Wednesday, July 30, 2008

Speed Reading - Part VI


We are still at the Inspectional Reading Stage focusing on ‘What is the Book about?’ Inspectional Reading itself comprises of two stages:

1. Systematic Skimming; and
2. Superficial Reading.

Systematic skimming has already been covered in my earlier post. This post will cover the second stage, namely Superficial Reading.

The purpose of Superficial Reading is to enable us to read through the book continuously, so that we can grasp the flow and general thrust of the book. By doing so, we can understand the major points highlighted by the author and follow his line of reasoning.

There are three main steps to Superficial Reading:

1. Continuous Reading
In Superficial Reading, especially when reading a difficult book, read through without ever stopping to look up or ponder on the things we do not understand right away. Just pay attention to what we understand and read past the points that we find difficult to grasp. Continue with the ‘flow ‘of the book and ignore any potential stumbling blocks in our way. Even if we understand less than half the book, we will have grasped the overall thrust of the book. This will help us when we reread the areas we did not understand earlier.

2. Do not consult Extraneous Materials
Never consult a dictionary at this stage! For most of us, English is not our native language. As such, we have a tendency to refer to the dictionary for every word we don’t understand. DON’T DO THIS! Do not consult any dictionary, encyclopedia, footnotes, scholarly commentaries and other extraneous materials at this stage. JUST KEEP ON READING!

3. Look at the Forest, not the Trees!
At this stage, imagine that we are eagles soaring high above the sky. Our aim is to obtain a bird’s eye view of the forest. We want to see the BIG PICTURE and understand what the whole book is about and enjoy ourselves.

How many times have we picked up a book, only to interrupt our reading by consulting the dictionary? We then jot down the meaning of the word on the book and try to continue reading. Suddenly, we find that we’ve forgotten what we read earlier and have to start all over again.

If you do this, it is very likely that you will NEVER finish reading the book. Most likely, you’ll stop at page 10 and that’s the last you’ll ever see of the book. So, avoid this temptation! I promise you, if you read continuously as suggested, your reading skills will improve!

My future post will cover the Third Stage of Reading, Analytical Reading. This stage of reading is intensive, so stay tuned, if you are interested in learning about Analytical Reading.

Monday, July 28, 2008

Basics of Investing - Part VIII

The Oil Corp Saga: A Vexatious Variation Order!

Before investing, it is important for one to understand the role of external auditors and regulators. Since most people base their investment on the Annual Audited Financial Statements, there must be integrity in these reports.

Here’s an intriguing case on a dispute between Oil Corp Berhad, a public listed company in Bursa Malaysia and its’ auditors, Messrs. Baker Tilly Monteiro Heng (BTMH).

The Issues:

BTMH was adamant in its' stance that the value of the contract awarded to one of Oil Corp's subsidiaries by PBC was only worth RM90 million despite Oil Corp's insistence that it was worth RM110 million.

To resolve this dispute, Oil Corp then engaged Messrs. Horwarth (also an auditor of PBC) of to carry out an Independent Verification Report on this contract. Messrs. Horwath agreed with the valuation of RM110 million on the contract, subject to several disclaimers.

However, BTMH refused to budge and insisted on issuing a disclaimer of opinion on the audited financial statements of Oil Corp Berhad. A disclaimer of opinion means the auditors are unable to form an opinion on the truth and fairness of the audited financial statements. Such an opinion basically mean something is *VERY* WRONG with the audited financial statements.

As a consequence, Oil Corp's shares are suspended from trading as they are under PN17 status.

Timeline of the Oil Corp Saga…

The Implications:

1. External Auditors Taking a Stricter Stance towards Clients
It is very rare for external auditors to take such a strong stance against their client. I believe that the perception in Malaysia is that external auditors often take a very soft stance towards their clients. Where there is a benefit of a doubt, they would tend to agree rather than antagonize their audit clients. Surprisingly, BTMH here is willing to take such a strong stance against its’ former clients. Does this herald a change in the mindset of auditors? Or is this just a one-off case?

2. Corporate Governance Safeguards do not appear to be working
It is puzzling that Oil Corp's Independent Directors and the Audit Committee failed to act to prevent this issue from imploding. The Audit Committee is established for the very purpose of ensuring a frank and clear communication channel between the Board of Directors and external auditors. The various contentious issues highlighted should have been brought up much earlier and resolved. Do you think further improvements are necessary? If so, what do you suggest?

3. Importance of Mutual Trust and Communication
The document available on Bursa Malaysia suggests that mutual trust and communication between BTMH and Oil Corp had diminished substantially. On one hand, Oil Corp did not endear itself to BTMH as they submitted the relevant documentation at the very last minute, leaving BTMH very little time (or indeed, none at all) to vet through and perform an independent review on the contract. As for BTMH, perhaps the issues could have been communicated more clearly to the Audit Committee and the Board of Directors. If they had foreseen that this would have resulted Oil Corp being placed in a PN17 status and followed by bad publicity, this may have encouraged them to act more quickly and avoid this traumatic episode. What do you think?

I invite you to comment on this rather contentious issue.

The Way of the General - Part IV

What Hurts the People?

There are five things that hurt the people:

1. There are local officials who use public office for personal benefit, taking improper advantage of their authority, holding weapons in one hand and people’s livelihood in the other, corrupting their offices, and bleeding the people.

2. There are cases where serious offenses are given light penalties; there is inequality before the law, and the innocents are subjected to punishment, even execution. Sometimes serious crimes are pardoned, the strong are supported, and the weak are oppressed. Harsh penalties are applied, unjustly torturing people to get at facts.

3. Sometimes there are officials who condone crime and vice, punishing those who protest against this, cutting off the avenue of appeal and hiding the truth, plundering and ruining lives, unjust and arbitrary.

4. Sometimes there are senior officials who repeatedly change department heads so as to monopolize the government administration, favoring their friends and relatives while treating those they dislike with unjust harshness, oppressive in their actions, prejudiced and unruly. They also use taxation to reap profit, enriching themselves and their families by exactions and fraud.

5. Sometimes local officials extensively tailor awards and fines, welfare projects, and general expenditures, arbitrarily determining prices and measures, with the result that people lose their jobs. These five things are harmful to the people, and anyone who does any of these should be dismissed from the office.

