The Straits Times
www.straitstimes.com
Published on Apr 18, 2013
Hawker prices on the rise, finds Case survey
Two out of five of S'pore's favourite dishes costlier by about a sixth

By Jessica Lim Consumer Correspondent

THE prices of some hawker favourites have gone up, a survey revealed yesterday, with many a bowl of fishball noodles or a plate of vegetable rice starting off at $3 instead of $2.50.

Many hawkers were charging about a sixth more for two out of five of Singapore's most well-known dishes last year, according to research by the Consumers Association of Singapore (Case) - and other meals look set to follow suit.

Researchers visited 541 non-air-conditioned eateries to check the prices of chicken nasi briyani, chicken rice, plain roti prata, fishball noodles and mixed vegetable rice (a plate of rice with two portions of vegetables and one of meat).

The mode price - the price most commonly charged - for fishball noodles was $3, up from $2.50 in 2011, while vegetable rice went up from $2.50 in 2011 to $2.90 last year.

Mode prices for chicken nasi briyani ($4.50), chicken rice ($2.50) and plain roti prata (80 cents) remained the same, though the report noted that there were signs of an upward trend.

Out of the 159 chicken rice stalls surveyed, only 47 per cent sold the ubiquitous dish at $2.50 last year, down from 60 per cent in 2011. The highest price went up from $4 to $4.50.

The majority of stalls were transparent about their prices. There are about 2,500 non-air-conditioned eateries around Singapore.

The consumer watchdog carried out the survey with the help of 30 mystery diners - final-year students at Ngee Ann Polytechnic. Case executive director Seah Seng Choon said the aim was to point consumers to cheaper options and spur hawkers to keep their prices competitive.

It did not, however, take food quality into account.

Mr Seah also pointed out that food prices are "still reasonable", with the study giving examples of bargain meals still available.

For instance, a bowl of fishball noodles at Yan Kee Noodle House at Maxwell Food Centre goes for $2, while A-A Chicken Rice in Jurong charges just $1.50.

Varying rental costs, customer demand, competition, location and rising ingredient costs were among factors cited for the price differences. Ms Sarah Lim, a senior retail lecturer at Singapore Polytechnic, said: "If the area is full of well-heeled people and if there are no other food choices around, stalls can mark up prices. It all boils down to demand. If people still buy with high prices, then why not?"

A recent move by the Government to curb rising hawker-stall rents may take more time to trickle down to the rest of the market.

In April last year, minimum bid prices for hawker-centre stalls were scrapped, allowing applicants to get a stall for as little as a few dollars a month.

Mr Mark Lionel Tay of food and beverage consultancy Bar Smith said the aim is for new hawker stalls to charge less, forcing others to drop their prices too.

"This will take some time, if it happens at all. Rent is just one cost element. Everything else has been going up in price," he said.

Detailed findings of the survey will be posted on Case's website at www.case.org.sg

limjess@sph.com.sg

hmm..dunno how true is this article?

http://forum.channelnewsasia.com/showthr...k-Rib-Soup-!

S'pore just a tiny bonsai tree.....

WASHINGTON - Singapore is well-known for its efficiency and order, but on a visit to Washington the city state's prime minister displayed a less advertised attribute — humour.

In an after-dinner speech to U.S. businessmen, LHL made a couple of jokes that could pass for stand-up comedy.
He drew laughs — and some groans — with his quips, including several about China's environmental problems.

"Beijing residents joke that to get a free smoke all they have to do is open their windows!" Lee said.
He then alluded to thousands of pig carcasses recently fished from Chinese rivers.

"(In) Shanghai, if you want some pork soup, you just turn on the tap," he said.

His audience appeared doubtful if that was in good taste, until he added: "That's their joke, not mine!"

Lee, who met earlier in the day with President Barack Obama, had serious messages in his speech too.

He spoke about the challenges facing China as it emerges from its once-in-a-decade leadership transition, and on the need for the two global powers, the U.S. and China, to get along.

Singapore gets on well with both, and Lee said China, which remains cautious about political reform, looks at the prosperous city state to try to understand how to balance its economic and social goals as it develops.

With a little self-deprecation, Lee described Singapore as a "tiny Bonzai model" for China to learn from.

In summary: Yr 2013 DOW 16000, Yr 2014 DOW 18000

Valuation will move to 18-20X PE

http://video.cnbc.com/gallery/?play=1&video=3000160013

All thoughts are welcome

I have always wondered does SGX staff reads through all annual reports that is available?

Like this query on Sakae annual report:

http://info.sgx.com/webcoranncatth.nsf/V...90009F545/$file/Sakae_Query_AGM.pdf?openelement

If it's only selected companies, then those companies are quite suay right?

http://blogmaverick.com/2013/01/10/the-stock-market-2/

The Stock Market
Jan 10th 2013 8:49PM

Haven’t blogged in a while. So I decided to look back and pull out one of my first blog posts, from 2004. An oldie, but goodie !

The Number.I recommend that anyone with an interest in the market jump at the chance to buy it.

In 1990, I sold my company, MicroSolutions which specialized in what at the time was the relatively new business of helping companies network their computer equipment to CompuServe. After taxes, I walked away with about $2 million. That was going to be my nest egg, and my goal was to protect it at all costs, and grow it wisely.

I set about interviewing stockbrokers and settled upon a broker from Goldman Sachs, Raleigh Ralls. Raleigh was in his late 20s, and relatively new to Goldman. But we hit it off very well and I trusted him. As we planned my financial future, I made it clear that I wanted my nest egg to be invested not like I was 30 years old, but as if I were 60 years old. I was a widows and orphans investor.

Over the next year I stuck to my plan. I trusted Raleigh, and he put me in bonds, dividend-paying utilities and blue chips, just as I asked.

