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Archive for December, 2008

Gigaom, a Blog by Om Malik, is one I regularly read and this week he had an interesting one on what he learned this year especially while recovering from a heart attack. Made me think of the lessons I learnt this year, so here goes:

1. Analysts don’t know what the heck they are talking about, so why do we even bother to listen to them? Take the so called oil analysts. Early this year they were predicting that oil would rise from $30 to $100 and when it did they said it would rise to $200 with a whole lot of mumbo-jumbo about peak oil, shortages of oil, extremely high demand from China & India, etc. In a May 21, 2008 New York Times article,  Arjun N. Murti, the Goldman Sachs (where else) analyst who made these predictions was even called “An Oracle of Oil”. When oil hit its peak of $145, prices and economies collapsed because at $4.00 a gallon of oil US consumers (the world’s largest consumers) stopped using their cars and commodity prices were so high it affected consumer prices so badly that economies tanked. Of course Murti did not factor in the other crisis that was happening all around him, the credit crisis, real estate collapse and inflation. Of course many people believed that GS did this just to boost futures prices but no one can prove it. My question is where’s the Oracle today?

Then we have the commodities boom and the King here is none other than “Commodity Guru” Jim Rogers, the one time partner of George Soros. He was the biggest commodity bull and according to Fortune Magazine (June 2008) he predicted the commodities bull run in 1999! What, 1999? It only happened in 2007/8, a whole 8 years after his prediction. You can predict anything and sooner or later it will happen, that makes you a Guru? Well he did finally make chunks of money by literally talking up the commodities bull run earlier this year. He is counting his losses now but is still bullish on commodities. Let me say that Rogers is a great investor but only someone with his stature can make such predictions and people will believe it for 8 years before it comes true. Now there are oil analysts predicting $20 oil. Where do these guys crawl out from? All I can say is “never believe in analysts”.

2) In stock trading, Technical Analysis is superior to Fundamental Analysis. As some of you may already know, I sold out all my stocks (about 90% anyway) in August because I saw that the technicals were looking bad. You can predict a major correction using TA and it happened in early 2008 and again in July/August. Fundamentally, stocks in Asia still looked ok because most fundamental analysis is historic (backward looking) and not predictive (forward looking). Even future projected incomes is based on historical incomes, so its still inaccurate because it cannot take into account what can happen to not just companies but economies in the future. However, TA shows the behaviour of investors in the market and if many people are selling down then it would be unwise to stay in the market or worse yet to buy in. I will show you how TA works and why I sold down in this weekend’s article, so watch out for that. Can TA also predict when to buy into the market? Yes and I will save that for another article too (hahahaha…just a teaser to keep you coming back for more).

3) People never do the smart things in life. Let me give you some examples in business. Firstly Pseudo-Entrepreneurs (because they think they are Entrepreneurs but they are only business people not Entrepreneurs). Why are there so many copycat businesses? In the same place? Take the jagung (corn), or pomelo (a fruit) or goreng pisang (banana fritters) sellers along the highways or outstation roads. You can see literally a dozen guys selling the same thing along the same stretch of road. In the markets you will see tens of vegetable sellers, and you will see many similar restaurants selling the same things in the same place. How can they make money? Yes the will survive but only just. Why not sell something different? In technology we have literally hundreds of website developers, tens of accounting software builders and many more doing the same ‘ol thing. Can they ever make money or build something big? Never. Yet we see this all the time.

One thing that infuriates me is at the toll gates that dot KL. You will see long, long queues of cars lining up for 30 minutes to pay their toll in cash, yet if they have the electronic TAGs they can breeze through in seconds. Yes it costs a few dollars but its not expensive and the time and fuel saved will pay for it in just a couple of months. Still they line up. So are they dumb or what?

The bigger question is, if people are generally not clever, then anyone who is really smart should do very well indeed? Right? So all it takes in life and in business is just a bit of street smarts and you will do well. Think about it? Are you doing the smart thing, or are you being just plain dumb?

4) Life is too short, enjoy it because it does not wait for you! I came to this realisation when my 2nd brother had his first heart attack when he was around 45. He has had  2 more since. Then about 2 years ago my eldest brother had colon cancer & had an operation and chemotheraphy. This year he also discovered he has damaged his kidneys (probably caused by the chemo) and has only 40% usage of it. He may need dialysis if the doctors cannot contain the damage. Needless to say, life has not been the same for my brothers since their illnesses. I have also seen an old friend from my childhood die from a tumour in the brain and another friend from college (my junior) collapsed and died at the airport.  He was a workaholic.

I have since 2002 decided to slow down and enjoy life, family and friends. I do what I enjoy the most and although I may not make my millions I live vicariously by helping Entrepreneurs better themselves and hopefully make their millions. I have discovered there is more to life than money. Money is good, but hey health is better.

5) Family and Friends matter. Finally I have also learnt that F&F are crucial in enjoying life to the fullest. I cherish my family & friends. I spend time with them, especially my mother & my brothers. Never a week goes by without me seeing them unless I am abroad.

I may have learned a lot more this year, but these are the first things that come to mind, so I guess they are the most important.

Before I end this post let me repeat what Malik wrote at the end of his article, the wisdom of Mahatma Gandhi:

“Live as if you would die tomorrow, learn as if you would live forever.”

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Its not all doom and gloom in America.  Online sales are doing very well thank you. Amazon.com just recorded its “best ever” holiday season this year with a 17 percent increase in orders on its busiest day. Apparently more than 6.3 million products were ordered during its peak day on Dec. 15, compared with about 5.4 million on its peak day last year. The company shipped more than 5.6 million items on its busiest day, a 44 percent increase over its best day last year, when it shipped about 3.9 million items.

