New signings and arrivals

It's less than 2 weeks away from the opening of the new season and a month until the transfer window shuts. I've always done a few previews before the season starts and this will be one of the parts of the season preview. It will be mainly based on Arsenal except the final one which I will analyse the contenders for the season.

In short so far....Arsenal has been a disappointment in the transfer market. Manchester United has flexed their muscles early on and done all the work at the start. They look really settled and there's still a small chance they may nick a possible transfer of a midfielder, namely Wesley Sneijder.

We were promised a busy summer transfer window and so far it has completely fooled everyone. Regardless of ANY big surprises Arsene Wenger or Gazidis tries to pull out in the coming weeks, it can hardly compensate the fact that any new arrival should be given the maximum time to integrate with the team in pre-season. If a potential signing is not from England, there's even more reason to have done it earlier.Based on the two arrivals, business is far from being done.

There are more speculation of players leaving than players coming in this close season. We've got Clichy and Denilson leaving the club and very certain departures of Bendtner, Almunia and Eboue. Losing Clichy is a big blow regardless how to look at it, 25 year old for $7m, how on earth did this happen.

On the arrival front, we've got new signings in Gervinho and Jenkinson. Again, it hardly shows any conviction for a title push.Gervinho was barely targeted by any of our rivals and Jenkinson came for $1m. That takes net spending so far to 11m + 1m - 7m = $5m. Man Utd has already spent $55 million, a staggering 11 times more.

We need a defender, we need a defender, we need a defender. Our centre back positions were hugely vulnerable last season,not to mention for the past few years and it has cost us success for years. Only Vermaelen is a decent quality centre back we can depend on and I would have expected business to already be done sometime after July 1. But No, we missed out on Phil Jones, somehow were not interested in Roger Johnson, made no bid for Christopher Samba, put in a half hearted bid for Gary Cahill,made no contact for Scott Dann and put in a big lower than last season bid for Phil Jagielka. Can we take things a lot more seriously Mr. Wenger? That defence has been a calamity and disaster for awhile now, we've conceded so many late goals and lost so many points for that.It makes me really angry the more I think about it. Squillaci, Koscielny and Djourou being in the first eleven is not going to win us anything.

And we go to the biggest stories of the summer, the possible departures of Cesc Fabregas and Samir Nasri. Cesc obviously has the desire to leave because he loves where he came from but somehow decided to leave there many years ago. This protracted saga is not doing anybody good and I finally give in, if Barcelona meets out valuation then we should let him go. But there's still every reason to buy a new player to show some ambition, not wait until we sell Cesc and clubs taking the advantage of us having a warchest and inflating prices of our targets. We love you Cesc but your constant desire is negatively affecting the morale of the club, we wish you all the best if your potential employers do come through with the money.

The next issue is really embarrassing. Our player of the season only has one year left to run on his contract (Nasri). How the fudge did everyone in the club not lift a finger and tie him down earlier. His good form was in the first half of the season and didn't anything occur like offering him a new contract? This puts the club in an absolute dilemma, selling him throws the club into more uncertainty or the option of losing him for free next season sounds absurd financially. The club is willing to lose $23million pounds just to show ambition. Why waste that kind money? Buy someone now and let him go if he doesn't want to sign. I really thought it was a smokescreen like Wayne Rooney where the saga ran its course and surprise,surprise he signs a new contract a few days later. Nasri's case definitely isn't the same, the issue of him leaving has been here for awhile and that matter hasn't resolved in a comfortable time period. There's surely something happening in the background and it doesn't look good.

On the arrivals front, apart from the two new signings, we've got some players promoted to the first team and some coming back from going on loan.

1) Carlos Vela
All Arsenal fans can remember of him is his commendable record in the Carling Cup where he has scored some wonderful goals. His lack of contribution in other competitions has put a question mark over his future. I was actually quite excited when he signed some 6 YEARS ago, but like many huge 'potentials', Vela certainly hasn't proven it. It's most likely his last chance to shine and I hope he does.

