Seven Deadly Sins of Investing - Part I

An Interesting Quiz

With the current financial crisis, now is the time to start considering investing in the stock market. Before proceeding, we need to find out whether you have temperament and personality to be an Intelligent Investor. Sounds interesting? Well, take this quiz to find out. Ready? Here we go.

1. To Buy A Car
Oil prices have just gone up and your wallet has taken a huge dent. Your rickety old car is good enough for your needs even though you need to spend money servicing it frequently.

One fine day, you hop over to a car dealer just to admire the car. Immediately a car sales person pounces on you and brings you to look at a shiny brand new Toyota Altis. It appears to be reasonably price and looks gorgeous. Besides, you would be saving on repair costs on your old car. No harm rewarding yourself after working so hard, right? Besides, your year end bonus is coming up soon.

Do you buy the car?

2. An Intriguing Hobby
You have an extremely interesting hobby that you've just picked up. However, due to work and family commitments, you are unable to spend as much time on it as you would like.

Fortunately, this coming weekend, your wife and your kids have decided to go visit their grandparents leaving you free for the week. Your do not have much outstanding work in the office and you do not have any pressing engagements.

Do you spend your entire weekend on your hobby and disregard everything else?

3. A Fantastic Opportunity
You visit your relatives house and notice that they've just bought a brand new 42 inch Plasma TV. Before you can say anything, they start telling you about an investment scheme they participated in. It turns out that that they have placed their money with an offshore investment institution dabbling in oil futures. So far, they have doubled their principal in a month.

Although you remain skeptical, after much persuasion and encouragement, you invest RM5K in the scheme. To your surprise, two months later you receive a statement showing a total of RM15K in your account. You have the option to cash out at anytime. A check on the Internet reveals that the investment fund is legitimate and there are a large number of good reviews on the fund.

Do you invest more money in the Scheme?

4. Power of Attorney
You wish to purchase a property in Singapore but are unable to personally attend to all the paperwork. Your lawyer is from a medium sized legal firm which has a good reputation locally. He suggests that you delegate the paperwork to him via something called a Power of Attorney.

When you question him further, he tells you to just trust him. Further, he tells you that since you are not conversant with the law, explaining to you would be a waste of time.

Do you sign the Power of Attorney?

5. A Stolen Car
One fine day after work, you reach the car park and find that your car has been stolen. Darn it, of all days - you left your Identity Card, Passport, credit cards and ATM card in the car. Being a forgetful person, you left a password on a post-it-note in the car just in case your forgot it.

Do you scream, shout and burst into a wild tantrum before forcing yourself to calm down?

6. The Two Rivals
You and your fellow colleague are two of the brightest rising stars in your company. Both of you are highly competitive and more or less equal in skills and abilities. At this year end, only a single person was promoted. It was your colleague.

Although you feel that you contributed as much as your colleague, there was very little to differentiate between the two of you.

Do you feel continue to feel angry and upset that you were by-passed for promotion after a period of two weeks?

7. To Eat the Humble Pie
You are known as a meticulous, diligently and intelligent worker. One fine day, your *not-so-bright* colleague approaches you and remarked that there might be an error in your spreadsheet. Instinctively, you give him a piece of your mind, right there and then in front of everybody, After cooling down, the next day you review your spreadsheet.

GASP! He's right.

You want to apologize to him but you feel too proud to do so. Do you pretend as if nothing has happened and discreetly correct your error?

Where are the Answers?
The full Excel version of the quiz above with the answers has been sent via email to my subscribers. If you wish to receive it, you can subscribe to the e-mail subscription on the upper right hand corner, as follows:

Step 1 & 2:

Step 3:



Step 4:


Step 5:


If you are unable to subscribe, fret not. I will discuss each of the seven questions above on a weekly basis together with the answers, so that you understand the pre-requisites before dabbling in the stock market.

Conclusion:
Each of the seven questions represents a facet of the Seven Deadly Sins that one should avoid, when investing in the stock market. We will discuss these Sins one by one, begining with Lust starting next week.

eLawyer Legal Blog Writing Contest 2008

The Way of the General: On Adjudication

When rulers adjudicate criminal cases and execute punishments, they worry that they may be unclear. The innocent may be punished while the guilty may be released.

The powerful may arrogate to themselves alone the right to speak, while the powerless may have their rights infringed upon by those who bear grudges against them.

Honesty may be distorted; those who are wronged may not get a chance to express themselves. The trustworthy may be suspected; the loyal may be attacked.

