National B division Rugby final ; why did this happen ?

The free for all after the final whistle

Last week, the National 'B' division rugby finals was played at the Polo club with Saint Andrew's Secondary pitted against their arch rivals Anglo-Chinese School (Independent). I am a Saint Andrews Old Boy while my elder son is in ACS (I).

The final score was ACS (I) 8 , SAS 7, congratulations to ACS (I). However, an incident marred the result as immediately after the match, an ACS (I) player went over to an SAS player, patted his head and said something which infuriated the SAS player. He retaliated and in the fracas, the ACS (I) boy emerged with a chipped tooth and a broken nose. According to reports, this led to a pitch invasion as boys, parents and supporters threw punches in a melee until order was restored. Later, another boy from ACS (I) was hit at the bus stand.

The 2 schools have rightfully taken the steps to resolve the issue and uphold the principles of good sportsmanship,the SAS boy was suspended from playing in the future and made to make a public apology to the whole school, in addition, he will arrange to meet with the boy he fought. ACS on their part are also discussing with SAS on how to resolve the issues in an amicable manner. However, there are some equally culpable people who have gotten away scot-free which I feel is symptomatic
of our 'win at all costs' and 'kiasu' society.

Having been to such emotionally charged matches myself,I can understand the intense feelngs of joy, frustration, pleasure and anger at various stages of the game. I am perturbed to read in some emails circulating that outside of the pitch, there were adults who were taunting the boys in the field. Whichever team they were supporting,they were actually 'pouring oil into the fire' and antagonising the opposing team's players.

This is pathetic, the boys are men to be and at this juncture, very impressionable. So imagine if they are running by the sidelines and they are called all kinds of names.Surely, they would be psyched up even more to the point of playing recklessesly and using rough tactics just to spite the opposing supporters.

If we are to evolve as a gracious society yet rugged and mature,we need to take a hard look at ourselves and question : "what is wrong with us ?". Whether we win or lose, lets do it with style, graciousness and above all, empathy for the opposing team who have fought just as hard.

Singapore, we are a long way to developing that winner's mindset, if the Rugby 'B' Division Final is any indication of how we react to winning and losing.

Jakarta Visit April 7 - 8th 2010 Part 2

No durians please

The hotel stay in Jakarta was pleasant enough, Hotel Ciputra is located at the edge of the city along the main highway to the airport. Its central location makes it a favourite for businesspeople and one can access the industrial estates like Bogor and Cikarang within 1 to 1 1/2 hours. It is connected to the Central Shopping Mall with hundreds of shops and many restaurants. One of the nice things as a Singaporean, is that many Singapore brand food chains have setup in Jakarta, like Bread Talk, Crystal Jade, J Co amongst others. In addition, the banks like UOB, OCBC, CIMB and DBS are all over the place.


Interesting sculpture outside the hotel

Indonesia has roughly 220 million people spread over 3 major islands and hundreds of several smaller ones. It has in 2004 been hit by the world's worst ever tsunami, from an underground earthquake measuring 9.1 on the Richter scale and killing some 250,000 people in 10 countries with over 200,000 from Indonesia alone. It has had its fair share of natural disasters such as tsunamis as the island of Java lies very close to the fault lines which are under the sea.

Regardless of the natural disasters, as well as the occasional terrorist threats, the Indonesian people remain resilient and steadfast in the desire to move forward from the tragic events of the past. In 2002, there was the terrible bombing in Bali and in 2008 there was the Marriot Hotel suicide bombing which have put Indonesia on the world's headlines. But in Jakarta, life is peaceful and although I would not recommend walking the streets at night, it is relatively safer now than it was in 2000 when I last visited as there was massive unemployment, leading to lots of people begging in the streets and just hanging around.


View from the front of the hotel

Just as my visit to the seafood restaurant reinforced my impression that Indonesians have embraced the good life with good food, transport and shopping, I am still reminded that it is still very much a 3rd world country with the average salary hovering about S$ 300 per month or less. A lot of people get by with S$ 70 to $ 100 a month working as maids, drivers, gardeners or stall hands.


On the way back to the Sukarno Hatta airport

At the top end of the income scale are the very very rich people who never have to work a day of their adult lives. There are a significant minority of them and there presence can be felt very clearly during the weekends or public holidays in Singapore top shopping centers like Ion, Orchard Central, Mandarin Gallery and Somerset 313 ; the children of these rich Indonesians come to shop at the brand name stores and gamble in our casinos at their whim and fancy.

