Blend of both value and growth investing ensures stable returns

Blend of both value and growth investing ensures stable returns

13 OCT, 2011, 05.21AM IST, AMAR RANU,

Every fund manager's style of picking stocks and managing portfolios is different. While one group selects assets based on intrinsic values, the other favours companies with growth potential. These two widely followed strategies all over the world are known as value and growth investing. 

However, with the kind of volatility in the equity markets globally and domestically, fund managers often mix the two strategies to safeguard their 'style' and deliver decent returns over a period of time. 

But with individual investors, the situation is grim. Historical studies and the general consensus say that 75-90% of people who have invested in stock markets cannot explain why they own a particular stock. Their investment style is simple - if the share price is ascending and everyone is buying the stock, they will also buy. Similarly, they will sell it if it falls below a level. So, typically, investors have the 'herd instinct', a term coined in behavioural finance. 

Growth and Value investing 

Managers who seek value are also known as defensive managers who focus on the inherent strengths/weaknesses of individual companies and, as such, macro-level changes and market gyrations do not affect their style of investing. They look for stocks based on Benjamin Graham's tactics, like those with low price-earnings (P/E) or low price-book value (P/BV) ratios. 

The other ratios used are dividend yield, return on capital employed (RoCE), return on equity (RoE), enterprise value (EV), EBIDTA, etc. In a nutshell, they would invest in a stock which is at a significant discount to its intrinsic value. Globally, Warren Buffet is a wide follower of value investing who understands the management, competition and the business model, including the various ratios, in determining the actual value of a company.

Growth managers, on the other hand, target stocks that have above average earnings growth rate, low dividend yield, high price-earnings (P/E) ratio, etc. They place greater emphasis on the growth opportunities for a company and may not mind paying a price for it. So, they look for fast growing companies or those in sunrise sectors hoping to become the next Infosys or Reliance. The growth strategy is a risky strategy as the downside risk is relatively higher. 

The value-growth enigma 

Everything that appears cheap may not be a good bargain. Sometimes, the fall in stock prices happen due to a change in the dynamics of the industry concerned that are not captured in its current financials. Investors or managers buying such stocks thinking them to be value picks may end up with a dud. 

Value investing generates comparatively low, albeit stable, returns over a longer period. It causes less volatility as the fall in the inherent value of the stocks is less. Some investors associate value investing with contrarian investing, which it is not in the real sense. A contrarian transacts, ie, buys or sells a stock when a majority of the investors are behaving the other way. Such investment opportunities can happen in a rising or falling market. 

However, in an era of economic growth, growth investing strategy usually delivers higher returns over a shorter period. If there is a high growth opportunity in an industry within an economy, it will attract new investors who would invest more capital to set up new locations. As a result, over a period of time, the industry is more likely to lose its competitive edge leading to a setback to its mean growth rate. 

Which 'style' delivers more - Value or Growth? 

Across markets, the value strategy has delivered and outper formed other investment styles over a longer period of time. A study of the performance of MSCI Developed Market World Indices shows that value investing has generated significantly more returns than with the growth style over the last 25 years. Even in the MSCI Emerging Market Indices, value investing has outscored other investment styles over the last 10 years. The modern day value investor, Warren Buffet, has taken value investing to another level. 


http://economictimes.indiatimes.com/personal-finance/savings-centre/analysis/blend-of-both-value-and-growth-investing-ensures-stable-returns/articleshow/10334439.cms

Buffett’s Son Defends Occupy Wall Street

Buffett’s Son Defends Occupy Wall Street

By Andrew Frye and Alan Bjerga - Oct 13, 2011 12:00 PM GMT+0800

Howard Buffett, the Berkshire Hathaway Inc. (BRK/A) director and son of Chairman Warren Buffett, said Wall Street protesters were provoked by abuses from corporations amid a widening disparity between rich and poor.

“I think it takes that to make things happen sometimes,” Howard Buffett, 56, said of the demonstrations in an interview yesterday in Des Moines, Iowa. Over the past 15 years, “we saw large corporations really screw people.”

Occupy Wall Street has drawn out protesters from New York to Seattle and gained empathizers among the top executives at Citigroup Inc. (C)and Blackrock Inc. Warren Buffett, the world’s third-richest person, has said he is concerned about inequity in the U.S. The younger Buffett, a farmer and philanthropist, said obtaining enough food has become more difficult for more people.

