Thursday, April 30, 2009

China Heart Taiwan

What does it take for a country's stock market to rise 6% in a day? What kind of news can jump start that? Apparently, very little. China Mobile announced that it will buy a 12% stake in Far East Tone Telecommunications. The news raised hopes that there is a tacit approval from Beijing to encourage China firms to do more investments into Taiwan.

Besides being a good move politically, its a very good move economically as well. Just look at how Hong Kong's economy rely on China, its like a modern day umbilical cord. At the same time, it leverages on the advantages of each side to link up. A similar situation looks to be happening between China and Taiwan. Can you imagine the economic might of a Greater China economic grouping that has HK, China and Taiwan. Its pretty formidable. Its might and collective strength more than equates an ASEAN grouping.

Far East Tone is Taiwan's third largest telco. The deal still needs approval from Taiwan regulators, but it should be a done deal. If approved, it would be the first direct investment from China. This comes after another ground breaking development when China agreed to let Taiwan to send observers to the annual meeting of the World Health Assembly, the WHO's ruling body, next month in Geneva. Ties have improved significantly under Taiwan's President Ma Ying Jeou. The two sides have signed a series of agreements easing limits on investments between the two and establish the first regular two way air and shipping traffic.

President Ma Ying-jeou said that the 1952 Treaty of Taipei affirmed the transfer of Taiwan's sovereignty from Japan to the Republic of China. Ma's statement deviated from his previous claim that it was the 1943 Cairo Declaration that gave the ROC its claim to Taiwan. "While the 1952 treaty does not specify the legal successor government [of Taiwan], it was clear between the lines," he said. "Japan would not have signed the accord with the ROC if it did not intend to concede the territories to the ROC."

Ma said the 1952 pact had three meanings: It not only affirmed the "de jure termination of war between Japan and the ROC" after Tokyo's surrender in 1945, but reasserted the "de jure transfer of Taiwan's sovereignty to the ROC" as well as "restoring friendly and normal relations with Japan. Read this any way you like, its not the China Mobile story that pushed Taiex higher, its this statement by Ma.

There are many ways to court a girl. You can threaten, scream, shout and warn ... but those will never be as effective as cajole, serenade, being generous, showing respect and tenderness. China heart Taiwan.

p/s photos: JJ

56 Cents To The Dollar = $1,000 Billion Additional Writedowns

Banks may need to write down another $1,000 billion, and this is already widely hinted in the markets. I would rather not take this as a negative but a positive. Additional capital will not be lost, its to boost the balance sheets. US regulators may force Bank of America, Citigroup and at least a dozen of the nation’s biggest financial institutions to write down as much as $1 trillion in loans, twice what they’ve already recorded, based on past Federal Deposit Insurance Corp. Assets sold under the Legacy Loans Program may be worth an average of 56.3 cents on the dollar, based on the results of FDIC auctions at failed banks over the past 15 months. In view of the potential losses, reports emerge of banks trying to game the system by bidding each other's asset prices up.
  • GoldmanSachs and Mike Mayo report in their analysis that most banks carry unsecuritized loans at 92-98 cents on the dollar on their books. Moreover, most of the assets in the PPIP are loans.
  • Details of past FDIC distressed assets auctions: The FDIC’s average auction value of 56.3 cents on the dollar for residential and commercial loans is based on 312 sales worth $1.1 billion since Jan. 1, 2008, according to the FDIC. The average for 348 commercial loans for which borrowers stopped paying was 32 cents on the dollar. Auction prices ranged from 0.02 cent to 101.2 cents on the dollar, according to the FDIC.
  • Writedowns would total $1 trillion if the program buys $500 billion in loans at 32 cents on the dollar, the average for non- performing commercial loans in the FDIC sales.
  • Banks failing Federal Reserve evaluations of loans this month may be ordered to make sales worth as little as 32 cents on the dollar, according to FDIC data. That would be less than half of the 84 cents on the dollar the Treasury Department suggested was a possible purchase price. Some of the bank- insurance agency’s auctions brought 0.02 cent on the dollar.
  • The FDIC would auction assets after the Office of the Comptroller of the Currency, Office of Thrift Supervision or the Fed signals that a bank is in danger of failing.
  • Treasury spokesman Isaac Baker said in an e-mail that the program is voluntary. "Past auctions cannot reliably predict asset prices in the Public Private Investment Program, as we are creating a new market that has not previously existed to help value these assets, and offering financing to help investors purchase them."
  • The FDIC is considering allowing banks to share in future profits on loans sold to public-private partnerships to encourage healthier lenders to participate. The regulator is seeking comments through April 10 on the program.
  • Banks have almost $4.7 trillion of mortgages and $3 trillion of other loans that aren’t packaged into bonds, according to the Fed. The vast majority are carried at full value because they don’t need to be written down until they default.
  • While regulators don’t intend to publish the details of their stress tests, the results will effectively become known once banks announce how much capital they need to raise. Regulators will then give lenders six months to obtain funds from investors or taxpayers as a last resort.
  • The government’s toxic assets plan will force banks such as Citigroup, Bank of America and Wells Fargo to take large writedowns on their loans, requiring them to raise more capital from taxpayers or investors.
  • Including TARP, the U.S. government and the Fed have spent, lent or guaranteed $12.8 trillion to combat the financial collapse and a recession that began in December 2007. The amount approaches the $14.2 trillion U.S. gross domestic product last year.

p/s photos: Nancy Wu Ding Yan

Wednesday, April 29, 2009

Grooming & Style Tips For Executives

Impressions and how you present yourself are very important for an executive. In a world where first impressions are made in the first 3 to 6 seconds and 70% of that first impression is made with the eyes, the importance of being self assured and looking good has never been so vital. It indicates professionalism and how serious you regard what you do. I see too many executives who will just put on whatever they have with no serious thought on what image they present to their colleagues, superiors and clients. Some might argue that its the performance of the executive that counts. Yes, sure that is true, but business is also about branding and how you represent your company. That is why certain companies will always give a senior executive a certain type of executive car when they reach a certain level - its not really a perk, its there to ensure that this RM20,000 a month executive does not drive to work in a Proton Iswara - there are a host of issues to consider. Of course if you are an entrepreneur and is worth millions, no one will care how you dress, hence you don't need to care.

1) Bespoke / Tailor made vs Off the rack - Always the former. I know many will think they can just grab a shirt of the rack and they fit - really??? They only kinda fit, trust me. How the shirt hangs on your shoulders is critical, just 1 inch off and it will be noticeable. Everybody's arm's length are different, many of us have one which is slightly longer than the other. How the shirt feels around the chest or how the shirt looks when you raise your arms are the defining reasons why you need them to be tailor made. Neck size is critical as well and I always see some struggling to tie their ties as it may be too tight or too loose. One more important aspect is the collar, is it a flared collar or a closed off collar - how a collar shapes in the end determine how much of your tie knot is showing in the end. Many people make the mistake of wearing shirts with a wide V thus making even a good tie look bad. Make your shirts with a narrow V, it makes all ties look much better, trust me. You don't have to invest in dozens of shirts - at the end of the day, just 7-10 good shirts will do. If budget is a problem, promise yourself a very good tailor made shirt every 3 months (RM300-RM500 pp), by the end of one year you would have 4 good shirts, by the second year you will have a good closet. Keep doing that and its not a very expensive way to dress properly for an executive. A final reason for having bespoke shirts is the material quality. It is very bad to see executives wearing shirts with the thinnest fabrics, the ones you can see the guy's nipples, guys cannot get away with that unless you are girls.

