Bloomberg Business Week/ Apr 2 – Apr 8 2012

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Choc-full of articles that – i suspect – would be relevant case studies in the future. The articles still seem as relevant now (read in Jul) as when they went to print 2 to 3 months ago.

Plenty of interesting tech/ business related news. E.g. HD camera surveillance industry;

A special report on the austerity measures in Europe; insightful highlights of the various cost cutting measures by the various EU nations. Snippets of infographics, human-interest side stories to hammer home the point about the impact of the economic downturn and miscalculated government initiatives.

Another feature article: Steve Job’s obsession with breaking the Android OS; summary of the patent wars between Apple and Samsung. P60. has an excellent infographic that summarised the various patent cases and their linkages between major companies (Apple, Microsoft, Samsung, Motorola, Oracle, Google, Barnes and Noble, Kodak)

KFC’s contrasting approach towards investment in the US franchisees VS. boom towns in China and Ghana.

Economic woes arising from massive bad debts in the banking industry, mostly from risky housing loans. Seems to me there were several examples of the concurrent excesses of social welfare and generous state subsidy schemes from earlier years; of politicians indirectly guaranteeing votes through populist measures that were ultimately funded with government debt.

Other articles:

On the pending US debt-ceiling crisis that would have to be confronted on Jan 1, 2013.

UK men’s fashion revival.

Creating personal presence: how to look, talk, think and act like a leader/ dianna booher

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2011 publication.

Reads like a blog. Anecdotal mostly (not saying this was good or bad; just was). Chapter on “think like Hollywood”, on telling a story as part of putting points across, was quite a nice section, and the “think on your feet” on dealing with tough questions.

4 parts:
– look (body language, handshake, movement, dress, surroundings)
– talk (choice of words, physical voice qualities,
– thinking
– act.

Logic, emotions, character.

Work desk. Does it say a competent person works here, or that the person is overwhelmed and disorganized?

Use of space.

(aside: I like this quote cited in the book. Sir Ken Robinson, on the state of British Education system: “… Picasso once said this. He said that all children are born artists. The problem is to remain an artist as we grow up. I believe this passionately, that we don’t grow into creativity, we grow out of it. Or rather, we get educated out of it.”)

Chapter 15: Think on you feet.
Pause rather than utter um, ahs.
Respond rather than react to the question.
never repeat a faulty premise that was in a loaded question.
Summary statement, elaborate (with facts or concise points), give one example, conclude/ re-state.

Dining etiquette. What are your utensils.
BMW – left to right: bread, meal, water.

Small message, big impact: how to put the power of the elevator speech effect to work for you/ Terri L. Sjodin

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Communications; Sales; marketing message

Monroe’s Motivation Sequence:

  • Attention – be noticed in a favourable way
  • Need – the psychological core of the sequence; use solid evidence to stir minds and feelings
  • Satisfaction – provide the audience a solution to the need
  • Visualisation – project the audience to a future where they can see themselves enjoying the benefits from adopting the plan
  • Action – tell the audience what you want from them; what they have to do to make it all happen

It’s not about scoring each time, but advancing the ball with each “elevator pitch”.

Structure, sound reasoning, a sense of progression (for the listener, in terms of where the speech is going).

Introduction (the hook; attention step)
the body (three main points; the need, the satisfaction, visualisation)
the conclusion (summary; complete the visualisation step, transit to the close)
the close (action step in Monroe’s sequence; call for action)

Different type of talking points for different audiences:
– 3 questions approach: why choose you/ your pdt; why your company; why act now?
– past-future-present method: discuss where your listener was in the past; what I happening to them now; how their future can be improved/ where can you take them?

Three benchmarks:
– compelling case/ evidence in the message
– creativity (in content)
– authentic delivery

How to make the case more persuasive than informative: presenting the need.
The “so what” test. Six typical cases:
– time
– money
– sanity
– fun
– ease of use
– security

Always conclude; always have a close.

Being creative: using analogies, definitions, statistics, testimonials, hypothesis, alliteration, metaphors, personification. But use them not for their own sake but to fit the message.

