To Spend or To Save

Another good book to share. In any country, if the people never spend; the economy can’t expand. It happens in Philippines before and in Malaysia, it may happen if we keep on increasing our saving rate every month. Currently, I’m reading a book by Paul Krugman on “The Return of Depression Economics”, tells us the rising and downfall of great economy like Chile, Argentina, Mexico, Japan, Thailand and the rest of Asian countries. One of the reasons is, “high saving rate”. Surprising isn’t it? For more info log on: The-return-of-depression-economics-and-the-crisis-of-2008. 

To avoid this to happen, the government will normally help the people to spend. How? By issuing more bonds or Government Trust Funds (ASM, ASW and AS1M), hoping the public will take their money out from FD and invest into government related funds. The government will then use this money to stimulate the economy by creating or subsidizing more projects; especially to those sectors that will have greater “multiplier” effect (so call). One may also argue that, if they start to “bail out” companies own by their families or issuing projects related to their crony, it will back to square one or worst. Well, according to Paul Krugman, it is subject to  “moral hazard” (term use for corrupt leaders or politician). It’s all depends on how we uses a “knife”. It can be for good or otherwise.

Also read “To save or To Spend?” from The Star Online: The Real Matter, Pankaj Kumar. Happy reading and exploring.
  

Total Solar Eclipse 2009

The July total solar eclipse is considered unusually long. This will be a spectacular total eclipse, lasting over 6½ minutes at maximum and visible to millions of people over a path up to 258 km wide. The total solar eclipse of July 22 2009 will be visible across south-east Asia and the western Pacific. Millions of people in Asia will experience almost an hour of the the moon creeping across the sun's disc until finally being plunged into total darkness in the day.

For Hindu's in India, this eclipse has special significance, as it occurs in the Vedic months Aadi (July-Aug), the first New Moon of the Vedic Solstices. These signify a divine time shift for the celestial bodies and represents a perfect opportunity to appease your ancestors and receive great blessings. According to Vedic myth, millions of celestials, including the nine planets, who are all divine beings, participate and join together in prayer during the total Solar eclipse. This happens once every two or three lifetimes for a perfect Solar eclipse to occur like the one this month. The previous total eclipse, in August 2008, lasted two minutes and 27 seconds. This one will last six minutes and 39 seconds at its maximum point.

                                  

Total solar eclipses usually take place about once every 18 months, and always at new Moon - when the lunar body sits directly between the Sun and the Earth. The next total solar eclipse will occur on 11 July next year. It will be visible in a narrow corridor over the southern hemisphere, from the southern Pacific Ocean to Argentina. The next total solar eclipse seen in Hawaii will be in 2106. For more info, check out  solar eclipes 2009.    

You can also google all about Total Solar Eclipse 2009 at:
1. http://bawaal.com/blog/1034-longest-total-solar-eclipse-of-the-21st-century-on-july-22-2009

2. http://www.wsoctv.com/weather/20129616/detail.html

3. http://www.thaindian.com/newsportal/sci-tech/solar-eclipse-2009-streaming-video-sites_100221176.html

Happy reading and watching...

Inventor of Pen-drive is Malaysian?

Fact file:

Name: Pua Khein Seng

Age: 31

Hometown: Sekinchan, Selangor

Education: SJKC Yeok Kuan, Sekinchan; Pin Hwa Independent school, Klang; Chiao Tung University, Taiwan

Occupation: Engineer/ President of Phison Electonics Corp

Current base: Taipei , Taiwan

Years abroad: 12

WHEN he set off for Taiwan in 1993, Pua Khein Seng's only aim was to complete his degree in Electrical Control Engineering at the renowned Chiao Tung University and return home to work in Malaysia .Never did he envision himself heading a multi-million dollar Taiwanese company that developed the world's first USB flash removable disk, which they called Pen Drive.

Pua Khein Seng went to Taiwan to get his engineering degree but ended up staying on, starting his own company and inventing the pen drive. "I went to Taiwan to pursue my undergraduate degree. I chose Taiwan only because it was too expensive to study either in the United States or Singapore . "However, I did well in my undergraduate programme and was offered a place to do my masters," explained Pua, who was back in Kuala Lumpur recently for a holiday. After completing his Masters in July 1999, Pua worked for about six months in a local company before deciding to set up his own venture company with four fellow engineers who had studied with him at Chiao Tung.

"We were confident that we had the know-how and ability to start our own business, which is focused on USB technology. The company is called Phison because there are five of us - two Malaysians and three Taiwanese engineers," said Pua, 31, who hails from Sekinchan, Selangor. Phison Electronics Corporation was set up in November 2000 and within six months the young entrepreneurs came up with their first invention - a USB storage device called Pen Drive .