Jakarta Visit April 7 - 8th 2010

Bandar Jakarta Seafood Restaurant

During a recent 2 day visit to Jakarta, Indonesia, I was very plesantly surprised by the modernity of the capital city in Java. Located just 1 1/2 hour by flight from Singapore, it is a bustling modern metropolis city with all the trappings any modern Asian city. I had not been to Jakarta since 2000 so it was a good 10 years. My impression of it was

1) Corruption amongst the taxi driver touts was all but wiped out. Every cab company has a good reputation and there are easily 6 - 10 cab companies and countless private limousine services, so competition is fierce, which is good for the customer.

2. The traffic is very heavy during the peak hours of 5 - 8 pm and 8 - 10 am each working day. Try to avoid it if possible else, make sure you go to the rest room before your trip out to prevent an unexpected 'accident' or strained bladders to the point of bursting !

3. The infrastructure is still basic although, the cars are all looking brand new, and very cheap to own. There is no city MRT, or MTR or Skytrain like in Bangkok and KL. Buses are horrendously packed during peak hours, and there are some taxi-cycles which serve the basic transport purpose but as torists, its best to use the private limos or established taxi companies for safety reasons.


Free Boat Rides along the Marina

4. After the Bali and Marriot bombings in 2002 and 2008 respectively, security is very tight, with checks on bags in shopping centres, hotels and nightspots, there are metal detectors and auxillary policemen at every major building.

5. People are living harmoniously and there is very little evidence of the Muslim fundamentalism which has taken over much of Malaysia with many adult and youthful Indonesian women in western dressing. There is also freedom or worship and Indonesian people of Javanese, Batak, Boyanses, Iban heritage can worship any religion they choose to. They are not born into a particular religion like in Malaysia.


Bamboo Clams Live and Fresh

The seafood in Indonesia is summed up in one word, fantastic. The evening I was there, my friends who are chefs brought me to the Bandar Jakarta theme park for a pick up seafood meal. All the seafood was live and fresh, so we had river prawns, garouper, babmoo clams, mussels, honey clams, scallops, vegetables and all the beer we could drink for a really inexpensive price, which left my wallet smiling and still heavy.

They have brewed their own beer called Bintang, which is quite good actually and I have noticed that Indonesian people on the whole have progressed materially since the days of the Financial Crisis some 13 years ago. It is quite a remarkable achievement which has gone unnoticed by the foriegn funds for quite a while now.

Cross Country Day - ACS Barker Road

Tired father and Happy Son

Friday 12th March 2010 was the annual ACS Barker Road Cross Country Run for the secondary boys of Anglo-Chinese School.Initiated by the principal Mr. Peter Tan 1 year ago, this is the second year of its existence and I decided to do the father-son thing by running with my son Andrew. So at 8.30 am sharp on a Friday morning, I was at the start line of the 4.2 km 'sprint' race for the lower division boys ('C'). There were about 100 runners from various 'houses' and Andrew was representing the LSG or Lee Seng Gee (an old boy and Philantropist from the early days of the school). At the starter's gun, the boys surged ahead into a 100 m sprint leaving me and the principal plus 2 other adult teachers taking up the rear.


Andrew after his fine run

There was a roar and about 10 boys had fallen in the enthusiasm and there was a mess of bodies just 20m after the start.
We helped them back to their feet and it was then finding my son up in the distance. I was maintaining a fast pace, never really training for this short type of runs. (Yes 5km is short in my humble opinion). I picked up the pace and started oevrtaking some of the boys. The principal was a very fast runner, and was maintaining a lead of 100m ahead of me.

At around the 2 km mark, I came up to Andrew, who was walking and urged him to continue and not slacken his pace. He pulled a funny face to me and then started to run again. I was supposed to be running alongside Andrew but in my aniexty had run at a crazy speed, just trying to catch the principal. Luckily there were many teachers and assistants urging the boys to Run, Run Run.


The school tents at East Coast Park

Round the lake we ran and it was back to the start point. I finished in a decent time of 20 mins 20 seconds or about 5 minutes and 5 seconds per km. I was around the middle of the pack, around 40, but my proudest achievement was that Andrew finished at around 55th place and had earned valuable points for his 'house'.