“There has never been a larger gap between earnings in this country,” said Howard Buffett, who was in Des Moines to deliver a speech at the World Food Prize conference. “There has never been a time in my lifetime when the government is going to cut an incredible amount of programs that support poor people and feed them.”

Protesters criticized the government for propping up financial firms including Citigroup and Bank of America Corp. (BAC) in 2008 while individuals struggled with unemployment, depressed wages, foreclosures and reduced retirement savings. Republican lawmakers oppose raising taxes to reduce the U.S. deficit and have pushed for cuts to government programs.

‘Class Warfare’

Mitt Romney, the former Massachusetts governor and a candidate for the Republican presidential nomination, said protesters are targeting “a scapegoat” and are wrong to divide the country. President Barack Obama, who joined Warren Buffett in a push to raise taxes on the wealthy, is guilty of “class warfare,” Romney has said.

“There has been class warfare going on,” Buffett, 81, said in a Sept. 30 interview with Charlie Rose on PBS. “It’s just that my class is winning. And my class isn’t just winning, I mean we’re killing them.”

Howard Buffett, a Berkshire director since 1993, said hunger is rising in the U.S. as well as in poorer nations. A record 45.3 million Americans received food stamps in July and almost one in six live in poverty, the government said. Buffett is president of the Howard G. Buffett Foundation, which advances agriculture in developing nations.

Buffett’s Wagers

Warren Buffett has backed some of the biggest financial firms while chiding bankers for excesses in risk-taking and compensation. Omaha, Nebraska-based Berkshire invested $700 million in Salomon Inc. in 1987, $5 billion in Goldman Sachs Group Inc. in 2008 and $5 billion in Bank of America this year. Buffett, the father, has compared Wall Street to “a church that’s running raffles on the weekend.”

Wall Street “does a lot of good things and then it has this casino,” Buffett said in October 2010. “One of the problems we still have is we have unbalanced incentives for managers of huge financial institutions.”

Blackrock Chief Executive Officer Laurence D. Fink and Jim Chanos of hedge fund Kynikos Associates said this month they understand the anger directed at financial companies. Bill Gross, who runs the biggest bond fund at Pacific Investment Management Co., said in a Twitter post that wage earners are fighting back after three decades of class warfare in which they were “being shot at.” Citigroup CEO Vikram Pandit said yesterday he’d be happy to talk with protesters.

http://www.bloomberg.com/news/2011-10-13/howard-buffett-defends-occupy-wall-street-protests-to-make-things-happen-.html

How to interpret Market Behaviour?

HOW TO INTERPRET MARKET BEHAVIOR

Whether you are an existing investor who holds a portfolio of shares or a beginner trying to enter the market, it is important for you to understand how the market behaves and where it is heading. The overall market health has a direct impact on a company’s profitability and almost all shares are impacted by the market sentiment, to a certain extent. Therefore, in order to be successful in stock investing, you must at least know how to recognise the major market trends.

What is a bull market?
A bull market refers to a stock market that is on the rise. It is considered as a bull market when almost all stocks are appreciating in value for a considerable period of time, usually with a price gain of over 20%. You will know that it is a bull market when everyone seems to be talking about buying shares and nobody seems to want to sell. This is when you observe that the demand for the shares is very strong resulting in limited supply, which in turn, pushes the shares prices even higher as investors are competing for the shares. During a bull market, investors are confident that the uptrend will continue into a longer term and the overall economy outlook is favourable while the employment rate is high. This is the time when everyone is exhilarated about the stock market as their chances of losing money in such market is quite low.

What is a bear market then?
A bear market is the total opposite of a bull market. It is characterised by a market that is downward trending with the stock value being depreciated by more than 20%. During a bear market, the demand for stocks is low while supply is high because everybody is trying to sell and only a few want to buy as the price continues to dip further. In such a market, the chances of losing money are high and therefore, you will see that the market sentiment is very pessimistic. A bear market is usually associated with weak economic outlook and the likelihood of declining company performance.

A typical bull market usually starts at the bottom, when the economy seems to be weak, such as during a recession. Here, you can observe governments trying to take certain measures like lowering interest rates to boost their economic recovery. When the market liquidity eases and company borrowing cost is lower, company profitability will improve and this in turn will indicate a positive sign for a bullish market to start.