"We were the first company in the world to develop the USB Drive SoC (System On Chip) and we were very confident that the market for USB will be huge. At the time, no one believed in us so we had to do everything ourselves - from developing the technology, the chips to the product itself.

"We were only 27 at the time and inexperienced. But we were confident that we could design good systems and chips but we didn't know anything about selling. So, we sought partners or traders who could help sell our products for us," Pua added. Through smart partnerships and shrewd strategies, Phison soon made its way into European, American and Japanese markets. One quick move was securing Japanese tech giant Toshiba as Phison's largest shareholder and customer.

"We launched Pen Drive in June 2001 and by August the same year, we broke even! From September 2001, we were reaping monthly profits from our invention and there has been no turning back since."  Having established himself in Taiwan , Pua is in the midst of setting up Phison's branch in Malaysia , due to begin operations this February. "I am starting a branch in Malaysia because this is my country. I would like to do contribute to its development.

"We have about 100 engineers at Phison in Taiwan , 20 of whom are Malaysians. Though they studied in Taiwan , I had to re-train all the engineers I hire because, like most fresh graduates (in this field), they are not industry-ready upon graduation. "Unfortunately, some of the Malaysian engineers want to return home after a couple of years because they are homesick, about to start a family and so on. Some prefer to work in Singapore , as it is closer to home. Instead of losing them to competitors, I decided to set up an office in Malaysia where they can still work for me," said Pua.

Another problem faced by returning computer engineers from Taiwan , Pua added, was the lack of job opportunities for hardware engineers in Malaysia . "There is no environment or support for design engineers here in Malaysia . One of my Malaysian engineers from Phison returned home and ended up as a teacher in a Chinese school! I was shocked and thought, 'After all that training and re-training, he is going to just teach?' I told him to hold on till I open up the Phison branch in Malaysia ." Though he has been in Taiwan for the past 12 years and married to a Taiwanese, Pua is not sure how much longer he will remain there.

"I have really no idea where I will be in 20 years. Maybe Taiwan , maybe Malaysia , maybe somewhere else ... it all depends on my business. The industry is moving so fast that I cannot predict what or where I will be," he said.

For the moment though, Taiwan is home for Pua, his wife and two children even though he misses the Malaysian way of life. "I come home once a year for Chinese New Year and will usually stay for about two weeks. There are several things I really miss about Malaysia . One is the food! For the past 12 years I have been craving for Malaysian food ... I miss laksa, curry noodles, chee cheong fun and all the other delicious dishes we have here.

"I also miss the lifestyle and quality of life here. When I come back, I am always amazed to see people hanging out and relaxing at mamak shops at night. In Taiwan , most people would still be at work at that time of the night! "Before I got married, I used to work for 15 to 17 hours a day, everyday. Now that I have children, my wife has forbidden me to stay so late. Now, I go to work at 9am and come home by 11pm . These hours are quite normal for the Taiwanese."

The man who invented USB pen-drive is a young modest Malaysian who can't even get into a local University but invented the most versatile, indispensable computer peripheral today. And helped his adopted country, Taiwan made $31bil in the process. The rest is history....

Investment lessons from a bumpy ride.

Business Times - 27 May 2009

MONEY MATTERS: Investment lessons from a bumpy ride

Investors should not shy away from investments and leave all their money in cash as the latter has lagged the returns offered by equities and bonds.

By ERIC SANDLUND

OVER the last 10 years, the world's capital markets have presented investors with opportunities as well as many challenges. In 2000, the rapid rise in the valuation of technology stocks and their even more dramatic decline a year later preceded a three-year slump in the global equity markets. After 2003, when stock markets succumbed yet further on the news of an outbreak of Sars, there followed a period of leverage-inspired spending that contributed to increased earnings that drove stock markets to the unprecedented highs of the fourth quarter in 2007.

Of course, this has come to a shuddering halt and the consequences are plain to see. The resulting credit crunch has led to the world's longest recession since the 1930s and, understandably, many investors have been rocked by their recent experiences. But it's not just equity investments that have suffered. In the current financial environment, investors across all asset classes except for cash and government bonds have experienced declines. While gold has proven to be a relative safe haven, returns for corporate bonds, commodities, hedge funds, and property have all posted notable falls.

