Something to ponder. There are some 'good lessons' we can learn here. The article may appear 'a bit old' but most of what the author suggested here still apply! Having reading it, it makes me wonder sometimes...are we or are we not doing the right thing? Read it and tell me what you think.

Original Source : http://www.deanlebaron.com/book/ultimate/chapters/econ_forecast.html

Economic Forecasting (updated 27 Feb 99)

Almost every financial services firm has an extensive economic forecasting effort. It is usually part of a so-called 'top-down' investment process, which starts with an outlook for the economy and monetary conditions, continues to the strongest industries, follows with detailed company study for stock selection and may include an overlay of technical analysis to provide a timing dimension. Some would add analysis of social and political conditions even before economic studies

Economic forecasts derive from models - usually of the aggregate national or global economy, but sometimes of parts of those economies: particular industrial sectors, regions of the world or even single products or firms. Basic approaches to forecasting simply extrapolate the past; more sophisticated models attempt to understand the sources of past changes and build them into their forecasts. The latter requires knowledge of economic history and economic principles, though, even then, forecasting is by no means an exact science. But while the accuracy of economists' predictions is frequently a target of jokes, forecasting remains a popular pursuit.

Forecasts for the macroeconomy are published regularly by academic institutions, thinktanks, governments, central banks and international organizations like the OECD and the IMF. In these places, modeling can, to a certain extent, be conducted free of the constraint of producing quick and usable data on a daily basis. But in the investment world, forecasts are required to be done 'early and often'. A relatively short-term outlook is normally the limit of their aspirations - what will happen to interest rates within the next month? - with decision-makers demanding rapid output that they hope will be directly relevant to their immediate problems.

Much of the output of financial market models is naturally closely guarded in the hope that it may bring advantage to its owners and their clients. But, at the same time, investment economists like to maintain a public profile for marketing purposes, and are often called on by the media to give their opinion on the latest macroeconomic developments. Their interpretations of economic data may give some clues as to how the financial markets will react, though more often than not, they are explaining why the markets have already reacted as they did. Invariably, too, there are disagreements about what various indicators mean, depending on different beliefs about the economy, and whether the firm is taking an optimistic or pessimistic view of the markets.

Each month, the Economist polls a group of financial forecasters and calculates the average of their predictions for real GDP growth, consumer price inflation and current account balances in a variety of countries. More specialized services like Consensus Economics survey over three hundred economists each month and offer details on average private sector predictions.

Economic forecasting guru: Peter Bernstein

Despite the pressures for 'early and often' forecasts, a number of Wall Street and City economists do as good a job as any forecasters, among them Abby Joseph Cohen, Steve Roach and Ed Hyman. Most such investment economists are good students of market conditions - careful keepers of useful data, and on occasion creative in extracting some kind of signal out of the noise. Ed Yardeni, for example, the chief economist at Deutsche Bank Securities, turns his website into a cyber chart room. If you want to access data and view charts, Yardeni's site is an essential stop. He also makes his commentary available in a section for clients that is password protected, but a substantial amount of the content is openly accessible.

One economic commentator stands amid the few that many of us would class as the best: Peter Bernstein. He grew up heading his father's investment firm, Bernstein MacCauley in New York. He was the first editor of the Journal of Portfolio Management, founded by Gil Kaplan, and has received many awards, among them the highest honor granted by the investment management industry's professional body, the Association of Investment Management & Research.

Bernstein is able to walk on both streets - with practitioners and academics. He writes a newsletter, Economics and Portfolio Strategy, to test and disseminate his analyses. And writing is one of his main strengths: his two books on the history of risk and on how 'capital ideas' came to Wall Street have been regulars on the business bestseller lists during the 1990s.

Like a good academic, Bernstein marshals all the arguments, especially those that are counter to his own position. His mid-February 1998 letter, for example, examined the case for exuberant stock prices in the United States, giving particular emphasis to the markets' reliance upon an all-knowing Federal Reserve for economic management. Bernstein concluded that 'stocks are a risky investment and should be managed accordingly'. Since that analysis was approximately the same as his November 1997 conclusion, he was ahead of the wave and for the right reasons. Bernstein is also faster than most to admit where he has been wrong and to try to examine what led him astray - or, as he jokes, 'what led the market astray when it failed to act the way I thought it would'.

Counterpoint

Financial analysts are professional forecasters. But why study the economy, a traditional lagging indicator, if you want to forecast investment measures? The investment record of this process is only rarely better than random - and when you take account of the expenses of achieving these results, they come out a little bit less than chance. Why do it at all with that unconvincing record of success?

Economic forecasts are supposed to be meaningful. But if you believe that asset prices reflect a forecast of future outcomes, it would seem quite difficult to use a technique that reaches back into the past to get an idea of the future. But that is what economic forecasting does. It is teased for forecasting three recessions for every one that actually happens. No wonder it is called the dismal science.

Financial Times economics columnist Sir Samuel Brittan makes a pointed reflection on the practice of forecasting: 'The golden rule for economic forecasters is: forecast what has already happened and stay at the cautious end. Forecasts tell us more about the present and the recent past than about the future.'

Poor methods, bad models and inaccurate data are all blamed for the recurrence of serious forecast errors. But according to Oxford economics professor David Hendry, these are not the primary cause of systematic mistakes. Rather, unanticipated large changes within the forecast period are the culprit. The primary fault in economic forecasting is not rapidly adjusting the forecasts once they go wrong.

Hendry uses an analogy from rocket science: a rocket to the moon is forecast to reach there at a precise time and location, and usually does so. But if it is hit by a meteor and knocked off course - or destroyed - the forecast is systematically badly wrong. That outcome need not suggest poor engineering or bad forecasting models - and certainly does not suggest that Newtonian gravitation theory is incorrect.

Guru response

Peter Bernstein comments: 'For better or worse, economic forecasting is an essential ingredient in investing because earnings and interest rates are both conditional on economic conditions. So you have to do it or use it in some fashion. Furthermore, although a forecast of next quarter's GDP or even next year's earnings per share may be wrong, the kind of forecasting I do - and really that Abby Cohen does too - is to try to define the basic environment - inflationary or not, fast growth or not, competitive or not, and so on. That kind of thing is most helpful and has paid the biggest dividends over the years, not just in this cycle.'

At the front of this book is further commentary from Peter Bernstein: a grand sweeping history of the markets reprinted from the 1 December 1998 issue of his newsletter.

Where next?

Forecasting is a key task in financial institutions because of the profound effects economic developments can have on potential profits. And while leading economic indicators might provide a hint as to what the economic future holds, they do not anticipate what the additional effects of powerful economic agents like government policy and the financial markets themselves might be. To try to get ahead of the competition, companies will aim to model more accurately, and with more consideration of possible discontinuities in the markets.

One way to make forecasts more useful - though not necessarily better - might be to follow the principle of 'truth-in-labeling' used on food packages and elsewhere. We could describe the kind of forecast we are making more accurately. For example, if we are using backtesting, we should say that that is exactly what we are doing and which of two varieties.

One form of backtesting is 'momentum': the forecast is derived from a view that the past momentum will continue in roughly the same direction - often straight line - as it has in the past. The other form is 'regression to the mean': we think things will not go back or up or down, but return to average conditions. This is like a series of coin flips that goes ninety-nine times in one direction, and we think the next event is related to the preceding one.

Alternatively, we can say that our forecast comes from our own insight or novelty, and label it that way so we know that it is essentially out of our head and our own creativity - or lack of creativity, which we will know in time. Sometimes different techniques like high-frequency forecasting come from this. Or it can come from news and our response to new news. This is not necessarily insider information but news that is not necessarily generally recognized by others - a form of forecasting derived from information.