These are all perversions, problems causing disaster and violence, aberrations causing calamity and chaos.

Application:
It is pertinent to note than that even the Ancients considered the existence of just laws to be of paramount importance, in ensuring the security and stability of a nation.

With the current political climate, I am sure many of you are frustrated and have grievances with the legal system in Malaysia. Why not channel these emotions into something constructive by joining the eLawyer Legal Blog Writing Contest 2008?

An Intriguing Contest
All lawyers, law student and bloggers are invited to partcipate in the writing competition, featuring the following ‘hot’ topics:

1. Towards an independent judiciary in Malaysia
2. Common Bar Exams: The creation of a new problem or a solution for an old one?
3. Welcome CheDet.com: the impact of Tun Mahathir’s blog
4. Anti-party Hopping Law: Agree or Disagree?

You can choose EITHER ONE of the above topics, give your two-cents worth in not more than 1,000 words. You stand to win up to RM500 cash! Successful entries will be featured in an exclusive section on the eLawyer website. For more details on how to participate, click here.

Conclusion:
Instead of complaining, why not do something about it? Here’s your chance to voice out your thoughts and opinion.

Philosophical Musings - Part X

The Roots of Wisdom

It is necessary for one to speak out, if a friend has erred. Yet, it is difficult to give constructive criticisms gently and avoid offending the other party. How then should one act? Perhaps a verse from Hong Yingming’s, The Roots of Wisdom may illuminate the right way to criticize:

On Criticizing

When attacking someone’s faults
Do not be too severe

You need to consider
How well he will weather what he hears

When teaching someone
By showing him what is noble

Soar not to sublime heights
Descend to whence he can perceive

Buddhist Economics - Part II

We will continue with our discussion on Buddhist Economics based on E. F. Schumacher’s book, ‘Small is Beautiful’. Part I discussed about the concept of Labor. This post will discuss about mechanization of labor.

On Mechanization
From the Buddhist point of view, there are therefore two types of mechanization which must be clearly distinguished: one that enhances a man’s skill and power and one that turns the work of man over to a mechanical slave, leaving man in a position of having to serve the slave.

When is a machine an Enhancer or Slave?
“The craftsman himself,” says Ananda Coomaraswamy, a man equally competent to talk about the modern West as the ancient East, “can always, if allowed to, draw the delicate distinction between the machine and the tool.

The carpet loom is a tool, a contrivance for holding warp threads at a stretch for the pile to be woven round them by the craftsmen’s fingers; but the power loom is a machine, and its significance as a destroyer of culture lies in the fact that it does the essentially human part of the work.”

Work Serves to Purify One’s Character
It is clear, therefore, that Buddhist economics must be very different from the economics of modern materialism, since the Buddhist sees the essence of civilisation not in a multiplication of wants but in the purification of human character. Character, at the same time, is formed primarily by a man’s work. And work, properly conducted in conditions of human dignity and freedom, blesses those who do it and equally their products.

The Indian philosopher and economist J. C. Kumarappa sums the matter up as follows:

“If the nature of the work is properly appreciated and applied, it will stand in the same relation to the higher faculties as food is to the physical body. It nourishes and enlivens the higher man and urges him to produce the best he is capable of. It directs his free will along the proper course and disciplines the animal in him into progressive channels. It furnishes an excellent background for man to display his scale of values and develop his personality.

If a man has no chance of obtaining work he is in a desperate position, not simply because he lacks an income but because he lacks this nourishing and enlivening factor of disciplined work which nothing can replace.”

Conclusion:
Conventional economic systems places primacy of producing goods at the lowest cost, without any regard of the people employed. With the advent of new technologies, thousands of workers find themselves being ruthlessly retrenched. Can you imagine the impact of retrenchment on these people’s respect, their families and communities? Surely, an economic system that places people first is more humane than one that places goods first. Any questions or comments?

The Way of the General – Part X

On Cultivation
In order to succeed in life, perseverance is necessary. The following is an ancient story about the origin of Zhuge Liang and the struggles he faced when he was young. Take it with a pinch of salt though, since it's not part of any official records nor found in the Romance of the Three Kingdoms novel. This story originated from Clear Harmony.

Origins of a Legend
Zhuge Liang was the military strategist for the Han state in the Three Kingdoms period of China (220-280 A.D.). He was the most famous and ingenious military strategist in Chinese history. He was often pictured wearing a robe and holding a fan made of crane feathers.

