The traffic in Jakarta is congested. It moves slowly most times of the day. It takes a long time to travel a short distance.
Most managers have a driver. The salary of a driver is less than USD 100 a month. Although they have to spend a longer time on the road, the managers are able to discuss business in the car or to prepare for their meeting.
Jakarta has a system of bus-ways. They run on dedicated lanes. There are a few routes that run from north to south, with a circular line to connect them. To move from one place to another, the commuter may have to change to another line. It is easy to understand the system and to move from one part of the city to another part.
I hope that Jakarta will build a mono-rail system to take large number of commuters. They can follow the system of the bus-ways, as it is easy to understand.
Friday, June 1, 2007
Manchester United: A lesson in leadership
I am amazed at the speed by which Manchester United signed up for their top players for the next season.
The top leaders at Manchester United (i.e. the owner, team manager and chief executive) are able to work together. The trust the leadership provided by the team manager, Alex Ferguson.
It has not been easy for Manchester United. They had two lean years, in which they did not win any major trophy. By sticking to their experienced manager, they have rebuilt their team to win the English Premiership.
We read about the disagreement between in Chelsea, between the team manager and the owner. This makes it difficult for the team manager to win the matches in the football field.
Lesson: In the corporate world, the battle has to be fought in the market place. To win the battle, you need to have knowledgeable people who knows the market, and are not hampered by their owners.
The top leaders at Manchester United (i.e. the owner, team manager and chief executive) are able to work together. The trust the leadership provided by the team manager, Alex Ferguson.
It has not been easy for Manchester United. They had two lean years, in which they did not win any major trophy. By sticking to their experienced manager, they have rebuilt their team to win the English Premiership.
We read about the disagreement between in Chelsea, between the team manager and the owner. This makes it difficult for the team manager to win the matches in the football field.
Lesson: In the corporate world, the battle has to be fought in the market place. To win the battle, you need to have knowledgeable people who knows the market, and are not hampered by their owners.
Insurance Agent
Mr Tan
Is it better for me to buy my insurance directly from the company or go through an insurance agent. What is your advice?
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REPLY:
You can read my views in this FAQ.
Is it better for me to buy my insurance directly from the company or go through an insurance agent. What is your advice?
---------------------
REPLY:
You can read my views in this FAQ.
Family Insurance Plan
Hi Mr Tan,
I really enjoy reading your blog. It is simple to read and at times, amusing, as you write about your own observations on everyday experiences.
I wish to ask about the differences between the Protection plan and Family Insurance plan offered by NTUC Income. The descriptions and explanations are not clear.
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REPLY:
A protection policy is a whole life policy. It covers you for the whole of life and pays the sum assured and bonuses in the event of death or permanent disability for all causes.
The family insurance policy allows you to insure yourself and members of your family under several coverages, for example, term insurance, accident insurance, medical insurance. You can vary the amount of coverage for each person.
Normally, you will have to take a different policy for each type of coverage and for each person. Under the family policy, you can put these coverages under 1 policy and not under many separate policies.
I suggest that you read the FAQ in these two web-pages:
Protection
Family Insurance
I really enjoy reading your blog. It is simple to read and at times, amusing, as you write about your own observations on everyday experiences.
I wish to ask about the differences between the Protection plan and Family Insurance plan offered by NTUC Income. The descriptions and explanations are not clear.
-----------------------------
REPLY:
A protection policy is a whole life policy. It covers you for the whole of life and pays the sum assured and bonuses in the event of death or permanent disability for all causes.
The family insurance policy allows you to insure yourself and members of your family under several coverages, for example, term insurance, accident insurance, medical insurance. You can vary the amount of coverage for each person.
Normally, you will have to take a different policy for each type of coverage and for each person. Under the family policy, you can put these coverages under 1 policy and not under many separate policies.
I suggest that you read the FAQ in these two web-pages:
Protection
Family Insurance
Invest in Government Bonds
1. How can you invest in Government or Corporate Bonds?
* go through a stockbroker
* go to DollarDex or FundSupermarket
2. What is the yield?
* go through a stockbroker
* go to DollarDex or FundSupermarket
2. What is the yield?
Issuer Tenor Rating YTM
Sp Govt 4.8 yr AAA 2.48%
Sp Govt 7.1 yr AAA 2.67%
Sp Govt 9.3 yr AAA 2.78%
Sp Govt 13.3 yr AAA 2.91%
HDB 3.8 yr AAA 2.73%
Jackson Nat Life 3.8 yr AA 2.97%
HK Land 3.3 yr BBB+ 2.99%
Household Fin 6.7 yr AA 3.37%
Pinnacles Notes Series 7
Dear Mr Tan
What are your views about the Pinnacles Notes that has recently been advertised in the newspapers? Is it safe to invest in these Notes? Do they give a good return?