Finally, the most common form of forecasting is waffle: we do benchmark investing or stick to the middle because we do not know what else to do. That is perfectly all right, but we should label it as such. Let us say that is what we are doing, so people can understand what they are getting when they listen to us. Most of the time, a waffle is the right thing to do, but at all times, we can make our forecasts better by correctly labeling them.

Read on

In print

Peter Bernstein, Against the Gods: The Remarkable Story of Risk Peter Bernstein, Capital Ideas: The Improbable Origins of Modern Wall Street Peter Bernstein's newsletter Economics and Portfolio Strategy Reports from Consensus Economics

Online

econwpa.wustl.edu/EconFAQ/ - Bill Goffe's 'resources for economists on the internet', one of the best entry points on the internet for economic information
www.economics.ox.ac.uk/hendry/Frontpage.htm - David Hendry's research project on the econometrics of macroeconomic forecasting
www.economist.com - website of The Economist
www.ft.com - website of the Financial Times
www.yardeni.com - Ed Yardeni's website
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Almerica's Response (in blue) : Posted: 18 September 2005 at 10:27pm and Nik Zafri's Response (in red) : 24 September 2005 at 7:53pm

nikzafri wrote:

.....But, at the same time, investment economists like to maintain a public profile for marketing purposes, and are often called on by the media to give their opinion on the latest macroeconomic developments. Their interpretations of economic data may give some clues as to how the financial markets will react, though more often than not, they are explaining why the markets have already reacted as they did. Invariably, too, there are disagreements about what various indicators mean, depending on different beliefs about the economy, and whether the firm is taking an optimistic or pessimistic view of the markets.

This is where the danger lies where the urge to maintain a public profile for marketing purposes may cloud vital information that could have been made transparent to the public. More often than not publicity seekers thrive on being the bearer of good news and thus conceal certain information on the repercussions that could happen no matter how small the potential risk is which they already know before hand but in their opinion are not likely to occur. Only thing is that things don't always go as planned.

Yeap...highlight the good things and hide the 'bad' things - when we get these kind of people, do reverse reading - highlight the bad things and hide the good things - that's exactly what they are doing.

I ain't worried - as I know that in the end, these kind of 'soothsayers' will ask the infamous question - "who moved my cheese?"

nikzafri wrote:

....The investment record of this process is only rarely better than random - and when you take account of the expenses of achieving these results, they come out a little bit less than chance. Why do it at all with that unconvincing record of success?

It is actually due to the fact that it is the bread and butter of any analysts. lol

I think a true analyst conducts proper analysis. He/she should know for the fact that if there have been repetitive trends of "unconvincing records of success' derived from their so-called 'nostradamous' capabilities - these kind of 'analysts' should seriously consider looking for a new job. When you have to go, you have to go - your time is over - go find something else rather than 'clouding' people's minds.

nikzafri wrote:

Economic forecasts are supposed to be meaningful. But if you believe that asset prices reflect a forecast of future outcomes, it would seem quite difficult to use a technique that reaches back into the past to get an idea of the future. But that is what economic forecasting does. It is teased for forecasting three recessions for every one that actually happens. No wonder it is called the dismal science.

To a certain extent it is important eventhough it is dismal. It serves as a guideline for every individual's decision making process. They need to know the details, what to expect and understand what could and could not happen. They need to know the details so that they will be prepared for any direction the market turns. Many plan and know what they will do when they get windfalls but how many have a plan B or plan C to prepare themselves for adverse situations. So such economic forecasts which are genuine and transparent are always needed but to the individual it is not a recipe of success but rather an eye opener to help you prepare for the potential good as well as the potential bad.

Yes my friend, nowadays, nobody can really forecast by merely depending/trusting figures/statistics or merely conventional economic hypotheses - you have to 'experience' it yourself....there is a saying - "The analysis tools/mechanisms are not meant to change the formal decision making - sometimes good decisions are based merely on intuition" Despite there are abundance of these tools, sometimes a real businessman should trust his 'business instinct'

nikzafri wrote:

Financial Times economics columnist Sir Samuel Brittan makes a pointed reflection on the practice of forecasting: 'The golden rule for economic forecasters is: forecast what has already happened and stay at the cautious end. Forecasts tell us more about the present and the recent past than about the future.' Hendry uses an analogy from rocket science: a rocket to the moon is forecast to reach there at a precise time and location, and usually does so. But if it is hit by a meteor and knocked off course - or destroyed - the forecast is systematically badly wrong. That outcome need not suggest poor engineering or bad forecasting models - and certainly does not suggest that Newtonian gravitation theory is incorrect.

This is absolutely true. Notice how inaccurate certain analysis have been at times. Many are still not aware that it is no longer the reliable and predictable conditions that we have all been so accustomed to throughout the past one or two decades. There have been quantum leaps of advancements and the extent that what is a sure thing today could be a thing of the past. At the draw of a pen, embargos could be imposed or lifted, closed economies could be opened up. Tecnological discoveries occur almost every week...what was once invested as a need suddenly becomes a white elephant even before the investments have been amortized. What was once affordable could suddenly become free thus opening the gates to all of your competitors which run at lower operating costs to eat into your business. And then you get the daily news of violence and natural disasters. Economic analysts can never provide the framework of what to do when such things occur because it was never expected in the first place. Therefore the risks today deepens because the number of affecting factors (besides just statistical numbers and charts) have just grown out of hand.

I call this 'unwanted risk taking' and 'gambling' - based on luck and a little bit of law of probability..that's all. Indeed, the most dangerous path and pitfall!

nikzafri wrote:

Where next? Forecasting is a key task in financial institutions because of the profound effects economic developments can have on potential profits. And while leading economic indicators might provide a hint as to what the economic future holds, they do not anticipate what the additional effects of powerful economic agents like government policy and the financial markets themselves might be. To try to get ahead of the competition, companies will aim to model more accurately, and with more consideration of possible discontinuities in the markets. One way to make forecasts more useful - though not necessarily better - might be to follow the principle of 'truth-in-labeling' used on food packages and elsewhere. We could describe the kind of forecast we are making more accurately...

Exactly!

Here an article I would like to share :

http://www.globalexchange.org/campaigns/rulemakers/TenWaysToDemocratize.html

10 Ways to Democratize the Global Economy

Citizens can and should play an active role in shaping the future of our global economy. Here are some of the ways in which we can work together to reform global trade rules, demand that corporations are accountable to people's needs, build strong and free labor and promote fair and environmentally sustainable alternatives.

1. No Globalization without Representation

Multilateral institutions such as the World Trade Organization, the World Bank, and the International Monetary Fund create global policy with input mainly from multinational corporations and very little input from grassroots citizens groups. We need to ensure that all global citizens must be democratically represented in the formulation, implementation, and evaluation of all global social and economic policies of the WTO, the IMF, and the WB. The WTO must immediately halt all meetings and negotiations in order for a full, fair, and public assessment to be conducted of the impacts of the WTO's policies to date. The WTO must be replaced by a body that is fully democratic, transparent, and accountable to citizens of the entire world instead of to corporations. We must build support for trade policies that protect workers, human rights, and the environment.

2. Mandate Corporate Accountability

Corporations have so heavily influenced global trade negotiations that they now have rights and representation greater than individual citizens and even governments. Under the guise of 'free trade' they advocate weakening of labor and environmental laws -- a global economy of sweatshops and environmental devastation. Corporations must be subject to the people's will; they should have to prove their worth to society or be dismantled. Corporations must be accountable to public needs, be open to public scrutiny, provide living wage jobs, abide by all environmental and labor regulations, and be subject to all laws governing them. Shareholder activism is an excellent tool for challenging corporate behavior.

3. Restructure the Global Financial Architecture

Currency speculation and the derivatives market move over $1.5 trillion daily (compared to world trade of $6 trillion annually), earning short-term profits for wealthy investors at the expense of long-term development. Many countries are beginning to implement 'capital controls' in order to regulate the influence foreign capital, and grassroots groups are advocating the restructuring and regulation of the global financial architecture. Citizens can pass local city resolutions for the Tobin Tax - a tax of .1% to .25% on currency transactions which would provide a disincentive for speculation but not affect real capital investment, and create a huge fund for building schools & clinics throughout the world.