“polish comes from practice, charisma comes from certainty”

Prepare a variety of views on the same pitch.

Summary: 10 basic steps to crafting an elevator pitch
1. Define your intention
2. Examine scenario (who are your audience; profiles; needs)
3. Draft core outline
4. Build case (most compelling arguments)
5. Don’t forget to close
6. Be creative
7. Speak in your own voice
8. Write it out
9. Practice
10. Use it

Presents examples of an outline/ preparatory notes. Sample of an evaluation form.

appendix has forms, templates, diagrams referred in the book.

Buying time: trading your retirement income for income and lifestyle in your retirement years/ Daryl Diamond

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My takeaway from this book: (1) start thinking and planning for one’s retirement BEFORE the retirement years, (2) best to plan as early as possible; time is an asset, (3) it’s also never too late to plan; knowing is better than not, (4) plan not only for how money is needed for the retirement years but also other factors like one’s purpose, emotional, social, security, health and shelter needs; Maslow’s Hierarchy of Needs, plans to pass on assets to survivors, (5) calculate the effect of taxes/ tax brackets and tax breaks on income stream.

Has a Canadian-focus, e.g. Tax and pension policies. Some tax and retirement schemes don’t seem to have the equivalent in Singapore. But general principles would be equally applicable to most readers.

I also shudder at the amount of taxes Canadians have to pay (40+ percent at the highest bracket; 15% considered relatively low. Ouch).

Much of the taxes seem to before social safety nets and also state pensions (e.g. Old Age Security and the Canadian Pension Plan were two schemes mentioned). But not everyone is eligible, and even then the high taxes represent a high opportunity cost for those who are disciplined enough about financial management in one’s income productive years. Made me realize our CPF scheme may be a better scheme, as it’s savings – compulsory and state-dictated but one’s asset nonetheless. Taxes, on the other hand, are immediate expenses and loss in potential investment gains for those who are willing to invest.

That it’s more that just answering “how much do you need each month upon retiring”, but also asking questions about needs relating to:
– love
– Purpose/ fulfillment
– recreation
– security
– health
– accommodation
Author calls these “time hub” factors that are not measured but subjectively defined. Applying these subjective measures will help quantify the financial requirements pre and post retirement.

Chapter 1. “… the number one financial annoyance for retirees is the tax they pay on income.”
Explains the objective of “layering” financial streams to obtain desired income levels and still keeping “net income” low to reduce taxation on income. Suggests strategies like leveraging on dividend income, tax deferments, income splitting or other financial schemes for seniors. The point (for the rest of us) is to know and apply the available financial tools, exemptions or schemes.

Section 2 – suggests consolidating assets with one advisor or institution, rather than diversified, for efficiency and less paperwork for beneficiary (have to admit overall it does go against what I’ve learned but it is food for thought).

Also talks about Regular Retirement Savings Plan, which seems similar in concept to the Supplementary Retirement Scheme in Singapore.

Chpt 2 – the structured plan: “your retirement assets cannot stop working when you do”. They must be invested to last 25 to 35 years (after retirement). Have to also endure inflation and taxes for two or three decades after retirement.

Talks about an idea called “systematic withdrawal plan” (SWP), the reverse of a regular savings plan (RSP) for unit trusts. Author suggests some criteria for funds that are to be treated as SWP, e.g funds that show growth potential like equity or balanced funds, tax-free switches. In a RSP, you buy up units, which fluctuate in price, with a regular amount of investment and benefit from dollar-cost averaging. In a SWP, you regularly sell units to get a regular income/ withdrawal stream. The author suggests the benefit is that markets tend to rise over time, so the depletion in units may be less over time also. Though there are risks like inflation (eroding the present value) and coinciding with a depressed market with depreciated price. I also think there are the associated transaction costs (like platform fees) to consider. But an idea nonetheless.

Mentions a “joint life annuity” and joint “last to die” insurance contract, where the annuity will keep paying as long as one of the two beneficiaries are alive. Maybe this would be a new product in Singapore in future years?