The Han Dynasty arose like a Phoenix from the ashes of the Qin Dynasty. It would last over a period of four centuries and is commonly considered to be one of the greatest periods in China. Conversely, the Qin Dynasty was torn asunder within a decade of its’ establishment? What contributed to the rise and longevity of the Han Dynasty? This was largely due to its’ policies that avoided hurting people:

No Personal Benefit Allowed, Crime and Vice Punished
Emperor Wu-Di combined Legalist methods with the Confucian ideal that led to a civil service nomination system and compulsory knowledge of Confucian classics among candidates for the imperial bureaucracy. Officials were graded by rank and salary, were appointed to posts based on the merit of their skills rather than aristocratic clan affiliation, and were subject to dismissal, demotion, and transfer to different administrative regions. Thus, local officials performed their duties up to the standards required and kept the Empire at peace.

Inequitable Laws Avoided, Just Laws Perpetuated
The legal spirit of the Han dynasty was the fullest under Prime Minister Dong Zhongshu, a Confucianism who served during the reign of Emperor Wu-Di. Under Prime Minister Dong, every legal decision or ruling had to be accompanied by an explanation that explained why the decision was made and under what law the ruling was based on. Prime Minister Dong further suggested that masters not be able to kill their slaves at will. This idea took root and remained in China. Thus, the just laws of the Empire maintained the safety of the nation.

Taxation Minimised and Frugality in Expenditure
The entire Han Empire was heavily dependent upon its county governors responsible as they could decide military policy, economic regulations, and legal matters in the county they presided over.

The main tax exacted on the population during Han times was a poll tax, fixed at a rate of 120 government-issued coins for adults. For adults there was also the addition of mandatory labor service for one month out of the year. Besides the poll tax, there was also the land tax administered by county and commandery officials. This was set by the government at a relatively low rate of one-thirtieth of the collected harvest.

With a large amount of revenue in stable times, the Han government was able to fund various public works projects and state infrastructure. In the year 3 CE, a formalized nationwide government school system was established under Emperor Ping, with a central school located in the capital Chang'an and local schools in the prefectures and counties. Judicious use of the Empire’s finances benefited the people resulting in a prosperous and virtuous cycle.

The Han Dynasty flourished and prospered for over four centuries by attending to its people’s needs. The earlier Emperors were wise and not given to excess. The officials were upright and attended to its’ duties. During this Golden Age, intellectual, literary, and artistic endeavors revived and flourished during the Han Dynasty. These included the invention of paper, forging of high durable steel, hydraulic-powered armillary sphere and seismometer. Thus, do not hurt the people and the nation can be kept tranquil and peaceful.

Coming back to the present, do you think our Malaysian Government is governing in accordance to Zhuge Liang's principle of not hurting people? I would appreciate your views on this.

Friday, July 25, 2008

Philosophical Musings – Part I

Of Mice, Mom & Me

A mouse
'A mouse! A mouse in the house!' shrieked my mom as we saw the mouse scuttle around, playing hide and seek. Not a normal mouse, mind you but an intelligent mouse, with brains as big as the one above. He roamed and lorded over our house as night whilst we were sleeping.

And when we awoke? Gasp! What dastardly deeds had Mr. Mouse committed in the depth of the night? Handfuls of rice, a couple of sweet potatoes and even a packet of 3-in-1 instant tea were gone! Vamoosed! And there was not even a single trace of the Mr. Mouse’s tracks.

Every night, our family trembled in fear of Mr. Mouse exploits. What would go missing next? Silent, still and swift as the night – Mr. Mouse went about his business carefully, cautiously and calmly. For a month, he plundered and pillaged, till our house was barren and bare. Fortunately, Mr. Mouse had very good housekeeping habits and our house was clean though bare.

My Mom
‘Confound it! No mouse is going to get the better of me!’ my Mom remarked. Thus began the Battle of Wits between Mom and Mr. Mouse. She first set a mouse cage on the floor with some alluring bait to lure the Mr. Mouse into the trap. Unfortunately, Mr. Mouse preferred fine dining at my house table and refused to stoop so low.

Mom then packed all the foodstuffs and placed them into a plastic food basket. Heck, she even placed some canned foods on top of the food basket cover to prevent Mr. Mouse from getting his greedy paws on it. And the very next day, she found Mr. Mouse had nibbled through the openings in the basket to treat himself with some instant 3-in-1 coffee.

‘This means WAR!’ uttered my mom. With all manner of canned foods and condensed milk, mom began fortifying her food basket until it was a veritable fortress. Not even a Herculean mouse would be able to penetrate that fortress. She then placed even more enticing foods into the mouse trap!

Voila! After starving for several days, Mr. Mouse couldn’t resist and made for the mouse trap. The very next morning, Mr. Mouse had been caught.

Mr. Mouse looked very pitiful in his condition. When I first looked at Mr. Mouse, the cage stank of fear and refuse. He was in a pitiful condition and the fear was palpable. At that instant, I thought to myself:


I talked to my mom and she agreed. Taking away a being’s life is easy. Yet, can we succeed in restoring a being’s life, after it is taken away? So I took the mouse cage and walked to an open field, far away. As I held the mouse cage, I felt Mr. Mouse huddled at the cage, shivering and trembling.

That very instant, I had an epiphany! Was I any different from the mouse in the cage?

Me vis-à-vis Mr. Mouse
1. A not-so-intelligent being, entrapped due to foolish desires:
Mr. Mouse caught due to hunger for Food and me in my abandon, yearning for Wealth and Fame.

2. Regretful of the Past, Heedless of the Present and Fearful of the Future
Mr. Mouse and me were the perfect couple, both mindlessly living our mundane lives.

3. Audacity of Hope
Mr. Mouse had the audacity to hope that a human being, would be kind enough to release him. Me? I too, have the foolish hope that I, my family and all sentient beings will be happy and free from sadness and pain.

Three Leaps to Freedom

So, as we walked to the open field, I pondered long and hard. And I set the mouse cage on that open field and released the gate of the cage. Mr. Mouse did not dash out as I expected him to. I had to nudge him, once, twice and thrice before he finally sprinted out.