4. Cancel all Debt, End Structural Adjustment and Defend Economic Sovereignty

Debt is crushing most poor countries' ability to develop as they spend huge amounts of their resources servicing odious debt rather than serving the needs of their populations. Structural adjustment is the tool promoted by the IMF and World Bank to keep countries on schedule with debt payments, with programs promoting export-led development at the expense of social needs. There is an international movement demanding that all debt be cancelled in the year 2000 in order for countries to prioritize health care, education, and real development. Countries must have the autonomy to pursue their own economic plans, including prioritizing social needs over the needs of multinational corporations.

5. Prioritize Human Rights - Including Economic Rights - in Trade Agreements

The United Nations must be the strongest multilateral body - not the WTO. The US must ratify all international conventions on social and political rights. Trade rules must comply with higher laws on human rights as well as economic and labor rights included in the United Nations Declaration of Human Rights. We should promote alternative trade agreements that include fair trade, debt cancellation, micro-credit, and local control over development policies.

6. Promote Sustainable Development - Not Consumption - as the Key to Progress

Global trade and investment should not be ends in themselves, but rather the instruments for achieving equitable and sustainable development, including protection for workers and the environment. Global trade agreements should not undermine the ability of each nation, state or local community to meet its citizens' social, environmental, cultural or economic needs. International development should not be export-driven, but rather should prioritize food security, sustainability, and democratic participation.

7. Integrate Womens' Needs in All Economic Restructuring

Women make up half the world but hold less than 5% of positions of power in determining global economic policy, and own an estimated 1% of global property. Family survival around the world depends on the economic independence of women. Economic policies need to take into account women's important role in nutrition, education, and development. This includes access to family planning as well as education, credit, job training, policy decision-making, and other needs.

8. Build Free and Strong Labor Unions Internationally and Domestically

As trade becomes more 'free,' labor unions are still restricted from organizing in most countries. The International Labor Organization should have the same enforcement power as the WTO. The US should ratify ILO conventions and set an example in terms of enforcing workers' rights to organize and bargain collectively. As corporations increase their multinational strength, unions are working to build bridges across borders and organize globally. Activists can support their efforts and ensure that free labor is an essential component of any 'free trade' agreements.

9. Develop Community Control Over Capital; Promote Socially Responsible Investment

Local communities should not be beholden to the IMF, international capital, multinational corporations, or any other non-local body for policy. Communities should be able to develop investment and development programs that suit local needs including passing anti-sweatshop purchasing restrictions, promoting local credit unions and local barter currency, and implementing investment policies for their city, church, and union that reflect social responsibility criteria.

10. Promote Fair Trade Not Free Trade

While we work to reform 'free trade' institutions and keep corporate chain stores out of our neighborhoods, we should also promote our own vision of Fair Trade. We need to build networks of support and education for grassroots trade and trade in environmentally sustainable goods. We can promote labeling of goods such as Fair Trade Certified, organic, and sustainably harvested. We can purchase locally made goods and locally grown foods that support local economies and cooperative forms of production and trade.

The Star Global Malaysians Forum - Posted: 24 February 2007 at 6:52pm

brooklyn_3p3 wrote:

Hello. I was wondering, how effective is it to set a sell limit on a stock, by that I mean, telling your broker that if the stock reaches a certain level they should sell it? I always wanted to know how to make money in the stock market - without the agonizing stress and uncertainty. Please tell me how is that possible.

------------------------------
Nik Zafri's Response

Here's an interesting article that you should be reading. I've taken part of it from the original source

1. As time goes by. If you're going to invest in stocks, keep in mind a trend is just a trend. In short, don't overreact by trying to time the market. While past performance is not a predictor of future returns, historical data shows holding stocks for the long run really cuts the risk. According to a recent study by Chicago stock research firm Ibbotson Associates, for all three-year holding periods since 1946, stock returns were positive 93 percent of the time, based on the S&P 500 Index.

Take this hypothetical illustration: If you invested $1,000 every year for the past 34 years and reinvested all dividends in the S&P 500 Index, your $34,000 investment would have earned $325,771 if, with the worst timing imaginable, you had invested at the market high of the year. Of course, if you had perfect timing, investing your $1,000 at the market low, you would have earned $365,880. The difference between the extremes? A mere 12 percent; that's less than 1 percent annually. As a long-term investor, you avoid the aggravation of trying to get out at the top and in at the bottom of the market's cycles.

2. The bears wore red; the bulls wore blue. As a rule, the blue-chip stocks of large, well-
established multinational companies are less risky than the stocks of small, little known, single-product firms. When the markets drop, investors often see a "flight to quality," with money going where investors feel safest: the stocks of big companies. No stock, large or small, guarantees investor protection, but large companies are less prone to sudden plunges and are often the first to rebound when the markets begin to turn up again.

3. Don't be misinformed. Get your research from a reliable source--crystal balls and fishing buddies don't count. In-depth research involves the big picture, including political, economic and demographic factors as well as specifics of individual companies.

Technical analysis--using charts and computer programs to identify price trends--provides other information to help you make informed decisions. Base your research on facts, not feelings, hunches or tips.

4. Round up some unusual suspects. Smart investors use overall asset allocation to ensure their portfolios include different classes of securities, such as stocks, bonds and cash. In addition, no stock portfolio should consist of just one or two companies. Diversification means building a multistock portfolio, including domestic and foreign holdings, blue-chip and OTC (over-the-counter) shares, as well as companies in different industries.

5. The start of a beautiful friendship. If you're a risk-ready investor, you keep your eye on several traditional measures of investment value, including price-to-earnings (P/E) ratios, price-to-sales ratios and book values. All other things being equal, a stock selling for 60 times earnings is riskier than a stock selling for 10 times earnings. Growth stocks come from companies experiencing accelerated earnings growth; they often sell at high P/Es because investors expect that higher earnings will result in higher share prices. Value stocks are generally shares of long-established companies, often those familiar as household names with predictable long-term earnings growth rates. As you build a diversified portfolio, emphasize both value and growth stocks to protect it from excessive risk.

6. Play it again, Sam. Ups and downs in the market make you queasy, but you still have a financial goal you'd like to reach? Dollar cost averaging is a simple strategy used by investors to add to their holdings by investing a fixed amount of money at set intervals, such as every month or every quarter. This strategy doesn't assure a profit or protect against a loss in the case of a market meltdown, but it can help smooth out the effects of stock price fluctuations. Best of all, you can start with a small initial investment and make additional small, periodic investments in managed accounts.

The principle is simple: When the price of shares is lower, your investment dollars will buy more shares. When the price is higher, you'll buy fewer shares, but the prices of the shares you bought when prices were lower will have increased. The key here is sticking with the program.

Over the long term, assuming that stock prices continue to rise, the average cost of shares purchased through a dollar cost averaging plan will usually be lower than the shares' average price. How? Say you plan to invest $500 quarterly. If you make a purchase at $10 per share, for example, your $500 investment gets you 50 shares. If the share price rises to $20 during the ensuing quarter, your next purchase gets you 25 shares. After two quarters, your hypothetical purchases would total 75 shares bought at $15 each but with a lower average cost of $13.33 per share.

Because this strategy involves periodic investments, consider your financial ability and willingness to continue buying through periods of high and low prices.

7. I came for the stop orders. A stop order is an order to buy or sell a security at the market price once the security has traded at what is known as the stop price. If you're worried about market declines, consider putting protective sell stop orders in place. A stop order to sell is always set below the current market price and is usually designed to protect a profit or limit the loss on a security that you hold at a higher price. It works like this: Say you bought a stock at $40 per share, and now its price has increased to $60 per share. A sell stop at $50 means if your shares decline to $50, your order could possibly lock in a $10 profit, not including commissions.

