Philosophical Musings - Part VI

The Roots of Wisdom

Although I have spent over three decades in this world, the vastness of my ignorance overwhelms me. There is so much still, to understand and learn. In truth, I am like a child, full of ignorance, seeking the Way towards the Truth. Understanding thus, I cast away my pride, at my meager store of knowledge. Whenever I feel proud of my accomplishments, I recall the following verse about wholeness by Hong Yingming:

Wholeness

When the water vessel is full, it overturns

While the piggy bank remains empty, it is whole

Therefore, the gentleman:

Resides in vacuity
Rather than existence

And exists in lacking
Rather than saturation

Speed Reading - Part VII

Analytical Reading: An Overview

Having mastered the first two stages of reading, we are now ready to proceed with the third stage, namely Analytical Reading. I wish to reiterate that this stage requires substantial concentration, suitable only, if you are seeeking deep insights from the book being read. If you are reading novels or magazines merely for leisure, you do not need to use Analytical Reading. Let us review the purpose of this stage of reading:

‘CHEW AND DIGEST THE BOOK!’
At this stage, reading is a complex and systematic activity. This requires a thorough and complete reading. Unlike inspectional reading, analytical reading attempts the best and complete reading, given an UNLIMITED amount of time. The reader here, must ask many and organized questions. Since this is an intense activity, it is NOT REQUIRED for all reading. It is used only when you require an in-depth understanding of the particular book you are reading.

As you can see from the Diagram above, there are seven interlocking steps when performing analytical reading. We will briefly review each of these seven steps for now.

1. Classification
You must know what kind of book you are reading even before you read it analytically.

2. X-Ray
State the gist of the whole book in a short and concise paragraph.

3. Establish Rapport
Find the important words and through them, establish rapport with the author.

4. What’s the Message?
Find the paragraphs in the book stating its’ core arguments. If there are none, construct your own paragraph based on your own understanding of the book.

5. Fair Criticism
Suspend your judgment and seek first to understand the author’s line of thinking.

6. Judgment
Form your opinion and substantiate your judgment as to the validity of the authors’ reasoning.

7. Aids to Reading
Here, discussions will revolve around the use of extrinsic aids to reading such as commentaries & abstracts, reference books, dictionaries and encyclopedias.

Conclusion:
It is important that one masters Analytical Reading as you will profit greatly from it. Applying Analytical Reading will become progressively easier if you practice it often. I will look at each of these seven steps in future posts.

The Way of the General - Part VIII

Decadence in Generals

There are eight kinds of decadence in generalship:

First is to be insatiably greedy.
Second is to be jealous and envious of the wise and able.
Third is to believe slanders and make friends with the treacherous.
Fourth is to assess others without assessing oneself.
Fifth is to be hesitant and indecisive.
Sixth is to be heavily addicted to wine and sex.
Seventh is to be a malicious liar with a cowardly heart.
Eighth is to talk wildly, without courtesy.

Application:
According to legend, Zhang Fei together swore an oath of brotherhood with Liu Bei and Guan Yu, known as the Oath of the Peach Garden. His exploits indicate him to me a masterful general, rather than merely a valiant warrior. Yet, he too, had his faults. Often treating his superiors with respect, he showed little courtesy for his subordinates. All too often, he was warned by Liu Bei that his habit of over-punishing his own soldiers by lashing and sometimes killing them, would bring about his own disaster.

To Guard A City
Prior to the Battle of the Red Cliffs, rivals Liu Bei and Lu Bu struggled for supremacy in Central China. At one time, Liu Bei had to leave his base Xu Zhou and carry out the Imperial Command to capture Yuan Shu. Zhang Fei volunteered to undertake the task of guarding the city. This was what transpired.

‘You will fail,’ said Liu Bei. ‘After one of your drinking bouts, you will get savage and flog the soldiers. Beside you are rash and will not listen to anyone's advice. I shall be uneasy all the time.’

‘Henceforth I drink no more wine. I will not beat the soldiers and I will always listen to advice,’ said Zhang Fei.

‘I fear the mouth does not correspond to the heart,’ said Mi Zhu, one of Liu Bei’s advisors.

‘I have followed my elder brother these many years and never broken faith. Why should you be contemptuous?’ said Zhang Fei.

Thus Liu Bei relented and left Zhang Fei in charge of the city of Xu Zhou.

Heavily Addicted to Wine, Talk Wildly without Courtesy
In Xuzhou, after Liu Bei had started on his expedition, Zhang Fei gave a banquet to all the military officers and said:

‘Before my brother left, he bade me keep clear of the wine cup for fear of accidents. Now, gentlemen, you may drink deep today. But from tomorrow wine is forbidden, for we must keep the city safe. So take your fill.’

And with this he and all his guests rose to drink together. The wine bearer came to Cao Bao who declined it, saying, ‘I never drink as I am forbidden of heaven.’

‘What! A fighting man does not drink wine!’ said the host. "I want you to take just one cup.’

Cao Bao was afraid to offend, so he drank.

Now Zhang Fei drank huge goblets with all his guests on every hand and so swallowed a huge quantity of liquor. He became quite intoxicated. Yet he would drink more and insisted on a cup with every guest. It came to the turn of Cao Bao who declined despite Zhang Fei’s persistence.

Then Zhang Fei in his drunken madness lost control of his temper and said, ‘If you disobey the orders of your general, you shall be beaten one hundred strokes.’

The guests interposed to beg him off, but their drunken host was obdurate, and the unhappy guest received fifty blows. Then at the earnest prayers of the others the remainder of the punishment was remitted.