2) Sweat stains / odour - Almost self explanatory. Guys who sweats a lot, you should know what to do, get a good spray deodorant. Then at least don't try to wear shirts where their colours will show sweat stains very clearly (e.g. light blue and sweat stains contrast beautifully and clearly). The other thing is when clothes smells of odour because its not properly dry enough or has not been dried in the sun - that defeats everything, you might as well come to work in a Pagoda white singlet cause that has the same effect. Make sure your clothes are properly dry, preferably in the sun, inside and out. Another tip is to put in boxes of dehumidifiers in your closet, they will soak up moisture from your clothes. If one box is not enough, put in two for better effect - oh yeah, never put mothballs in the closet, you don't want your clothes to smell like that.

3) Ties - Learn how to tie ties well. There are basically two ways, half knot or full knot. Depending on the fabric, usually you do not tie the full knot as the thing will look like a bunched up cauliflower, unless its a thinner fabric. A half knot is good enough, and learn to create a dimpled middle in your tie for better effect. Have at least 3 or 4 good solid colour ties. Solid colours mean all black, all grey, all blue, etc... Its increasingly difficult to carry off fancy designs. Solid colour ties makes it clean and sharp to match with striped shirts. Never try to matched striped shirts with ties that are heavily patterned. Stick to solid colours or the classic striped ties. These never go out of style and it gives an air of conservatism and coolness. Fancy multi patterned ties always shouts and basically tries too hard. How long you tie your ties is a dead giveaway to your sense of style and decorum. Ties should always just cover your belt buckle. Never, never wear ties that does not reach your trousers' top.

4) Double-cuffs - Its now more acceptable and trendy to wear double-cuff shirts. Just beware of the cuffs you are using. Double-cuffs used to be for tuxedos wear, but now its a lot more common. Hence many of those cuff links that are very classic, are usually larger and more boring, square or round in solid colours. Executive wear for double cuff links should be slightly smaller. Cuff links are an accessory, use it well.

5) Shoes - Thankfully, guys do not need 20 pairs of shoes. If you think about it seriously, you only need 2 very very good pairs of executive shoes, and they will last for sometime. If you keep buying those RM100-150 pp, they will look bad very quickly and you will have to replace them more often. Guys have the habit of doing everything well but neglecting their shoes. A good pair of black leather executive shoes should cost at least RM600-1,500pp. I can tell you a secret, that girls put a lot of importance in the shoes that guys wear. Slip ons or those with laces, I would always side with laces for executive wear. Never brown, always black, and always take care of your leather shoes with proper polish.

6) Trousers - Always wear pants with a nice conservative belt, hopefully black with a simple buckle. Not brown or light brown belts. Never wear pants without a belt to work, even if the pants fit - its bad style.

p/s photos: Fala Chen

Tuesday, April 28, 2009

Cricket Terminologies For Dating & Sex

Well, to really appreciate this posting, you have to be a fan of cricket like me. Sports mad fans will stand or sit and drink their Tooheys (or VB if you are from the inferior southern city), and cricket being cricket, there will be plenty of time to talk about other stuff. Cricket is full of its own lingo, positions, batting, bowling, catches, fielding... its natural to associate those terms with dating and sex, especially when you are talking with your mates in a pub. Somehow football does not have that many terminologies of phrases where you can equate to dating and sex. We can try:

he missed the bloody penalty - a girl who really likes a guy but he just didn't care

he took a dive in the penalty box - a guy pretending to be someone high and mighty to impress chicks

he was yellow carded - a guy who has been rejected a couple of times by different girls in a bar

he was red carded - a guy trying to pick up chicks in a bar but his girlfriend/wife arrived

he took the ball to the corner flag - playing for time, wasting time, when nothing's ever gonna happen with him and the girl

we did a nice one~two - you and a wing man cooperating to court a chick in a bar successfully

Anyway, you get what I mean, here are some juicy cricket terminologies:

Let one go outside off: Decline an invitation from an unsuitable partner.

Smack one over the bowler's head: Succeed very quickly with a woman.

Pull one over the covers: Masturbation.

Fending 'em off down the leg side: Too many woman to handle.

Fielding at first slip: Running off your mate who has a surplus of feminine attention.

Bowling from both ends: Working two women in the same room.

A barrage of bouncers forcing you to duck for cover: More than one ex-girlfriend in the room while you are trying to tune other women.

Getting your eye in: Practice conversations with women earlier in the night.

Dispatched to the boundary: Have sex.

Whip the bails off: Masturbation or getting a woman's smalls off. "How'd ya go mate? Did ya even get the bails off?

They're flying off the edge: Attempts at conversation or connection with the opposite sex are going awry.

Let it go through to the keeper: Ignore a flirtatious offer from a woman or allow a woman's phone call to go to voicemail.

Batting too high up the order: Aiming too high with women.

Playing county cricket: God's gift to Australian men; English backpackers.

It's all about time in the middle: You need to talk to women often to become successful at it.

Seeing them like watermelons: Having great success with the opposite sex.

Coming out of the hand nicely: Your interactions with women have proved positive so far.

A one-dayer: A one-night stand.

IPL: Exotic action.

Twenty20: Explosive, short-lived sexual encounter, typified by flashy stroke-play.

Running between the wickets let you down: You've drunk a little too much.

Played a very straight bat: You didn't come on to a woman in any shape or form. Usually a mate's ex or sister.

Lot of moisture in the wicket: Many women present at an establishment.

Lot of turn in the wicket: Your interactions with the opposite sex are garnering unpredictable results.

Bowling into the rough: Trying to get a reaction from a woman.

Spent a lot of time at the crease: You've been drinking and/or chatting up for many hours.

Left arm around the wicket: Gay.

French cut: Blokes who act effeminate around women.

12th man: Carries the drinks all night, doesn't get any female company for his troubles. "I've been 12th man the last three weekends in a row."

Appeal against the light: Decline to have sex with a person because of their race/skin colour.

Battling without a helmet: No contraception.

Taking the new ball: Partaking in chemical enhancement after too many beers.

Leg byes: Pulling a root without a great deal of effort.

Enforce the follow-on: Sex after sex. "Mate, we both woke up at 10am and she enforced the follow-on."

Right-arm orthodox: The missionary position.

The yorker: An acute, well-delivered line or action that virtually guarantees sex. "We were getting on pretty good and they I yorked her, so she had to play at the ball."

Seagulling: Sitting in a pub on your own or with a couple of mates and making no contribution whatsoever to the pursuit of the opposite sex.

Duckworth-Lewis: The formula employed to gauge how many drinks you're prepared to buy a woman in order to get her into bed.

Adjust the sight-screen: Drink a few more beers in the hope the girl will somehow grow hotter.

Stranded at the non-striker's end: Your wing man, who was keeping a woman's friend busy, has crashed and burned and both females have brushed you.

Wide ball: Fat.

No ball: Fugly.

Ball tampering: Shaving your privates for a partner.

Night watchman: The father of a young girl with a curfew.

Underarm delivery: Australians acting like dickheads.

Pitch report: When your mate points out the hotties in the place when you arrive.

Stranded on 99: Getting along great in bed, clothes off, about to raise the bat and kiss the emblem and the girl gets cold feet and says no. Doesn't happen often and it was a good knock until then.