2) Armand Traore
When he first made an appearance in the first ever Emirates Cup back in 2007, I was extremely happy with what I saw. He was only 16 but he played like he was 20. He had the pace and was very calm with the ball. Few years on, he hasn't yet broke into the first team. His key strengths are his attacking runs and crosses but there are still doubts he has the defensive qualities required for a full back. Arsene Wenger not making an acquisition for a left back clearly signals the revival of Traore as he will be the main understudy to Gibbs. Lots of unfulfilled potential again and I really hope for the best. Not many players going out on loan ever makes a comeback, he is one of the few.

3) Emmanuel Frimpong
Emmanuel was clearly earmarked to be in the first team last season, only to suffer a season ending injury which was a huge blow. He is probably a straight replacement for Denilson in the middle of the park. Still young without much experience, I would prefer not seeing him making more than 20 starts.

4) Henri Lansbury
His goal against Spurs in the Carling Cup last season will have a part in every Gooner's mind. He has been named many times on the bench for the first team but mainly for the Carling Cup but rarely for the League. He does look like he has a good future ahead of him. Again, the lack of experience is going to make him not such a valuable asset to the team. Another player coming back from going out on loan. He was close to being sold just a few weeks ago but Arsene decided against it in the last minute. Another player with a final lifeline..

5) Craig Eastmond
Yes, he went out on loan too. I did remember him making his debut in the centre of midfield and Arsene told the press he liked Eastmond because he was intelligent. He does not appeal on the physical side of things and this worries me a lot because when we get dominated in the middle of the park, we're always doomed. I'm less optimistic on Craig, with Song, Frimpong, Ramsey and Diaby already occupying those places. It may not be a surprise if he does get sent out on loan.

6) Ryo Miyaichi
Sorry, it's getting a bit repetitive at this point about players coming back from being on loan. I've seen Ryo make appearances in the Asia tour and Germany. And also judging by Feyenoord's comments about him, he seems like an exciting prospect. I hope he gets the work permit to play though.

At the moment, the current squad may not finish in the top four. Champion's League football has always kept Arsenal at a minimum acceptable standard of being a respected top European team and our earnings are highly weighted on this lucrative competition. There has been rumours on potential arrivals. At the moment, the more probable concrete ones are Juan Mata from Valencia, Phil Jagielka from Everton and Costa Rican Joel Campbell. If we do get these three players, it probably still won't win us anything but a top four spot might seem more likely. I can't believe the club is considered to be out of contention for the league, it's just very disappointing.

The other rumours are Gary Cahill, Karim Benzema, Eden Hazard and a few others. They are quality players but I don't think it will happen to be honest.

If the three players are to join the club with Cesc and Nasri staying,it just might be a surprise to everyone. There's still time to do some business in the transfer window and I really hope lots of good news is on the way.

The next post should be about the contenders for the League and I'll probably include a wrap up at the close of the transfer window. There's so many big moves that have already taken place and it will be interesting to see how the next few weeks unfolds.

~deyao~

Supermodel Miranda Kerr

I've probably have not written about Miranda Kerr before, but after learning so much about her in the last few years I've been really inspired by her life and have become a big fan of her.

Miranda Kerr was born in a small in town in Gunnedah, New South Wales, Australia. Although she shot to fame at age of 14 by winning a competition and appearing on the cover of Dolly, she has faced many rejections along the way before becoming Australia's most successful model. She's the first Australian to be part of the exclusive group of Victoria's Secret Angels and is the face of Australian upmarket retailer David Jones. In recent years, she married movie star Orlando Bloom, created her own line of products Kora Organics, released her first book Treasure Yourself and of course she's a mum to her recently newborn Flynn.

I've been a fan of Miranda for a few years now and I've become a close follower these days. Apart from being a great model, she's a huge inspiration to so many people and her perspective to life admirable. Her determination, personality and journey to success has become really good example to many people, including myself.

Below is video of her recent interview.

Treasure Yourself

~deyao~

The Self-Sustaining Model

When Arsenal CEO Ivan Gazidis spoke to the AST a few weeks ago, he mentioned about Arsenal's self-sustaining model many times. In simple terms, he was describing the corporate side of things, which is to run and grow the business on its own. Football is not just about winning trophies, it's also about making money so that the success could be sustained in the long term. You can win the league but if the club is insolvent, the likelihood is the club's future will be in doubt, players will be sold, points will be deducted and the club could go down for a long time (Leeds is a good example and luckily their fortunes have changed in the last few years).