During that year, Raleigh began asking me a lot of questions about technology. Because of my experience at MicroSolutions, I knew the products and companies that were hot. Synoptics, Wellfleet, NetWorth, Lotus, Novell and others. I knew which had products that worked, didn’t work, were selling or not. How these companies were marketed, and whether or not they were or would be successful.

I couldn’t believe that I would have an advantage in the market. After all, I had read A Random Walk Down Wall Street in college. I truly thought that the markets were efficient, that any available knowledge about a company was already reflected in its stock price. Yet I saw Raleigh using the information I gave him to make money for his clients. He finally broke me down to start using this information to my advantage to make some money in the market. Finally after more than a year, I relented. I was ready to trade.

Notice I didn’t use the word invest. I wasn’t an investor. I just wanted to make money. The reason I was ready to try was that it was patently obvious that the market wasn’t efficient. Someone like me with industry knowledge had an advantage. My knowledge could be used profitably. As we got ready to start, I asked Raleigh if he had any words of wisdom that I should remember. His response was simple. “Get Long, Get Loud”.

Get Long, Get Loud. As we started buying and selling technology stocks, most of which were in the local area networking field that I had specialized in at MicroSolutions, Raleigh put me on the phone with analysts, money managers, individual investors, reporters, anyone with money or influence who wanted to talk technology and stocks.

We talked about token ring topologies that didn’t work on 10BaseT. We talked about what companies were stuffing channels – selling more equipment to their distributors than the distributors really needed to meet the retail demand. We talked about who was winning, and who was losing. We talked about things that really amounted to the things you would hear if you attended any industry trade show panel. Yet after hanging up the phone with these people, I would watch stocks move up and down. Of course as the stocks moved, the number of people wanting to talk to me grew.

I remember buying stock in a Canadian company called Gandalf Technologies in the early 90s. Gandalf made Ethernet
bridges that allowed businesses and homes to connect to the Internet and each other via high-speed digital phone lines
called ISDN.

I had bought one for my house and liked the product, and I’d talked to other people who’d used it. They had
decent results, nothing spectacular, but good enough. I had no idea Gandalf was even a public company until a
friend of Raleigh’s asked me about it. What did I think about Gandalf Technologies? It was trading at the time at
about a buck a share. It was a decent company, I said. It had competition, but the market was new and they had as
much chance as anyone to succeed. Sure, I’ll buy some, and I would be happy to answer any questions about the
technology. The market size, the competition, the growth rates. Whatever I knew, I would tell.

I bought the stock, I answered the questions, and I watched Gandalf climb from a dollar to about $20 a share over
the next months.

At a dollar, I could make an argument that Gandalf could be attractive. Its market was growing, and compared
to the competition, it was reasonably valued on a price-sales or price-earnings basis. But at $20, the company’s
market value was close to $1 billion – which in those days was real money. The situation was crazy. People were
buying the stock because other people were buying the stock.

To add to the volume, a mid-sized investment bank that specialized in technology companies came out with a buy
rating on Gandalf. They reiterated all the marketing mishmash that was fun to talk about when the stock was a
dollar. The ISDN market was exploding. The product was good. Gandalf was adding distributors. If they
only maintained X percentage of the market, they would grow to some big number. Their competitors were trading at
huge market caps, so this company looks cheap. Et cetera, et cetera.

The bank made up forecasts formulating revenue numbers at monstrous growth rates that at some point in the future
led to profits. Unfortunately, the bank couldn’t attract enough new money to the stock to sustain its
price. It didn’t have enough brokers to shout out the marketing spiel to entice enough new buyers to pay the old
buyers. The hope among the “sophisticated buyers” was that one bank picking up coverage would lead to others doing the
same. It didn’t happen. No other big investment banks published reports on the stock. The volume turned
down.

So I did the only smart thing. I sold my stock, and I shorted it to boot. Then I told the same people who asked me
why I was buying the stock that I had shorted the stock. Over the next months, the stock sank into oblivion. In
1997, Gandalf filed for bankruptcy. Its shares were canceled – wiped out – a few months later. I wish I
could take credit for the stock going up, and going down. I can’t. If the company had performed well, who knows
what the stock would have done?

But the entire experience taught me quite a bit about how the market works. For years on end a company’s price
can have less to do with a company’s real prospects than with the excitement it and its supporters are able to generate
among investors. That lesson was reinforced as I saw the Gandalf experience repeated with many different stocks
over the next 10 years. Brokers and bankers market and sell stocks. Unless demand can be manufactured, the
stock will decline.

In July of 1998, my partner Todd Wagner and I took our company, Broadcast.com, public with Morgan Stanley.
Broadcast.com used audio and video streaming to enable companies to communicate live with customers, employees,
vendors, anyone with a PC. We founded Broadcast.com in 1995, and we were well on our way to being profitable. Still, we
never thought we would go public so quickly. But this was the Internet Era, and the demand for Internet stocks was
starting to explode. So publicly traded we would become and Morgan Stanley would shepherd us.

Part of the process of taking a new company public is something called a road show. The road show is just
that. A company getting ready to sell shares visits the big mutual funds, hedge funds, pension funds – anyone who
can buy millions of dollars of stock in a single order. It’s a sales tour. 7 days, 63 presentations.
We often discussed turning up the volume on the stock. It was the ultimate “Get Loud.” Call it
Stockapalooza.

Prior to the road show, we put together an amazing presentation. We hired consultants to help us. We
practiced and practiced. We argued about what we should and shouldn’t say. We had Morgan Stanley and others
ask us every possible question they could think of so we wouldn’t look stupid when we sat in front of these savvy
investors.