Do a Gilly: Walk when you didn't have to, the girl is ready to go home with you but you somehow disappear (tribute to Adam Gilchrist).

p/s photos: Zhou Wei Tong

Monday, April 27, 2009

Next Market Catalyst - Banks Stress-Test Results

The next catalyst for the US markets has to be the government's stress-testing of banks' results. Most analysts and commentators can only guess what the parameters are like. Some banks will be asked to raise additional capital due to the results of the stress-test.

19 banks were asked to submit to the test. If we look at the table for comparison, their Tier-1 capital would be a start. Those around 10% or below would fall under the "danger list", but its not all definitive, its probably one of the many factors that the government looks at. But Wells Fargo, Bank of America, even American Express and PNC Financial would fall under the "to be watched" category.

Of greater importance will be the Tangible Common Equity Ratio which has been harped on by Bernanke and Geithner. I think this measurement will be more critical. I would worry if the ratio is 4% or lower. Bank of America stands at just 3.1%. Citigroup is making me nervous at 1.7%. PNC Financial is there again at 3.3%, and US Bancorp is also there at 3.7%. Wells Fargo, despite registering such wonderful profits is there at 3.3%.

I think those that are below 4% will be barred from returning TARP funds back to the US government. Which is to say the Bank of America and Wells Fargo will still stay under the "jurisdiction of the US government" and will have to toe the line a lot more when it comes to compensation matters.

JP Morgan and Goldman Sachs are in the clear, and Goldman can return the funds should they wish. Returning the funds would allow Goldman to soothe executive nerves on drastic changes to their compensation scheme, and may act as a buffer to retain and attract talent in this difficult environment.

Even if Bank of America and Well Fargo may be asked to raise more capital. It is not a death sentence. It could just mean that these banks will have to try to convert existing preferred shares into common stock. We have to remember that when Citigroup did a similar announcement of the plan, it rocked the share price of Citigroup.
The blessings of the stress-test is that it will make more transparent the health of major US banks. Even though some may be asked to raise more common equity capital, the general view should be more of a relief to investors that these banks are continually being subjected to more screenings and testing of their viability. The end result of the stress-test is probably a boost to confidence and may actually see banking stocks moving up higher in tandem.

[stress tested]

In February, the Obama administration said 19 bank holding companies with more than $100 billion of assets would have to undergo a stress test. The move was designed to calm fears about the solvency of the banking system. The exams, conducted by more than 150 federal regulators, analyzed potential losses from residential mortgages to complex securities products. Banks will have several days to challenge the findings before the government makes results public the week of May 4.

p/s photos: Janice Man Wing Shan (a model turned actress, she will be a wonderful actress in the future judging by her stunning acting chops displayed in Love Story and La Lingerie)

Swine Flu A/H1N1 Takes Centerstage

Can something like an unknown swine flu affect financial market? One need only ask Hong Kong, and the rest of Asia during the SARS outbreak. It nearly crippled the surrounding economies. AirAsia could weather oil prices above $100, but the SARS outbreak nearly drove the company to collapse. So, it is best to keep a close watch on the flu outbreak as it seems to be spreading beyond Mexico. The Obama administration declared a public-health emergency with 20 cases confirmed in the U.S., including eight in New York, and said that there are likely to be more illnesses. China and Russia made plans to quarantine anyone with symptoms of the virus. Asian airports used a device to test arriving passengers for fever.

Russia banned meat imports from Mexico and several U.S. states, although World Health Organization officials said there is no sign the flu spreads by contact with meat. A WHO panel will convene Tuesday to consider whether to raise its global pandemic alert. In Geneva, World Health Organization Director-General Margaret Chan warned that the virus had the potential to cause a pandemic, but cautioned that it was too early to tell whether it would erupt into a global outbreak.

Only one of the 20 U.S. patients has required hospitalization, none had antiviral treatment, and there have been no fatalities. In Mexico, officials have confirmed 20 deaths as due to the new flu and believe 61 more deaths probably were. New cases of the flu, which is taking its heaviest toll in young adults, were seen outside Mexico City, the city that's been hardest hit.

Exactly how the disease is spread remains a mystery, though it is known to be able to move from one human being to another. The virus is made up of genetic material from swine, bird and human viruses. Often, it triggers only mild symptoms.

Stockpiles of Australian developed antiviral drug Relenza are being prepared for use around the world by governments in the global effort to combat the outbreak of swine flu. The US government announced overnight that it would release a quarter of its stockpile of Relenza and the other anti-viral drug Tamiflu after 20 cases of the flu were confirmed there, while other countries are expected to follow if further cases are confirmed. The death toll in Mexico alone now stands at 103, Reuters reported.

Relenza was developed by Melbourne-based company Biota and has been licensed to global pharmaceutical maker GlaxoSmithKline, which produces the inhalant at sites including its plant at Boronia, in Melbourne's east. Shares in Biota, which collects a 7% royalty from sales, shot up 67 cents, or 77%, or 62, to $1.54 this morning.

Authorities around the world are getting ready to tap into their stockpiles of Relenza and the Roche-produced Tamiflu to combat the outbreak of the disease, which emerged from Mexico at the weekend.Tamiflu, known generically as oseltamivir, and Relenza, or zanamivir, are both recommended drugs for seasonal flu and have been shown to work against viral samples of the new disease.

"Anti-viral drugs for seasonal influenza are available in some countries and effectively prevent and treat the illness,'' the World Health Organisation said in a statement over the weekend. The WHO said recent samples of swine flu were resistant to another class of anti-flu drug known as adamantanes, but were "sensitive to'' Tamiflu and Relenza.

Spanish health authorities are investigating seven cases of possible swine flu in people who returned from Mexico in recent days. New Zealand officials said that 10 students "likely" had been infected with the disease after a school trip to Mexico. Canada recorded four cases in Nova Scotia and two in British Columbia, in people with some link to recent travel to Mexico.

Mexican health authorities said the death toll from the new strain of A/H1N1 swine flu remains at 20, and they are continuing to investigate whether more than 1,000 others were infected with the mysterious bug, which attacked in three geographically diverse areas of the country and is taking its heaviest toll in young adults.

p/s photos: Kibby Lau

Saturday, April 25, 2009

Business Reads To Start With

There have been a few readers who have asked me what business books to recommend. I am not going to recommend textbooks, as you can go and do a CFA and read those books on their required list. If you are venturing into the business world, in particular in financial industry, be it research, brokerage, remisier, dealer, fund management or investment banking - these books are a good start. These books are well written, but more than that, its rooted in reality. In the corporate world, you need to appreciate how the different players interact, how to view various players, deciphering the motivations of various players... It should help enormously to have a sense of the kind of loyalty, integrity and egos running around.

Liar's Poker by Michael Lewis

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Panic! by Michael Lewis

Panic! by Michael Lewis: Book Cover

House of Cards by William D. Cohan

The Real Price of Everything by Michael Lewis

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The Money Culture by Michael Lewis

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The New, New Thing by Michael Lewis

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Capital, The Story of Long Term Excellence by Charles D. Ellis

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Barbarians At The Gate by Bryan Burrough & John Hellyar

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p/s photos: Carmen Soo

Wednesday, April 22, 2009

100 Million Vs 3 Million - The Beautiful Soul Of Eva Cassidy

The Susan Boyle youtube video now has been seen by more than 100m people collectively in just one week. While I am happy for her, I am a bit angry that only a few million (just 3 over million, and this was over a few years mind you) have seen this video of Eva Cassidy.