On the other hand, when the market seems to be very hot with widespread bullishness, especially when the economic growth rate is high, coupled with high inflation rate, usually these signs signify a market top. This would indicate that there is a potential end of a bull market and the beginning of a bear market. During this period, investors should pay more attention to bad corporate news and warning signs to prepare for the turn in cycle.

How do these markets affect investors? 
Investor would ideally buy when the bull market is just about to start. This is when the stocks are still cheap and riding the bull wave until it reaches the top, before being sold as to maximise profit. Unfortunately, no one can be certain as to when the market is going to reach the top or the bottom. Therefore, by understanding how the market behaves, investors would have an idea on where the market is heading so that they can prepare themselves to take the necessary action. For example, an investor may not catch the stocks at the very bottom of the market, but at least he or she would know that the market is on its way to recovery and as such would start to pick up stocks with sound fundamentals but are still undervalue to invest in. Then, they would wait for the price to come up. Relatively, investing in a bull market is easier as the chances of making losses are low compared to investing in a bear market.

There are a few strategies that investors may take when dealing with a bear market. 

-  The most conservative way adopted would be to move out from stocks and invest in fixed income securities until the market recovers. 

-  Some would turn to the defensive stocks, such as those in the industries that are less affected by economic downturn, for example, food or utilities industries. 

-     The third option that is viable for investors is buying as the market continues to drop further to capitalize on the price reduction. However, investors who adopt this option face the risk of having their cash drying up all before the market reaches the bottom.

What is most important for investors to take note of when making investing decisions is the need  for homework; they need to do their homework properly, be it on the company itself or the overall economic situation. This is to ensure that their investment risk is minimised.

http://www.min.com.my/index.php?option=com_content&view=article&id=79

When Stock Prices Drop, Where's the Money?

To sum it all up, you can think of the stock market as a huge vehicle for wealth creation and destruction.

When Stock Prices Drop, Where's the Money?

by Investopedia Staff
Monday, March 16, 2009

Have you ever wondered what happened to your socks when you put them into the dryer and then never saw them again? It's an unexplained mystery that may never have an answer. Many people feel the same way when they suddenly find that their brokerage account balance has taken a nosedive. So, where did that money go? Fortunately, money that is gained or lost on a stock doesn't just disappear. Read to find out what happens to it and what causes it.

Disappearing Money

Before we get to how money disappears, it is important to understand that regardless of whether the market is in bull (appreciating) or bear (depreciating) mode, supply and demand drive the price of stocks, and fluctuations in stock prices determine whether you make money or lose it.

So, if you purchase a stock for $10 and then sell it for only $5, you will (obviously) lose $5. It may feel like that money must go to someone else, but that isn't exactly true. It doesn't go to the person who buys the stock from you. The company that issued the stock doesn't get it either. The brokerage is also left empty-handed, as you only paid it to make the transaction on your behalf. So the question remains: where did the money go?

Implicit and Explicit Value

The most straightforward answer to this question is that it actually disappeared into thin air, along with the decrease in demand for the stock, or, more specifically, the decrease in investors' favorable perception of it.

But this capacity of money to dissolve into the unknown demonstrates the complex and somewhat contradictory nature of money. Yes, money is a teaser - at once intangible, flirting with our dreams and fantasies, and concrete, the thing with which we obtain our daily bread. More precisely, this duplicity of money represents the two parts that make up a stock's market value: the implicit and explicit value.

On the one hand, money can be created or dissolved with the change in a stock's implicit value, which is determined by the personal perceptions and research of investors and analysts. For example, a pharmaceutical company with the rights to the patent for the cure for cancer may have a much higher implicit value than that of a corner store.

Depending on investors' perceptions and expectations for the stock, implicit value is based on revenues and earnings forecasts. If the implicit value undergoes a change - which, really, is generated by abstract things like faith and emotion - the stock price follows. A decrease in implicit value, for instance, leaves the owners of the stock with a loss because their asset is now worth less than its original price. Again, no one else necessarily received the money; it has been lost to investors' perceptions.

Now that we've covered the somewhat "unreal" characteristic of money, we cannot ignore how money also represents explicit value, which is the concrete worth of a company. Referred to as the accounting value (or sometimes book value), the explicit value is calculated by adding up all assets and subtracting liabilities. So, this represents the amount of money that would be left over if a company were to sell all of its assets at fair market value and then pay off all of liabilities.