It was almost as if, he could not believe he was freed. At the end of the field, I saw him jump thrice. His initial skip, seemed to signify gratefulness. His next – was one of joy. And his final huge leap, was one of freedom and happiness of being free, in the present moment. Thus, he leaped out of my sight.


Was I dreaming? It was such a small thing, releasing Mr. Mouse. Yet, at that very moment, I realize an important thing. Happiness is fleeting, true. And yet, true happiness requires so very little, only gratefulness and staying true to the present moment.

Wednesday, July 23, 2008

Speed Reading - Part V


Today, we are ready to learn about Inspectional Reading. Just to recap, Inspectional Reading is at the Second Level of Reading, focusing on What is the Book about?’

This level of reading is characterized by its special emphasis on time. At this stage, a student might be allowed a set time, to complete a certain amount of reading. Inspectional reading is the art of skimming systematically the material. Here, one attempts the best and complete reading that is possible given a LIMITED amount of time.

Inspectional Reading itself comprises of two stages:

1. Systematic Skimming; and
2. Superficial Reading.

This post will review the first stage of Inspectional Reading, namely Systematic Skimming. Here, the main purpose of Systematic Skimming is to allow us to understand the main contents and purpose of the book. By doing so, we can discover whether the book requires a more careful reading. It also allows us to place the book in our mental catalogue, so that we can refer to it, should the need arise.

Systematic skimming consists of the following steps:

1. Look at the Title Page and Preface
Our aim here is to attempt to place the book under an appropriate category, together with other similar books. Further, we need to consider the scope, aim and the author’s special angle on his subject.

2. Study the Table of Contents (ToC)
Reading the ToC with the chapters and sub-titles broken down, enables us to obtain a general overview of the book’s structure. Some books even have an extensive analytical ToC for each chapter, allowing us to understand the structure and ‘flow’ of the book in greater detail. In short, the ToC is extremely useful, as it acts as a roadmap to the entire book.

3. Check the Index
After looking at the title page & preface, and studying the ToC, we should have a fairly good idea as to what are the important terms in the book. For those crucial terms, we should refer to the index and look at the passages where these terms are cited. Within these passages, one may discover the crux of the author’s thesis.

4. Review the Pivotal Chapters
Based on the overall tone of the book, look at those chapters that seem pivotal to the arguments postulated by its’ author. If these chapters have summary statements in their opening or closing pages, read through it carefully. These are passages, which may summarize the major contentions being opined by the author.

5. Tune in to the ‘Pulse’
At this stage, we are ready to tune in to the ‘pulse’ of the book. This is performed by turning the pages, dipping in here and there, reading a paragraph or two, and sometimes several pages in sequence. Our main aim is to look for the signs of the main arguments put forward by the author. Remember to read the last final two or three pages of the book, for its conclusion. Authors often sum up new and important matters in this section.

After performing Systematic Skimming, we are able to understand the main contents and purpose of the book. With this, we are ready to perform the Second Stage of Inspectional Reading – Superficial Reading!

Monday, July 21, 2008

The Way of the General - Part III

Rewards and Penalties

A policy of rewards and penalties means rewarding the good and penalizing wrongdoers. Rewarding the good is to promote achievement; penalizing wrongdoers is to prevent treachery.

It is imperative that rewards and punishments be fair and impartial. When they know rewards are to be given, courageous warriors know what they are dying for; when they know penalties are to be applied, villains know what to fear.

Therefore, rewards should not be given without reason, and penalties should not be applied arbitrary. If rewards are given for no reason, those who have worked hard in public service will be resentful; if penalties are applied arbitrary, upright people will be bitter.

The Mightiest Warrior - Lu Bu
During his era, Lu Bu, was most powerful warrior in all of China. His prowess in wielding his ji, ‘Sky Piercer’ 方天畫戟, on top of his steed Red Hare was legendary. In AD 190, Dong Zhuo’s tyrannical ways angered many regional warlords and they formed a coalition under Yuan Shao and came for Dong Zhuo in the capital Luo Yang, to vanquish him.
However, they were stopped at Hu Lao pass, 50 li from Luoyang. Riding forth on his Red Hare, his halberd in hand, Lu Bu taunted for challengers to duel him. Every warrior who came within range of his halberd met a swift, bloody death. Wielding his ten-foot Serpent Halberd, Zhang Fei insulted Lu Bu to get his attention and galloped out to fight him.

Zhang Fei wielding the strength of a hundred men in battle struggled against Lu Bu for more than fifty bouts, unable to gain an advantage. Then Guan Yu, brandishing his Green Dragon Crescent Blade, dashed out to assist his brother. The three fighters were engaged in another thirty bouts or so when Liu Bei, holding up his Dual Swords, also joined the battle.

Like a merry-go-round, the three brothers galloped in a circle caging Lu Bu inside, who finally began to tire. Unable to face the combined efforts of his three opponents at once, Lu Bu then made a feign at Liu Bei and retreated through the resulting gap back to the pass gate. The Trio chased after Lu Bu but due to the speed of Red Hare, his horse, they could not keep up with him.

Such was Lu Bu's prowess as a warrior!

After Wang Yun’s devious 美人計 stratagem, Dong Zhuo’s faction was destroyed. Lu Bu led those forces loyal to him and settled in Xia Pi. Realizing the immense threat that Lu Bu posed to his ambition to control Northern China, Cao Cao entered into a short-term alliance with Liu Bei to attack Lu Bu. In AD 198, both Cao Cao and Liu Bei laid siege on Xia Pi. The siege dragged on for two months without significant gains. Two advisors to Cao Cao, Xun Yu
and Guo Jia, then suggested flooding the city with water from the Yi River (沂水) and Si River

As the water level rose and submerged the city gates, Lu Bu's subjects rushed to inform their leader, but Lu Bu dismissed the threat on account that his Red Hare could run as well in water as on land. Thereupon he returned to his wine and consorts.

However, heavy indulgence in alcohol and women had wasted his strength away such that one day Lu Bu looked into the mirror and found himself looking thin and pallid. Making the resolution to quit drinking, he then issued an order that no one should drink wine under penalty of death.

One day, Hou Cheng
, an officer under Lu Bu, caught a defector who attempted to steal fifty horses and give it to the Liu Bei. To celebrate the occasion, Hou Cheng brewed a few barrels of wine to be drunk at the feast.