I hope to continue running with Andrew for years to come as this is one sport both father and son can bond with.

International Sales Conference 2010 in Singapore

Fun and revelry in 2008 Shanghai

This years International Sales Conference will be held in Singapore from 21st - 24th March. This is a watershed year for the Germany principal Weiss Technik which my company represents. There will be a number of old faces missing from the line up at Weiss. The Managing Director Mr. Karl Heinz Hehl has stepped down and retired after serving for over 40 years in the company. This is indeed a rarity in these days of CEOs lasting about 5 years on average and bottom line profit making being the one and only consideration. Also gone is my long time friend and mentor, Frank Rigley, who was the Asia Pacific Sales Manager from the early 90s till 2010. He has totally left the scene, in retirement mode now.

The new management at Weiss will be headed by a Mr. Niedermeier who is the Managing Director for Sales and the existing export sales department is headed by Mr. Dieter Haus. In 4 short days we will be experiencing and understanding what are the new philosophies and expectations of the new management.


2008 Sales Conference in Shanghai

Things are expected to be moving at a much higher pace and one can expect that there will be some major changes in the organisation as well as its representatives. So, while people are on the edge as to what to expect, it is good to come prepared for the unexpected. We live in challenging and dangerous times.

Glee cover Don't Stop Believing

Buying and profiting from Property - A Sound Investment Strategy

Recetly I bought a book "How to profit from Asian Properties" by Andrew Moffat.In it, there are many illustrations and data of how one can make money from property provided one is diligent in preparing himself in investing and most likely holding on to this major asset. The key point made in this book is the answer to the question : "Why invest in a property ? " There are several,however, one must understand the following principles / circumstances :

1. Your first property is something which is a necessity, so when you buy is more or less irrelevant, you will still need a roof over your head and your family too. If you bought low and sold high, you will still need to buy high to own your first
home so it doesn't make you profits unless you sell and downgrade to a smaller home
or rent.

2. A property is a solid asset built using bricks and mortar (cement), unlike stocks, bonds, insurance, unit trusts and the like.Though its cycles will swing up and down, its value will hardly ever be zero. The rest of the asset classes can technically failand their value fall to zero. See recent bust of Lehman brothers linked derivative funds like Minibonds and DBS High Notes for examples orwarrants
Not so for property.

3. A property is not as liquid (ie. can be bought and sold easily and can be cashed out) as the other assets,instruments or investments like stocks, insurance and unit trusts, as it takes time, months or even years to sell and buy (time is set aside for foundation and construction of the said property, plus a time line to get the Temporary Occupancy Permit of TOP).

4. An apartment or house, is a fixed commodity, and its value is subject to the valuation based on age of the apartment or house, the lease structure (freehold versus leasehold 99 years in Singapore, land area, price per square promixity to
amenities like shopping centres, wet markets,supermarkets, MRT train stations,good schools and most importantly accessibility to all of the above, in short, its about 'location,location location'.

5. Best of all, a property is yours to keep forever, once you have paid off the mortgage on it. It is a hedge (bet) against long term inflation which normally is about 2%, so spread over 20 years, the property value normally should have
appreciated by more than that. Additionally, if one is renting out the apartment, the rental income on the property should cover most if not all of the mortgage payments.

6. Key point is that as an investor, if you can afford to pay the 20% downpayment for the house or apartment, and get a tenant to rent it from you that is not the end of the story. In a down cycle, the country will be in recession, many foreign nationals and companies will pull out and these tenants will be the first to go. So if you are stuck with an empty house or apartment,with no tenant prepared to pay what you ask for, you have to take 1 of 2 possible causes of action :

a) lower your rental expectation and get a lower rental. This may be as much as 20% to 30% than your original asking price.

b) fork out the money for the mortgage for the duration (up to 1 year) until you find a tenant. This is very critical.

7. There is this 'trap' which many owners fall into. It is called 'negative equity'. Say you bought this nice new apartment for S$ 1 million and you put a S$200,000 dowpayment on it and it is valued at $1 million. So the bank lends you S$ 800,000.
You take a mortgage loan of S$800,000 spread over 20 years at 3% interest per year. So that works out at S$ 5,200 per month. You manage to find a tenant who is the GM of an American company based in your country's capital.He agrees to pay S$ 5,000 per month and all is good. This rental covers your mortgage and you need to pay only $200per month to cover up the shortfall.