When Zhuge Liang was 9 years old, he still was unable to speak. His family was poor and Zhuge Liang was asked by his father to herd the sheep at a nearby hill of a mountain. Up on the mountain there was a Taoist temple where an elderly Taoist with a full head of gray hair resided (A Taoist is one who studies the 'Tao' or 'Way of the Universe').

The Taoist took a leisurely stroll outside the Taoist temple every day. When he ran into Zhuge Liang, he would try to tease the boy with hand signs. Zhuge Liang also enjoyed “talking” back to the Taoist with hand signs. The Taoist grew very fond of the smart and adorable Zhuge Liang. He started to treat the boy’s muteness problem. Before long, Zhuge Liang was able to speak!

Zhuge Liang was delighted when he was finally able to speak. He went up to the Taoist temple and thanked the Taoist in person. The elderly Taoist told him, “When you return home, tell your parents that I am taking you as a disciple and I will teach you to read. I will also teach you the art of astronomy, geography and the applied theories of Yin and Yang in military strategies. If your parents agree, you must come attend the school every day and you must never skip a class!”

From that day on, Zhuge Liang became the elderly Taoist’s disciple. Come rain or shine, Zhuge Liang would climb up to the mountain to receive his education. He was a very smart and diligent boy who took his study seriously. He also had a photographic memory. The Taoist never had to teach him anything twice. Naturally, the Taoist became all the more fond of him.

Eight years passed quickly and Zhuge Liang became a teenager.

No Man May Pass the Hall of Beauties
One day while Zhuge Liang was coming down the mountain as usual, he passed by a deserted nunnery located in the middle of the mountain. Suddenly there came a gusty wind, followed by a thunderstorm. Zhuge Liang had no choice but to flee to the deserted nunnery to escape the storm. There a young woman he had never met came out to meet him. She had a large pair of eyes and thin eyebrows. She was so beautiful that Zhuge Liang almost mistook her for a goddess. He was immediately attracted to the young woman.

When the storm stopped, the beautiful woman saw him off at the door and said to him with a grin, “Now that we have met each other. You are free to come by and have a cup of tea whenever you wish to take a break in your trip up or down the mountain.” As Zhuge Liang was walking out of the nunnery, he felt suspicious. “Why didn’t I notice that someone lived in this nunnery before?” he thought.

From that day on, Zhuge Liang began to frequent the nunnery. Each time the beautiful woman would entertain him with warm hospitality. She cooked him delectable meals and always encouraged him to stay longer. After dinner they would chat heartily and play chess. Compared to the Taoist temple, the nunnery appeared to be a paradise.

Thoughts about the woman often diverted his attention from his education and he began to lose interest in studying. He paid less and less attention to the Taoist’s lectures. He also became forgetful and had difficulty in learning new textbooks.

On Mindfulness
The elderly Taoist discovered his problem. One day he summoned Zhuge Liang and let out a long sigh. “It is easier to ruin a tree than grow a tree!” he said. “I have wasted many years on you!”

Zhuge Liang lowered his head in shame and said, “Master, I will never disappoint you again or waste your education!”

“I don’t believe you,” said the elderly Taoist. “I knew you are a very smart boy, so I wanted to treat your illness and give you a proper education. For the past eight years you have been very diligent in your study, so I thought it was worth the hard work of educating you. But now you are neglecting your education. No matter how smart you are, you will never get anywhere if you continue to carry on like this! You are now promising me to never disappoint me again. How can I trust your words?”

The elderly Taoist continued, “Everything has its cause.” Then he pointed at a tree wrapped up by many thick vines in the courtyard. “Look at the tree,” he said. “Why do you think the tree is half alive and is struggling in its growth?”

“The vines binding the tree are keeping it from growing!” answered Zhuge Liang.

“Precisely! This tree had a tough time growing up in this rocky mountain with little soil. But it keeps growing because it is determined to develop its roots and branches. It fears neither the heat nor the cold. However, when the vines wrap around it, it cannot grow up any taller. It is funny how ‘soft’ vines can defeat a tall, robust tree!”

Zhuge Liang was smart, so he immediately knew what his Master was referring to. He asked, “Master, you knew about my dates at the nunnery””

The elderly Taoist said, “Living near the water, a man will learn the fish’s nature. Living on the mountain, a man will learn the birds’ language. I have been observing you and your actions. How can your romantic affair escape my attention?”