While this may sound like an easy strategy, there is, naturally, more to it. The risk is that this type of stop order may be executed several points below the stop price because of market orders placed before it. These market orders could radically change your order's execution price. To be more certain of the price at which your order will go off, consider a stop-limit order. This kind of stop order becomes a sell order only when the specific stop price is reached. Unfortunately, the stop-limit order carries the risk of missing the market altogether since the specific price may never occur. In our above example, say you set a sell stop-limit order of $50, which is reached but delayed because of market orders ahead of it. If these market orders cause the stock price to fall below the $50 stop-limit, your stock will not get sold and you'll still own it at whatever price it reaches.

Setting stop orders is tricky business because sell orders can be triggered by temporary volatility. Cautious investors move stop orders up as stock prices rise, but the trick is to avoid setting them too close or too far from the price of the stock in question. Consult your financial advisor for more information on how best to use stop orders.

Volatile markets are the ones that separate the investors from the speculators, those who panic from those who profit. Whatever kind of investing you decide to do, make sure you and your portfolio are risk-ready

The Star Global Malaysians Forum - Posted: 09 March 2007 at 4:30pm

Back to economics basics - The Superbull. Take into account :

a) Consumer Price Index & Inflation,
b) The volatility global crude oil price (may turn the Superbull and to a Deep Bear),
c) Bluechips - carefully/systematically plan anything to do with abroad investment,(also never forget the RM)
d) Anyone know if there are still 'safe stocks' (bear-proof)? If so, will the risk increase or decrease in owning such stocks in large numbers?
e) Closely monitor NASDAQ/DOW - gaining or not gaining? (weight)
f) WAR-WAR-WAR...no more WAR!
g) Always be reminded of the 1990s
h) Politics
i) Buying Power, Selling Pressure and Profit Taking

The superbull is real but the current volatile correction should now serve as a reminder for everyone to 'review investment plans'

Where else can I find my superbull?

Yesterday, someone told me - 'Commodities'? I said - "Huh? What investment or economics books have you been reading? "

Reply : "Yes, it's a bit conventional but it may hold the answer. Up to you Nik to take my word for granted or otherwise - remember, you brought up the subjects of improving internal mechanisms of any business entity - e.g. supply and demand, quality & productivity, find better ways of doing/improving marketing/branding and sales, improved governance, tips/rumours/data/information screening & analysis?

I didn't give any response but asked him again..."Any other 'superbullish' tips? He stood up, called the waiter, paid the bill, shake my hands and said "Mutual Funds"

and guess what, momentarily before he left, he said some 'ouching' phrases to me "And Nik, cut the craps about the 'psychological sentiment' - I know you mean well, You're an analyst - not a fortune teller" (and left with that 'unforgettable cynical smile')

Gosh...I was stunned...(the guy has been reading GMN)

Ok..my advise - it's time for us to correct our past inaccuracy, prepare a better plan when buying or selling - remember, if the superbull come charging in later (which I'm counting on it - I can almost hear the 'snorts'), all of us would be lucky...trust me!

nikzafri wrote:

I'm not really worried about what this news is telling us - but I'm 'a bit' concerned on the USD performance - read the news about USD currency - not conventional economics. Why am I worried? Read my original post here. If something is not done on USD current performance, then other currencies will be effected, when others are effected, then the pricing of everything will be effected, when pricing is effected, then economy will somehow be effected and of course all of us will feel it. Hedging can be one of the cause and the mortgage crisis may also become another - when lenders want to play too safe and not taking any risk.

nikzafri wrote:

Ask a forex trader (those who trade using USD) or a banker (esp. international banks) or local company linked (investment wise) to the US, they'll tell you how this subprime mortgage crisis effects the stock markets all over the world! It would start with the USD value getting hurt due to the too much dependance on subprime sector and housing market. The USD will start declining further as such as the lenders starting to charge higher and more borrowers couldn't afford to pay the loans and risk facing legal charges even the lenders promised refinancing (be careful, you could end up in more trouble if you refinance esp. Predatory Lenders)

nikzafri wrote:

Yes, it doesn't (the relationship between Malaysia stock market performance and the US economy) - because stock prices are a determinant of several factors operating on a given day - it's still about supply and demand. Thus it is technically wrong to assume it's due to one factor that is - concerns over US subprime market. So, we're quite clear that the market current underperformance has; in principle; nothing to do directly with sub-prime mortgate crisis in the United States. But why it is still effected? Why the concerns? Coincidence? No..it can't be as the WORLD stock markets are encountering the same thing.

It gets better....

The Star Business - 10/12/07 - Monday

US dollar woes far from over

IN PERSPECTIVE
By BALJEET GREWAL

CONSIDER this – 2000 years ago, Rome was running a trade shortfall equivalent to 3% of its total economy, one of the many factors that led to the empire’s eventual downfall.

Fifty years ago, Brazil had a massive trade deficit, which were critical to its decline – the currency was battered over and over again.

Eight years ago, the tiger economies of Asia were plunged into a currency crisis, due to big domestic and over-reliance on foreign capital.

Today, international bodies assert that if a country’s trade deficit exceeds 4.5% of its gross deficit product (GDP), it’s a sign of real and present economic danger.

And yet the US economy continues to flaunt history and economics. At 6.4% of GDP (US$58.9bil), US trade deficits are perilous and significantly exceed those of Rome, Brazil or any Asian country one decade ago.

With the recent decline of the US dollar, there are good reasons to expect its slide to continue. Weak economic numbers triggered the fall of the greenback against slower housing starts, sluggish durable goods orders and lethargic consumer confidence – all point to a correction in the economy.

Compounding this is the US’ current account and budget deficit (3.5% of GDP) as well as the narrowing interest rate differential between the US and regional Asian countries. The impact of the subprime market and the widespread repercussions on consumer and corporate consumption exacerbates the dollar woes. All these factors combined offer the possibility of a prolonged economic malaise which continues to weigh down the dollar.

On the contrary, improved economic fundamentals in Asia (reduced external debt and budget deficits, higher international reserves, potential sovereign ratings upgrades and sizeable portfolio capital flows into Asia) have further supported regional currencies.

Further appreciation is on the cards, driven by dwindling US macro dynamics and slower growth expectations. Year-to-date 2006, the Malaysian ringgit has appreciated 5.52% against the greenback, the Singapore dollar at 5.97% and the Thai baht at 16.96%. More telling will be a likely renminbi appreciation fuelling regional currencies given China’s imminent economic reforms and move towards a flexible mechanism. Increasingly, the fortunes of economies in the region are being lifted, driven in many cases by demand from China.

While a weak dollar has seen currencies rally against a weary US economy, a significant correction in US macro data and serious negatives from a bourgeoning current account deficit may flip dynamics if left unchecked. The largest threat globally remains an unruly adjustment of the US dollar which could send regional markets into a downward spiral premised on a sell off in US dollar assets. The tumbling dollar will not only halt export growth but also see a flight away from capital markets. The US is still the single largest trading partner of most East Asian economies, and the Achilles heel of emerging Asia.

To offset this, East Asian countries will need to ensure that their currencies appreciate in unison and do not fluctuate sharply in value relative to one another given the weightage of trade. East Asian economies can withstand about 20% decline in the trade-weighted value of the dollar provided their currencies appreciate together – consensus show that the US dollar will need to decline by 30% in trade weightage terms for trade deficit to look palatable.

Collectively, Asian central banks hold about US$3.2 trillion in foreign exchange reserves, most of it in dollars, and their large purchases of US dollar leading to 2006 have played a crucial role in curtailing the dollar's decline. If the US dollar is certain to fall further, central banks will sell dollar reserves or switch into other reserve currencies, which will exacerbate the dollar’s fall.