A self-sustaining model is a business model that relies entirely on the business' operations and retained earnings for growth. In Arsenal's perspective, the business grows by the profit it makes from football which includes TV rights, gate receipts, sponsorships, merchandise and others. This is in comparison to the other extremes like Chelsea and Manchester City, whose businesses are built on the wealth of their owners. They sign very expensive players, pay top wages and expect fast results. Do their business' make a profit? Unlikely. With exception of Man Utd and Real Madrid which have much higher revenues, even top tier clubs like Arsenal do not make anywhere near that much profit to cover those big signings like a 50m Torres or a 32.5m Robinho. But teams like Chelsea are able to service their debts and continue to make extravagant purchases as long as their owners are happy to pump more funds into the business. The high level of spending can't continue in long run but in the next few years the billionaires from the Middle East and Russia still have large buffers in their coffers, which will not stop them from continuing their transfer market frenzy.

Obviously if these owners continue to lose money year after year, they might be fed up and could sell the club, which 'rich' clubs are at risk of. But the owners are mostly quite intelligent people who are aiming to tap the growing revenues of football clubs, thus they are willing to spend these huge 'outlays'. Chelsea and Man City's spending in the transfer market has changed the game entirely. They might not be financially efficient in terms of a "return on investment ratio", but they have transformed into a top footballing clubs in Europe. Money does make things happen, but is this what the football world has become today?

The Cost of Winning

Football is a sport and the aim is to win. Clubs should do all they can to win, but does it mean "all they can"? Real Madrid has spent mind-boggling sums of money to recapture the title of European Champions, but they have not done it. Player after player, manager after manager, payouts after payouts. They should be going bust by now right, they have only won 1 trophy in the last 8 years! But NO, they are the richest football club in the world and today they are still spending huge sums of money. What does this mean? Real doesn't need to win to become rich and famous. But does wealth make a football club great?

To another Spanish club Barcelona. A cabinet full of trophies, sensational players and tremendous quality of football, but stricken with 400m of debt? Considering all the prize money, TV rights and their popularity, they are in truckloads of debt! And they've got no stadium debt as well! A winning club but in poor financial state, is this admirable and ideal?

One of the biggest conflicts Arsenal's supporters have with the board is whether Arsenal should do 'more' to win trophies. Is the aim ENTIRELY to win? The fans seem to think so and I would kill to see Arsenal win a trophy to be honest. Is the benefit of silverware more than offset the cost of obtaining it? If Arsenal spent 50m, will the DIFFERENCE of winning the league compared to being in top 4 be enough to cover that 50m? If winning does not cover that cost, why win (in the context of running a business) ? This is a business issue and so far there's no perfect answer to this. Had Arsenal won trophies over the last few years, Arsenal could say they have the best football with the best business model and everyone can shut it. Unfortunately Arsenal only has a good business model with no results on the pitch. As mentioned, football is a sport and it is about winning, so is Arsenal a complete failure? If judged on silverware, Arsenal are worst than Portsmouth, although they are relegated, they have more silverware than Arsenal in the last 6 years. Is Arsenal worst than Liverpool who has not finished in the top four in the 2 years running but managed to win the Champions League in 2005?


The Balancing Act

It's an absolutely fcking torture to be an Arsenal fan. We've got issues in ownership and we got stadium debt to add to our woes. We are so close every year but we lack the few percent to pull through. Although the change in ownership is not changing the club's financial state, the stadium debt in costing us 20m a year. There's the extra money we could have had for transfers, instead it's used for servicing the debt. How long more will it take? If the sources are correct, it's another 20 years! But in the larger perspective, we've needed a bigger stadium for a long time to capitalise on growth and to compete with other top teams. It can also be said we are unlucky compared to the other clubs which already have larger stadiums. In the short term, the stadium obviously has not 'broke even'. It is still costing the club more than the additional revenues generated. This means our transfer spending is reduced by this. In the long term, probably when revenues grow much higher or at worst when Arsenal pay off the stadium debt, that is when we could fully realise the benefits of the investment. It's a painful wait unfortunately.

Our extremely lower level of 'net spending' in the transfer market has been the most popular causal variable to our lack of success. I have to admit there is truth in this as the team has not replaced the big players it has sold in the last few years. The manager has made some gambles trying to develop youth and buying unknown players, financially it has been great, but in terms of success, it has been a big letdown.