Savvy investors? I was shocked. Of the 63 companies and 400-plus participants we visited, I would be
exaggerating if I said we got 10 good questions about our business and how it worked. The vast majority of people
in the meetings had no clue who we were or what we did. They just knew that there were a lot of people talking
about the company and they should be there.

The lack of knowledge at the meetings got to be such a joke between Todd and I that we used to purposely mess up to
see if anyone noticed. Or we would have pet lines that we would make up to crack each other up. Did we ruin
our chance for the IPO? Was our product so complicated that no one got it and as a result no one bought the
stock? Hell no. They might not have had a clue, but that didn’t stop them from buying the stock. We batted
1.000. Every single investor we talked to placed the maximum order allowable for the stock.

On July 18, 1998, Broadcast.com went public as BCST, priced at 18 dollars a share. It closed at $62.75, a gain
of almost 250 percent, which at the time was the largest one day rise of a new offering in the history of the stock
market. The same mutual fund managers who were completely clueless about our company placed multimillion orders
for our stock. Multimillion dollar orders using YOUR MONEY.

If the value of a stock is what people will pay for it, then Broadcast.com was fairly valued. We were able to
work with Morgan Stanley to create volume around the stock. Volume creates demand. Stocks don’t go up
because companies do well or do poorly. Stocks go up and down depending on supply and demand. If a stock is
marketed well enough to create more demand from buyers than there are sellers, the stock will go up. What about
fundamentals? Fundamentals is a word invented by sellers to find buyers.

Price-earnings ratios, price-sales, the present value of future cash flows, pick one. Fundamentals are merely
metrics created to help stockbrokers sell stocks, and to give buyers reassurance when buying stocks. Even how
profits are calculated is manipulated to give confidence to buyers.

I get asked every day to invest in private companies. I always ask the same couple questions. How soon till I
get my money back, and how much cash can I make from the investment? I never ask what the PE ratio will be, what
the Price to Sales ratio will be. Most private investors are the same way. Heck, in Junior Achievement we were
taught to return money to our investors. For some reason, as Alex points out in The Number, buyers of stocks have
lost sight of the value of companies paying them cash for their investment. In today’s markets, cash isn’t earned
by holding a company and collecting dividends. It’s earned by convincing someone to buy your stock from you.

If you really think of it, when a stock doesn’t pay dividends, there really isn’t a whole lot of difference between
a share of stock and a baseball card.

If you put your Mickey Mantle rookie card on your desk, and a share of your favorite non-dividend paying stock next
to it, and let it sit there for 20 years. After 20 years you would still just have two pieces of paper sitting on
your desk.

The difference in value would come from how well they were marketed. If there were millions of stockbrokers
selling baseball cards, if there were financial television channels dedicated to covering the value of baseball cards
with a ticker of baseball card prices streaming at the bottom, if the fund industry spent billions to tell you to buy
and hold baseball cards, I am willing to bet we would talk about the fundamentals of baseball cards instead of
stocks.

I know that sounds crazy, but the stock market has gone from a place where investors actually own part of a company
and have a say in their management, to a market designed to enrich insiders by allowing them to sell shares they buy
cheaply through options. Companies continuously issue new shares to their managers without asking their existing
shareholders. Those managers then leak that stock to the market a little at a time. It’s unlimited dilution
of existing shareholders’ stakes, death by a thousand dilutive cuts. If that isn’t a scam, I don’t know what
is. Individual shareholders have nothing but the chance to sell it to the next sucker. A mutual fund buys
one million shares of a company with your and your coworkers’ money. You own 1 percent of the company. Six
weeks later you own less, and all that money went to insiders, not to the company. And no one asked your
permission, and you didn’t know you got diluted or by how much till 90 days after the fact if that soon.

When Broadcast.com went public, we raised a lot of money that certainly helped us grow as a company. But once
you get past the raising capital part of the market, the stock market becomes not only inefficient, but as close to a
Ponzi scheme as you can get.

As a public company, we got calls every day from people who owned Broadcast.com stock or had bought it for their
funds. They didn’t call because they were confused during our road show, were too embarrassed to ask questions and
wanted to get more information. They called because they wanted to know if the “fundamentals” – the marketing
points – they had heard before were improving. And the most important fundamental was “The Number,” our quarterly
earnings (or in our case, a loss). Once we went public, Morgan Stanley published a report on our company, as did
several other firms. They all projected our quarterly sales and earnings. Would we beat The Number?

Of course, by law, we were not allowed to say anything. That didn’t stop people from asking. They needed
us to beat the forecast. They knew if we beat The Number the volume on the stock would go up. Brokers would
tell their clients about it. The Wall Street Journal would write about it. CNBC would shout the good news
to day traders and investment banks that watched their network all day long. All the volume would drive up the
stock price.

Unfortunately, patience is not a virtue on Wall Street. Every day, portfolios are valued by at closing
price. If the value of your fund isn’t keeping up with the indexes or your competition, the new money coming in
the market won’t come to you. It just wasn’t feasible for these investors to wait till the number was reported by
companies each quarter. The volume had to be on the stocks in you fund. To keep the volume about a stock up, and
the demand for the stock increasing, you needed to have good news to tell.

Volume, The Number, whisper numbers, insiders granting themselves millions and millions of options – these are the games that Wall Street plays to keep on enriching themselves at the expense of the public. I know this. I have tried to tell people to be careful before they turned over their life savings and their financial future to someone whose first job is to keep their job, not make you money.

Till I read The Number by Alex Berenson, I never had a book that explained how the market truly worked that I could tell my friends, family and acquaintances to read. I never had a book that would truly warn them that the market was not as fair and honest as mutual fund and brokerage commercials made them out to be. I may be a cynic when it comes to the stock market, but I am an informed cynic, and that has helped me make some very, very profitable decisions in the market.