“Purpose of your capital” section includes advice on how to reduce financial risks in various financial instruments (btw, book has one of the clearest explanation, that I’ve come across, how bonds work). In summary, I read it as diversifying in terms of funds/ asset types (e.g. drawing on cash reserves rather than depleting mutual fund values during already depressed markets, rebalancing, start early and not trying to time the market.

Advocates the use of a written financial plan, stating objectives, risk tolerances, preferred asset mix etc.

Advices that financial planning is also done with one’s parents.

Chapter 4, on health-risk management. To consider aspects like cost of long term care (and options), power-of-attorney.

Chpt 5, on wealth transfer. Offers questions to be considered. E.g.

How an economy works and why it crashes/ Peter D. Schiff

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Published in 2010.

I wonder how much this book would make sense to one without any sort of economics background. I think it would, and you don’t need to have that foundation. Though if you do and your day job isn’t being an economist, then the understanding would increase vastly.

This book clarifies the basic economic concept of Demand and Supply, the concept of money Vs barter, the money and banking system, balance of trade, fiscal and monetary policy. All in layman terms and concept but it doesn’t dumb down.

P11. “The simplest definition of economy is the effort to maximize limited resources… to meet as many human demands as possible. Tools, capital, and innovation are the keys to this equation.”

There are no new economic concepts (not the aim of the book) but there is a new level of understanding, for me, as to the origin of government debt and economic insolvency, e.g. Why countries can default and loans and go bankrupt.

Basic premise, as I understood it: It all starts with people saving money. Real economic growth comes from productivity increases (efficiency in production, given the same labour) and not because people are spending more. Savings go into banks, who offer loans with interest to people/ companies to start production. The products and then comes services help generate more goods (supply). The author argues it’s not demand that generates economic growth but the availability and supply of goods. Any economic downturns are a way to correct the unsustainable consumption.

P21. “Most economists think that demand can be increased by giving people more money to spend. But that doesn’t change real demand, just how much people can spend on items that have been produced*. Only by increasing supply** can people actually get more of what they demand.”
* which leads to inflation when money supply increases without increases in supply.

(** chapter 14 and 15 explains the the US housing market crash, albeit a simplified version. US govt offering indirect subsidies (Fannie Mae; Freddie Mac) and tax breaks that basically led to banks lending to people who ordinarily didn’t qualify for the loans (people borrowing more than what their earnings/ savings could cover). And people deciding it was more lucrative to borrow to buy and sell houses than save or start a business. It came to a point people were speculating on houses, which led to them borrowing more to speculate, thinking they can cash in anytime, and that raised demand and prices even more. Then came refinancing schemes.)

P178 “It’s hard to say when the market first turned.” (basically the housing crash was preceded by herd instinct; everyone wanted out and then prices and confidence plunged. Those who still had to service their housing loans now found the payments a burden and their property values vastly decreased. Many decided to default on their loans. The housing boom was up to 2007/ 08).

But when the government starts to tweak into just giving people more money to spend (ultimately by selling their debt to other countries and also printing more money to redeem those debts), it does not solve the root cause of supply and productivity.

Other countries buy up the debt (e.g. China buying US debt) but will reach a point where they have to continue buying the debt. If they don’t and the borrower-country cannot pay, there’s nothing to redeem and the debt is worthless.

Although interesting, I wonder if government debt can be backed by a collateral like state land. So instead of wars, countries conquer more territories if the borrower cannot pay. But I’d imagine it’ll still be war, just like loan sharks harass and threaten the borrower to pay up.

Later parts, the book obviously talks about the USA and the problem of its national debt. Where the US economy and its citizenry’s high spending/ low savings is fueled by borrowing from other countries. Basically, the US cannot continue to spend (and hence US citizens) without saving more. It also ends by saying the current fiat-money economy has no precedence and there’s a certain sense of uncertainty how it will all play out.