Unsurprisingly, in response to the tumult of the capital markets, investors have shifted a high proportion of their portfolios into cash, as many have taken the view that cash is definitely king. While there are, without doubt, certain periods when holding cash is a safer alternative, it should not be forgotten that, historically, cash has lagged the returns offered by equities and bonds. The long-term performance of equities has provided investors with the highest returns, followed by returns from fixed-income. And we believe that the capital markets are now entering a period when it is time to start investing the cash currently held.

The collapse of Lehman Brothers in September 2008 signalled a loss of trust in the financial system. And as financial institutions lost confidence to lend to their counterparts, the rapid widening of interest rate spreads that resulted meant lending activity slumped to worryingly low levels. With the world's central banks responding forcefully by slashing interest rates in an attempt to halt the decline in lending and in investment and global trade, it was against this backdrop that the US Federal Reserve reduced its Federal Funds rate to between zero and a quarter of a per cent.

Subsequently, risk-free returns collapsed, with three-month Treasury Bills closing with a yield of 0.17 per cent and it is as a consequence of this that we believe that capital markets are moving away from the cash is king mentality. The credit crisis has provided investors with invaluable lessons that will shape their investment preferences for the future. Over the last year, we have witnessed enormous pressure on certain sectors of the global economy that has culminated in many bankruptcies.

The consequences for holders of the associated equity and fixed-income instruments have been severe and have served as a reminder to investors of the risks of single-issuer investments and the advantages of diversification. Investors have also re-learnt the sometimes painful lesson that it's best to invest in things you understand. While we do not expect investors to avoid derivative instruments in the future, we expect greater caution going forward regarding buying them. This should include exhibiting greater awareness of their leverage.

It will also lead to greater care when using that to extrapolate trends. Typically, during times of crisis, investors show a greater home bias: they tend to have increased confidence when investing in the countries and regions they know best. In Asia, this has been reflected by foreign investors' net selling of the region in 2008. This indicates that domestic investors have increased their rate of participation in the region's markets.

Moves experienced by Asia's stock markets have been rapid and sharp and leads to the question of when is the best time to buy. Asia ex-Japan markets appeared to find their floor in late October 2008, yet, investors who missed those lows must have felt pleased by early March 2009 when the US equity markets dived to their lowest levels in the current cycle. That satisfaction has probably shifted to dismay as equities have staged a powerful rally over the last three months. This experience reminds investors of the perils of trying to time the market. As Bernard Baruch, the great American financier of the 20th Century, said:

'Don't try to buy at the bottom and sell at the top. It can't be done except by liars.'

Another lesson investors have learnt is the need to correctly understand their risk tolerance and to target more realistic returns on capital levels while avoiding over-leveraging their capital base. Investors now also understand the importance of their own liquidity requirements so as to allow for times of market corrections and illiquidity. While it remains uncertain whether global equity markets have reached their bottom, there have been encouraging developments.

Indeed, UBS Wealth Management Research recommended going overweight in equities in October 2008 for the following reasons: governments were responding to the credit crisis forcefully with increased spending and interest rate cuts; equity valuations looked compelling on a through-the-cycle basis; dividend yields had moved above risk-free rates; and sentiment had moved from the greed seen in 2007 to fear. Recently, UBS Wealth Management Research shifted to a neutral position on equities. This reflects our view that, although we still see long-term value in equities, the recent sharp equity market rally appears temporarily overextended.

In conclusion, the crisis should not make you shy away from investments and leave all your money in cash. But do take note of some of the lessons from the crisis which should better position you in your investment journey, going forward.

Eric Sandlund is head, Investment Management Asia, UBS Wealth Management
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved

Kotobian Tadau Kaamatan May'09

Rukun Moginum:
1. Kepercayaan kepada "tajau",
2. Kesetiaan kepada "siopon",
3. Keluhuran kepada "sasad",
4. Kedaulatan "linutau",
5. Kesopanan "moginum",
6. Kesusilaan "magauk".

Hantar kepada 5 orang yang selalu kogutan, anda akan mendapat 10 biji "sasad" percuma jenama "pahit manis" serta 5 mangkuk "bosou kara". Sikapai selagi haro stok.

Harvest Festival wishes to all my Borneo friends (especially Kadazan-Dusun, Iban and Bidayuh). May you enjoy a "bountiful harvest this year'09. God bless...!

Bull run ‘breakout’ at year end

Whether it is the "end of bearish market" or "the bear market rally"; I'll still prefer to practice a "ringgit cost averaging" approach to minimise "emotional investing" pattern. It has been told many times by investment gurus that the best approach is to stagger our investment over a period of time, especially during the down-trend. Investors normally fail when their actions are driven by GREED and FEAR. I attached an article appeared in The Straits Times Singapore for your reading pleasure.