The club's attempt to balance success on and off the pitch has been a failure. We've tried to work around our limited resources (transfer funds) but it hasn't been enough for success. Many would agree Arsenal are doing very well and being very efficient in terms of achieving what they have with so little money, but the measures of success in the world of football is trophies, and Arsenal hasn't got any to show for.

Is it time for Arsenal to start splashing the cash and possibly compromising the club's finances to please the fans and critics? Should Arsenal change the way they measure success towards winning trophies? Of course ideally Arsenal would want to be able to achieve success with their present finances, but time has gone and this plan has failed. Is it time for Arsenal to take a step back in terms of their pride of having a self-sustaining model and deliver trophies even though it is not beneficial financially?

There are a few solutions

1) New investment. Arsenal could get a new owner or the present owner to inject cash in the club to facilitate transfers to buy more experienced players. This would turn the current model on its head but could finally deliver silverware.

2) Be even better at what they do. Arsenal has an extremely tight purse string and they spend very prudently. The solution here is to uncover more and even better talent (like Fabregas) and buy players that has not been noticed. Disadvantage... still sticking to the old policy which is currently not working.

3) Change the manager - Wenger has done extremely big things for the club and it hasn't occurred until more recent times he doesn't quite deliver as well as he used to. His strategies in transfer dealings and style of football has epitomised what the club stood for in the last 15 years. It's clear things are no longer the same as they were used it, is his time finally up?

I would love the discuss the possible transfers this season but I'll leave it here. This post is about the balance of success in terms of a business and footballing capabilites and I can only hope the club can find a solution and balance to this that includes silverware.

On a lighter note, Arsenal supporters should be proud to have a supermodel supporting the club (I was definitely not using a model to coincide with my title).Thanks for reading.

~deyao~

2011: Caution

I haven't written any finance topics of late, maybe because I haven't found inspiration. Now with a moment of it, I thought I start typing. The market in 2009 was brilliant, indices in the world doubled and wealth grew for many. 2010 had also a good run but indices lagged and the 'market' did not really perform. In Australia, resources companies have been the clear winner and financials were no match over the last 12 months. The ASX 200 is currently not much different from October 2009.

In my predictions last year, I was very bullish on stocks predicting 5500 for the All Ords and 11000-12000 for the Dow. I was quite a big way off for the All Ords but I was close on the Dow. The Aussie index has been a a laggard compared to the rest of the Asia Pacific indices. It was easy to be bullish after the huge rally in 2009 but as 2010 showed a slow down in market performance, my view is cautious for 2011.

QE2 by the Fed has been a key driver for the markets in the past months but this 'artificial' flood of money is going to wear out soon and markets will take a big turn, in my view. Billions of dollars are flooded in the market to support prices everyday, when it stops there can't be a good outcome. A third QE is not an option according to many experts. The Japan earthquake did stop markets for a few days, but after that Dow has only been in one direction after the few days of panic. It was a big buying opportunity and many stocks have rebounded since.

Since the GFC in 2008, money has been flooded in the market as though they cost nothing. Trillions of dollars have been poured in the market to avoid a deeper recession. Some say it had to be done, but the truth is it would have better off letting it collapse. To 'artificially' keep the market afloat is no different from avoiding the truth. The US economy is loaded with too much debt and the solution of the Fed to stimulate the economy is spending itself out of it. Where's the money coming from again? Debt. I call it a vicious cycle and until someone puts a halt to it, Americans have to fear for their future. The dollar is going to weaken further and inflation will be next for the economy.

Signs of caution in 2011

1) Higher oil prices
We know higher oil prices is not good for the economy because inflation will affect growth. Remember I said last time, oil prices only benefit people who own it, the rest of the people like us pays. The spiraling oil prices would indicate the first sign of a slowdown, in the worse case, a recession. Higher oil prices are also due to the unrest in the middle east, but the reason does not matter, the price does.

2) The ending of QE2
QE2 will end in a few months and there's no more money to keep driving the Dow. If prices are to revert to their fair values, we could see a major correction.

3) More defaults from Europe
Although it sounds like the debt problem has been solved for the big European countries, I am not convinced at all. The amount of debt they have to raise is staggering and the probability of another Greece story may not be far away. Debt ratings have a been slashed for a reason, a higher probability of default.