If you are considering investing in the market, any part of it, or if you are considering giving your hard earned
money over to someone else to manage, please, please read The Number first.

Mark Cuban, Dallas, Texas, January 2004

Quick note: technically Paul Tudor Jones is more of a trader than a value investor and the following speech is not directly related to investing but still....

PERFECT FAILURE

COMMENCEMENT ADDRESS TO GRADUATING CLASS OF
THE BUCKLEY SCHOOL

June 10, 2009

When I was asked to give the commencement address to a graduating class of 9th graders, I jumped at the chance. You see, I have four teenagers of my own and I feel like this is the point in my life when I am supposed to tell them something profound. So thank you Buckley community for giving me this opportunity. I tried this speech out on them last night and am happy to report that none of them fell asleep until I was three quarters done.

When composing this message I searched my memory for my same experience back in 1969 when I was sitting right where you are. I realized that I could hardly remember one single speaker from my junior high or high school days. Now that could be my age. I’m old enough now that some days I can’t remember how old I am. But it could also have been a sign of the times. Remember, I was part of the student rebellion, and we did not listen to anything that someone over 30 said because they were just too clueless. Or so we thought.

Anyway, as I sat there considering this speech further, I suddenly had a flashback of the one speaker who I actually did remember from youthful days. He was a Shakespearean actor who came to our school to extol the virtues of Shakespeare. He started out by telling us that Shakespeare was not about poetry or romance or love, but instead, was all about battle, and fighting and death and war. Then he pulled out a huge sword which he began waving over the top of his head as he described various bloody conflicts that were all part and parcel of Shakespeare’s plays. Now being a 15-year old testosterone laden student at an all boys school, I thought this was pretty cool. I remember thinking, “Yea, this guy gets it. Forget about the deep meaning and messages in the words, let’s talk about who’s getting the blade.”

As you can see, I have a similar sword which I am going to stop waving over my head now, because A) I think you are permanently scarred, and B) the headmaster looks like he is about to tackle me and C) some of you, I can tell, are way too excited about this sword, and you’re scaring me a little.

I’m here with you young men today because your parents wanted me to speak to you about service—that is, serving others and giving back to the broader community for the blessings that you have received in your life. But that is a speech for a later time in your life. Don’t get me wrong, serving others is really, really important. It truly is the secret to happiness in life. I swear to God. Money won’t do it. Fame won’t do it. Nor will sex, drugs, homeruns or high achievement. But now I am getting preachy.

Today, I want to talk to you about the dirtiest word that any of you 9th graders know. It’s a word that is so terrible that your parents won’t talk about it; your teachers won’t talk about it; and you certainly don’t ever want to dwell on it. But this is a preparatory school, and you need to be prepared to deal with this phenomenon because you will experience it. That is a guarantee. Every single one of you will experience it not once but multiple times, and every adult in this room has had to deal with this in its many forms and manifestations. It’s the “F” word.

FAILURE.

Failure that is so mortifying and so devastating that it makes you try to become invisible. It makes you want to hide your face, your soul, your being from everyone else because of the shame. Trust me, boys—if you haven’t already tasted that, you will. I am sure most of you here already have. AND IT IS HARD. I know this firsthand, but I also know that failure was a key element to my life’s journey.

My first real failure was in 1966 in the 6th grade. I played on our basketball team, and I was the smallest and youngest kid on the team. It was the last game of the season and I was the only player on the squad that had not scored a point all season. So in the second half the coach directed all the kids to throw me the ball when I went in, and for me to shoot so that I would score. The problem was that Coach Clark said it loud enough that every person in the stands could hear it as well as every member of the opposing team. Going into the fourth quarter, our team was well ahead, Coach Clark inserted me and thus, began the worst eight minutes of my life up until that point. Every time I got the ball, the
entire other team would rush towards me, and on top of that, that afternoon I was the greatest brick layer the world had ever seen.

The game ended. I had missed five shots, and the other team erupted in jubilation that I had not scored. I ran out of the gym as fast as I could only to bump into two of the opposing team’s players who proceeded to laugh and tease and ridicule me. I cried and hid in the bathroom. Well, that passed, and I kept trying team sports, but I was just too small to really compete. So in the 10th grade, I took up boxing where suddenly everyone was my size and weight. I nearly won the Memphis Golden Gloves my senior year in high school and did win the collegiate championship when I was 19. Standing in the middle of that ring and getting that trophy, I still remember looking around for those two little kids who had run me into that bathroom back in the 6th grade, because I was going to knock their blocks off. That’s one problem with failure. It can stay with you for a very long time.

The next time the dragon of failure reared his ugly head was in 1978. I was working in New Orleans for one of the greatest cotton traders of all time, Eli Tullis. Now, New Orleans is an unbelievable city. It has the Strawberry Festival, the Jazz Festival, the Sugar Bowl, Mardi Gras, and just about every other excuse for a party that you can ever imagine. Heck, in that town, waking up was an excuse to party. I was still pretty fresh out of college, and my mentality, unfortunately, was still firmly set on fraternity row. It was a Friday morning in June, and I had been out literally all night with a bunch of my friends. My job was to man the phone all day during trading hours and call cotton prices quotes from New York into Mr. Tullis’ office. Around noon, things got quiet on the New York floor, and I got overly drowsy. The next thing I remember was a ruler prying my chin off my chest, and Mr. Tullis calling to me, “Paul. Paul.” My eyes fluttered opened and as I came to my senses, he said to me, “Son, you are fired.” I’d never been so shocked or hurt in my life. I literally thought I was going to die for I had just been sacked by an iconic figure in my business. My shame turned into anger. I was not angry at Mr. Tullis for he was right. I was angry at myself. But I knew I was not a failure, and I swore that I was going to prove to myself that I could be a success. I called a friend and secured a job on the floor of the New York Cotton Exchange and moved to the City. Today, I will put my work ethic up against anybody’s on Wall Street. Failure will give you a tattoo that will stay with you your whole life, and sometimes it’s a really good thing. One other side note, to this day, I’ve never told my parents that I got fired. I told them I just wanted to try something different. Shame can be a lifetime companion for which you better prepare yourself.