He paused for a moment before telling his disciple with a stern look. “Let me tell you the truth about the beautiful woman. She is not a human being. She is a divine crane in heaven. She was kicked out of the heavenly palace as a punishment after she stole and ate the Queen of Heaven’s peaches. She came to the human realm and assumed the appearance of a beautiful woman. She is a depraved divine crane that knows only to seek pleasure. You have been beguiled by her appearance, but you have wasted more than your time. If you allow yourself to lose your will, you will become a loser! Moreover, if you refuse to comply with her wishes, she will hurt you eventually.”

It was not until then that Zhuge Liang realised the severity of his escapade. He anxiously asked his Master for a solution.

The elderly Taoist said, “The divine crane has a habit of returning to her original form at midnight and flying up to the heavenly river for a bath. While she is away from the nunnery, you will enter her room and burn her robe. She stole the robe from the Heavenly Palace. Without the robe, she can no longer assume the shape of a beautiful woman.”

Zhuge Liang promised to follow his Master’s instructions. Before he took off, his Master handed him a cane with the carving of a dragon’s head on the top. He told Zhuge Ling, “When the divine crane finds there is a fire in the nunnery, she will fly down from the heavenly river right away. She will realise that you have burned her robe and will attack you. When that happens, you must hit her with the cane! It is important that you remember and do what I have told you!”

At midnight, Zhuge Liang went to the nunnery quietly. He opened the woman’s room only to find her robe on the bed. He immediately set the robe on fire.

While the divine crane was bathing in the heavenly river, she felt a sudden heartache. She checked the direction of the nunnery and saw it was on fire. She immediately flied down and saw it was Zhuge Liang who had set her robe on fire. She came at Zhuge Liang and tried to attack his eyes with her beak. Zhuge Liang had quick reflexes. He raised the cane and knocked the divine crane down to the ground. Then he grabbed the crane by her tail. The divine crane struggled and was able to escape, but she lost her tail features to Zhuge Liang.

She became a crane with a bald tail. She was embarrassed by her looks, so she stopped bathing in the heavenly river. She dared not enter the Heavenly Palace to steal another robe either, so she had no choice but to remain in the human realm forever and live among ordinary cranes.

In order to remind himself of this lesson, Zhuge Liang kept the tail feathers of the crane.

Blossoming of the Mind’s Eye
From that day on, Zhuge Liang became even more diligent. He would memorise everything his Master taught him and every textbook. He truly absorbed what he had learnt and was able to apply it freely. Another year passed. On the very day he had burned the divine crane’s robe a year ago, the elderly Taoist told him with a big smile, “My disciple, you have been studying under my tutelage for nine years. I have taught you everything you need to learn and you have learnt every textbook here. There is an idiom, ‘Master takes you through the entrance, and it is up to you to practise cultivation.’ You are now 18 years old. It is time for you to leave your home and develop your career!”

When Zhuge Liang heard that he had completed his education, he begged his Master for more. “Master! The more I learn, the more humble I feel. I feel there is more I need to learn from you!”

“True education comes from real life. You must learn to apply your knowledge to life and design different solutions for different situations! For example, you have learnt an important lesson from the dates with the divine crane that one must not be tempted by lust or emotion. This is a practical lesson from a life experience. With that in mind, you must not be confused by this illusionary surface of the world. Take great caution in everything you do. You must see everything in its true form. This is my farewell advice to you! I will be leaving you today.”

“Master, where are you going?” Zhuge Liang asked in astonishment. “Where can I find you or visit you from now on?”

“I will wander around the world and will not settle down again.”

Suddenly Zhuge Liang found hot tears filling his eyes. He said to his Master, “Master! Before you leave, you must give me an opportunity to kowtow to you and thank you for giving me the education!”

Next Zhuge Liang kowtowed to his Master. When he got up, the Taoist had disappeared.

The Taoist left him with a robe with the print of the Eight Diagrams. Zhuge Liang thought of his Master regularly; therefore, he often wore his robe with the print of the Eight Diagrams because it gave him the feeling that his Master was right beside him.

Zhuge Liang never forgot his Master’s advice, especially his parting advice. He made a feather fan out of the divine crane’s tail feathers to remind himself to take great caution for the rest of his life. This is the story behind the famous feather fan that Zhuge Liang carried.

Conclusion:
If a genius like Zhuge Liang could be led astray, what about mere mortals such as us? One should be doubly vigilant in one’s affairs to avoid being led astray. Any comments?