Many people just had to stop whatever they were doing and just listen to her when they first heard her sing Over The Rainbow. Some even said they were driving and had to pull over, listen to her song which was playing on the radio, and then tears just flowed. Eva touches so many of her listeners because she has a beautiful soul, and you know she sings from a place deep inside her. Eva never had the success she deserved when she was alive, and later she battled cancer but still sang her heart out. She got her fame after she died when some station picked up her recordings, and her albums now have sold millions. If there were so many of you who have watched Susan Boyle or Paul Potts, the least you could do is to give Eva a few minutes of your time, and you will be touched and amazed by her sincerity and talent.

Beautiful Eva died in 1996, from melanoma, the most deadly form of skin cancer. Her music was little-known during her 33 years of life, but today her soul-stirring voice is reaching people all over the world. For some fans, the pleasure of listening is enough. Others want to know more: "Who was this remarkable singer? Why haven't we heard of her before?
Just listening to her rendition of Over The Rainbow, you'd never know the song could be so heartfelt and meaningful. Eva's assuredness, phrasing, brings out the lyrics as a genuine soul yearning for redemption and assurance, its reflective and hopeful, achingly beautiful. You know that "somewhere" place she sang about in the song, I am pretty sure she is there now. Now go buy all her albums.

It was the fall of 1996, and Eva Cassidy was dying. As she lay in bed in the Bowie home of her parents, musicians in a nearby studio were laying guitar, piano, and violin tracks on vocals Cassidy had recorded over the years.

"After they'd finish, they'd come in and say, 'Eva, we just finished one of your songs—would you like to hear it?' " recalls friend Jackie Fletcher. "She had left so many incredible recordings."

Her friends wanted to do something—anything—for Eva. They wanted to share with others a voice that had been little heard outside Washington. Fletcher sent tapes to local radio stations, requesting that they play Cassidy.

"If they'd tell me, 'Jackie, I'm going to play Eva in this hour,' I'd call Eva and say, 'Listen to the station—they're going to play you tonight.' It made her so happy. She had worked so hard, and finally she was getting some recognition."

No one guessed then how the voice of Eva Cassidy would spread.

Four and a half years after her death from melanoma, a posthumous album, Songbird, reached number one on the United Kingdom chart with more than a million copies sold. One Web site devoted to Cassidy—there are five and counting—has messages from fans in Australia, Poland, Hong Kong, even Vatican City. In this country, National Public Radio aired a nine-minute segment on Cassidy in December, and soon her albums occupied five of the top seven slots on Amazon's bestseller list.

What is it about Eva that has created such a sensation?

For one thing, her voice is captivating. Mary Chapin Carpenter, a gifted singer herself, says that the first time she heard Cassidy's voice she "just about fell off the couch."

When radio stations play Eva, their switchboards light up. Many callers say they were in their car when they first heard her and had to pull over to cry.

"Eva evokes that kind of reaction. Not just 'She's good' but 'Who the heck is that?' " says Keith Grimes, who was a guitarist in the Eva Cassidy Band.

Cassidy had great control, phrasing, and range. She was petite—five-foot-two—but could belt out a bluesy "People Get Ready" as easily as she could sing a delicate tune like "Autumn Leaves." Some who heard this soulful Scotch-Irish-German woman thought she was black.

It's more than Cassidy's technical skill that grabs people. It's the sense as she sang that she was reaching from her heart to her listener's.

"There are singers that have great instruments but are just singing the notes," says Grace Griffith, a friend and local chanteuse. "Other singers have emotion but not the instrument. Eva had both."

No song speaks to this expressiveness as much as her rendition of "Over the Rainbow." Cassidy, who loved the Wizard of Oz books as a child, breathed new life into an old song about hope and longing.

An amateur video of Eva shot at Blues Alley, her face full of feeling as she sings "Over the Rainbow," is largely responsible for the big sales in England. It's just about the most requested video in BBC history.

Eva's parents receive two or three letters a week that mention how soothing and uplifting Eva's music is, how it helps them through troubled times. Her mother, Barbara, recalls a letter from a woman who said that when her son died, "the doctor gave her a hug and Eva's record."

In 1998, when David Finn's mother was dying, Cassidy's voice provided comfort.

"With the diabetes, she had lost her sight and was bedridden the last six months of her life," recalls Finn, who once owned an Annapolis restaurant called Pearl's, where Cassidy performed. "We would sing along with Eva's songs. The diabetes causes a lot of pain. It was one of the things that would help ease the pain."

Some may wonder if Cassidy's death at the age of 33 accounts for some of the popularity. No doubt her life story is part of it. But articles about her haven't boosted sales as much as when her songs are played on the BBC or NPR. Hearing about Eva Cassidy isn't as powerful as hearing her.

Says her father, Hugh Cassidy: "The letters, the things I read, more and more confirm that there's something afoot here. It is kind of mysterious the effect it's having."

Eva Cassidy was happiest not in a smoky nightclub but outdoors, where she hiked and biked and basked in the beauty around her. She and her mother—her best friend—went for a walk, bike ride, or drive to the water almost every Sunday.

"She had this old pickup truck, and one time we were on this country road and she started swerving," recalls Barbara Cassidy. "I said, 'What are you doing?' And she said, 'Mom, don't you see those caterpillars? I can't run over those.' "

"She's one of those people who see God in everything," says Keith Grimes. "She had respect and appreciation for living things. She wasn't a religious person in the churchgoing sense, but she was spiritual."

Cassidy's favorite "holiday" was the first day of spring. Her birthday was in February, and she'd save one of the sugar roses off her sheet cake and stick it in the freezer. Then on the first day of spring she'd take it out and savor it.

Cassidy's favorite time was sunset, which she called "the golden time."

"When I'm working out in the shop, I wait for the golden time," says Hugh Cassidy, a retired Prince George's County teacher and a metal sculptor. "You just stop what you're doing and take it in. When I see those golden rays, every once in a while I'll say, 'It's time to put on Eva.' "

Yale University Endowment Fund Beats Harvard

University endowment funds are widely tracked and followed. Yale, Harvard, Virginia, etc... have high profile managers and there is a strong fascination to follow how these supposedly top business universities manage their own funds. The fact that these universities can attract the best professors and teaches the best management practices and finance courses, puts additional pressure on themselves in that regard. Can they apply what they supposedly know best?

Yale and Harvard led the pack, and their most significant move was to diversify their portfolio into private equity and hedge funds. Harvard went as far as buying tracts of timber concessions. The rationale is quite good. If all your funds are in equity, you are tracking listed companies' fortunes. The best you can do is to continually beating the index, which is very difficult over the longer term. It can be argued that funds that seek out alpha returns are usually hedge funds and private equity funds, owing to the fact that they have specialised knowledge. The key is of course, being able to pick the right managers in private equity and hedge funds.

Even so, one can argue that these investments have a similar danger: they all tend to look good during a bull run, and not sufficient clarity is available on how they perform during extended bear markets like the ones you have currently. The danger is more pronounced in hedge funds because many hedge funds tend to close shop when they have a couple of negative years (not worthwhile to stick around, as you need to claw back the losses before you get your 20% profits on gains).