But thinking his chief might find him in fault, Hou Cheng sent the bottles of wine to Lu Bu's palace with a petition explaining, "By your virtue of warlike renown, I have recovered my horses; and as my comrades come with their congratulations, I brew some bottles of wine, first to offer Your Lordship and second to ask your permission to have a little wine at the feast."

Lu Bu took it very angrily, saying, "When I have forbidden all wine, you brew some and begin to give feasts: You are simply defying me!"

Whereupon he ordered the officer to instant execution. However, Song Xian, Wei Xu, and other officers came in and interceded, and after a time Lu Bu softened.

"You ought to lose your head for this disobedience. But for the sake of your colleagues, the punishment shall be reduced to a hundred strokes."

They tried to beg him off this, but only succeeded in reducing the number of blows to one half. When the sentence had been carried out and Hou Cheng was permitted to return home, his colleagues came sadly to console him.

"Had it not been for you, I should have been put to death," said Hou Cheng.

Song Xian replied, "All Lu Bu cares for is his family. There is no pity for anyone else. We are no more than the weeds by the roadside."

Wei Xu said, "The city is besieged; the water is drowning us out. There will not be much more of this, for we may die any day."

"He is a beast, with neither a sense of humanity nor of right. Let us leave him," said Song Xian.

"He is not worth fighting for. The best we could do, would be to seize him and hand him over to Cao Cao," said Wei Xu.

That very night, Hou Cheng sneaked into the stables and got Red Hare away and presented the horse and told Cao Cao that they would show a white flag and open the gates to his army. Early next morning, Cao Cao began a fierce attack as the white flag had just appeared. The battle dragged into high noon and the attackers backed off for a rest.

The exhausted Lu Bu then took a nap himself on top of the wall. Taking the opportunity, Song Xian and Wei Xu tied Lu Bu up and hoisted a white flag. The two also threw Lu Bu's halberd down the wall as proof. Seeing the signals, Cao Cao's troops then poured into the city and seized it in no time. Thus, Lu Bu’s fate now laid in the hands of Cao Cao.

Lu Bu should have governed in an upright and fair manner. By dispensing penalties in such an arbitrary manner, he lost the confidence and support of upright people. By formenting such bitterness in the hearts of his officers and supporters, he merely hastened his defeat at the hands of Cao Cao.

Friday, July 18, 2008

Financial Intelligence - Part VIII

Financial Freedom!

The Aim
At the beginning of this series of posts, our sole aim has been to achieve financial freedom. So, you may be forgiven for asking - where is it all leading to? Ultimately, our aim is as indicated in the Diagram above. Although most of us may never achieve the luxury of sitting at home doing nothing but watching the dough roll in, it does no harm to strive to the summit of Financial Independence.

The Method
At its’ essence, Financial Freedom is about generating enough passive income to cover all your monthly expenses. To achieve this, we must increase our monthly passive income and reduce our monthly expenditures.

Reduce Expenditures
In the diagram above, most of us are currently at Stage 1. At this stage, our monthly salary is insufficient to cover the monthly expenses. In such a situation, cost cutting measures are necessary, so that one can break-even. Otherwise, one may resort to borrowing from banks and sink into a cesspool of loans and debts.

We have covered the methods to categorize the different classes of expenditures and how to reduce unnecessary expenses in earlier posts. By using common sense and discernment, it is definitely possible to reduce our monthly expenses and break-even as indicated in Stage 2.

Increase Monthly Investment Income
How does one obtain monthly passive investment income? We need something called ‘SAVINGS!’ That’s right. Once your monthly income exceeds your monthly expenditures, the difference is your savings which will result in an increase in your bank balance. In the Diagram, we are now in Stage 2.5, slowly climbing our way towards Financial Freedom.

With your savings, you can now generate monthly passive income by placing your savings into a Fixed Deposit to earn interest income. Alternatively, you can invest this money into the local stock market to earn higher returns. You can read more about investing in my Fundamentals and Basics of Investing topics, if you are interested.

The Outcome:
With the miracle of compounded interest, you may find yourself at Stage 3. Suddenly, you notice that your monthly investment income is more than your monthly expenses. Hallelujah! It’s time to sit back and relax! No more work and labor. Just some R&R whilst watching the dough roll in. :)

Most of us may never achieve such rarified heights of financial freedom. Still, why not strive for the summit of independence? Even if one is unable to achieve absolute financial freedom, your efforts will result strong finances to enable you to weather the tough times ahead.

Wednesday, July 16, 2008

Romance of the Three Kingdoms - Red Cliff (John Woo)

Interlude: Red Cliff (John Woo film)

For those of you that are interested in my Romance of the Three Kingdoms posts, the Battle of Red Cliff, has been fleshed out in reel life by John Woo. Part 1 of 2 is now showing in cinemas right now, so if you find my posts interesting, you should definitely check the movie out.

Red Cliff, is a Chinese epic film based on the Battle of Red Cliff
and events during the Three Kingdoms period in Ancient China. The film is expected to be released in two versions: within Asia, Red Cliff is to be released in two parts totaling over four hours in length, with the first part premiering in July 2008 and the second in January 2009.

The film is directed by
John Woo and stars Tony Leung Chiu-Wai, Takeshi Kaneshiro, Zhang Fengyi, Chang Chen, Hu Jun, Lin Chi-ling and Zhao Wei. With an estimated budget of US$80 million, Red Cliff is the most expensive Asian-financed film to date.

This film is based largely on the 'Chronicle of the Three Kingdoms', which is more historically correct. Hence, both Cao Cao and Zhou Yu are given fairer treatment in the movie than in the fictionalised account in the novel 'Romance of the Three Kingdoms'.

The Antagonist: Prime Minister of Han, Cao Cao
The regal looking Cao Cao, Prime Minister of the Han Empire. A magnificent general, leading over 240,000 men to subdue the Southern Rebels. How could he lose? In the movie, Cao Cao was potrayed as desiring to possess the beautiful Xiao Qiao. Bah humbug! A great leader drooling over a mere woman?

The Most Beautiful Woman in China: Xiao Qiao
Is Xiao Qiao a ravishing beauty, enough to move your heart and set your mind ablaze with desire?