---------------------------
REPLY:
1. Tranche B (in SGD) pays interest at 5% p.a. for the first 5 1/2 years with a return of the principal on maturity and possible payment of an equity bonus coupon of of 4% p.a. All the payments are subject to conditions.
2. Now, READ THE FINE PRINTS.
The equity bonus coupon is payable if several conditions are fulfilled, including the need for the average closing price of the ordinary share of each "Basket Company", on 3 observation dates to be equal or above 110% of the initial spot price. If any one Basket Company fails, then the bonus is NOT payable. The advertisement did not identify the Basket Companies, but ask you to read the Prospectus for details.
What is the chance of receiving the bonus? I suspect that it is very, very slim.
3. The interest payment of 5% p.a. appears to be attractive. But, the FINE PRINT says:
"The Notes are not principal guaranteed. Payment of interest and repayment of 100% of the principal amount at maturity, may not occur in all circumstances. In particular, upon the occurrence of a Credit Event, a Mandatory Redemption Event, an Event of Default .... you could lose all or substantially or of your investment in the Notes".
What is the chance of any of these events happening? What is the amount that could be lost?
Frankly, I do not know. I am an actuary (and quite knowledgeable about calculations). I know that it is impossible for any investor to calculate the odds.
4. The issuer has the right to exercise the Call option and redeem the Notes. This right can be exercised to the detriment of the investor, if interest rate has dropped. In this case, the Issuer pays back the principal and the investor has to re-invest the money to earn a much lower rate.
5. There is a statement that the Notes are secured by US Dollar demonimated Synthetic CDO rated AA or higher at the time of investment. This type of investment carries credit and currency risks.
6. The advertisement ask the investor to read the Base Prospectus, Applicable Annex, Pricing Statement and supplements. The investor is required to understand all the points that are written in these documents (which comprise many dozens of pages writtenin a confusing manner.)
7. My advice: There are too much uncertainty and risk. This product is too complicated. Do not invest in these Notes.
What are your views about the Pinnacles Notes that has recently been advertised in the newspapers? Is it safe to invest in these Notes? Do they give a good return?
---------------------------
REPLY:
1. Tranche B (in SGD) pays interest at 5% p.a. for the first 5 1/2 years with a return of the principal on maturity and possible payment of an equity bonus coupon of of 4% p.a. All the payments are subject to conditions.
2. Now, READ THE FINE PRINTS.
The equity bonus coupon is payable if several conditions are fulfilled, including the need for the average closing price of the ordinary share of each "Basket Company", on 3 observation dates to be equal or above 110% of the initial spot price. If any one Basket Company fails, then the bonus is NOT payable. The advertisement did not identify the Basket Companies, but ask you to read the Prospectus for details.
What is the chance of receiving the bonus? I suspect that it is very, very slim.
3. The interest payment of 5% p.a. appears to be attractive. But, the FINE PRINT says:
"The Notes are not principal guaranteed. Payment of interest and repayment of 100% of the principal amount at maturity, may not occur in all circumstances. In particular, upon the occurrence of a Credit Event, a Mandatory Redemption Event, an Event of Default .... you could lose all or substantially or of your investment in the Notes".
What is the chance of any of these events happening? What is the amount that could be lost?
Frankly, I do not know. I am an actuary (and quite knowledgeable about calculations). I know that it is impossible for any investor to calculate the odds.
4. The issuer has the right to exercise the Call option and redeem the Notes. This right can be exercised to the detriment of the investor, if interest rate has dropped. In this case, the Issuer pays back the principal and the investor has to re-invest the money to earn a much lower rate.
5. There is a statement that the Notes are secured by US Dollar demonimated Synthetic CDO rated AA or higher at the time of investment. This type of investment carries credit and currency risks.
6. The advertisement ask the investor to read the Base Prospectus, Applicable Annex, Pricing Statement and supplements. The investor is required to understand all the points that are written in these documents (which comprise many dozens of pages writtenin a confusing manner.)
7. My advice: There are too much uncertainty and risk. This product is too complicated. Do not invest in these Notes.
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