Endowment funds are not like other funds in that there is no "massive withdrawal by investors" or panicked runs on funds. In that sense, they are better off in holding out till the markets return. They only need to budget for annual fund requirements by the university to fund their operations. Nevertheless the article in did a good job singing the praises of David Swensen.


University endowment managers followed Yale investment guru David Swensen into private equity and hedge funds, eager for the same 16 percent annual returns he got. Now with the crash, they’re short on cash. Luckily for Yale, Swensen didn’t always follow his own advice.Swensen’s idea, implemented at Yale and copied nationwide, was that universities should shift their endowment money out of traditional investments such as stocks and bonds and into higher-yielding ones like private equity, hedge funds, and real estate. The Yale model, as it came to be known, perennially outperformed stodgier strategies, gaining Swensen gurulike adulation. Since June, though, endowments on average have given up 22.5 percent of their value. Moreover, the economic crisis would seem to have exposed a major flaw in the Yale model: Alternative investments like private equity and real estate are very difficult to convert to cash without significant loss, leaving universities with a dearth of ready money. As a result, many schools have slashed operating budgets and sold off stocks at depressed values.

Swensen is unrepentant. Walking me through his offices on the fifth floor of a brick building a couple of blocks from campus, he shows me a slip of paper documenting the Yale endowment’s performance in the decade ending June 30, 2008: up 16.3 percent annually, compared with 6.5 percent for the average college endowment and 2.9 percent for Standard & Poor’s 500-stock index. The value added to Yale’s coffers was $14.9 billion.

Since Swensen took over in 1985, Yale’s endowment has led all universities in average returns and leapfrogged Princeton and the University of Texas to become the second largest, behind Harvard. In the spring of 2008, alumni mounted a campaign to name a new residential college after him. His insights into the markets landed him a spot on President Barack Obama’s economic-recovery advisory board.

Tributes clutter the walls and shelves of Swensen’s office: a 2006 fan letter from Warren Buffett (“Yale and the investment world owe you a great deal”); the Mory’s Cup for distinguished service to Yale, an award whose other recipients include former president George H.W. Bush (“Bush one, not Bush two,” Swensen notes); and a limerick in his honor by the economist and Nobel laureate James Tobin, celebrating the endowment’s reaching $10 billion in 2000. Called “Son of Sven,” it neatly summarizes the biography of Swensen, a Wisconsin native with a doctorate in economics from Yale: “A young Viking, a badger called Dave / Determined poor Eli to save / First he’d be / A PhD / And then make those markets behave.” Mugs illustrated by the children’s book author Sandra Boynton commemorate several endowment milestones: “I actually drink out of the $6 billion coffee mug every morning,” Swensen says.

He earned these plaudits with a bold strategy that increased Yale’s stake in private equity from 3.2 to 20.2 percent; in real assets—timber, real estate, and the like—from 8.5 to 29.3 percent; and in hedge funds, from zero to 25.1 percent. During his tenure, the share of Yale’s endowment invested in domestic stocks and bonds has dropped from 71.9 to 14.1 percent.

In his 2000 book, Pioneering Portfolio Management: An Unconventional Approach to Institutional Investment, and in numerous speeches, Swensen championed such alternative investments. He argued that while beating the stock market is almost impossible because so much information is available about public companies and shares are accurately priced, shrewd managers can exploit inefficiencies in the pricing of less familiar private assets. Diversification into alternatives, he added, reduces risk.

He contended that keeping funds in investments that are more liquid—that is, easily converted into cash—is more valuable to short-term players than to endowments, which can afford to wait until private assets are sold or go public. He brushed aside concerns that most alternative investments are tied up for years and therefore illiquid. “Investors should pursue success, not liquidity,” he wrote. “Portfolio managers should fear failure, not illiquidity.” And again: “Accepting illiquidity pays outsize dividends to the patient long-term investor.”

For endowment managers, the Yale model appeared to solve a constant dilemma: how to generate returns high enough to support their operating budgets and simultaneously preserve capital for the future by allowing growth to keep up with inflation. Princeton, the Massachusetts Institute of Technology, and Bowdoin College hired Swensen protégés to run their endowments. By the 2007 fiscal year, colleges were devoting 42 percent of their endowments to alternative investments, up from 23 percent in fiscal 2000, according to Commonfund, a money manager for nonprofit institutions. Endowments grew so fast that many schools, including Yale, hiked their payouts—the percentage allocated to the operating budget. Private equity was particularly rewarding, averaging a 16.9 percent annual return to university endowments.Now, the recession that has already undone the reputations of Alan Greenspan, Robert Rubin, and other economic sages threatens Swensen’s too. Nearly every sort of alternative investment has been slammed, undermining Swensen’s diversification rationale, and his advice to downplay liquidity has backfired. With private donations dwindling and students clamoring for aid, universities that followed the Yale model find themselves in a plight that could be called cash-22. The publicly traded stocks they still own have plummeted in value, leaving the schools overdependent on illiquid alternatives—and constrained by contractual obligations to invest even more. The Yale model assumes returns when private holdings go public, but no initial public offerings are taking place.

From the best and brightest on down, most universities failed to anticipate this quandary. Harvard, Duke, Columbia, and the University of Virginia are looking to unload private equity at a loss by trading it on a secondary market that has emerged as a last resort during the cash crunch. Many schools are also trying to redeem shares in hedge funds—generally considered the most liquid alternative investment—only to encounter “gates” or “lockup clauses” in their contracts that prevent them from getting their money back. Brandeis University, which boosted its allocation to alternative investments from 29 percent of its endowment in 2003 to 65 percent in 2008, has seen its endowment drop 23 percent since June, and several of its big donors have been hit by losses in the Bernie Madoff fraud. To raise cash, Brandeis has considered closing its art museum and selling its renowned collection of contemporary art. Other schools are imposing salary and hiring freezes and delaying building projects. Like many investors who bet on mortgage-backed derivatives and similarly novel strategies during the boom, the Yale model’s adherents have painfully learned the old lesson that greater returns carry greater risk.

“Institutions were attempting to emulate the Yale model because it seemed to make sense,” says the chief investment officer for a university with a billion-dollar endowment. “Now this is the squeeze that everybody’s in. Were we wrong to go into this asset class? Is the asset class dead forever? Do we have to change the model going forward? These are all questions people are grappling with.”

Nevertheless, Yale doesn’t seem to be hurting as much as some of its imitators. That’s because Swensen, it turns out, hasn’t always followed his book’s advice. He pursued success and liquidity, employing lessons he had learned from prior bubbles and crashes to ensure ready access to cash. Now, with his counterparts at other top colleges dumping private equity investments in a panic, Swensen, ever the contrarian, is looking to buy more. Those who know him would expect nothing less.

Swensen tells me that Yale is about to break precedent and announce endowment results before the end of the fiscal year. They aren’t good: down 25 percent, to $17 billion from $22.9 billion. He concedes that the economic crisis has identified “real weaknesses” among some of Yale’s outside managers, including one who put together a land-development fund without enough capital. On the other hand, Swensen points out, he’s still beating the stock market, which has slid by an even greater amount. When critics deride the performance of alternative investments, “they aren’t asking, ‘Relative to what?’ Hedge fund returns are negative. That’s very disappointing, but they’re still far superior to equity returns,” he insists, spinning the numbers like a campaign manager. Although it’s too early to evaluate how private equity has done, he adds, “I’d bet, two or three years from now, when we look back, high-quality private equity managers will produce superior returns” to public equities.