4) Lower growth from China
China grew at record rates even during the last recession for most of the world. The tightening of policies and increase in reserve requirements will definitely slow the economy down, but in my view, is a really good move in the long run. Short term pain for the world, but keeps in the bubble of housing from growing. There is a bubble in housing based on the record rise in prices but it is still within control at the moment.


Opportunities in 2011

The mood I have is cautious but there's still money to be made in the market. Stick to stocks with very good fundamentals and growth rates and of course invest in sectors that provide huge growth opportunities in an inflationary environment. I haven't mention there has been outstanding performers in the market over the past year and they haven't been contrary to history. Fundamentals are drivers of stock prices and they will continue to be . Market indices are there to show the performance as a whole but outstanding winners do not need any guidance from market indices. If they are good, they will perform.

Jim Rogers have been bullish on commodities since the 1980s and he has a few points to take from. This is not a new point but definitely invest in businesses that leverages on the demand from China. Japan is rebuilding after the disaster and there's no doubt they would need lots of materials as well.

And lastly, keep doing your homework and keep a closer look this year.

Invest for the future
~deyao~

Players Arsenal need to sell

Last summer was probably one of the best clear outs to freshen up the squad. We have not improved vastly but the team is much better. But even before the season ends, it is already clear some players are not up to par. The team is good but not enough to win silverware. We have players who are fives and sixes who are not winning quality. I don't usually do this but it is about time.

1) Denilson
He has shown some promise here and there but he simply doesn't fit in the team well. He has scored some good long range goals but his impact on the game is very disappointing.He lacks defensive capabilities and on many occasions, pace. His short range passing game is definitely not versatile or good enough.

2) Tomas Rosicky

He arrived with such a good reputation and after scoring some screamers in the 2006 World Cup, Arsenal fans thought he would be the next Pires. He only scored a handful of goals and compounded by the misery of being 18 months out of the game, he has never lived up to his potential. Lacks defensive capabilities and does not have the pace to compensate his lack of physical presence. He has returned and played more regular football nowadays but the quality he has shown is far from expectations.

3) Manuel Almunia

Despite some heroics on a few occasion, he does not have what it takes to stand between the Arsenal goal, let alone wear the number 1 shirt. In short, too many errors by any standards and that has cost the team very dearly for the last few years.

4) Lukasz Fabianski

Also another big potential player when he arrived. Has shown amazing shot stopping capabilities. But when given the chance in cup games, he has squandered them. Although he has not played enough games to prove himself, there's little hint he is good enough after some very costly errors. Lacks the imposing figure too.

Players on the verge (Should still be given one last chance)

1)Sebastien Squillaci

He may have just arrived, but based on his performances so far I will give a 6.0. He has not improved the defensive situation much despite being at his peak and has loads of experience. His lack of BPL experience and age makes him not an attractive player to keep.

2) Nicklas Bendtner

He may have scored some good headers and a couple of impressive hattricks, but he is still very far from being a top player. Although still at 23, he has not shown enough for that age. Has admirable ability to pick out passes and being a threat in set plays, but I am still doubtful he is good enough. One more season perhaps.

3) Carlos Vela

Made a massive contribution in the Carling Cup over the last few years but nothing in the league. Needs to have a good contribution in the next season or he is out.


The list might seem short with 7 players. But imagine if those 7 players were replaced by world class players. It might not be within our budgets but the conclusion here is we need make more changes if we are going to improve.

~deyao~

One Last Chance

Awhile back when 19 year old Neill Mellor scored the winner in the last minute against Arsenal, I was heart broken. My dad who sat beside me told me in a dialect, 'You can't win if you don't lose'. I have taken that quote with me since. In the last few years, Arsenal have lost big time and every year I would think, 'OK, next year will the year'. But... it has been such a huge disappointment. Since our last trophy, 3 cup finals and a couple of runner's up positions in the league is all we can show. Silverware? None at all.

Does Arsenal deserve to win anything? With Wenger's incredible belief in youth, a sound financial record and years of effort put in, isn't it about time?

Well, first of all the competitive world does not compensate losers by letting them win. Arsenal don't deserve a trophy just because they haven't won any for the past few years (I'm reluctant to state the number of years). Has Arsenal done enough to deserve a title?