The banquet came to an end, and the beaten Cao Bao went away burning with resentment. That night he sent a letter to Lu Bu in Xiaopei relating the insults he had received from Zhang Fei. The letter told Lu Bu of Liu Bei's absence and proposed that a sudden raid should be made that very night before Zhang Fei had recovered from his drunken fit.

Lu Bu got ready at once and soon arrived at Xu Zhou with five hundred cavalrymen. The guards on the wall were Cao Bao's people, and they opened the gates to let Lu Bu in. Zhang Fei was in his apartment sleeping off the fumes of wine. His servants hastened to arouse him and told him an enemy had got the gates open.

Zhang Fei savagely got into his armor and laid hold of his mighty serpent halberd. But as he was mounting his horse at the gate, the attacking soldiers came up. He rushed at them but being still half intoxicated, he made but a poor fight. Lu Bu knowing Zhang Fei's prowess did not press him hard, and Zhang Fei made his way, with eighteen leading Guards of Yan, to the east gate, and there went out, leaving Liu Bei's family to their fate.

Zhang Fei with his few followers went to his brother's camp at Xuyi and told his story of treachery and surprise. All were greatly distressed.

‘Success is not worth rejoicing over; failure is not worth grieving over.’ said Liu Bei with a sigh.

Conclusion:
One should be wary of the eight kinds of decadence in one’s own character as well. Often it is easy to perceive the faults of others, yet difficult to realize the faults of one’s own.

Philosophical Musings - Part V

The Roots of Wisdom

One of the most interesting aspects of life is dealing with various types of people in this world. Although each and every person is unique in their own way, yet truly how different is one person from another? This is what Hong Yingming has to say:

Types of People



Under a clear sky and bright moon,
How many should be flitting free under the heavens?

The flitting moths that alone throw themselves into the night lights?

With a clear spring and green grasses,
How many things should they be able to peck and eat?

The owls that so love the rotted flesh of mice?

Ah, those people,
In this world,
Who do not resemble the moths and owls,
How many can there be?

Analytical Review 101 - Part XVI

A Circle has no End

Overall Summary on Analytical Review of Nestle's Financial Statements

If you look at this series of posts, you will have realized that we have spent a substantial amount of time analyzing the Nestle’s financial statements. Perhaps more importantly, it would have struck you that it’s a LOT OF WORK! Yes, it is. Then again, perhaps it would be wise to reflect on how much time it took for you to earn RM10K before deciding to invest in a company? It may have took you perhaps two or three months of your life to save this much money. Then why are you so eager to invest in shares without spending, say one or two days researching the company you intend to invest?

My overall perception of Nestle is that it is a sound company to invest in. Cash flows are managed well and it has an attractive dividend policy. However, due to its’ strong brand name and excellent cash flows, the share price of Nestle is too high compared to its’ earnings. It is an excellent blue chip share to invest in, as a hedge against inflation. You may ask me, so at what price should I decide to buy shares in this company?

My answer is simple: Reread my series of posts and look at the latest quarterly financial results of Nestle in the link below. Then, make up your own mind and you decide at what price it is worth investing!

http://www.klse.com.my/website/bm/listed_companies/company_announcements/announcements/index.jsp

An End of a Long Journey
We have journeyed long through this Analytical Review 101 series. For those of you that have been diligently reading it, this series of posts may raise more questions than answers. Trust me, this is a good thing. The world of investing is fraught with perils and dangers. A little knowledge is a dangerous thing. I hope though, I have highlighted the dangers such ventures to your attention. Forearmed with such knowledge, an intelligent investor may yet profit from his investments.

For those readers that are interested in downloading Nestle (Malaysia) Berhad’s 2007 Annual Report, you can find it via the link below.

http://www.klse.com.my/website/bm/listed_companies/company_announcements/annual_reports/index.jsp

If you that are interested in constructing your own financial dashboards, I will be sending out my Nestle Financial Dashboard and all the relevant workings in an excel file. If you wish to receive it, kindly subscribe for my blog via the Feedburner Email subscription on the upper-right hand side. Your email will not be divulged nor will you be spammed.

Alternatively, kindly drop a comment in my blog with your e-mail address so that I can send the spreadsheet to you. I’ll be sending out the worksheet on the 30 August 2008 to all my subscribers or interested commentators.

A New Beginning
A circle has no end! Similarly, there is no end to our journey in the world of investing. One must learn, unlearn and re-learn about the stock market and our opinions of the companies we invest in. In my future posts, we will look at the more advanced aspects of investing. We will also look at the more noteworthy companies in Bursa Malaysia and perform detailed financial analysis to evaluate whether they are worth investing.

Two Intriguing Questions?
It is surprising to me that none of my readers have yet to pose me these two rather intriguing question. Some of you know me well, though for others, I am a totally anonymous figure. I do not wish to disclose my identity merely because I wish to remain low profile. However, if I were a reader, I would surely ask the blog author this:

‘Why should I listen to you?’
I ask you not to listen to me. Rather, I ask you to merely listen to what I have to say. As with all things, it is your judgment and discernment that will serve you best. If you agree with what I say, then act accordingly. Otherwise, let it pass. Comment, if you have any doubts or questions and I shall endeavor to answer any questions you may have.

‘Why the PriceLess advice?’
At this time and age, if you do not raise such a question, I would indeed be worried. Truthfully, this blog serves as both a personal motivational and disciplinary tool to ensure that my journey into the world of investing is both well reasoned and carefully planned. I have gained much from those that were willing to share their knowledge and wisdom with me, so why should I be miserly with my own? Remember, what is valuable is sometimes free, but not all those who read can profit from it.

Feedback
I would appreciate if you could revert with any comments or feedback you may have on this series of posts. Further, if you wish to me to explore certain investing topics in greater detail, please do let me know.