Swensen disavows any responsibility for the troubles of other endowments that adopted the Yale model. He’s heard the attacks, he says: “Sometimes it’s me personally, or Yale. They put my name on it, or Yale’s name on it, and criticize the approach.”

p/s photos: Haruna Yabuki

Tuesday, April 21, 2009

The Susan Boyle Phenomena Debated

Sometimes the media can drive something into orbit and then take the other side and whack the same thing down, after being largely responsible for jazzing up the frenzy. Granted, Susan Boyle was very good. The fact that she was frumpy, even a bit fat and not in the requisite package, made her rise to stardom all the more wonderful and appealing. We have a strong streak in rooting for underdogs. Now after all the hype and hoopla, we have the detractors coming in to pour cold water on the Susan Boyle phenomena.

Some would compare her to Paul Potts, who won the previous year. The thing that made Susan's appearance on the show all the more remarkable was that she faced a hostile audience that treated her with complete disdain, yet she silenced and won them over within four or five bars of her song. Potts faced no such hostility during his audition in 2007 and the reason was he knew his place: he was fat, ugly, poorly dressed, a typical "mild, unassuming, probably a loser" and the look of someone who has been probably bullied way too often and discarded when he fronted the judges, it was almost pitiful - like he was bracing for the inevitable rejection. Susan Boyle, however, did not know her place: she was old, fat, ugly, dowdy, unemployed and didn't pluck her eyebrows, yet she had sass, she refused to shuffle meekly onto the stage, her body language said "like it or lump it".

That seems to be a big thing about prejudging people, that everyone should know their place in life, and not step out of those boundaries. If you do not look like a supermodel, don't try to wear those "revealing clothes". Don't pretend to be scholarly and smart when you cannot even deliver a proper sentence in English. Don't attempt to be sexy when you do not have the goods. Don't think you can be accepted by the snobs just because you learn a few simple terminologies from the Wine For Dummies book. Susan basically taught us all that no matter how you look or is presented, you are still a person, not a non-person in the many instances I have cited above.

It's that the judges and most of us that didn't know our place and we ended up looking like morons for judging a person in a singing contest on her appearance. We should embrace and feel comfortable in our own skin. There is nothing wrong with having self confidence and projecting an image of success at all times - even though we may not have the requisite appearance that the shallow society dictates. If you haven't grown out of superficiality by the time you hit your 30s, you probably never will. Aesthetics should always run second to substance.

We all have our Susan Boyles in life, people whom we have prejudged unfairly, and maybe never having given them a decent or fair chance before categorising them. People are only discovering now the way human nature works? If you're physically attractive, people will give you the benefit of the doubt. If you're a hot chick with a nice rack, men will be even more generous to you on a first impression. If you're fugly, people expect you to prove your worth. While that may be the unspoken mantra of the world as we know it, we should all strive to cut that bit by bit out of the already "false world" that we live in and that we somehow built up.

The second part of the debate lies in determining just how really good Susan Boyle was. OK granted, she was good but so too were the hundreds of aspiring singers who tried out for the same role of Fantine for Les Mis in London, New York, Toronto, Sydney, Tokyo, etc... If you put them together, maybe just 5 final shortlisted candidates for the role of Fantine for each staged musical of Les Mis, you'd have close to 200 candidates. I believe Les Mis has been performed in more than 20 countries already and counting. Thus we can argue that out of those shows, maybe there were 160 really good singers that are still trying out week in week out to make a decent living as a musical actor, and let's say just 20 of them are better than Susan Boyle - what about the fate of these 20 brilliant singers still barely making enough week in week out, who haven't tasted stardom, who are still locked into playing bit parts, waiting for the day for their big chance. The sad thing is for most of them, the big breaks never do come at all.

This puts into perspective that as good as Susan Boyle is, she is but one of thousands of similarly talented people. Her frumpiness and not-so-correct age may have actually given her a better chance at success than the 20 or 30 aspiring professional singers/actors I mentioned earlier, probably better looking and much younger Fantine wannabes in the Les Mis phenomenon.

I did say before that I think Susan Boyle sounded better than Elaine Paige, and she did, but we have to remember that Elaine Paige is more than just a singer, she is a stage and theater musical performer. Elaine is a more complete package when she acts and sings on stage, e.g. her performances in Evita and Cats were absolutely wonderful. I don't wish to prejudge Susan here, but it is probably going to take years of experience and training to sing and act anywhere close to the level Elaine Paige is at. Granted, I still think Susan sounded better than Elaine, its the timbre in her voice and the soaring range (that doesn't go into yelling) she has. Susan will make a good recording artist, probably of heart-stopping show-stopping numbers: Memory (Cats), You'll Never Walk Alone (yes, you Liverpool buggers, the song does not belong to your fucking club, its the magnificent number from the 1945 Rodgers & Hammerstein musical Carousel), I Am What I Am (now that would be wonderful to hear.... the song is from one of my favourite musicals La Cage Aux Folles) .... gee, I should get some fees as a producer!!??

So how?

p/s photos: Wen Wen Go

Monday, April 20, 2009

Glimmer Of Recovery In HK Property Market

HK and Singapore properties went down sharply at the beginning of the crisis. Singapore is still nursing a down trending market. However things are looking up in HK. Recent property launches have attract a lot of buyers. Of course the pricing of these new developments were a bit more attractive, and we should remember that many of the buyers were from mainland China. Developers reported vigorous weekend sales as Sun Hung Kai Properties (0016) sold 400 apartments at The Latitude while Cheung Kong (0001) said all flats at Central Park Towers II were sold on Saturday.

SHKP raised prices by 3 to 5 percent after the first batch of 50 homes at The Latitude, a San Po Kong residential project, were sold on Saturday. The average price was 2 percent higher than the original price of HK$7,255 per square foot.

The developer reaped more than HK$3 billion from flat sales at The Latitude, at an average price of HK$7,400 psf. Prices ranged between HK$5,300 and HK$15,000 psf. Flats were sold at between HK$3.6 million and HK$18.5 million. A special 1,712 sq ft flat, "Sky Latitude" with a 1,294 sq ft "sky garden" was sold for HK$26.5 million. The project has five residential towers totaling 1,159 homes.

Meanwhile, Cheung Kong executive director Justin Chiu Kwok-hung said the 1,068 flats at the Tin Shui Wai project Central Parks Tower II were all sold in three days since the launch on Thursday. Chiu earlier estimated the sales to generate about HK$2 billion.

The secondary home market is expected to be fueled by the good sales in the primary market, said Centaline Property research associate director Wong Leung-sing. "Home transactions in the secondary market may jump 9.1 percent and 11.1 percent by volume and value, respectively, this month, to 6,000 deals and HK$17 billion, when compared with March," Wong said.

The value of home sales in Hong Kong soared 86.8 percent month on month to HK$25.4 billion in March to hit a nine-month high, while the number of deals rose 58.3 percent to 7,102, according to data from the Land Registry.

"Earlier-than-expected signs of stabilization of major economies lead us to believe that various governments' stimulus measures could help restore homebuyers' confidence and bring forward the inflection point of price stabilization," Goldman Sachs analyst Anthony Wu said. The research house forecast prices in the primary market will fall 5 percent and that of the secondary market will be flat this year.