The results are always a fair reflection overall on how a team has performed. Unfortunately, Arsenal have not come on top for a very long time. I can understand the frustration sometimes because of injuries and a tight budget. Injuries to key players over the past few years have dented chances of silverware. If Van Persie was fit last season, the outcome last season would have been so different. With so many injuries over the last few seasons, it's really tough to accept. Vermaelen has been injured this season, no doubt we would have done a better job defensively had he been at centre back. Blame it on luck? We should never, but it has been the case.

When the media suggested Arsenal were gunning for the trophies on four fronts, I knew realistically it would have been two, tops. The signs this season have been really mixed and there has been numerous poor performances. Being two goals up against Spurs at half time and losing the game was a terrible signal. Four goal lead squandered to Newcastle almost signaled the end of out title ambitions had another result a couple of hours later been the opposite. Although the poor performances in cup games didn't count as much, it showed the team were lacking the winning quality ; winning when you're not at your best. And when the crucial cup final came along, we had decent chances but we failed to earn our luck.

The story of a gooner for the past years have been a major letdown. This season hasn't been much different to the last. Last season we were on track to win the title with a very battered squad. With the determination and drive we were very close to making it. Although the end of the season league table did not depict how close it was, the killer blow was one Kevin Phillips goal right at the death. The run in meltdown has been a pattern for a long time and we absolutely can't afford another. The odds are again heavily stacked on us. The growing treatment table list is definitely not helping.

I don't believe in excuses although injuries have been hampering Arsenal for years. Right from the Henry, Pires, Diaby, Gilberto days we had them out for months on some occasions. As an Arsenal fan, you just fear the next injury because it has happened so many times. We've heard out for the season too many times so please gives us a break. Vermaelen just made the list yesterday.

I really don't care what is going on in the dressing room or the treatment table, the aim is to win. It's time for players to stand up and be counted. It's time for players to give it their all and play their best football until the end of the season. It's time for players to clear their heads and look forward. No team is a clear favourite this season so it is definitely one opportunity we cannot miss. There is still chance for salvation this season.

It's going to be a challenge but we really need this.

~deyao~

Key Factor:Transportation

It's another 9 years till year 2020 for Malaysia to achieve its 'developed' status. Personally I don't think we will make it but a few years later won't do us much harm. Driving for the past few years and being able to compare the transport system with Singapore and Australia, Malaysia has got one hell of a mountain to climb. Infrastructures are not yet in place and the transport system needs major changes. I'm sure politicians who recently went to visit the Hong Kong MTR would learn a lot and I hope they have done enough of their homework. We think politicians are the best people to take us forward but that is not true. Well, regardless whether they know better or not, here's my 10 pointers to implement to even get a chance for 2020.

10. Road Signs

For a country with resonable living standards, our road signs are below par. Wrong signs, missing signs, broken (incomplete) signs to semi-visible obstructed signs. There has to be changes to this. It's really a shame how motorist have to guess directions at times where signs are supposedly be placed. Some signs are covered by trees and some do not continue showing a destination after some time. There needs to a body to oversee this.

9. Bus Stops

Proper bus stops are lacking in the country and the laws allow buses and taxis to stop as they like which is dangerous for both the motorists and the passengers of these vehicles. There needs to be proper bus stops which are sheltered and safe for users. And there must be rules for proper stopping places for buses for convenience and safety.

8. Taxi System

There has been a recent reform to the taxi system where fares have been reviewed and more taxis and using the meter. The increase in fare was necessary for taxis to continue to operate with rising cost. However, there still will be taxis who are reluctant to use the meter or refuse to take passengers to certain destinations. This is still a huge problem for the taxi system. CVLB has to place certain laws pertaining to this to protect users from unfair behaviour.

7. Local Carmakers

Perodua has outshone Proton in the last few years and this comes to show Proton is even losing out to a local counterpart. The protection given to local carmakers should gradually be lifted to increase the efficiency of these companies. The quality of local cars have barely improved and people are already prepared to fork out extra for a much reliable Japanese car. The motor vehicle industry is a growing one and if they don't improve, they will continue to lose market share and eventually become unprofitable. The country has given the carmakers more than enough support in terms of sales and protectionist policies. All they have to do is make a decent car, which they have yet to.