Ok so not all online sites are doing as well.  According to SpendingPulse, a division of MasterCard Advisors that tracks spending, preliminary data shows that online sales fell 2.3 percent compared with last year’s holiday season BUT overall retail sales fell 5.5 percent to 8 percent. So while sales are falling overall, its not as bad online.

There are many reasons for this. Negatives like inclement weather (snow storms), people saving on fuel, shorter trading days are balanced by positives like better bargains online, special sales, coupons and closing sales all contributed to this. Its also easier to compare & buy from cheaper stores when you buy online.

So retailers who adopted the Internet are doing better than the old fashioned stores still dependent on foot traffic.

Moral of the story? Adopt technology or die!

P.S. I just read this new article in the New York Times confirming the death of the Bookstore. Readers are even selling used books online for just a few cents and this means bookstores lose out to the books being recirculated several times over online. Unfortunately authors don’t make money either when used books are sold for pennies. Death of the Authors too?

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This is a nice graphic of the rebranding of some major corporations thanks to the economic crisis.

corporate-rebranding-failure2

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Just saw this interesting interview of Bill Gates by Charlie Rose.  What I found really interesting was the passion Bill still has not just for Microsoft but also for technology in general but mostly for philanthropy (his Bill & Melinda Gates Foundation is the world’s largest).

I want to comment on a point I found most interesting.

His thirst for knowledge (of all sorts not just for technology) is what make him a great Entrepreneur. He is still very curious not just about society but about history, language, physics, medicine …. so many things. This is indeed one important characteristic of a truly great Entrepreneur. I find that in the case of many young Entrepreneurs today they lack this hunger for knowledge. Yes they read all the tech magazines and blogs but this gives them only a narrow view of the world. They also find it difficult to interact with people outside their circle, so end up in a technology cocoon.

I have even found that many of them have never even read about strategy or marketing, what more social sciences or history. This is no way to be a great Entrepreneur.

So my advise to anyone who wants to succeed as an Entrepreneur is to read widely, read everything. Curiosity is what makes one successful. It drives an Entrepreneur to seek out new things, new processes, new discoveries and new solutions. Ask “why?” and you are on the way to solving the puzzle.

Make sure you don’t end up in a “Technology Cocoon” or “Marketing Cocoon” or any other cocoon.

You can view the video here:

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One of my favourite news sites is the New York Times and one of my favourite Op-Ed columnists is Thomas L. Friedman. This week’s article by Friedman is entitled “Time to Reboot America” in which he talks about America needing a not just a ‘reboot’ but a national makeover. He talks not just about the crumbling infrastructure in America compared to Asia but also about policy failings and all the things that have gone wrong in America. For example:

“To top it off, we’ve fallen into a trend of diverting and rewarding the best of our collective I.Q. to people doing financial engineering rather than real engineering. These rocket scientists and engineers were designing complex financial instruments to make money out of money — rather than designing cars, phones, computers, teaching tools, Internet programs and medical equipment that could improve the lives and productivity of millions”.

While reading this I can’t help thinking about all the things that are wrong in Malaysia & why we just cannot seem to get things right. Unlike American we are ‘infrastructure Kings’ because we just love to build, build and build somemore. So we have highways that often go nowhere (have you tried the Silk Highway from Balakong to Kajang? Hardly anyone uses it & it really goes on & on like the Hume Highway between Melbourne & Sydney, but this is still in the Klang Valley). Who the hell built them anyway & for what purpose, I wonder?

We have great telecom infra but poor quality broadband; light rail and monorail links but the coaches are packed like sardines at peak hours and there is hardly any parking space at the stations; we have hundreds of colleges & universities (and this strange thing called a ‘University College’, whats that anyway?) producing such poor quality graduates that they are not just unemployed but unemployable; we have billions in research grants with no commercialisation and few patents of value; we produce few things of significance other than oil, palm oil and medical gloves (which are mere commodities); we don’t have enough people that do things that  “could improve the lives and productivity of millions” as Friedman says and we have politicians and teachers who think progress is teaching science and maths in Malay, Chinese or Tamil.

We do have many bright and creative people but the narrow minded politics of the nation drives them away and benefits only our competitors like Singapore and Australia. Sigh!

We need to do more in Malaysia. Like improving meritocracy and hiring the best to do the most important jobs, regardless of their political inclinations, race or connections. We must teach our children to think and be creative and we must improve their language skills especially English so that they can learn Maths and Science in English and keep up with progress and not be left behind. We need to reward people who do the right thing, in politics, business, education and in society not ostracise them because their race or politics is different from that of the ruling party.

As nations rise around us and make great economic strides like China, India, Vietnam, Indonesia or Cambodia or do the right things politically and policy wise like Singapore & Indonesia we get increasingly left behind because of our narrow politics or backward policies and poor command of English.

As a diverse and multicultural nation we have so many things going for us. Its time we made it count. Its time we did the right thing and as we move into 2009 with a new Prime Minister waiting in the wings I hope we will. They say time and tide waits for no man. Well progress doesn’t either.

I will share my thoughts on these issues with you as we enter 2009 and I remain ever optimistic that we will make good in the future. I have to be or I would have not returned to Malaysia after my PhD. Lets hope I made the right decision…..

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Welcome to my Blog

Hi there! Welcome to my blog. Its been a long time coming. Actually I started a blog sometime back but never did update it. I discovered its not easy being a blogger ….  8)

It takes lots of discipline and perserverence to be a blogger. Well this is my second attempt and this time I am more hopeful that I will make it.

So ….. on with the show …. wish me luck …. 😉

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