But you see, without explicit value, implicit value would not exist: investors' interpretation of how well a company will make use of its explicit value is the force behind implicit value.

Disappearing Trick Revealed

For instance, in February 2009, Cisco Systems Inc. had 5.81 billion shares outstanding, which means that if the value of the shares dropped by $1, it would be the equivalent to losing more than $5.81 billion in (implicit) value. Because CSCO has many billions of dollars in concrete assets, we know that the change occurs not in explicit value, so the idea of money disappearing into thin air ironically becomes much more tangible. In essence, what's happening is that investors, analysts and market professionals are declaring that their projections for the company have narrowed. Investors are therefore not willing to pay as much for the stock as they were before.

So, faith and expectations can translate into cold hard cash, but only because of something very real: the capacity of a company to create something, whether it is a product people can use or a service people need. The better a company is at creating something, the higher the company's earnings will be and the more faith investors will have in the company.

In a bull market, there is an overall positive perception of the market's ability to keep producing and creating. Because this perception would not exist were it not for some evidence that something is being or will be created, everyone in a bull market can be making money. Of course, the exact opposite can happen in a bear market.

To sum it all up, you can think of the stock market as a huge vehicle for wealth creation and destruction.

Disappearing Socks

No one really knows why socks go into the dryer and never come out, but next time you're wondering where that stock price came from or went to, at least you can chalk it up to market perception.


http://finance.yahoo.com/focus-retirement/article/106739/When-Stock-Prices-Drop-Where

Financial Crisis: German push for Greek default risks EMU-wide 'snowball'

Germany is pushing behind the scenes for a "hard" default in Greece with losses of up to 60pc for banks and pension funds, risking a chain-reaction across southern Europe unless credible defences are established first.

German Chancellor Angela Merkel and Greek Prime Minister George Papandreou. Officials in Berlin told The Telegraph it is 'more likely than not' that investors will suffer fresh losses on holdings of Greek debt Photo: AFP

By Ambrose Evans-Pritchard

9:13PM BST 10 Oct 2011

456 Comments

Officials in Berlin told The Telegraph it is "more likely than not" that investors will suffer fresh losses on holdings of Greek debt, beyond the 21pc haircut agreed in July.

The exact level will depend on findings by the EU-IMF "Troika" in Athens.

"A lot has happened since July. Greece has fallen back on its commitments, so we have to assume that the 21pc cut is no longer enough," said one source.

Finance minister Wolfgang Schäuble told the Frankfurter Allgemeine that the original haircuts were "probably" too low, saying banks must have "sufficient capital" to cover greater losses if need be. Estimates near 60pc have been circulating in Berlin.

The shift in German policy has ominous echoes of last year when Chancellor Angela Merkel first called for bondholder haircuts, setting off investor flight from Ireland and a fresh spasm in the EU debt crisis.

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"This could set off a snowball effect," said Andrew Roberts, credit chief at RBS. "The markets will instantly switch attention to Portugal, where two-year yields are already 17pc".

Although Greece's 10-year bonds are trading at a 60pc discount on the open market, European banks do not have to write down losses so long as there is no formal default and the debt is held in their long-term loan book. The danger arises if banks are forced to "crystallize" the damage before raising their capital buffers.

Marchel Alexandrovich from Jefferies Fixed Income said Germany risks opening a "Pandora's Box" by unpicking the Greek deal.

"It would be a complete disaster, a signal that sovereign debt is not safe. Investors would pull their deposits out of Portugal, Ireland, Spain and Italy and set off bank runs across Europe," he said. "The French are against doing this and so is the European Central Bank. They know banks need more time to adjust. We don't think Europe will pull the trigger."

Mrs Merkel and French president Nicolas Sarkozy vowed over the weekend to do "all that is necessary to guarantee bank recapitalisation", promising a package for Greece and the eurozone by the end of the month. The pledge was vague.

"No details of the plans were released, presumably because they haven't actually got any yet. That in itself is astonishing," said Gary Jenkins from Evolution Securities. "Nothing has really changed and we still expect that the most likely outcome will be a comprehensive package – that circles the wagons around the sovereigns and the banks – that will only be agreed at one minute to midnight when the alternative is that the market is about to implode on the Monday morning."

France and Germany have yet to agree on how to beef up the banks, or on the scale of the threat.

Antonio Borges, Europe chief for the International Monetary Fund, said lenders may need up to €200bn to cope with losses.