On the contrary, if Asian economies try to prevent their currencies from rising against the dollar to preserve export competitiveness, then the result could be broadbased weakness in Asian currencies and a rapid accumulation of currency reserves. Delicate balancing of foreign exchange reserves in this instance is crucial, especially given the trade impact; hence a communal appreciation will thwart any potential regional imbalance.

So, does a falling US dollar spell disaster for Asia? Not necessarily. Asian economies today are characterised by current account surpluses, large foreign exchange reserves and high rates of domestic savings. Equity markets across the region have been breaching all-time highs, reflecting the underlying strength of economies across the region and the perception that Asian stocks represent the best growth prospects at reasonable risk premium.

Thanks in part to the de-linking of Asia's capital markets from the US (more visible in the bond market), and a greater reliance in intra-regional trade (particularly with China), Asian markets seem well-placed to withstand the slowdown in the US that is expected in 2007.

These improved economic fundamentals will serve the region well over the next few years as the global economy slows and investors become more risk-averse. Nevertheless, the dip in Asian capital markets and a slide in Asian currencies against the US dollar in August this year, from the fallout of the subprime crisis serve as a reminder that the region is not immune to a change in global investor sentiment.

Meanwhile, positive overtures from an appreciating ringgit will continue to buoy domestic markets. The ringgit surged to its highest level post de-pegging, closing at 3.3177 (Nov 9) to the US dollar in line with strengthening regional currencies. The broadbased impact from a stronger ringgit is positive in general; especially in sectors which derive ringgit revenue with USD denominated costs.

Note: The author is group chief economist at Kuwait Finance House, Malaysia (KFH). KFH is one of the largest Islamic banks in the world and the first Islamic Bank with an Economic & Investment Research team.

----------------------

Since the author said "Not necessarily", this may also serves to mean as 'depends'.

Here are my personal hypotheses :

Despite it is understandable that trade surpluses could be the solution for future economic growth i.e. by means of amending policies not to be overdependent on foreign trade (only recently done), it may only work if country like US decide to run the corresponding trade deficit.

I may be wrong, but what if US decides to reduce the deficit?

Will it not create some 'not so nice' repercussions?

I'm not really being devil advocate here, but the gap of surpluses and deficits are not getting any smaller as we speak and it is foreseeable that the next issue will be misalignments in USD adjustment and definitely some 'not so nice' impact on global growth.

Of course, I'm neither suggesting that we should be adjusting exchange rates in Asian surplus counter nor pushing down demand and growth in deficit countries but rather I was kinda HOPING that Asian should assume a much bigger function in expanding their domestic demands and head towards becoming the catalyst to global growth (as soon as possible)

I am also yet to see two things : (anyone, please correct, I might have missed it)

a) EU coming in although much have been said by them and

b) adjustments on worldwide macroeconomic policies

When we deal with global financial management, we need a state-of-the art multilateral approaches to ensure a more predictable trading environment.

In global economy, every nation should not be left behind (or be put in the dark wondering what would be the future or what's next?) and they all deserve a more fair/equal treatment. IMF and UNCTAD should play more transparent roles rather than be seen as 'being used' to determine monetary policies and exchange rates.

The whole world is on the way towards interdependency, nobody should be ignored. Asia should no longer limit itself by merely quoting China as a benchmark of Asian or world growth, but other Asian nations as well.

My special thanks to Tuan Haji Ahmad bin Che Din, Taman Merdeka, Selama, Perak Darul Ridzuan, Malaysia

The 14 Golden Rules for Malaysian Business
(Version 02-May, 2006) - By : Nik Zafri (V1-2002)

(KNOWLEDGABLE) - Possess sufficient knowledge, skills/competencies, abilities, experience, exposures and qualifications. All these criterions must be geared towards developing result-oriented system.

(HELPING HAND) - A lending hand to interested parties - associates, partners, staff and general public (including competitors) related to the business. This include sharing new business methodologies through training/ briefing/ conversation/ meeting/ coaching etc. etc. with a perspective of building a better business network in the long run. Becoming responsible corporate citizens by helping the needies (social/welfare activities) and susceptible to the surroundings (including general public)

(CORRUPTION-FREE) - Free from graft of any form. Bribery destroy businesses in a short time and it is also against religious beliefs and the laws.

(EFFECTIVE MARKETING) - Approach the market ethically upon seeing prospects. Diligence and hardworking without giving up easily. Never say 'NO' to customers requests or enquiries. Form up smart partnership(s) or JV(s) with more experienced parties if required.

(NO WASTAGES) - Do not waste time/money on prospective clients/sub-contractors/suppliers at entertainment centres/nightspots or going on tour - vacation in order to win certain tenders (s) or as one of the 'implied criterons' for tender(s) award. Wastages should also be avoided in terms of quality costs (scrap, duplicate activities, wastages etc. etc.) and where practicable, recycle. Apart from the above, meetings/discussions which are time- consuming and unproductive must be minimised including to experiment or test-run a certain 'blue print' or system which is still theoritical. Finally, negative habits such as loafing, truancy, too much talking, spending too long of a time at canteens/cafeteria/stalls should be avoided.

(VISIONARY) - having long term strategic plans in the context of mission, objective and goal. All planning should consider measurement, implementation, current financial status, human resources, technology and business suitability. Expecting potential problems proactively may prevent future pitfalls.

(EXCELLENCE) - excellence and having own business branding without 'xeroxing' or too much influenced by others/competitors. Being proud of own business (even how small or how big) without inferiority.

(PRACTICAL) - Putting all effort towards achieving the objectives and goals being set-up and not simply developing hypothesis or lip-service. Having business-'ownership' feeling, leadership and ability to work independently. These include the process of critical decision making under any circumstances. Responsible, committed and accountable on duties being executed.

(TRANSPARENCY) - adopting transparency in matters/current development pertaining business that need to be made known to interested parties (client, stakeholders, general public, consumers etc. etc.)

(SUSCEPTIBLE) - caring and susceptible towards the volatile changes in the requirements (specification/trend) of interested parties.

(TENDENCY TOWARDS CHANGE) - Readiness to embrace change or upgrade the quality of services and products according to the latest trends regarding new knowledge, technology and method. These include willingness to allocate additional investment(s) aimed towards continual improvement and long term returns.

(LISTENING TO OPINIONS AND CONSTRUCTIVE CRITICISM) - becoming a good listener to views and (constructive) criticisms from interested parties as they may become catalyst to business growth.

(NOT DEPENDING ON RUMOURS) - not depending solely on rumours in the course of running business. This include unverified/unreliable tips of market shares/stocks (known to fluctuate)

(QUALITY) - OVERALL - implementation of policy, procedures, standards/codes of practice, process, product/services, resources - technology, training, development of management/staff/workers, customers, teamwork, welfare, occupational health and safety/environmental management. Instilling discipline (or self-instilled disciplines) in all aspects including subordination

The Star Global Malaysians Forum - Posted: 08 September 2006 at 8:59pm

Awareness must come from people like us. We must keep educating in any way we can even it may take ages. The order and chaos are co-existing but the choice is always ours. Our effort even a small contribution but in good faith would definitely help somewhere..to a certain extent - Every little bit helps.

The idea of having people who still care is the best we could do for now (I wish there's a better solution) in common scenarios like :

a) 'you're on your own' -> it's you who will make the change or it's a dirty job but someone has to do it. I view these as you can't do anything by just sitting and watching or hoping everything will be OK. To me, participating in this forum would reflect at a minimum level - your intention to help out even merely by talking or giving opinion/views.

b) 'ask not what the government can do for you but what you can do for the government' -> yes, it sounds a bit rhetoric again but if you think carefully after reading this phrase (It's a call for help) - > how do you define government? Can it exist without people, can it exist without votes. Again, it's our hands that are causing the government to exist. It takes two to tango!

c) 'If you can't get to the government, let the government comes to you' - we must not give up hope, keep trying. Someone somewhere will see your good intentions. But if you fail to gain attention even how hard you tried, there will be predecessors if not your own children.