I got a better understanding of the root causes of the global finance crisis. The book covers the developments in the US housing and loans market, putting the cause as populist government policies that encourages banks to make risky housing loans, in the interest of making housing affordable. (aside: there’s nothing wrong with the intent, but I think the point of the book is that the combination of Populist tax cuts and policies that don’t allow the market forces to self-correct, and imprudent government over-spending)

The agile enterprise

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P15. Years to reach 50 million users:
Internet (4), television (13), radio (38), telephone (74).

P15. Overview of music-sharing sites and court action:, napster (others that subsequently followed: Kazaa, Limewire, iMesh, Shareaza, BitTorrent). On Apple capturing the legal music download/ sales market.

P25. three categories of value propositions:
* Price-value (Dell, Walmart: extend their low cost to adjacent markets)
* Performance-value (Intel, Nokia, Medtronic: growth based on emerging/ converging tech)
* Relational-value (Fidelity Investments, IBM Global Services: provide/ extend integrated solutions)

P25 – 31. agile enterprise is about continual introspection and reinvention, while maintaining focus on growth and cost control (which are also management challenges today). Also the need for “breakthrough culture” (mindsets, attitudes), adaptive/ innovative teams and adaptive infrastructure (inclusion, governance, tech transfer, process innovation).

P51. Enterprise agility can be measured by time taken for managerial actions for: sensing a need to change directions (sense), to decide on a course of action (decide), make change and return to the beginning of the cycle (respond), time taken to validate the outcome (sense).

P35. Three types of innovation: Product, Collaboration (enhance pdt/ service offered through partnering other enterprises), process (Dell & Amazon offering different and better ways to sell a similar product against their competitors).

P41. Talks about “next generation process automation”.

P61. Definition of a Service Vs. Process: A service has defined deliverables; measured and reported quality; a defined price; value is judged by the customer (last one is the key).

P103. Diagram showing GNP growth against various eras: though chart is confusing. Not sure which country: agricultural (up to 1700?), Industrial (up to 1970), information (up to 1995 or starting?), network (to 2005)

Fundsupermart/ 4Q 2009

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ISSN: 17938945

Articles cover India, China, Hong Kong, Brazil, Malaysia.

P26. “Protect your equity portfolio with three resilient assets”. Examines different “asset classes” as a means of further diversification. Compares against 2008 financial crisis, which affected global markets. Summary – (1) Japan stock market and Yen have low correlation to other equity markets; (2) Gold as a hedge; (3) Bonds having low or negative correlation with equities; (I thought the article explains basic financial/ economic principles; great for layperson investor).

P46. Interview with BNP Paribas Asset Management Brazil, on Brazil’s emerging economy.

p54. Another interview, with investment manager of Aberdeen Asset Management Asia Limited, on emerging markets (China, India, Brazil, Russia, Thailand).

P58. On UCITS funds (Undertakings for Collective Investment in Transferable Securities).

P70. Interview with Robert P. Miles (expert on Warren Buffet and Berkshire Hathaway). Suggests passive investors can benefit from low cost index fund and dollar cost averaging and compounding over time. Analyse what could go wrong for the company, in addition to what could go right. Understand the business you are investing. Consider management quality, and finance yardsticks like ROE, margins, retained earnings. Ability of the business to generate cash flow in future (“intrinsic value”: present value of cash flow generated by an investment in the future). To remain rational, control emotions, avoid buying when everyone is buying and selling when everyone is selling, importance of patience.

P71. “An investor’s guide to Islamic funds”.

P78. “Signs of an asset bubble in China?”

P82. “Bottom-fishing: will buying the worst performers give the bets future performance?” Article suggests it may not. Advise is to make the usual considerations in investing rather than pursue a bombed-out stock.

P86. Article explaining what is Yield-to-Maturity in evaluating bond funds. YTM is the expected returns when bond is held to maturity, assuming no default and coupons are reinvested at same rate. As invested amount increase, YTM decreases. Cautions against assuming a low bond price equals low yield. “The appropriate thing to do would be to buy bonds or increase bond holdings when the yield is high and decrease when the yield is low”. Advise is to compare yield of bonds than their performance (price) charts. Some fund sites provide YTM info.

P90. On ETFs (like mutual funds but can be traded like shares). Has ETFs for bear markets.

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