The Protagonists: Charismatic Liu Bei and Brave Sun Quan

Liu Bei, famous for his charisma, together with sworn brothers Guan Yu and Zhang Fei understands that this is their last stand. Should the Alliance fall here, all would be lost.

Sun Quan, bold beyond belief, daring to challenge the might of the Han Prime Minister. Only 50,000 brave marines stand against the might of 240,000 Cao Cao's valiant warriors.

Orchestrator of the Symphony of Stratagems: Maestro Zhou Yu

Given great prominence in the movie is non other than Maestro Zhou Yu. Not surprising since he was the mastermind behind the 連環計 Symphony of Stratagems at Red Cliff.

Sleeping Dragon: Master Strategist, Zhuge Liang

Zhuge Liang looks dashing here in his Taoist robes. The movie hints at the rivalry between the two master strategists, at latter date, as they serve rival warlords.

So, what more can you ask for? Go watch it and post your comments here on how you feel about the movie!

Monday, July 14, 2008

The Way of the General - Part II

Capacities of Commanders

The capacities of commanders are not the same; some are greater, some are lesser.

One who spies out treachery and disaster, who wins the allegiance of others, is the leader of 10 men.

One who rises early in the morning and retires late at night, and whose words are discreet yet perceptive, is the leader of a 100 men.

One who is direct yet circumspect, who is brave and can fight, is the leader of a 1,000 men.

One of martial bearing and fierceness of heart, who knows the hardships of others and spares people from hunger and cold, is the leader of 10,000 men.

One who associates with the wise and promotes the able, who is careful of how he spends each day, who is sincere, trustworthy, and magnanimous, and who is guarded in times of order as well as times of disturbance, is the leader of a 100,000 men.

One whose humanitarian care extends to all under his command, whose trustworthiness and justice win the allegiance of neighboring nations, who understands the signs of the sky above, the patterns of the earth below, and the affairs of humanity in between, and who regards all people as his family, is a world-class leader, one who cannot be opposed.

After the demise of Dong Zhuo, there were numerous warlords vying for supremacy over Northern China including Lu Bu, Yuan Shao, Yuan Shu and Liu Biao. Yet against all odds, Cao Cao managed to reign supreme overcoming all his bitter rivals. His most decisive victory was at the Battle of Guandu where he led 40,000 men and vanquished his rival Yuan Shao, commanding a horde of over 150,000 men.

What manner of man was Cao Cao such that he became the pivotal antagonist in the Romance of the Three Kingdoms?

Cao Cao himself once utttered:
‘I would rather betray the world than have the world betray me!

Xu Shao who was famed for his ability to evaluate one's potentials and talents commented as follows:
‘A good subject in time of peace, a crafty hero in time of trouble.’

Zhuge Liang, described his achievements thus:
‘One bold person after another has arisen in various parts of the empire ever since the days of the rebel Dong Zhuo. Cao Cao was not so powerful as Yuan Shao, but he overcame Yuan Shao by seizing the favorable moment and using his soldiers properly. Now he is all-powerful: He rules an immense army and, through his control of the court, the various feudal lords as well. You cannot think of opposing him.’

Cao Cao was as a brilliant ruler and military genius who treated his officers like his family. He was also skilled in poetry and the martial arts, and wrote many war journals. He was greater than a leader of a 100,000 men and yet, fell short of Zhuge Liang’s standard of an exalted leader, one who could not be opposed.

Associates with the wise
When Cao Cao first set up his province in Yanzhou, he welcomed wise counselors and bold warriors, and many gathered around him including Xun Yu and Xun You and Guo Jia. By encouraging able people to assist him, he had intelligent advisers on the civil side and valiant generals in the army. He became famous throughout the East of the Pass. Surrounding himself with the wise and the bold, Cao Cao would erect the pillars of the Wei Kingdom and lay the foundations of the Jin Dynasty.

Magnanimous & Promotes the Able
During his Northern Campaign, Cao Cao successfully subjugated Wan Cheng. Unfortunately, Cao Cao’s soldiers under Xiahou Dun seized the occasion to plunder the people. Yu Jin (another general of Wei), took his army, fell upon them, and slew many. Thus he protected and appeased the people. The plunderers, meeting Cao Cao on the road, knelt down howling and said Yu Jin had mutinied and attacked them. Cao Cao was surprised, and he gave order to Xiahou Dun, Xu Chu, Li Dian, and Yue Jing to attack Yu Jin.

Now when Yu Jin saw his master and a great company approaching, he set his troops to make a camp, as he realized that Zhang Xiu, the local warlord intended to take advantage of the situation and attack both him and Cao Cao.

An officer asked him, "The Qingzhou soldiers say you have turned traitor. Why do you not explain now that the Prime Minister has arrived? Why first make a camp?"

Yu Jin replied, "Our enemies are coming up in our rear and are very close. It is necessary to prepare for defense or we shall not withstand them. Explanation is a small matter, but defense is very important."

Soon after the camp was finished, Zhang Xiu fell upon them. Yu Jin himself rode out to face them. Zhang Xiu drew back. The other generals of Yu Jin, seeing he advance thus boldly, also attacked, and Zhang Xiu was overcome. They pursued him a great distance until his force was almost annihilated. With the miserable remnant he finally fled to Liu Biao.

Cao Cao's army reformed, and the commanders mustered. Then Yu Jin went to see his master and told him of the conduct of the Qingzhou soldiers and their looting and why he had attacked them.

"Why did you not tell me before you made the camp?"

Yu Jin related what had occurred.

Said Cao Cao, "When the first thought of a leader in the time of greatest stress is to maintain order and to strengthen his defenses, giving no thought to slander but shouldering his burdens bravely, and when he thereby turns a defeat into a victory, who, even of the ancient leaders, can excel Yu Jin?"

Cao Cao rewarded Yu Jin with a golden armor and the lordship of Yishou.