In my past, my management plans have been nicknamed 'poison' by one ex-employer. But of course, I don't easily throw what seemed/claimed to be 'poisonous' to them because I believe that 'People reject to what they don't understand" or "People are scared of change" and most importantly I believe that 'the poison' they were referring to are actually 'a cure' to their 'illness' or perhaps other people's illness somewhere else. It's very sad that I have to resign from that organization just to prove myself right - lucky me - I don't easily give up. I joined another company (bigger than the previous) and miraculously, against all odds; ironically, what seemed to be the 'poisonous' plans were actually 'cures' to the new organization. Would I have thrown the plans away, I would not have reached this far. And you know what? The previous employer had the guts to come back to me and expressed how 'stupid' he was to not stop my resignation. But I; in good faith; calmly/sportingly replied to him that his company was not the 'chosen one'...what to do..it's fated I guess. But I did want to help his company back but the employer chose not to accept because he felt a little bit 'shame'.

c) 'nobody is wrong, everyone is right', 'nobody is right or wrong' -> which one are you?

Someone once asked me : "Can you do a better job Nik if you're chosen to lead the Government?" I said : "It's not an easy job" - "The chances are, I could be doing worse " BUT "I do know that I don't have to be a politician or authority to uphold good/best practices and principles"

Nobody thought that the Walls of Berlin can be finally crushed down. Nobody thought that Malaysia can have their own cars. Nobody thought that the speed of sound can be broken. Nobody thought that we can go to the moon. Nobody thought that ICT/information/knowledge will become one of the most important asset in our lives...

But in the course of history, negativities have prevailed in 'burning Joan of Arc', 'murdering Mahatma Gandhi and Lincoln', 'branding inventors/scientists as magicians' etc. etc. I'm sad to think of the fact that there must be casualties/martyrs in order to help humanity reaching what we define today as 'civilisation' or 'peace' or whatever you want to call it. In a way, I'm beginning to understand why we can't tamper with nature - for eg. In the jungle, tigers/wolves have to eat smaller animals in order to survive, seagulls have to eat fish or newly born turtles to live - it's the survival of the fittest. It's the way you perceive it or see it. If you see tigers as 'bad animals', then you will shoot the tiger not knowing (or ignoring) of what would happen to their cubs.

Well, I believe - if we keep frequently seeing things negatively (not that we cannot have 'benefits of the doubt' at all) - they will stay negative in our hearts and worse - these negativities will dictate our actions. But if we try to turn 'weaknesses' into 'strengths', it will definitely be positive to us so long as you have faith and confidence - whatever happens.

Being a normal human being - despite God is so powerful and can 'bring' food to your doorstep without putting any effort - we still have to find or have a job; even if it's small one as this is what we are and being created for (with brains, limbs and senses) I don't deny the fact that miracles exist (or at least 'luck') but hoping for too much miracles (luck) may lead us nowhere. On the other hand, I've seen miracles/lucks happening when I put some good effort on certain things.

There must be a point whereby we must learn to give credit to ourselves, being satisfied or feel the thrill of victory in our lives (in our very own ways) - even how small these can be. Give hope to yourself if you fail to give hope to others.

The one question that came to me during my 40th birthday :

"Have I made the difference?"

I don't believe that people will always resort to dissatisfaction all the time. Pain and bad memories are something you can't erase, you have to bring them with you but how you're going to deal with them later that matters most - anger? fear? vengeance? or not letting us to be 'beaten' again.

There will always be 'pros' and 'contras' in everything and it will stay that way till the end of the world. But best thing is that it's these pros/contras that help nation building - believe it or not. Just like having catalyst in chemical. But if there's too much of pros or too much of contras...then our world will never go anywhere.

Don't be sad if you have to do mistakes or making the 'wrong' choices in our lives. After all, we are only human. After all, to err is human.
-------------------------
Response by adie/ghost001 - Posted: 15 September 2006

A very good comments indeed Nik. Yes, we can never know what's prepared for us in the future. We only know the remnants of the past and try to improve the present and the future with it. But there's no point of trying to improve the future so much if we haven't learn from our past mistakes.

I agree with you on becoming 'independent' as today's world is like, nobody knows you and you don't know anyone. But if you strive hard enough you will succeed but one thing requires explanation - although I understand what you mean by predecessors but how to let the government come to you? (Perhaps I'm not as smart you are..can you please enlighten?)

I'm sad reading the part when people thought you're bringing 'arsenic' whereas in actual fact, you're bringing 'antedote'...I remember reading your pal's opinion almerica that clearly indicated you as a guy who don't like 'craps' and getting straight to the point. Well you did prove to the old management about the new management you later joined did you not?(almerica, I noticed that you've met Nik, is he the kind of the same person?)

I have no comments on the rest of your views as they are 'self-explanatory' but I think, having seeing your web and the forum here, you have made the difference.
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Response from Almerica - Posted: 18 September 2006 at 2:13am

Hi ghost001, yes, I've met up with Nik albeit it was just a very short hello and get to know session. A very active fella I might add (hehe). The most important thing is that this forum provides every one of us the opportunity to make our voices heard (well at the least, it is heard by those who share a strong belief in doing the right things and doing things right!), so keep it up with your postings.
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Posted: 19 September 2006 at 7:11pm

Hi ghost001/adie, glad to know that you've quoted my names here and there in many threads. But a piece of advice - be yourself and not be me.

I see great potentials in you (quite a good judgement of character myself) even you're not one of my 'apprentice'. (Yes, I do have so many 'apprentices' that have succesfully 'go places' under my strict supervision & guides) I'm sorry if this statement may appear 'arrogant' to you but I mean well. I do not want people to say that you're some sort of my crony..please...

Happy Foruming
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Response from adie/ghost001 - Posted: 19 September 2006 at 7:21pm

Thank you for the good advise and I'm really sorry if I have gone overboard although I thought that's part of being a fan is all about. Sometimes I didn't realize that I'm doing something that might attract your unnecessary attention. Yes, I know your PMs and emails are full becoz of me and sometimes I admit that people do get irritated on my persistence.

I understand perfectly what you mean as you're the kind of person who likes to say things 'straight to the face' and I really admire you for that. But - If I have the opportunity, I would like to register myself to become your apprentice - seeing your principles and beliefs are good enough for me and I won't be turned off by your last comments but on the other hand, I will treat them as constructive criticisms.

Kudos to you my friend!
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Nik Zafri's Response - Posted: 19 September 2006 at 7:27pm

THAT'S THE SPIRIT GHOST!!!

But please understand, not that I don't want you to use my name at all in your threads (for e.g. using 'quote' button..that's ok with me - interactive/comments) - but not too much like 'Nik says this and Nik says that or because of Nik etc.'...I don't like it. I can take praise & admiration but not fanatism or obsession.

I may consider you to become my apprentice..one day. You are one of a kind - ghost (kinda remind me of myself when I was your age) Alas, please remember in one of my last thread - I did say "We must learn to give credits to ourselves". I'm a humble man, ghost but not too humble as this attitude may potentially turns into 'inferiority complex'. A lot of people tend to take opportunity when you're being 'too low' (Take this as one of the lesson if you want to become a good businessman)

Withdrawal doesn't always mean that you're loosing..but you're actually restrategising.

Cheers...
----------------------------
Response by Almerica - Posted: 20 September 2006 at 12:39am

Hi ghost,

The best judge is yourself. You can gauge your own level of daily performance and personal expectations every night when the day is done. Just ask yourself these questions before you knock off to bed.