Now, there are two types of failure you will experience in life. The first type is what I just described and comes from things you can control. That is the worst kind. But there is another form of failure that will be equally devastating to you, and that is the kind beyond your control.

This happened to me in 1982. I had met a very lovely young Harvard student from Connecticut, dated her for two years then asked her to marry me right after she graduated from college. We set a date; we sent out the invitations; and all was fantastic until one month before the wedding when her father called me. He said, “Paul, my daughter sat me down this afternoon, and she doesn’t know how to tell you this, but she is really unhappy and thinks it’s time for you two to take a break.”

At first I thought he was joking because he was a very funny guy. Then he said, “No, she is serious about this.” I thought to myself, “Oh, my God, I am being dumped at the altar.” I’m from Tennessee. Getting dumped at the altar was the supreme social embarrassment of that time. It was a big deal. When all my family and friends found out, they were ready to re-start the Civil War on the spot. I had to remind them that the last Civil War didn’t go so well for our side, and I didn’t like our chances in a rematch.

The reality was that I was a 26-year old knucklehead, and since all my friends were getting married, I kind of felt it was time for me to do the same thing. And that was the worst reason in the world to get married. I actually think she understood that and to a certain extent spared me what would have been a very tough marriage. Instead, I’ve had an incredible marriage for twenty years to a wonderful wife, and we have four kids that I love more than anything on Earth.

Some things happen to you that at the time will make you feel like the world is coming to an end, but in actuality, there is a very good reason for it. You just can’t see it and don’t know it. When one door closes, another will open, but standing in that hallway can be hell. You just have to persevere. Quite often that dragon of failure is really chasing you off the wrong road and on to the right one.

By now you are thinking, how much longer is this loser going to keep on talking. My kids are all teenagers, and whenever I’m telling them something I think is important, they often wonder the same thing. But the main point I want you to take away today is that some of your greatest successes are going to be the children of failure.

This touches upon the original reason I was invited here today. In 1986, I adopted a class of Bedford Stuyvesant 6th graders and promised them if they graduated from high school, I would pay for their college. For those of you who don’t know, Bed-Stuy is one of New York City’s toughest neighborhoods. Even the rats are scared to go there at night. Statistically about 8% of the class I adopted would graduate from high school, so my intervention was designed to get them all into college. For the next six years, I did everything I could for them. I spent about $5,000 annually per student taking them on ski trips, taking them to
Africa, taking them to my home in Virginia on the weekends, having report card night, hiring a counselor to help coordinate afternoon activities and doing my heartfelt best to get them ready for college.

Six years later, a researcher from Harvard contacted me and asked if he could study my kids as part of an overall assessment of what then was called the “I Have a Dream” Program. I said sure. He came back to me a few months later and shared some really disturbing statistics. 86 kids that I had poured my heart and soul into for six years were statistically no different than kids from a nearby school that did not have the
services our afterschool program provided. There was no difference in graduation rates, dropout rates, academic scores, teenage pregnancies, and the list went on. The only thing that we managed to do was get three times as many of our kids into college because we were offering scholarships whereas the other schools were not. But in terms of preparing these kids for college, we completely and totally failed. Boy, did this open my eyes.

That was the first real-time example for me of how intellectual capital will always trump financial capital. In other words, I had the money to help these kids, but it was useless because I didn’t have the brains to help them. I had tried to succeed with sheer force of will and energy and financial resources. I learned that this was not enough. What I needed were better defined goals, better metrics, and most importantly, more efficient technologies that would enable me to achieve those goals.

What that whole experience taught me was that starting with kids at age 12 was 12 years too late. An afterschool program was actually putting a band-aid on a much deeper structural issue, and that was that our public
education system was failing us. So in 2000, along with the greatest educator I knew, a young man named Norman Atkins, we started the Excellence Charter School in Bedford Stuyvesant for boys. We set the explicit goal of hiring the best teachers with the greatest set of skills to be the top performing school in the city.

Now that was an ambitious goal but last year in 2008, Excellence ranked #1 out of 543 public schools in New York City for reading and math proficiency for any third and fourth grade cohort, and our school was 98% African American boys. We never would have done that had I not failed almost 15 years earlier.

So here is the point: you are going to meet the dragon of failure in your life. You may not get into the school you want or you may get kicked out of the school you are in. You may get your heart broken by the girl of your dreams or God forbid, get into an accident beyond your control. But the point is that everything happens for a reason. At the time it may not be clear. And certainly the pain and the shame are going to be overwhelming and devastating. But just as sure as the sun comes up, there will come a time on the next day or the next week or the next year, when you will grab that sword and point it at that dragon and tell him, “Be gone, dragon. Tarry with me and I will cut your head off. For I must find the destination God and life hold in store for me!”

Young men of Buckley, good luck on your journey…..

I would be grateful if forummers with External Auditing know-how can help me. I know there are a few highly skilled auditors amongst the forummer community although I sense they are too modest too admit it.

My questions are with regard to Impairment Tests and the scope for External Auditors to probe into the calculations of listed companies:

1. Are external auditors able to challenge a) the Impairment Test calculation itself? and b) the input parameters used in the Impairment Test calculation? Or do they have to take, as givens, the input parameters - and I'm specifically thinking of predictions of future revenue drivers and future cost drivers - as used by the auditee?

2. If an External Auditor suspects that an asset should be financially impaired and hence a write-down taken, and the auditee refuses to undertake the necessary Impairment Test analysis, shouldn't the External Auditor make a formal qualification to the accounts?