6. Airport

A world class airport costing billions of dollars and thousands of trees, but it is under-utilised. Although there has been growth in passengers coming through KLIA, there's still big opportunities for more airlines to fly to KLIA. Our neighbours are running at capacity and there more passengers to accommodate, so please do something about it. Budget traveling has emerged in the last few years and LCCT has failed to accommodate the spike in passengers,. Govt has to make sure "KLIA 2" will be large enough to accommodate the growth of AirAsia and the other budget carriers. There must be proper and sufficient personnel, systems and infrastructure to make it work.

5. Port Klang

Singapore has the second most busiest port in the world and every one of those ships still passes Port Klang. Our location is not a disadvantage at all but our personnel has been a letdown. A potential source of large revenue if managed properly. The corruption that is happening is not an issue to discuss here. The location on the Straits of Malacca is unbelievable and we have just gave billion ounces of gold to our neighbours .

4. Learning programs

Malaysian drivers are known to be one of the worst and some blame has to be put on the learning programs. It needs to tougher, stricter and more transparent. Programs today do not create competent drivers on the road and this will deteriorate if not reformed. The only way is to completely overhaul the program and taking developed countries as an example. A safer road can save millions of dollars a year, not mentioning lives.

3. Road conditions

Potholes and damaging surfaces create hazards for driving. This will waste millions of dollars a year on repairs. Starting from major roads, there needs to certain materials laid under the roads to prevent potholes from reoccurring. Patching up pot holes every time they occur will only temporarily solve the problem and money will be spent wastefully every year. Open your eyes govt, why does other countries not have this problem, there must be something different.

2. Enforcement

Having a police officer pull you over is not such a scary or a lesson for many, in fact, it has become a joking topic over dinner conversations. Did you last hear how your friend got away with speeding or using the emergency lane? How much did the person pay? You know what I am talking about. Drivers simply feel they are bulletproof from the authorities because when the time comes they will get away with a slap on the wrist. This problem comes from all the way up to the highest levels of government. Change can only come from the top and this is not something that can happen with little effort.


1. Public transportation
Why are there so many cars on the road? Well, why not take the public transport? Oh yeah, there aren't available in my area or it will take me too long. The public transportation state is in a mess and this is probably what we should be having about 10 years ago. In simpler terms, we are 10 years behind. There should be one company running the service like in most countries and it is closely monitored by govt authorities. Now there are few bus operators overlapping each other. A timetable is unheard of and the information available to the public about transportation is limited. The KTM is a dinosaur,trains break down now and then, the bus services needs a major overhaul and the current level of service is very poor. With the cost of materials going up, it's going to be even harder to improve services.

Implications of good transportation

1) Less cars on the road, less congestion.

2) Less consumption of fuel, less outflow of national income and exposure to rising fuel prices.

3) Improves efficiency of businesses. Higher turnover rates for logistics, lower cost, which affects 99% of businesses. Less time spent on the road, more time spent working, more goods and services produced, higher GDP....

4) Lower expenditure on cars, which lowers national debt.

5) Encourages tourism.

6) Lower expenses on repairs due to accident and road conditions, less outflow unnecessarily, lower premiums on insurance, more money for everyone.

7) Increases the attractiveness of the economy due to efficiency, more investments perhaps.

8) An indication of a developed country?

9) Less money to AP holders , won't that reduce c_ _ _ _ _tion?

10) Less motor vehicles, less pollution.

It doesn't take a genius to know what I just wrote. Politicians are supposingly the most capable people to manage the country, well we all know it's not true at all, but at least do something right for once, for the country.

~deyao~

Make or Buy?

I learnt about this question awhile back doing management accounting and I felt this question is one of the best questions to ask yourself when making a decision. For example, you need a bicycle, make or buy? We mostly likely do not have skills and knowledge to make a bicycle so it's most likely we buy one. You are planning for dinner tonight? Eat in or out, make dinner on your own or buy it from somewhere. There's infinite examples when it comes to make or buy so I hope you get the basic idea.

A friend recently asked me why do I buy stocks/shares rather than start up a business? It came to my mind immediately it was a make or buy question. Starting up a business not only requires capital, it requires other attributes such as knowledge, management, research etc. It's certainly is not beyond a person to start a business but it is going to have a certain degree of risk. Until a person has the expertise to manage risk, the normal person usually buys. Unless you can make dinner for yourself, you do not have a choice.