- Did I really do things that were of value today?
- What did I do right? What did I do wrong (or what haven't I done that I should have)...and Why?
- What did I learn today? How can I use what I learnt today to be applied to what I can do in the future?
- What happened today that made me feel good/bad and why?

Then remember them and rectify what you think you did wrong (or do what you didn't do which you could have done) OR practice and try to inculcate the good things you have discovered or learnt.

Imagine if you can rid yourself of 1 bad habit in just a week and adopt 1 good thing you have leant in a week...in just one year you would have eradicated 52 negative habits of yours and adopted 52 positive traits. Tell me then that you need a mentor when in fact you would have been qualified to be a mentor to others.

But the key is that when you analyse yourself and the situations everyday, don't let the devil on your shoulder try to give you excuses on why you had to do something this way or that way...just be honest with yourself because you can't afford to lie to yourself just to make yourself feel better. Simple right?
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Response from adie/ghost001 - 20 September 2006 at 2:07pm

Thank you for the good advise almerica. I'll try to remember them. It's a sign of care from GMN members and I really appreciate it.

The Star Global Malaysians Forum - Posted: 02 June 2007 at 3:21pm

I always ponder on this subject since I was a kid – perhaps influence from sci-fi stories. Will we be seeing building designs of the future be different or with the sophisticated looks? Or perhaps getting taller and taller?

As I entered the 90s, yes, I have seen some futuristic developments as I expected when I was a child. But do you think, the building will be taller and taller in the future?

I don’t think so. Of course, once people become really economic-conscious, this skyscrapers would no longer be built as you don’t have proper justifications in terms of economy. Just visit any skyscraper in the world today - look at the ‘small’ office spaces as you go further up? And look at the rental price?

But if you all ask me, will digital age encounter higher evolution as time goes by? My answer would be a big ‘YES” and to evolutionize the digital age, you do not need to build high buildings, right?

You can just ‘go anywhere’ to find :

a) ‘wi-fi’ and ‘wi-max’ – a very rapid evolution of broadband which started from leased line which started from ‘dial-up’

b) ‘3G’ facilities – a very rapid evolution of GPRS, Bluetooth which started from WAP.

then you’ll get connected to the world - and these technologies are getting better and better as I speak now!

Now why would people build tall buildings on the first place? If you study carefully, the typical claims would be :

a. to denote some kind of success and glory via ‘monuments’,

b. plus (ironically) also an indication of the lifestyle of rich and famous, the taller the penthouse or CEO’s office suite be, the ‘taller’ the ‘success level’ would be

So, do you think, this philosophy will still be valid in the future? (Maybe now) I think what we’re facing now is part of the new industrial revolution (we’re still in the learning stage) and soon when quality genuinely takes its place, we would be concentrating to building a more secured, stronger + environmental friendly superstructures – green buildings (not necessarily high)

Now how would I know this? I see ‘signs are happening now’. I noticed that some true rich men coincidentally related to the digital business – surprisingly prefers lower buildings with good surroundings - just look at Google, Yahoo offices and even Microsoft building in Richmond. Now these firms are more into evolutionizing digital technology rather than making skyscrapers to denote their success.

Now the following are what I foresee (not Nostradamaus-oriented) :

a) The current skyscrapers will stay the way they are but new ones will no longer be built,

b) Even if there are new buildings to be built, the focus would be on reliability, strength, longer life-cycle and especially environmental friendly elements – in simple terms – GENUINE sustainable development,

c) Digital technology race and evolution will come to a total halt one day (but not as soon as skyscrapers) and we would still be maintaining what we have – possibly try to go back to the basics as much as we can.
-------------------------------
Response from flick068-Posted: 02 June 2007 at 4:34pm

I think you're not very far off in your Nostradamaus-oriented predictions. The current movement is towards green and sustainable buildings rather than glorified monuments. Although glorified monuments seems to be de rigueur in developing nations eg India & China. For eg, just read in today's paper a billionaire in India building a 60-storey palace with helipad, health club, etc for his business/office and home, just 'coz he can! If you've got it, flaunt it type of mentality I suppose. And look at all the one-upman-ship happening around in Shanghai, Taiwan, Malaysia included on who builds the tallest, longest, biggest building... (how about a building that works and not crack or leak would be better don't you think?)

Once people realise about scarcity of resources and the need for sustainability then the buildings will follow. In some ways the developed nations are getting there because they are the first to feel the effect, in a way.

Also, with the digital movement, it will change the way people work. Perhaps more people will work from home and there won't be need for massive office buildings - although i think this is much further away in the future.... i don't think human bosses have the necessary skills to manage staff remotely (another whole different discussion on human bosses' skills....)
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Nik Zafri's Response : Posted: 08 June 2007 at 2:46pm

Hi flick, thanks for seconding. The more I look into this matter, the more I see few things :

a. We have to learn the hard way - that is when the environmental factors started to deteriorate profusely, only then, people will understand that how important to safeguard nature in order not to destroy the future of their very own future generation. (many countries started out where we started. Some realized fast and drew the line to block the 'madness of unsustainable development' plus restarted trees planting but some countries were left very far behind and awaiting destruction - as a result of their own past guilts)

b. The (a) factor is very much related to serious need for attitude change - ignorance, talking hypotheses/dissertation (talk the walk), no follow-up action taken, waiting for something to happen first (reactive and corrective or firefighting attitudes) etc.etc.

Indeed ICT evolution should be channelled towards educating the people proactively!

The Star Global Malaysians Forum - Posted: 06 August 2006 at 7:37pm

I read a report by OECD/Economic Intelligence Unit/Cisco Systems sent to me by a friend. The paper themed 'Foresight 2020' - Economic, Industry & Corporate trends' The principal findings from the research are (among others):

Globalisation - Asia - There will be a redistribution of economic power esp. China & India. Non-OECD markets will account for a higher share of revenue growth between now and 2020 than OECD economies.

Demographics - Population shifts will have a significant impact on economies, companies and customers. The favourable demographic profile of the US will help to spur growth; ageing populations in Europe will inhibit it. Industries will target more products and services at ageing populations, from investment advice to low-cost, functional cars.

Atomisation - Network technologies and globalisation will enable firms to better use the world as their supply base for talent and materials. Processes, firms, customers and supply chains will fragment as companies expand overseas. As a result, effective collaboration will become more important. The boundaries between different functions, organisations and even industries will blur.

The BEST part of all is a survey (1650 participants - analysts, policy makers, senior executives) determine the areas of activity that will likely to offer the greatest potential for productivity gains in 2020.

In accordance to priority...

Priority No. 1 - KNOWLEDGE MANAGEMENT
" " 2. Customer Service & Support
" " 3. Operation & Production Process
" " 4. Strategy & Business Development
" " 5. Marketing & Sales
" " 6. HRM & Training
" " 7. Corporate Performance Management
" " 8. Product Development
" " 9. Financial Management & Reporting
" "10. Supply Chain Management
" "11. Risk Management & Compliance
" "12. Procurement

So guys...study hard and please contribute to this topic...KNOWLEDGE MANAGEMENT is gonna be your future.
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Response by Almerica - Posted: 06 August 2006 at 10:01pm

Great reference points my friend. Truly spot on. Allow me to add something extra based on my own analysis of the market changes around us. The key towards progress or growth today no longer depends on just knowledge management on a particular subject / trade or skill.

Specialization in a specific skill or area of expertise will only be applicable for those professionals like medical surgeons, etc... Today, I personally feel that should one be able to move forward, knowledge management in only one or two areas will not ensure that the person or the company will do well. Gone were the days where people used to mock the phrase "Jack of all trades, master of none", today the more you know the more rounded you become, the wider your scope the higher your chances are of survival.

What I feel is going to be the decisive factor for success in the days ahead will be the ability of one to be a human sponge and absorb as much info as possible from all trades. The winners will be those that could tweak the age old phrase into a new one "Jack of all trades and master of all".