3. What are the duties of an External Auditor when it comes to Impairment Tests of listed companies?

Forgive me for bring audit related questions into the weekend of forummers. And no, I'm not going to divulge which company I have in mind when asking these questions.

Thanks in advance.

Perhaps I am right in saying there is more conspicuous consumption nowadays? The politics of envy will become more and more pronounced in time to come.

The Straits Times
www.straitstimes.com
Published on Apr 07, 2013
Posh nightclubs, Porsches and the politics of envy

By Robin Chan Political Correspondent

I entered Pangaea last year, dressed in what I thought was a pretty sharp outfit - a Uniqlo T-shirt and jeans I had bought, all for under $80.

Yet, I felt like I had committed a crime, as the girl at the door of what is billed as Singapore's most exclusive club scanned me from top to bottom with distinct disapproval.

When I was eventually let through, it was as if I had cheated St Peter to slip through the Pearly Gates. The music was thumping. The women had squeezed into their tightest dresses. The bottle service was in full swing.

Known for its trademark safari theme, Pangaea had that feel all right - I was in a reserve of the well-heeled, where the privileged could preen and frolic in their exclusive and natural habitat.

Owner Michael Ault has called the club the ultimate house party for the world's glitterati - where exclusivity and top service come at an exorbitant premium. It can be, at the same time, severely discombobulating and invigorating. Am I in New York, London, or Las Vegas?

People who can afford it go there to have a good time, as at any club, bar or house party. But Pangaea will tell you it does it better.

A recent article in the Wall Street Journal's wealth magazine stirred up discussion with its vivid depiction of excess at this club. As someone who has had a peek inside, I would warn people not to take it at face value.

The majority of its clientele appeared to have more in common with me than the Eduardo Saverins of the world - most seemed firmly middle-income, salaried professionals likely to spend on a few glasses of gin and tonic, rather than a 10-bottle train of Cristal champagne.

In fact, the total hit for a mere mortal like me that night was less than $80 - for a $40 cover charge and two drinks. My bank account lived to fight another day.

Yet, while the picture painted by the Journal wasn't exactly what greeted me inside the club, the depiction can serve as an important warning sign. There may not yet be this parallel world of the super rich that is unrecognisable to the ordinary Singaporean but there are signs that the country is developing a new type of wealth.

It is a wealth marked by a penchant for extreme, in-your-face conspicuous consumption.

Singapore has always had its share of the very rich but they did not care to flaunt it. People like banker Wee Cho Yaw and the late real estate tycoon Ng Teng Fong lived modest lives in public despite accumulating huge fortunes in their lifetimes.

The implicit understanding, embodied also by our political leaders, was for the rich and powerful to lead a lifestyle of prudence and simplicity.

One extreme example is former prime minister Lee Kuan Yew, whose spartan lifestyle included wearing the same jacket for 20 years.

That sensitivity preserved a sense of unity in society despite rapid income growth and the rise in the number of millionaires.

But somewhere along the line, that changed. As Singaporeans wanted more excitement and more opportunities in the city, it also attracted different people, lifestyles and values into society. The Government decided to push Singapore as a wealth management hub. It built the integrated resorts. Then more clubs and bars opened, the waterfront at Fullerton was developed and Marina Bay has been transformed into a dazzling spectacle.

In a decade, Singapore went from frumpy to sexy.

But with that emerged also a newer and younger generation, with an obsession for more "bling". Where Singapore's old money was frugal, low-key and respectful, Singapore's new money is more flashy and arrogant. It is at risk of unleashing a potion of envy that can poison any society.

British philosopher John Stuart Mill described envy as "the most anti-social and odious of all passions". Envy knows no reason, it is a visceral and irrational feeling that no amount of charts and statistics can temper. Even if the income gap were to narrow with aggressive measures to lift wages at the bottom, increase productivity and raise taxes at the top, I wonder if it will be enough to temper the feelings of envy that could come from this flaunting of wealth.

A study published in the Journal of Economic Psychology on conspicuous consumption and its effects on satisfaction found that as the number of Ferraris and Porsches increased in Switzerland, it caused a decrease in the level of income satisfaction. That means people felt less happy with themselves just by seeing more expensive cars on the road. Now imagine that in a dense city state of five million people.

Much more destructive than the economics of inequality is the politics of envy.

chanckr@sph.com.sg

The Straits Times
www.straitstimes.com
Published on Apr 07, 2013
Room at the top - for rich to pay more taxes
Some among the rich argue - or would at least agree - that they should pay more

By Han Fook Kwang Managing Editor

If you asked someone whether he was willing to pay more tax, you would probably be expecting a rude answer - it seems like asking if he wants to have his bones broken.

It turns out though that it isn't such a no-brainer, and there are people who are not only prepared to pay more but who will also argue quite vociferously why they should do so.

The most well-known is American billionaire investor Warren Buffett, who has long argued that the United States' tax system needs to be overhauled because wealthy people like him are not paying enough tax.

According to him, the tax rate on his income amounted to only 17.7 per cent in 2011, way below the 32.9 per cent average of what his own office staff, including his secretary, were paying.

That's because a large part of his income came from stock-related earnings, which in the US attracted a flat tax rate of 15 per cent.

This was how he put his case in a piece he wrote in 2011: "Our leaders have asked for 'shared sacrifice'. But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.

"While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labours but are allowed to classify our income as 'carried interest', thereby getting a bargain 15 per cent tax rate...

"These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It's nice to have friends in high places."

The world's most successful investor, who is worth US$53 billion (S$66 billion), wants a more progressive tax system where the rich are taxed a much higher rate.

He isn't alone in making this call.