Warren Buffett once said buying stocks was no different from buying a business. When you are buying a stock, you are essentially acquiring ownership of a business. Buffett as you know is a guru of buying, making his fortune in companies such as Coca-Cola, Kraft, Johnson and Johnson etc. He is one of the best examples when it comes to buying and he proves that you can actually succeed by buying. He looks for businesses with great potential and undervalued according to his analysis and buys them. His knowledge for his insurance business should also be noted.

Not every division of a great company is the best. And when it came to a video website for Google, it never took off like its other products.Google Video was nowhere. Google is the leader in the internet world and they have some of the most genius creations, but they couldn't create a successful site for videos. What did they do, they bought. They bought the world's most popular site for videos, YouTube. They paid a large sum of money for it, but it was a site they just couldn't match so they bought them out.

How about making? We've seen thousands of people creating their own companies and eventually growing them so huge and listing it in public. Robert Kiyosaki calls them the ultimate investors, people who create companies where the public wants a slice of it. People like Robert himself, Donald Trump, the Walton family (Wal-Mart), Larry and Sergey (Google) and soon to be Mike Zuckerberg (Facebook). An important term people like them like to be described as, entrepreneurs. I know there are many other prominent people I've not mentioned but you get the point. They are the king of making. Using their talents and hard work they created business worth billions of dollars. Think about Microsoft, eBay , Amazon etc, just imagine how far they can go from starting from scratch. People like them make companies and the rest of us buy them. We may not "make" a listed company one day, but rewards of a successful business can be very substantial.

So make or buy?Still a difficult decision. In terms of risk, it's a big debate. By having your own company, you decide everything that goes on and the business risk will be known and managed by yourself, there is no information asymmetry . The big question mark is expertise. If you have the expertise of making a bicycle which will cost less than the one at the shop, it should be a "make" decision. So do you have the capabilities and talents to carry out the "make" decision.

Having the expertise in buying or making can make you a lot money either way so understanding the key factors and differences is important when deciding. When you're buying a business and the business is not run by yourself, 99% of the time you would be facing agency cost. Agency cost occurs when interest of management is not in line with shareholders (owners) of the business and this will be a 'cost' to the shareholders. When you're buying a publicly listed stock, you generally do not have much control over the business and you are just hopeful the company in run properly by management and value is added to your investment.

As I mentioned, information asymmetry occurs and this can be a cost to shareholders. Management in a company generally will possess some "inside information"(non-publicly available information) which can be used to make money for themselves. Although there are laws preventing such actions, people who use this information still have means to get immunity in the form of disclosure. As a shareholder, value can be lost because insiders trade ahead of everyone and this takes a cut out of the potential profits of shareholders.

Although there are mechanisms in place such as corporate governance and employment incentives to align the interest of management with shareholders, agency cost will never be eliminated completely, which means the wealth of shareholders are transferred from them. Corporate governance has become a bigger issue lately with the collapse of big corporations, but this cannot fully solve the problems of agency especially when the directors are managers themselves or there is a lack of independence in the board of directors and management. More accountability is placed on the duties of directors but this does necessary reduce agency cost because it acts more in a form of punishment rather than being a deterrent. Thus shareholders will have to bear that risk and cost.

Almost all corporations give their employees the option to own the corporation's shares to motivate the employees. It will lessen agency cost but things like employee benefits, bonuses and perks are still coming out the pocket of shareholders. So are you comfortable with that happening?

Is agency cost minimal enough to overcome when "buying", that's probably an important question you have to ask yourself when making the decision. If you think management places too much interest on themselves, then "buying" would not be a good investment decision for you. There are many people who don't think management act in the best interest of shareholders and they stay away from the buy option. So it is up to your analysis to decide whether you can "trust" the company's management to run YOUR business. One of Buffett's most important steps to deciding on his investment is meeting with management. It is true he meets with management to see whether they are capable and dedicated enough to maximise the value of his investment. Lesson: He buys beyond the fundamentals of the business.

To succeed in your finances, you cannot avoid the make or buy decision. Some people avoid this decision completely and work for life. For the benefit of yourself, it's time to ask yourself, make or buy.

~deyao~