UBS analyst Eric Wong also upgraded home price forecasts "as credit conditions continues to normalize, mortgage competition returns, good stock markets boost confidence, and global quantitative easing raises awareness of the need to hold real assets instead of fiat money." Wong also believes the Hong Kong homes market will rebound earlier and faster than most property markets.

p/'s photos: Priyanka Chopra

Don't Marry An Economist! - The Trouble With Economists

You can only listen to economists for so long. They are generally depressing. Have you ever seen a bullish economist? Start of a bull market for stocks, economists will be guarded and cautious. During the market's peak, the economists get more alarmist, warning of impending doom. When markets crash, they will say they told you so, and their prognosis is its not over yet. Deep into a recession, they will find more work and still say the worse is yet to come. When markets start a bull run, they will still be guarded and cautious - and that my friend, is as bullish as economists will get, guarded and cautious. Its very depressing to read an economist blog, worse, hear him talk. They look at past figures to project the future and somehow their projections are never bullish. Their famous lines during a recession, heck, even deep in a recession:

1. Things are still getting worse. They will seek out the negatives rather than look for positive. Even today, they will cite that industrial production just hit a 10-year low. Housing starts remain incredibly weak. Foreclosures ... are surging again. Can you imagine being married to one - the steak is too rare, too well done, was too expensive, not worth the money spent, too cold, ... imagine what its like in bed with them ... what do you expect, its called the diminishing marginal utility returns...

2. Some of the good news isn’t convincing. Even when face to face with good news, they will choose not to believe and trust them. Wells Fargo, for example, announced its best quarterly earnings ever. But ... reported earnings ... depend a lot on the amount the bank sets aside to cover expected future losses on its loans. And some analysts expressed considerable doubt about Wells Fargo’s assumptions... Meanwhile, Goldman Sachs announced a huge jump in profits... But as analysts quickly noticed, Goldman changed its definition of “quarter” ... so that — I kid you not — the month of December,... a bad one..., disappeared from this comparison.

3. There may be other shoes yet to drop. To an economist, there's always the other shoe to drop, I mean, how many shoes do we have, are we octopuses? Can we revisit the lows again and again? Well, commercial real estate is coming apart at the seams, credit card losses are surging and nobody knows yet just how bad things will get in Japan or Eastern Europe. We probably won’t repeat the disaster of 1931, but it’s far from certain that the worst is over.

4. Even when it’s over, it won’t be over. That's why I want to whack them over their heads with a club. They are still harping on things such as: the 2001 recession officially lasted only eight months... But unemployment kept rising for another year and a half. The same thing happened after the 1990-91 recession. And there’s every reason to believe that it will happen this time too. Don’t be surprised if unemployment keeps rising right through 2010. ... Employment will eventually recover... But it probably won’t happen fast.

You need to know that an economist WILL NEVER BE ABLE TO TELL YOU WHEN A BULL MARKET HAS STARTED, they are too busy looking for negatives. The entire subject of economics is a historical study of facts and figures, ever met a joyful historian? The subject of economics and its training naturally turns out skeptics. That has been their strength and their main downfall. They are killjoys.

For all their commentary on financial markets, how many economists are there in the richest 1000 in the US? None, I believe. In order to do well, get tenured as a professor. Over the last ten years or so, with the popularity of business books and the advent of the internet, we have a new breed of economists surfacing. Still pessimistic, still pragmatic, but increasingly vocal. In order to stand out, they need to shout louder that the disasters are bigger and more severe - economists are like seismologists, they look for disasters, they are not research scientists, they will never shout that they have found a cure for cancer or patched the genome of .... (you fill in the blanks). Hence to be noticed, to get that book deal, to be quoted by the news sites, you have to say the more extreme things.

They will never tell you when to buy, because they themselves don't know when to buy. They will tell you when to sell, they only have sell now, sell more now, be cautious, sell everything, sell some - and that runs the gamut of their advice to us. If you take only one side of the equation, you will eventually be right, just like Marc Faber or Jim Rogers.

My main gripe is that we also know when the economists will finally say its ok to buy some stocks, ... when the Dow has just breach past 10,000 ... what effing use is that?

The entire market place encourages them to be pessimistic. In markets, it pays to be negative, because when markets fall, they will recognise your calls. If markets turn bullish, they players are so happy anyway, they will forget you ever called for a prolonged bear market. And, thats how the game is played.

p/s photos: Coco Jiang

Sunday, April 19, 2009

Bangkok (Really) Dangerous

The Thais still don't know what they really want. Three years on and they are still at it. As neighbours, we need to keep watch on why they are still at it. The King is still not interfering, and it looks increasingly likely that it will be up to the King to make a call. The shooting of Sondhi Limtongkul (yellow shirts' leader) indicates that things are getting to a boiling point and some of the more extreme members are resorting to desperate measures which does not jive with the spirit of the protests from both sides - many are wondering what have they created. Unrest left to fester will always see bad hats trying increasingly ruthless strategies to win the battle - it is not a nice development.

  • The government was once again surrounded by protesters Mar 26-Apr 14, 2009, this time called the Red Shirts, a.k.a. United Front for Democracy against Dictatorship (UDD). The protests underscore the ongoing political rift in the country between Thaksin supporters and opponents despite the formation of a new government led by the Democrats.
  • Short term risks remain for more clashes and unrest which may spread into the provinces. Prolonged prosecution of the arrested Red Shirts could cause simmering dissent. Thais in the provinces still aspire to democracy in the sense that their majority votes will produce a government of their choosing. It appears the government fully realizes that if it fails to alleviate economic hardships in the months ahead, dissatisfaction could worsen political instability.
  • Economic Repercussions

  • Ongoing political instability will worsen Thailand's looming recession as it may disrupt much-needed fiscal stimulus spending at a time when foreign investor confidence has been fragile since Thaksin was deposed 3 years ago.
  • Fitch and Standard & Poor's downgraded Thai sovereignt debt, which would raise the cost of financing a growing budget deficit.
  • Late 2008 airport blockade cost economy $500 million. Further losses may ensue from damage to tourist confidence. Tourist expenditure is approx. 10% of GDP.
  • Political Context

  • Red Shirts accuse key privy councilors in the current government (i.e. General Prem Tinsulanonda, the king's adviser) of being involved in the overthrow of Dr. Thaksin's government in Sept 2006. They demand the resignation of these individuals and PM Abhisit to restore true democracy in Thailand. Protests are co-led by Jakrapob Penkair, ousted minister facing lese majeste charges
  • Street protests revive old battle line between Thaksin opponents (Bangkok elite, assorted royalist groups and elements of the military, Democrat Party, PAD) and Thaksin supporters (poor rural and urban working-class masses, UDD, PTP or Phue Thai Party formerly known as PPP under PM Sundarajev and formerly known as TRT under Thaksin)
  • Anti-Thaksin PAD (People's Alliance for Democracy) or the 'Yellow Shirts' claims Thailand's rural majority — who gave landslide election victories to the Thaksin camp — is too poorly educated to responsibly choose their representatives and says they are susceptible to vote buying. PAD wants the country to abandon the system of 'one-person, one-vote', and instead have a mixed system in which most representatives are chosen by profession and social group
  • Timeline: Political crisis has entered its 3rd year