Robert Kiyosaki based his teachings on Paradigm Shifts but I believe that it is not completely correct. I have coined myself the tagline "Expanding Paradigms" (and also used it as my corporate tagline, hehe) because shifting means leaving something that you have been doing to do something else. I feel that we should expand our paradigm and not merely shift to another because from what we are currently doing or have done in the past, there will always be good things to learn from it and of course bad stuffs too for us to learn from and not to repeat them.

I feel that what we have to do is extend our reach for knowledge into many other areas and include them into our existing paradigm. Worried about mental overload? Well what we should do is to filter away whatever negatives we encountered from our current or old paradigm and maintain the good positive ones. Now imagine if we add on or fill the space of our mental capacity with more positive knowledge from other so called paradigms into our own existing one? What we have done is expanded our own paradigm by including positives from other paradigms to make us more formidable market players. Hmmm hope Koyasaki won't take offence of this but this is basically what I have been constantly instilling into our team.

Specialization into just one thing is very very risky today as a valuable know how may be reduced to shreads if it is suddenly easily replaced (technology does that with the blink of an eye sometimes). Knowledge Management in Multiple Areas actually does these :

- helps one to be quick to react to certain situations as many trades are interdependent with one another (even though on the surface it does not look so). Solid knowledge on another industry besides your own will act like the beacon or alarm button for you to decide on the direction that you would want to take if some indicators beep in that other industry. It will be a real pity if you know so much about your own thing only and then try to react when a "wave" hits your shores. Yes it would also be good to know something about the wind and not just the tides because they are interdependent
- helps you become flexible. With the market conditions being so violatile, ups and downs of a certain commodity or service are getting harder to predict. What may constitute to be a huge booming potential may just fade away with the market demands swaying its attention to other areas of focus. You need flexibility to survive in such scenarios and to be flexible you need to be well rounded. In short, a great swimmer needs to learn how to crawl, or fly pretty well too as you will never know when you need to do it. We just got to crawl when we are put in the desert, swim when placed in water and fly when dropped from the sky.
- allows you to adopt applications or solutions from other industries and apply them to yours. You'd be surprise how well that works sometimes because what is commonly carried out in one industry has frequently never been done in others before. Why reinvent the shape of the wheel when we can put it to good use in other aspects and yet be seen as a great idea that works in your own industry?
- gives you the competitive edge. You could also gain more as you are able to provide packaged services that covers various scopes of requirement from the client if you are a "Master of All". Clients prefer to deal with one who can solve or handle various scopes effectively for them as they would be able to have a better service support when needed. They need not have to encounter the hassle of having multiple vendor sources to track the root of any problems.
- opens your door to your future product / service lines. You could easily introduce new products or services to your existing client when you are ready as the barrier of having to undergo the "get to know" session no longer applies as you already have an existing business relationship with your client from a previous product or service that you have provided.

A closing phrase which I believe everyone would agree. Inspite of all efforts to gain knowledge and manage it well, knowledge only works best when it is applied.
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Nik Zafri's Response - Posted: 07 August 2006 at 1:38pm

Yes of course…exactly what we're doing now…’unleashing all the potentials’ in this forum – all the competencies – all the knowledge – all the experience – all the data and learn & learn & learn new things - networking. You see..I can’t be running around doing the usual things that I’m doing…I got to ‘diversify’ (my version of your expanding paradigms – by the way…Mr. Kiyosaki is a good author but he tends to make us ‘guessing’ what he means in every line of his book…thus, I read Kiyosaki for fun…)

Eric, you're right about not sticking to one thing only. When you close your mind to something new, it means you are heading for BIG pitfalls. I know that most of them wanna keep/maintain their ‘branding’ (perhaps influenced by some ‘success stories’ of some billionaires) but being a fanatic in the ‘branding’ won’t bring you anywhere. I am still sticking to my 'branding' but I still do other things. Those billionaires out there, they also adopted similar approaches…they really love what they are good at, but for the sake of sustainability, they will resort to other things first and having succeeded, they will make a comeback to the things that they really like. (look at Donald Trump - even Bill Gates)

Knowledge Application - Yeap, do what you say, say what you do
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Response from Almerica - Posted: 09 August 2006 at 1:07am

Yeah, my friend, in one of the episodes of The Apprentice, Trump hit the nail on the head. Quote "Most people have great ideas and knowledge which could make millions but if they fail to apply them or use them, they are still labelled as failures!" - how true.

Of course many people talk about needing huge capital to kick start something (not surprisingly I was one of them) but sometimes if we expand from our ideas and we are hungry enough, you'd be surprise how another idea may pop up to help you get what you need to start the engines running. So we just gotta crack our brains and make it work overtime to find the perfect solution rather than wallow in desperation reminiscing over how close we were with the brilliant idea that couldn't take off. Ah and the funny thing is that I am sure many of us shared the idea with others but since we couldnt take it off, others did with great results and impact. (Boy, did I have loads of those.)

Some of the "what could have been" stories of mine were ideas that were thought of with great self satisfaction and pride then, complimenting myself for coming up with such brilliant ideas (only to be brought down to earth when I didnt pursue it hard enough and let it just slowly slip away AND to find out that they have been thought out much later and carried out with extremely great successes by companies like Citibank, Std Chartered, and public listed development companies - mind you, they were 3 totally different ideas that were adopted by 3 giants!)hahaha but those were great lessons in life.

So for those with "know hows" and great ideas PUT IT TO GOOD USE! Find a way, there is always some funny "unthought of" solution hiding in the back of your mind.
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Nik Zafri's Response :Posted: 09 August 2006 at 3:49pm

Thanks Eric (that's why I like this guy - they didn't make him the CEO for nothing..heheheh)

Here's some related excerpts from my 'old' collection of comments here in GMN and elsewhere. You will notice my 'consistency' in encouraging people on how to run business by 'going back to basics', the 'branding', 'diversification' and 'networking'. My only hope that our readers here can benefit from our experience...

No. 1 - Robert T. Kiyosaki - Rich Dad Poor Dad

I can say a little bit on Robert T. Kiyosaki Rich Dad/Poor Dad Series. If you read carefully Robert's view on 'let the money work for you', you will discover that he is also talking about another phrase that goes something like 'a business is something that do not require my presence and if I have to work there, it's not a business anymore, it becomes my job'. Many have been said about these two popular phrases - some relate them to Multi-Level-Marketing, Insurance, Stock/Shares, Properties etc. Some even lead to the famous Donald Trump of Trump International.

While these assumptions maybe true, but I think Robert is also talking about how you can spend and budget your money effectively. (At least I felt this is how it applies to me but to others it may apply differently)

In the Malaysian environment point of view, I may have not reached 100% on 'a business that do not require my presence' but I think I have achieved 'let the money work for you' by both working hard and smart.

e.g. I have 3 consultancy assignments to complete in a manyear. I've 'sub-contracted' the first 2 jobs to another 2 guys as I am not a superman to take all 3. Although I will eventually be paid for all 3 jobs, I still have to 'sacrifice' one job payment to cover my overheads (house, car, others) which leaves me with another 2 jobs. The 2nd job, I have to again 'sacrifice' for my 'capital' to run future jobs including to cover my office overheads and perhaps for marketing/training etc. The last job is the one that solely belong to me after taxation. In a way, I do not have to worry about my overheads, it has been 'paid'. I have to assume my 3rd job is my take home pay (nett). If I found out that one of the jobs is coming towards an end (contract completion), a month ahead, I will either reconvince the same client for reorder or start to find new prospects.

The simple scenarios above are something quite common to most of us but require only one thing in mind - Discipline! In my case, I think Robert is talking about Discipline and Proper Planning.

I also welcome those who feels that R.T.Kiyosaki has a different effect on them cos' as I said earlier, it's the way you see it and how you apply/customize it according to your nature of competency or industry.