Some time ago, I heard on BBC radio a Scandinavian businessman defend the very high taxes he had to pay to support the welfare system there because he believed it was a good system and those better off should help pay to support it.

The issue of how progressive a tax system Singapore should have was raised in this year's Budget debate when Finance Minister Tharman Shanmugaratnam gave what I thought was the most detailed thinking from the Government on this matter.

He made several points worth recapping because this will be an important issue in the years ahead as government spending increases and revenues decline with an ageing population.

First, he argued that Singapore already has a progressive system and that if you take total taxes - including maid levies, car taxes and so on, and not just income tax - the top 10 per cent of tax payers contribute one third of the tax revenue.

Second, he stressed that the Government wasn't interested in making the system progressive for its own sake but wanted to do it in a way which would best help the lower- and middle-income groups.

Hence it needed to take into consideration issues such as how any change would affect the economic dynamism of the country, what it would spend the revenue collected on and whether the system was fair and equitable.

These are sound principles and we are fortunate to have a finance minister who has thought deeply about these issues.

The question remains though: Can and should the rich be made to pay more?

I believe there is room in Singapore to do so.

This is particularly so in the area of wealth, as opposed to income.

Wealth is what you have at any one time - property being the most common - while income is what you earn in a year.

The rich here get away with too much of their wealth left intact from taxation.

Owners of high-value homes must have felt like Mr Buffett, having friends in high places, when the Government abolished estate duty in 2008.

This is a tax on assets left behind after death and, when it was applied to property before it was abolished, affected those with a value above $9 million.

It was a high threshold and so would not affect most people, only the very rich.

Yet it was removed, without much debate even from the opposition Workers' Party.

One reason cited then was that removing it would help promote the wealth management industry in Singapore by encouraging the overseas rich to bring their assets here.

I wouldn't be surprised if they responded in droves as a result, with many buying property here to add to their stockpile, pushing up prices.

Whatever the result, the move made the tax system less progressive.

In this year's Budget, there was an attempt to redress this somewhat when changes were made to property tax which would result in those owning high-value homes paying more taxes.

But estate duty remains a relic of the past.

Is it time to bring it back, perhaps for the second and subsequent property?

And what about introducing a capital gains tax which taxes gains made when, say, you sell a property or shares in the market?

Any decision about how much more the wealthy should pay should take into account the principles that Mr Tharman highlighted. It also depends on whether there is a need to increase tax revenue, given the healthy surpluses in the Government's coffers.

One further caveat: This shouldn't descend into an ideological war to milk the rich for its own sake. That's why it was important for Government to set out its approach to this issue.

You might ask what right any government has to tax what is rightfully yours and you've worked hard to accumulate.

The answer is that when the value of your assets, especially property, goes up, it usually isn't solely because of what you've done personally, but the result of the effort of all in the country to make it a stable and prosperous place with a promising future. Without these conditions, there would be no asset appreciation.

Singapore is a great place for the wealthy - it's peaceful, safe and stable, has first-class infrastructure, and where everything (well, almost) works.

Where else can the super-rich drive and park their luxury cars in peace?

When millionaires buy seafront homes on Sentosa, they know there will be no armed robbers from the sea to threaten their lives.

Should they be taxed more to enjoy these privileges?

If they were asked whether they would pay more so as to continue with this happy state of affairs, I believe most will say yes.

That's as good a reason as any to tax them more.

hanfk@sph.com.sg

The Straits Times
www.straitstimes.com
Published on Apr 06, 2013
Mind... the gap
The nature of inequality is changing and the pressure to take from the rich to give to the poor looks set to grow. Rachel Chang dissects the challenges ahead.

THE millennium was a turning point for economic inequality in Singapore.

From the year 2000, an income gap that was narrowing turned the corner and began to widen. The wages of skilled, top earners began to pull away from unskilled workers at the bottom, whose incomes stagnated.

This is the story of inequality in Singapore that the Gini coefficient alone - the most widely used measure of inequality - does not tell.

Singapore has always had a high Gini coefficient of over 0.4 due to its open economic structure. The Gini coefficient plots inequality from a scale of zero to 1, with zero representing completely equal incomes across a population.

Singapore's Gini actually rose more briskly in the 1990s - from 0.408 in 1990 to 0.442 in 2000, than in the noughties, when it went to 0.472 in 2010.

But it is only in the past decade that a gulf has opened up between skilled and unskilled workers.

Globalisation and a technological boom have powered the "skills premium" that highly qualified workers command worldwide.

In Singapore, it collided with local factors of an economic restructuring, a liberal intake of cheap foreign workers and an ageing demographic to explosive effect.

Singapore Management University economist Hoon Hian Teck's research shows that from 2000 to 2010, the economy moved decisively away from manufacturing to high-end services.

For example, foreign direct investment in the manufacturing sector, as a ratio of gross domestic product, shrank from 36 per cent to 21 per cent over this period, but grew in its financial and insurance services sector from 36 per cent to 43 per cent. This exacerbated the skills premium for high-end workers as demand for them grew faster than supply, he explains.

The millennial turning point is also reflected in the ratio of average incomes of the top fifth of earners compared to the bottom fifth.

This fell from 14.4 in 1980 to 10.1 in 2000, before U-turning. It has risen through the last 10 years; as of last year, top earners made 13 times what bottom earners made.

Thirteen years after its turning point, inequality has entered a new phase of urgency, say observers.

Unlike in the past, notes Nominated MP Laurence Lien, income inequality is no longer set to a backdrop of a "rising tide that lifts all boats". Then, "most individuals and families felt that their plight was improving all the time and social mobility was higher", says the chief executive of the Lien Foundation. Now, there is wage stagnation and some depression, not just for those on a low income, but for a wider group.