France wants banks to be able to tap the EU bail-out fund (EFSF) directly if they cannot raise enough capital on the open market. This would avoid any further strain on the French state, already at risk of losing its AAA rating.

Mr Schäuble said the EFSF should be the last resort when all else fails – "Ultima Ratio" – and deployed only under the strictest conditions. He said the fund should not buy the debt of states in difficulty (presumably Italy and Spain) until they implement tough reforms under "tight control", signalling that Germany will not endorse blanket purchases of EMU debt to cap yields.

He ruled out any attempt to leverage the EFSF beyond €440bn by letting it act as a bank: "That would be to monetise European state debt. That is not acceptable."

The apparent German veto on any expansion of the EFSF leaves it unclear how Europe's debt crisis can be contained if the region tips into a double-dip recession, which would play havoc with debt dynamics. City analysts say the fund needs €2 trillion to restore confidence.

"We think Europe is going to struggle to escape market pessimism until we see the emergence of a lender-of-last resort, whether a much larger commitment from the ECB to buy bonds [ideally QE] or a significantly revamped EFSF," said Graham Secker from Morgan Stanley.

Whether the EFSF can safely be increased is unclear. Yield spreads between German Bunds and 10-year EFSF debt have widened from 66 to 112 basis points since early July. If yields creep much higher, the fund itself may become a problem.

Critics say Germany is making a policy blunder by treating the crisis as a Greek morality tale, losing sight of EMU's deeper structural woes. Portugal is as vulnerable as Greece, with higher levels of combined private and public debt and an equally large trade deficit. Spain is still in the early phase of its housing bust. Italy has lost 40pc in unit labour competitiveness against Germany since 1995.

Pulling the plug on Greece risks bringing a much bigger crisis to a head all too quickly.

http://www.telegraph.co.uk/finance/financialcrisis/8819195/German-push-for-Greek-default-risks-EMU-wide-snowball.html

Buy Low - Sell High, Buy High - Sell Higher

Many investors prefer to pay low for a stock and hope that its price will eventually rise. However, they fail to realize that sometimes it is better to pay a higher price for a stock that has the potentials for a future growth. The money you will save from purchasing a down stock may not justify your investment if the stock continues to languish.

For example, let's assume that stock X has a P/E (price to earnings ratio) equal to 25, whereas stock Y has a P/E equal to 8. If you are ignorant enough and decide to make your investment decision based only on this metric, then stock X will seem as being overpriced.

Let us make another assumption, namely that stock X has experienced this overpricing for several periods of times. On the other hand, stock Y has consistently been under the fair price of the market.

What is more, stock X is experiencing a trading activity that is near the 52-week high, whereas stock Y has experienced a 20% down in its trailing 180-day average.

Typically, investors fail to recognize that the maxim stating that what goes down must come up and the vice versa, doesn't always hold truth. There are many exceptions back in the history.

If you follow this maxim, you will probably conclude that stock X is about to decrease. On the other hand, again under the maxim stated above, an investor may conclude that stock Y is about to make its big jump since its price is low and the stock market will recognize its strengths. Both assumptions may turn out to be completely wrong.

Buy High, Sell Higher

This strategy is highly recommended if you expect that the stock will continue to grow in the future. Thus, you should not be scared off by the high price. A stock that provides a steady percentage of growth is worth paying its higher price today, because if it continues to grow at this rate, its price will be even higher tomorrow.

You should make a careful research before following the Wall Street pack. You may probably regret that you haven't purchased the stock several months ago before its price has not jumped to the sky. However, if you make a careful research and verify that the stock possesses good potentials for future growth, then you should not be discouraged from investing in it.

Keep in mind that the stock's price will rise and fall in the short term, but over the long term a growth stock will move upwards.

Buy Low, Sell High

Many investors prefer to search for bargains, which they can later sell at a higher price. However, if you decide to apply this strategy you should be well aware that the price of the stock may not rise again.

Value investors tend to look for stocks that are overlooked and undervalued by the stock market. However, price is only one of the factors that are part of their selection process. The key consideration made is whether the stock provides steady potential for future growth.

