measure of house prices adds weight to the view that house price weakness is far from over. To our minds, weak housing-market activity indicators mean that further falls in house prices are likely. There is no doubt that this will reduce the amount of equity in people's homes, making it even harder to remortgage."

Martin Ellis, housing economist, Halifax
"Last year, a shortage of properties for sale contributed to an imbalance between supply and demand, a key factor in pushing up house prices. More recently, more properties have come on to the market and reduced this imbalance. Plus, renewed uncertainty about the economy and jobs has caused consumer confidence to falter, dampening demand for home purchases. The factors have been exerting downward pressure on prices.

"In addition, volatility of the month-on-month measure has increased due to low transaction levels across the market; to get the best view of the underlying trend we should look to the quarterly figure – which shows a 0.9pc decrease.

"It is far too early to suggest that this is the beginning of sustained falls. House prices in the third quarter of 2010 were 0.9pc lower than in the second quarter of 2010. The rate of decline is slower than 2008, when it was consistently in excess of minus 5pc and minus 6pc throughout the second half of the year.''

Howard Archer, chief UK and European economist, Global Insight
"While a drop in house prices always seemed probable in September, after Halifax had reported price rises in August and July that conflicted with other surveys, a plunge of 3.6pc month-on-month was off everybody's radar.

"It is important to put the data into perspective. The Halifax data highlights how volatile housing market data can be on a month-to-month basis and from survey to survey. The 3.6pc plunge reported by the Halifax is partly a correction to the rises reported in August and July, which conflicted with other data and surveys.''

PHILIP SHAW, ECONOMIST, INVESTEC SECURITIES
"It is difficult to know how literally to take the Halifax number – it implies that the housing market has fallen off a cliff. Taking September's figure on its own implies that house prices are now 0.7pc below those a year ago. By contrast, the Nationwide estimates house prices are 3pc above 12 months ago.

"If it is right, one hopes that lower prices will help to attract first-time buyers. This would help to stimulate not just housing activity, but spending in the economy.

"The housing market is very nervous right now, but we will get further clues from the RICS survey this week. Don't forget that the market recovered abruptly in spring last year."

SIMON RUBINSOHN, CHIEF ECONOMIST, ROYAL INSTITUTION OF CHARTERED SURVEYORS
"We expect prices to slip a little further over the coming months, but believe the risk of large house price falls is relatively limited. Key RICS lead indicators measuring the gap between demand and supply suggest the gap is beginning to narrow, which points to a more stable picture for early 2011."


http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/8051488/What-next-for-house-prices.html