Guarded in times of order
During 194 AD, major famine occurred due to a locust plague. At that time, people even ate each other out of desperation. Without food, many armies were defeated even without fighting. From this, Cao Cao realized the ample food supply in building a strong military. He began a series of agricultural programs in cities such as Xu Chang and Chen Liu. Refugees were recruited and given wastelands to cultivate. Later, encampments not faced with imminent danger of war were also made to farm. This system was continued and spread to all regions under Cao Cao as his realm expanded. Although Cao Cao's primary intention was to build a powerful army, the agricultural program also improved the living standards of the people, especially war refugees. [from Wikipedia]

Guarded in times of disturbance
Lu Bu was one of Cao Cao’s fiercest rivals during his Northern Campaign. In his attempt to capture the city of Puyang, Cao Cao was lured into attacking the city as he received information that there were defectors willing to open the gates to him.

And so at the first watch Cao Cao led the way. The moon had not yet arisen. As he drew near the west gate, they heard a crackling sound, then a loud shouting, and then torches moved hither and thither. Next the gates were thrown wide open, and Cao Cao, whipping up his steed, galloped in.

But when he reached the state residence, he noticed the streets were quite deserted, and then he knew he had been tricked. Wheeling round his horse, he shouted to his followers to retire. This was the signal for another move. An explosion of a signal bomb was heard close at hand, and it was echoed from every side in a deafening roar. Gongs and drums beat all around with a roar like rivers rushing backward to their source, and the ocean boiling up from its depths.

Cao Cao dashed off toward the north. On the way, sharply outlined against the glow, he saw the figure of Lu Bu coming toward him with his trident halberd ready to kill. Cao Cao covered his face with his hand, whipped up his steed and galloped past. But Lu Bu came galloping up behind him and tapping him on the helmet with the halberd cried, "Where is Cao Cao?"

Cao Cao turned and, pointing to a dun horse well ahead, cried, ‘There; on that dun! That's he.’ Hearing this Lu Bu left pursuing Cao Cao to gallop after the rider of the dun. Thus, Cao Cao escaped from harm and survived. Eventually, even mighty Lu Bu met his end at Cao Cao’s hands.

Even though one may not be able to reach the exalted standards of a world class leader, it may be wise to strive to emulate the qualities exhibited by the leader of a 100,000 men. Such efforts will surely yield bountiful harvests in the future.

Friday, July 11, 2008

Financial Intelligence - Part VII

Five Sure Ways to Save Money!

钱不够用 Money No Enough!

It never ceases to amaze me the sheer number of people who keep uttering these words. For those of you in such a predicament, fret not! Here are 5 sure ways to save money. To be successful, you need only to exercise discernment and mindfulness.

1. Stop trying to impress other people!
Most of your neighbors, colleagues or friends are too tied up with their own complicated lives, to even notice your efforts at impressing them. And, if you do succeed, you’ll just royally p*ss them off, causing them to envy and resent you. So, why spend excessively to keep up appearances and pander to your ego? In the end, it’ll be the bankers and entrepreneurs that will get the last laugh.

Remember the adage ‘He who laughs last, laughs best!’. So, please don’t follow the Malay proverb Duit tak-de tak apa, Gaya mesti ada, lest you regret it in your old age.

2. Pay off your loans
Credit card loans, car and housing mortgages! Pay off these loans as fast as possible, especially the former. An astounding 18% per annum is charged by credit card companies, on your oustanding debts. So, the earlier you pay off the principal, the more you save. Next, try to pay off all your mortgages. This will reduce the total purchase price you spend on your car or house.

3. Live frugally
Always live within your means. This is common sense! It merely means that you should ONLY buy what you can afford. Always set some money aside for a rainy day and avoid debt unless you have strong assurance that you can repay such loans. If you live beyond your means, you are sacrificing your future for momentary happiness. Act wisely: 先苦后甜!

4. Don’t go shopping
If you don’t go shopping, there will be no avenue for you to spend money. By going shopping, I mean browsing in shopping malls and looking at the enticing goods and services on sale. Most of us would be unable to resist the temptation to buy at ‘spur of the moment’. Avoid advertisements as well, since they are designed to do only one thing – encourage you to buy and consume stuff! If you really need to purchase groceries, make a full list and go out and buy based on the list. JUST DON’T GO SHOPPING!

5. Take care of what you have and wear it out.
Learn to take care of, not only your body but all your possessions as well. Routine preventive practices such as exercising; cleaning your tools and dusting your refrigerator coils will save you huge medical and repair bills, later on.

Further, if your current possessions are still usable, continue using them instead of buying something new. Following the latest fashion trends is costly. Practice recycling your old material instead of junking them. For example, a chipped cup can be used as a pencil holder.

Saving money is easy! Just exercise some discernment & mindfulness. The tips above should help you on your journey, towards financial independence.

Wednesday, July 9, 2008

Speed Reading - Part IV


Sub-vocalization is the tendency for the reader to ‘mouth’ the words in the passage they are reading. Usually, this arises due to the use of the phonic or ‘look-say’ method used, to teach children. Although sub-vocalization is an impediment towards reading, they is a specific method to overcome it.

The best suggestion comes from The Speed Reading Book by Tony Buzan. The ideas below are largely based on his book, so check it out, if you are interested.

It is important to realize that for most readers, sub-vocalization cannot and should not, be completely eliminated. For these readers, sub-vocalization forms part of the thought process in rendering the written material intelligible. It allows them to consciously increase the ‘volume’ of the material being read and assist in comprehension.

Whilst sub-vocalization persists, it can be pushed further and further back into the semi-conscious, such that the reader becomes less dependent on it. The reader must sub-vocalize using his brain and avoid verbalizing (or saying out aloud) the material he is reading. It is important to realize that it is THE BRAIN that is performing the sub-vocalization and not the mouth. It is possible to sub-vocalize at a reading speed of 2,000 words per minute.

How can one push sub-vocalization, further and further back to the semi-conscious? This can be performed by using a reading guide to aid your eyes in focusing on the reading material. The best reading guide would be a long thin object such as a slim pencil, which will avoid blocking your view of the page. Using the finger as a reading guide is discouraged, since the hand blocks your vision of the page.

Place the reading guide underneath the line you are reading and sweep it smoothly along the reading materials. Stop moving the reading guide once you have read the whole line and move downwards.

Refer to the diagram above to see how your reading should look like.

Verbal sub-vocalization is a bad reading habit that must be stopped as it impedes your reading speed. For most, mental sub-vocalization cannot be avoided. In order to improve your reading speeds, mental sub-vocalization must be pushed into the semi-conscious by increasing your reading speed. You can achieve this by using a reading guide such as a slim pencil.