Final Piece of Advice

Avoid making investment decisions based only on the price of the stock because a stock that is down is not obligatory to go up. Additionally, a stock that is up may come down and may not. Look at the other metrics in order to make a more educated and successful decision.

http://www.stock-market-investors.com/stock-market-advices-and-tips/buy-low-sell-high-buy-high-sell-higher.html

Budget 2012: Highlights

Budget 2012: Highlights
Written by Joseph Chin of theedgemalaysia.com
Friday, 07 October 2011 18:56

Highlights of Budget 2012 proposals announced by Prime Minister Datuk Seri Najib Tun Razak on Friday, Oct 7.
FDIs: Inflows of foreign direct investment have regained momentum. Foreign direct investment increased six-fold to RM29 billion in 2010, the highest growth in Asia. In 1H of 2011, FDI surged further by 75% to RM21.2 billion compared with RM12.1 billion for the same period in 2010. Private investment to expand 15.9% in 2012.
Expenditure: RM232.8 billion to implement all Government development plans, which include the projects and programmes. Of the amount, RM181.6 billion is for operating expenditure and RM51.2 billion for development expenditure.
Federal Government revenue expected to increase 1.9% to RM186.9 billion in 2012 compared with RM183.4 billion in 2011. Ddeficit in 2012 is expected to improve to 4.7% of GDP compared with 5.4% in 2011.
Stimulus package: RM6 billion for Special Stimulus Package through Private Financing Initiative to undertake several public projects. Projects include upgrading and maintenance of schools, including CONSTRUCTION [] of new blocks, upgrading hospitals, flood mitigation programme, upgrading basic rural infrastructure.
RM978 million to accelerate the development in five regional corridors, including building Johor Bahru-Nusa Jaya coastal highway in Iskandar, Johor; heritage tourism development in Taiping in the Northern Corridor; agropolitan scheme in Besut in the East Coast Economic Region; palm oil industrial cluster project in Lahad Datu in Sabah Development Corridor; and Samalaju water supply in the Sarawak Corridor of Renewable Energy.
Kuala Lumpur International Financial District (KLIFD): Income tax exemption of 100% for 10 years and stamp duty exemption on loan and service agreements for KLIFD status companies; Income tax exemption of 70% for 5 years for property developers in KLIFD.
Sukuk: Income tax exemption given for non-ringgit sukuk issuance and transactions is extended for another 3 years until the year of assessment 2014.
ETF: To boost Exchange Traded Funds (ETFs), Valuecap Sdn. Bhd subsidiary, I-VCAP, to provide RM200 million as seed monies for shariah-compliant ETFs. This fund will provide a matching loan subject to a maximum of RM20 million.
FELDA: FELDA Global Ventures Holding to be listed on Bursa Malaysia by mid-2012 to raise funds for the company to be a global conglomerate. Listing will create another blue chip PLANTATION [] company besides attracting international investors to Bursa Malaysia.
Rights and interests of FELDA settlers will continue to be protected by Koperasi Permodalan FELDA as the majority shareholder. FELDA settlers are expected to receive a windfall, with the amount to be announced before listing.
REITS: Govt to extend incentive for concessionary tax rate of 10% on dividends of non-corporate institutional and individual investors in Real Estate Investment Trusts (REITs) for another five years from Jan 1, 2012 to Dec 31, 2016.
SMEs: Government  to provide RM100 million for the SME Revitalisation Fund. This scheme offers soft loans up to a maximum of RM1 million for entrepreneurs to revive their businesses. To help SMEs to commercialise research products, government to set up shariah-compliant Commercialisation Innovation Fund totalling RM500 million with an attractive profit margin.
Hybrid cars: Full exemption of import duty and excise duty on hybrid cars and electric cars will continue to be given to franchise holders. Tax exemption extended until Dec 31, 2013.
Tourism: Langkawi Five Year Tourism Development Master Plan will be launched with an allocation of RM420 million.
Property: Government proposes review of real property gains tax (RPGT) as current rate of 5% not effective in curbing real estate speculative activities. Government proposes RPGT rate be reviewed. For PROPERTIES [] held and disposed within 2 years, the RPGT rate is 10%. For properties held and disposed within a period exceeding 2 years and up to 5 years, the rate is 5%. Properties held and disposed after 5 years are not subject to RPGT.
Schools: RM1 billion for the construction, improvement and maintenance of schools, particularly to cater for the immediate needs of schools.
Civil service, bonus: Government proposes new Civil Service Remuneration Scheme or SBPA which includes an exit policy for underperforming civil servants and for those who opt to leave the service.
Annual increment of civil servants increased between RM80 and RM320 according to the grade. Also civil servants who accept SBPA will receive an annual increment between 7% and 13%.
Compulsory retirement age increased from 58 to 60 years old to optimise civil servants’ contribution.
Additional bonus of half-month salary with a minimum payment of RM500 and an assistance of RM500 to government pensioners to be paid together with the December salary this year.
For 2011, this totals to one month pay with a minimum payment of RM1,000 for civil servants and RM1,000 for Government pensioners. This will benefit 1.3 million civil servants as well as 618,000 Government pensioners. The total bonus and assistance payments for this year accounts for RM4 billion.
Homes: Under My First Home Scheme for those earning below RM3,000, government to increase the limit of house prices from a maximum of RM220,000 to RM400,000.
Government will introduce Skim Amanah Rakyat 1Malaysia for households with income below RM3,000 per month, to benefit 100,000 households. Participants can apply for a RM5,000 loan with a repayment period of 5 years.
Entrepreneurs: Government will allocate RM200 million to develop Bumiputera entrepreneurs and contractors through the Ministry of Rural and Regional Development.
Venture capital: Government will establish MyCreative Venture Capital with an initial fund of RM200 million.
EPF: Tax relief up to RM6,000 for EPF and life insurance to be extended to the Private Pension Fund now known as Private Retirement Scheme. Employers’ contribution be increased from 12% to 13% for contributors who earn RM5,000 and below, benefit 5.3 million EPF contributors.