  • Apr 14, 2009: Protest leaders called off rally after being surrounded by troops
  • Apr 13 2009: Bangkok erupts in violent clashes between military and protesters
  • Apr 12 2009: PM Abhisit declares state of emergency. Thaksin addresses his supporters via phone and video link and calls for peaceful revolution
  • Apr 11 2009: Protesters break into ASEAN summit in Pattaya. ASEAN summit canceled
  • Mar 26 2009: Government offices in Bangkok surrounded by anti-Abhisit protesters
  • Mar 21 2009: PM Abhisit receives 176 no-confidence votes, 246 confidence votes from Parliament after PTP-led censure debate
  • Dec 15 2008: Democrat Party's Abhisit Vejjajiva elected as Prime Minister
  • Dec 6 2008: The 3 ruling parties reconstituted under new guises. Democrat Party and representatives of smaller parties formed new coalition government of at least 250 MPs. Phue Thai Party (the reincarnation of PPP) said it may contest Democrat bid to form a coalition government
  • Dec 3 2008: Airports reopened after they were blockaded by protesters
  • Dec 2 2008: Constitutional court disbanded the coalition government (as demanded by protesters) and banned its executives from government for 5 years
  • Dec 1 2008: Standard & Poor's lowered economic outlook for Thailand due to chance of another military coup
  • Nov 23 2008: Protesters blockade airports, halting cargo and passenger flights
  • Oct 21 2008: Thaksin found guilty in Ratchadaphisek land case, sentenced to 2yrs in jail
  • Oct 20 2008: Top army general called for PM Somchai's resignation
  • Oct 6-7 2008: PAD besieged parliament to demand dissolution of House
  • Sep 17 2008: Parliament elects Somchai Wongsawat, Thaksin's brother-in-law, as new PM
  • Sep 14 2008: Emergency rule ends
  • Sep 9 2008: Constitution Court disqualified Prime Minister Samak Sundaravej from the premiership on conflict of interest charges related to his role in hosting two television cooking programs while in office. The ruling will dissolve Samak's cabinet in 30 days
  • Sep 2 2008: Thai Prime Minister Samak Sundaravej imposed a state of emergency in Bangkok after clashes between anti-government protesters and supporters of the administration broke out after Thailand Election Commission ruled unanimously in favor of ruling party PPP's dissolution on account of electoral fraud by PPP deputy leader Yongyuth
  • May 2008: Office Minister Jakrapob Penkair resigns on lese majeste charges that he denounced the monarchy at a speech to the Foreign Correspondents Club of Thailand
  • Jan 2008: PPP forms coalition government after falling short of a majority - only 232 seats secured in 480-seat parliament. None of 7 parties won majority
  • 2007: The year under the junta was chock full of surprises for Thai markets, with capital controls, populist rhetoric, economic policy indecision, violence in the muslim south and elsewhere, uncertain timing of return to democracy, elections postponed 2x, draft constitution less democratic than hoped - Senate half appointed, half elected - but passed anyway with only 58% of votes cast
p/s photos: Aum Patcharapa Chaichua

Saturday, April 18, 2009

Putting Bear Markets Into Perspective

Putting the 4 truly bad bear markets next to each other kind of puts into perspective where we are. The grey line is the Great Depression, were the markets lost as much as 89.2% before recovering. The 73-74 oil crisis saw equity markets losing 48.2% before rebounding. The internet boom and crash saw equities losing 49.1% before recovering.

The current correction went as low as losing 56.8% and has since recovered some 28% from its low. This is not to say that we have definitely touched the low point, but it looks persuasive enough. I would say that we have a better than 75% chance NOT to revisit the lows again, which means we should recover slowly from here.

p/s photos: Maggie Wu

Update On Marketocracy Portfolio

My portfolio was started on 1st August 2008. Marketocracy lets you manage a virtual portfolio of $1M in a simulated trading environment, allowing you to track your performance accurately and compare your fund management skills to other investors and professional fund managers. Yes, they do take into account transaction cost as well. If your track record turns out to be one of the best, you could be hired to help manage a real fund at Marketocracy. It's a great place to learn, and a great place to prove your talent. They also have important rules to ensure that you are running an actual investing portfolio and not just sitting on cash:
  • No position can exceed 25% of your total portfolio value.
  • Half your portfolio must be comprised of positions under 10% each.
  • Your cash position isn't limited by this guideline, although you must be 65% invested
My fund was smartly called SMF, or Salvador Mutual Fund (no, not the foul language acronyms you are thinking). So far so good, although the first couple of months was iffy. SMF fund performance in orange colour.

The main objective of the fund is to beat the S&P 500. For the past 6 months, the S&P 500 has lost 6.58% while my fund has gained 27.3%. There are usually rules which dictate that you must be at least 60% or 80% invested at all time, and your aim is to beat the index. If you can consistently beat the index, you should be golden. If you look at the turnover rates, I have increased the trading activity over the past two months as I think the recovery is still volatile and is more suited to be traded.

modern portfolio theory, you basically aim to beat the index, based on the premise that:

over the long run stocks offer superior returns

hence if you consistently beat the index, over the long run, you should have superior returns

graph of fund vs. market indexes
SMF m100 S&P 500 DJIA Nasdaq

recent returns right curve

Last Week 3.55%
Last Month 25.13%
Last 3 Months 30.78%
Last 6 Months 27.34%
Last 12 Months N/A
Last 2 Years N/A
Last 3 Years N/A
Last 5 Years N/A
Since Inception -11.71%
(Annualized) -15.71%
Last Week 1.04%
Last Month 11.39%
Last 3 Months 2.55%
Last 6 Months -6.58%
Last 12 Months N/A
Last 2 Years N/A
Last 3 Years N/A
Last 5 Years N/A
Since Inception -29.75%
(Annualized) -38.40%
Last Week 2.52%
Last Month 13.74%
Last 3 Months 28.23%
Last 6 Months 33.93%
Last 12 Months N/A
Last 2 Years N/A
Last 3 Years N/A
Last 5 Years N/A
Since Inception 18.04%
(Annualized) 22.69%

left curve alpha/beta vs. S&P500 right curve

Alpha 34.99%
Beta 1.12
R-Squared 0.78

left curve turnover right curve

Last Month 119.32%
Last 3 Months 163.76%
Last 6 Months 189.82%
Last 12 Months N/A

Symbol Price Shares Portion of Fund Gains Today Inception Return
EXM $7.24 8,000 6.32% $34,961.48 3.72% 36.83%
KBH $16.59 6,500 11.99% $19,730.30 1.90% 22.39%
ERX $26.85 3,000 8.95% $20,702.75 1.94% 21.09%
BRCD $4.58 15,000 7.76% $8,139.56 0.22% 13.44%
UBET $1.80 20,000 4.08% $6,590.86 0.00% 11.02%
QSII $49.80 2,000 11.39% $5,127.90 -0.93% 5.43%
DLTR $43.46 2,000 9.87% $4,022.24 -0.28% 4.85%
GCH $9.52 7,157 7.72% -$3,331.55 -0.85% -3.80%
ACTG $4.18 12,000 5.60% -$5,661.30 1.55% -5.93%
WFR $15.47 6,000 10.51% -$12,943.44 0.06% -12.24%
FXI $32.55 2,000 7.46% -$25,322.00 -1.17% -28.00%

p/s photos: Xu Jinglei

Things To Do During Lockdown

All local councils, utility companies, construction firms (those with permission) and city planners in Malaysia should take the opportunity...