Any comments or questions are most welcome.

Monday, July 7, 2008

The Way of the General – Part I

Knowing People

Due to the relative popularity of the Romance of the Three Kingdoms posts, I am starting another topic, based on the Zhuge Liang’s treatise “The Way of the General”. Whilst Sun Tzu’s “Art of War” may be familiar to many, most of you may not be acquainted to Zhuge Liang’s treatise. Click on the link above to read the complete book.

In each post, I will analyze some excerpts from his book, translated by Thomas Cleary. A review of the application of his essays will be looked at various periods, during the Romance of the Three Kingdoms era.

Knowing People

Nothing is harder to see into people’s natures. Though good and bad are different, their conditions and appearances are not always uniform.

1. There are some people who are nice enough but steal.
2. Some people are outwardly respectful while inwardly making fools of everyone.
3. Some people are brave on the outside yet cowardly on the inside.
4. Some people do their best but are not loyal.

Hard though it is, to know people, there are ways.

1. First is to question them concerning right and wrong, to observe their ideas.
2. Second is to exhaust all their arguments, to see how they change.
3. Third is to consult with them about strategy, to see how perceptive they are.
4. Fourth is to announce that there is trouble, to see how brave they are.
5. Fifth is to present them with the prospect of gain, to see how modest they are.
6. Sixth is to give them a task to do within a specific time, to see how trustworthy they are.


Let us return to view Dong Zhuo’s meteoric rise to power. His success in recruiting Lu Bu was the pillar of his success in seizing control over the remnants of the Han Empire. During his latter days, his hubris clouded his understanding Lu Bu’s psychology, ultimately contributing to his untimely death.

Ensnaring the Flying General
Following the death of Emperor Ling in 189 AD, Supreme General He Jin summoned Dong Zhuo to lead his troops into Luoyang and aid him in eliminating the powerful eunuch faction. Before Dong Zhuo arrived, however, He Jin was assassinated by the eunuchs and the capital fell into chaos. The eunuchs then kidnapped Emperor Shao
and headed out of the capital. They were intercepted by Dong Zhuo, who brought the Emperor back to the palace.

At this time, Dong Zhuo had intended to install his puppet, Prince Xian to the throne of the Han Empire. He was opposed vigorously by Ding Yuan, the Imperial Protector of Bingzhou, another warlord summoned by He Jin. Angered by Ding Yuan’s opposition, Dong Zhuo would have slain him. However, Ding Yuan was escorted by none other than his adopted son, the famous Flying General - Lu Bu.

Dong Zhuo, recognising Lu Bu’s prowess and skills as a warrior coveted to recruit him. However, would Lu Bu submit to Dong Zhuo and betray his adopted father? Or would be angered by such an attempt and exert all his efforts in destroying Dong Zhuo?

Present them with the prospect of gain, to see how modest they are.
Li Su, a subordinate of Dong Zhuo suggested the following:
“You have a fine horse, Red Hare, one of the best ever bred. I must have this steed, and gold and pearls to win his heart. Then will I go and persuade him. He will certainly abandon Ding Yuan's service for yours."

Some people do their best but are not loyal.
Li Su then secretly met Lu Bu and enticed him with the lavish gifts. Pondering long and in silence, he replied:
"I might slay Ding Yuan and bring over his soldiers to Dong Zhuo's side. What think you of that?"

That very night, Lu Bu entered, sword in hand, into his master's tent. He found Ding Yuan reading by the light of a solitary candle and slew him. Next day, with the head of the murdered man as his gift, Lu Bu betook himself to Li Su, who led him to Dong Zhuo. Dong Zhuo received him with a warm welcome and had wine set before him.

Thus, with Ding Yuan’s death and his army torn asunder, Dong Zhuo became the sole warlord in control of the Han Capital, Luo Yang. AD190 marked the beginning of Dong Zhuo’s reign of terror.

In life, it is important observe the person you are dealing with. If you are discerning enough, observe their deeds, demeanor and speech at all times. Whilst they may maintain a facade, it is impossible for continue doing so, at all times. Use Zhuge Liang’s advice to understand a person’s true nature.

Friday, July 4, 2008

Speed Reading - Part III


When reading, there are certain common reading habits practiced by unskillful readers. These are major impediments to efficient reading. Today, we will discuss about some of these unskillful habits, namely narrow fixations, back-skipping and regressions.

Narrow Fixations
Whilst reading, the eyes make small and regular jumps. The eye fixes at a certain point and then jumps to the next point. At each point, termed as a fixation, the eye encompasses a few words at a time. In reading, the eyes move in small jumps from left to right, stopping momentarily to take a few words at a time, before moving to the next fixation. The eye does not move smoothly, a word at a time from left to right. Unskillful readers generally have a narrow fixation. This means, at each stop, his eyes merely take in one or two words at a time. This slows down his reading, substantially.

In regression, one consciously returns to words, phrases or paragraphs already read earlier. This is usually because the reader feels that they may have missed or misunderstood the material read earlier. The reader feels a compulsion to go back and re-read the material in order to improve comprehension.

However, studies have shown that regression does very little in aiding or improving comprehension. Usually, the reader lacks confidence in their reading skills, resulting in acts of regression.

When a reader repeatedly regresses whilst reading, it may form into an unconscious habit, until he is unaware that he is constantly skipping to words or phrases read earlier. This unconscious act is termed as back-skipping. The reader is hardly ever aware that he has a tendency to back
-skip when reading.

Let us review reading material below to demonstrate the difference in reading styles between the Skillful Reader and Unskillful Reader.

Reading Material (approximately 60 words)

Romance of Three Kingdoms gives us a world of versatility in full scale---a rolling panorama of human passions and ambitions. What makes the book fascinating is its wide appeal to many kinds of readers. In Asia, children read the book like they do with fairy tales, whereas politicians embrace it for strategies, scholars wisdoms, parents guidelines, everyday people entertainment.

Unskillful Reader
The Unskillful Reader looks at this paragraph and breaks down this into 45 fixations, often taking in only one or two words at a time. Each fixation requires approximately ½ a second. Therefore, he requires approximately 22 seconds, reading this paragraph.