SINGAPORE, May 11 — Templeton Asset Management’s veteran fund manager Mark Mobius is so bullish on emerging markets that he thinks the recent dramatic stock market surge is barely the beginning. He believes the “breakout” for emerging market stocks has not yet happened.

The money manager said the bull run could start in earnest at the end of this year and could even breach the highs that were seen about two years ago. “It could go higher than (in) 2007, as we’re now in a different era. A lot of companies are much stronger, with stronger balance sheets,” he said in a recent interview.

Mobius’ confidence comes as many market analysts are urging investors to be careful as the current rally may be a false dawn. For example, economist Andy Xie has cautioned that this is a bear market bounce that will end in tears.

But why the bearish outlook? Mobius, who in 2006 was named one of the Top 100 Most Powerful and Influential People by Asiamoney magazine, explained: ‘Because they lost so much money in the downfall, they are very bearish. They said “never again”.

“You’ll find all kinds of doom scenarios out there. Some will say it’ll get worst and that the markets will go down further, while others say that there’ll be a depression greater than (in) the 1930s.” Mobius, who is bullish on commodities as well as companies that cater to emerging market consumers, thinks this economic downturn is “not as bad” as the Great Depression of the 1930s in the US.

“During the Great Depression, there were no guarantees on bank deposits...People had bank deposits and they didn’t get one cent back. And there was no social security system,” he said. Mobius said China’s rapid growth would spur demand for consumer goods, and Chinese consumers, in spite of their high propensity to save, would continue to spend. “Their savings rate is high, but per capita income is going up, so they are able to devote a high proportion to not only saving but also spending,’ he added.

“The Chinese government is also subsidising purchases, giving rebates, and that should drive more consumption.” Reiterating what he told investors earlier this year, he said: “We’re building a base for the next bull market.” But Mobius cautions investors not to put all their money into the markets right away, but to dollar cost average (invest regularly with small amounts) over, say, a year.

“You’ll have the jagged movement up and down...and lots of volatility. Until all the bears are out and confidence has returned, then you’ll see a breakout. When that happens, it’s anyone’s guess, but we’re looking at the end of this year, possibly,” he said. — The Straits Times

Tales of Two Bukits + One River

PETALING JAYA: It is status quo for Barisan Nasional and Pakatan Rakyat after the keenly contested tri-elections. Barisan retained the Batang Ai state seat, which it won in the 2006 state elections, while Pakatan coalition members PAS and PKR regained the Bukit Gantang parliamentary seat and Bukit Selambau state seat respectively, which they won in the 2008 general election. watch video...

The most interesting show in the history of Malaysia election was in Sungai Petani, where 13 independent candidates racing along side with 1 PKR and 1 BN candidate. One may say that we're truely democratic by allowing our "eligible" citizen to participate in the election but something must be done to stop/minimize any "Tom, Dick and Harry" to participate in future election as independents candidate. Charisma, affordability and sufficient supporters aside; an independent candidates should also be someone with basic qualification or knowledge...say about Malaysia and State Constitutions, Rukun Negara, basic ideology; and the main functions of Executive, Legislative and Judiciary...etc. Some political parties which I've came across did send their future leaders or potential candidates to such courses to understand politics better. They even teach their party constitution too to ensure party members understand the party struggle, philosophy and objectives. Probably the respected party/ies like Election Commission should look into providing basic courses to all future election candidates (especially the Indenpendent). What we've seen at Bukit Selambau may cause some "laughing-stock" from other countries. Candidate aside, the logo's that they use (ranging from an umbrella, bus, bicycle, keys, aeroplane...) already tells us something wasn't that right. EC should also consider limiting the Independent candidate to only 1 (like other political parties did). By doing this we can also avoid "unscrupulous" political parties of using such individual/s as independent to split vote/s.

The Outcome/Consequences:

1. All the 13 independent candidates in Bukit Selambau lost their deposits amounting to RM65,000. Each candidate had been required to garner at least 3,075 votes to have their RM5,000 deposit reimbursed. The total number of votes – 1,326 – polled by all 13 independent candidates did not even amount to half the minimum number needed by any one candidate to redeem his deposit.

2. Due to too many names, even EC got it wrong too. (The Star Online: 8th Apr'09 - Election Commission sets right logos, names mix-up). The Election Commission (EC) reverted to putting only logos on ballot trays following a complaint lodged by independent candidate Venason Michael.

I'm all the way to support "Democracy...The Eastern Style".
Note: Pictures and some content of this posting was extracted from The Star Online, 8th Apr'09).