Suppose, another Financial Crisis hits (God forbid), and the economy stalls, foreign investment pulls out, your tenant GM gets recalled back to the States, and he pulls out of the tenancy agreement leaving you with a mortgage to pay of
S$ 5,200 per month. You can't pay becuase you are stuck as your income exactly equals your expenditure and that includes paying for your first house plus your other household and children's expenses. Worse things may befall you in the downturn, you may lose your job and whatever you can squeeze to cover the 2 mortgages from the salary, now its totally gone.

Worse, you advertise for 3 to 6 months and no one comes forward with an offer. There are many desperate rentals out there because many tenants have gone home. So you owe the bank S$ 32,000 in back mortgage.

Even worse, the value of your house /apartment drops to now $750,000 because of the crisis. (What goes up does come down !!). Your bank manager friend is nowhere to be found and you get calls from the bank's receviers to

a) Pay S$ 32,000 in back mortgage (6 months) PLUS interest

b) Pay another S$ 50,000 as exposure - the house is valued at S$ 750,000 and you owe the bank S$ 800,000.

So you sell the house / apartment at you guess it, $750,000 and now you owe the bank S$ 82,000 !!!

You will be forced to make good the loan, and you either, take another job, work out a 2 - 3 year payment plan or even sell your abode, the house you are residing in.

So in the end, you are either made a bankrupt, or you have no roof over your head, or you are worse than if you had NOT started investing at all !!

This is the ONE 'trap' one must avoid at all costs.

So now for the good news, YOU MUST TIME YOUR PURCHASE RIGHT. BUY 'LOW' AND SELL 'HIGH'.

a) say an investor, invests $200,000 in a property worth S$ 1 Million (20% downpayment), if everything goes OK, in a stableand growing environment, he would be able to get a tenant to rent it at say S$5,000 for a yield of 6%.

The yield is calculated based on how much rental the property can fetch in 1 year as compared to how much it was purchased for, so S$60,000 divided by S$ 1 million is 6%.

b) Furthermore, if the investor is lucky, he will see his property appreciate to $1.5 million in 5 years or less and if his tenant stays with him, he can aim to either

- sell the property for a quick S$ 500,000 profit. This is more than 200% of the amount invested of S$200,000 in 5 years.

He can then take back his initial capital outlay of S$ 200,000 and with the S$ 500,000 profits use that later (wait for the next bust cycle) and buy 2 properties worth S$ 1 million and so it multplies from there on.

- aim to continue servicing the loan and maybe in 10 years, the property would be would $ 2 million. In essence, that would be 500% in 10 years. !!

Nothing in other asset classes matches these outstanding performances.

THINGS TO TAKE NOTE OF :

Property like stocks are dependent on the country's economic performance in Gross Domestic Product (GDP), unemployment. So in short, when thecountry's GDP is good, people get good paying jobs, bonuses, stock market is performing well and of course the property market will be rising at rates of anything from 2% to 10 or even 20% per year. So all propety prices will rise in tandem as every seller wants to make good profit quickly.

So in short, you can make profit in a short time,perhaps something like 20% * Depending on what is the level of the property price * This is what I would call a SUBJECTIVE OPINION. But in the long run, your property investment should yield easily 100% to 500% of the original purchase price. It totally depends on when you BUY and when you SELL.

But, in a poor economy, like the recent Worldwide Financial Crisis,yes the property prices may fall 10 - up to 30 or even 40% in 1 to 2 years but these sellers are normally desperate cases who are forced to sell to pay back business failures or other asset failues. Most property investors, if they are savvy, will have rental income from the property which should give them the buffer to 'hold' during these lean times and pay the outstanding mortgage.

So the bottom line for this is, in a poor economy, yes there will be more desperate sellers, but the actual sales transacted will be few, as compared to a booming market.

As an engineer, I view the property curve in terms of boom bust cycles but always rising up at a certain angle. Provided Asia can continue to sustain the momentum and growth path for say the next 20 - 30 years (some say 50 to 100), then we should all buy property (that is being able to sustain it during the good as well as the bad) at every 5 to 10 years of our lives.

It is the fastest way to wealth, but do your sums first.