http://www.theedgemalaysia.com/business/194202-budget-2012-highlights.html

Fame, popularity and riches don't last; only character endures

Monday October 10, 2011

Monday Starters - By Soo Ewe Jin

ONE of the quotations I remember well is this “Fame is a vapour, popularity an accident, and riches take wings. Only one thing endures and that is character.”

My classmate had written that on my copy of the school magazine after we finished our Form 5. Although I did my Form 6 in the same school, this friend went on to another school and subsequently took over his father's business in operating a shop dealing with antiques.

Although this quote has been attributed to different people, includingPresident Harry Truman, the original author is probably Horace Greeley, an American newspaper editor who is known especially for his articulation of the North's vigorous antislavery sentiments during the 1850s.

It was also around that time of my schooldays that we had a new headmaster who decided to fill up the walls of some of the school blocks with interesting quotations and the most memorable one was, “Academic excellence is no substitute for poverty of character.”

Perhaps in those days much of the significance of these wise sayings were lost on us. But now that I have reached an age when looking back seems to be a favourite pastime (thanks also to The Star that is currently in a “down memory lane” mode), I can better appreciate the true value of character.

Fame and riches are indeed temporary, whether one is a celebrity, a world leader or a corporate icon.

In the past few weeks, you saw many flashback articles of the famous and the infamous from as far as 40 years back published in this newspaper. But unless you are aged 40 and above, I doubt if many of these personalities will be known to you.

Character, fortunately, has a longer legacy. And the wonderful thing is that it applies to ordinary people like us.

Many of the heart-warming stories in the Looking Back series hinge on such a legacy. We may not remember specifically the individuals by name but we remember and applaud their positive traits to this day.

Like the honest cabbie who always returned anything left behind in his taxi. Or the man who brought up a baby abandoned at the hospital as his own. Or the people who dug deep into their savings to help save the Ethiopians, the Palestinians or some stranger needing a heart operation. That is what character is all about.

Some of the best teachers I remember to this day are not the ones who drove me to score a string of As. Rather, they were the ones concerned about the health of my soul and that I would know how to make the right choices when I come by the many junctions in life.

My best bosses were also the ones who understood well the ethical foundations necessary to fight the many temptations in our profession. They were the ones who reminded me that few people will remember the stories we write, even if they made the front page. What is more important, opined one, is how that story touched lives or changed society for the better.

These are lessons that I continue to learn to this day. And they often come afresh when young people are about to start out in their careers and they come to this old uncle for advice. And that is when I find the quotation at the beginning of today's column most useful.

Deputy executive editor Soo Ewe Jin agrees with the opening sentence of the tribute to Steve Jobs posted on the Apple homepage “Apple has lost a visionary and creative genius, and the world has lost an amazing human being.” He was indeed quite a character.

http://biz.thestar.com.my/news/story.asp?file=/2011/10/10/business/9664180&sec=business