Further, the Unskillful Reader will have a tendency in regressing or back-skipping. Each regression or back-skip may take approximately ½ second as well. If he regresses or back-skips ten times in reading this paragraph, he has wasted an additional 5 seconds.

The Unskillful Reader will take approximately 27 seconds to read this 60 word paragraph. His reading speed is 2.22 words per second or 133 words per minute.

Skillful Reader
By habit, when the Skillful Reader looks at this paragraph, he groups large number of words together in one fixation. He is able to do this, as each group of words represents an idea or meaning, which he can quickly grasp. Therefore, the Skillful Reader only requires 12 fixations to complete reading this paragraph. As he does not have the habit of regression or back-skipping, no further time is wasted.

The Skillful Reader requires only 6 seconds reading this paragraph. His reading speed is 10 words per second or 600 words per minute. The Skillful Reader is 4.5x faster than the Unskillful Reader by having a wide fixation and avoiding bad habits such as regression and back-skipping.

To eliminate the bad habits above, you must first DISCIPLINE YOURSELF not to re-read the sections you believe you missed out. Secondly, you must gradually increase your reading speed by maintaining an even rhythm in your eye movements. The increase in speed will minimize or prevent regression and back-skipping, whilst improving comprehension. Thirdly, try to slowly increase your peripheral vision by absorbing more words in a visual gulp. By doing so, you will be able to widen your fixations to read more words in each fixation.

Wednesday, July 2, 2008

Financial Intelligence – Part VI

Earth provides enough to satisfy every man's need, but not every man's greed. ~Mohandas K. Gandhi

As reiterated in my earlier post, if you are to succeed in achieving financial intelligence, you must track your expenditures in detail. Once you have done so, this post will show you exactly how to categorize your expenses.

There are two main dimensions to your spending, namely necessity and desire. Understanding these two dimensions are of crucial importance, if you wish to cultivate thrifty habits and achieve financial independence.

What are the bare necessities required by a person in this world? Personally, I believe that we have been afflicted by consumerism to a grave extent. We have lost sight of how little we really need to survive with contentment, here and now. Food and water, clothing, shelter and medicines: these are the bare necessities of life. In this modern world, is it really necessary to obtain more than these basic needs?

The Buddha once remarked:
‘Human desires are endless. It is like the thirst of a man who drinks salt water; he gets no satisfaction and his thirst is only increased. So it is a man who seeks to gratify his desires; he only gains increased dissatisfaction and his woes are multiplied.’

The very crux or essence of Financial Intelligence lies in the ability of a person to distinguish between these two very different needs: Something NECESSARY vs. Something DESIRABLE. To achieve financial independence, a person must cultivate the awareness of the difference between these two concepts.

Four Categories of Expenditure
Using the two dimensions of Necessity and Desire, we can classify all expenses into four major categories, as indicated in the diagram above. Let us look at each category in detail.

Quadrant 1: Necessary and Desirable
These are things that are both necessary and desirable. In other words, it’s something that you must and want to do! For instance, IT skills such as Excel may be invaluable for your career and personal development. Let assume that you are interested in enrolling for an Excel course and familiarity with this software is important for your career progress. The fees spent to enroll into this course, falls under Quadrant 1. You should not hesitate to spend money on Quadrant 1 items.

Quadrant 2: Necessary but not Desirable
Sometimes, there are expenses that are necessary but may not be desirable. Expenses such as medical check-ups or routine car maintenance may fall under this category. These are expenses that you do not like spending money on. However, it is important that you do so, as it concerns your well-being or will save you from spending more money later on (e.g. to car overhaul due to poor car maintenance). Often, failure to spend on Quadrant 2 items may result you having to spend more money on Quadrant 4 items, later on.

Quadrant 3: Not Necessary but Desirable
Aha! We have reached the type of expenses beloved by companies and marketers. These are expenses that are neither necessary nor required by us. Yet, through prolonged exposure to advertisements and campaigns, we are *brainwashed* into thinking that these are necessities. Often, items purchased in this category are overpriced and rarely used. For example, there are numerous exercise and massage machines costing over RM10K. I am sure a large majority of the people who purchase such machines grow quickly tired of them, after a few months. Are not such expenses, wasteful? Be very careful when deciding to spend on items in Quadrant 3. If you are discerning enough, Quadrant 3 offers ample opportunities for you to cut-down on your monthly expenditures and save money.

Quadrant 4: Not Necessary and not Desirable
These categories of expenditures are those expenses that cannot be avoided, once the needs arise. These consist of expenses such as car overhaul, fixing your leaky roof and taking heart medication. Yet, if you are wary enough, you can minimize such expenses before such a need arises (i.e. by spending on Quadrant 2 items)
. For example, if you send your car for routine maintenance, you may have avoided your car from breaking down. Further, if you keep a healthy lifestyle, it may not be necessary to spend money on heart medication, years later.

Let’s have a quick quiz to see whether you understand the differences between these four quadrants. Look at each of the expenses below and place them into one of the quadrants.

1. A Master Grade (MG) Gundam model kit, worth RM150;
2. A bi-annual medical check up, costing RM800;
3. Annual overseas vacation trip with the whole family, RM15,000;
4. Purchases of self-improvement books, totalling RM1,000 annually – tax deductible;
5. Purchases of health supplements, amounting to RM2,000 per annum;
6. Beauty treatment and facials at a local spa, costing RM2,400 per annum;
7. Tuition and exam fees for a degree course at a local college, worth RM12,000 per annum;
8. A 40 inch Plasma TV, costing RM8,000;
9. Monthly Astro subscription, of RM1,200 per annum; and
10. Mobile phone bills of RM2,400 per annum.

So, which items do you think falls under Quadrant(s) 1-4? Any opinions or comments are most welcome. As our needs and desires are different, it will be interesting if you share your opinion in categorizing the expenditures above. Please feel free to comment on any issues related to financial intelligence, as well.

The objective of this post is to get you started thinking, whenever you decide to spend on something. Is it something you really need or merely something you desire? If it is something you merely desire, ponder wisely before purchasing it. There is always an opportunity cost involved. If you are looking forward to a vacation with your family in Phuket, it may be wise to spend less on unnecessary things. By doing so, you can afford the trip, that both you and your family have been looking forward to.

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