The 'inequality' word

FROM 2000 to last year, as the wage gap grew, the word "inequality" was conspicuously absent from the Government's annual Budget statement.

Competitiveness, rather than redistribution, was the order of the day. Following a global trend, top income tax rates were lowered throughout the decade from 28 per cent in 2000 to 20 per cent in 2006 for economic attractiveness.

But last year, the "inequality" word reared its head - three times at that, in Deputy Prime Minister Tharman Shanmugaratnam's Budget speech then. This year, he said it five times.

More noticeably, his rhetoric was sharply different.

In 2011, responding to MPs' concerns over the income gap, Mr Tharman said that "(income inequality) is something we should be concerned with. But what matters most is not income inequality itself, but whether we succeed in raising incomes and living standards for all Singaporeans, including and especially the lower-income groups".

In this year's Budget, which promised more social spending while hiking taxes on luxury cars and investment properties, Mr Tharman said that inequality is growing everywhere - but "it matters more to us because Singapore is not just a city but also a nation. We must take further steps to temper inequality".

Observers see a new direction - and a new determination - in the Government's redistributive efforts.

In the past few years, it has curbed the inflow of foreign labour, cajoled companies to invest in enhancing productivity, and expanded its skills training programme to "upgrade" workers.

It is also redistributing significantly straight from government coffers to low-income and older workers' pay cheques, through schemes such as the Workfare Income Supplement, the Special Employment Credit and the Wage Credit.

"The Government deserves a lot of credit for really pushing the restructuring this time. There is a lot of resources being put in here," says Institute of Policy Studies research fellow Tan Meng Wah.

But economists and experts point to blind spots, and say it remains to be seen if the Government's new zeal can keep up with inequality's own momentum.

The effort to boost productivity should raise incomes, but "this does not mean that nothing else needs to be done because rising wages is only one part of the problem", says the chief executive of Centennial Asia Advisors, Mr Manu Bhaskaran.

The retired, elderly poor, for example, will not benefit from higher wages - but will suffer the inflation that comes in tandem, he notes.

This group, who are both old and poor, will continue to grow in what Mr Tharman has said is a unique, local challenge.

Due to Singapore's rapid development, unskilled workers are largely also ageing ones. Of those who did not complete secondary school in the workforce, two- thirds are aged 50 and above.

That Singapore is now on the ageing downswing overall has also made its inequality more visceral, says Dr Tan.

"When you are 20 years old and you see large differences in income around you, it's okay. You're young, you can work harder and achieve that. But when you're 50, it's a different dynamic," he notes.

Inequality is a vicious circle of its own. Dr Tan notes that the income inequality of earlier decades has led to a "wealth gap" now, where the rich enjoy a steady stream of investment income that the poor do not. This wealth gap "has an even greater psychological impact because we live so close to one another", he notes.

National University of Singapore economist Hui Weng Tat points to a perfect storm of high costs of living and high aspirations: "For a developed economy where educational and aspirational levels of a large proportion of the population are high, and affordability of major essentials such as housing and private transport seems to be slipping away... significant resentment will undoubtedly be focused on the extent of inequality that exists."

Studies have found other psychological effects of inequality, such as reduced work morale and lower productivity, he notes. "The disillusionment and disappointment inevitably will be expressed at the polling booths."

Former chief statistician Paul Cheung says that a new "social distance" has emerged in Singapore in the last decade, one which may be unbridgeable.

"In the past, you have HDB blocks next to the rich enclaves. Now you have enclaves that even the middle class can't access, such as Sentosa Cove and other 'high-class' places."

Dr Cheung, now a social work professor at the National University of Singapore, adds: "Social class has become more distinct and stratified. This is a serious issue for Singapore as it underpins all political and social changes."

Tweaking social assistance

DURING the previous term of government, social spending rose from $13 billion in 2006 to $21.5 billion in 2011. Currently, low-income families get $4 in transfers for every $1 they pay in taxes.

But there still exists a wide public consensus that the Government is not redistributing enough, and is too tight-fisted in its social assistance.

A part of this is philosophical. Still evident in its new progressivity is the Government's enduring ideological commitment to self-reliance and aversion to handouts.

Almost all of its major new redistributive schemes are tied to being employed, and it has ploughed resources into early childhood education and adult skills training.

Its "humanitarian" assistance - that is, handouts - remains minimal. Public Assistance, given to the elderly with no one to depend on and who cannot work, is $450 a month, after a $50 increment in this year's Budget.

The Lien Foundation's Mr Lien says that the Government can be much less conservative in how it manages its social assistance programmes, like in its use of endowment funds. It uses a percentage of investment returns from the reserves to set up such funds. Then, only a percentage of these funds is spent per year: a "doubly conservative" method that ensures that much less is spent on social assistance than is available to be spent, he says.

Mr Tharman has expressed the view that rather than being conservative, this guarantees such social assistance programmes beyond the current term of government - insuring them against the vagaries of populist pressures and economic cycles.

While government transfers have grown in Singapore, this factor brings its Gini coefficient down by only about 6 per cent, from 0.478 before transfers, to 0.459 after. This is a far smaller magnitude than the 30 per cent downward effect that other Organisation for Economic Cooperation and Development countries achieve on average, says Prof Hui.

Boosting transfers will help acceptance of income inequality, adds SMU's Prof Hoon. This is because inequality is then seen as a necessary way to generate the fiscal resources needed to subsidise the disadvantaged, he says.

But some People's Action Party (PAP) backbenchers urge the Government to continue to stand firm against the political wind.

"Big and broad transfers might give you a lot of political capital, but where does that take the country in 20 years' time?" says Moulmein-Kallang GRC MP Edwin Tong. He argues that social assistance needs to be targeted and means-tested, as opposed to blanket handouts.

He says: "Once you start giving, it's much harder to scale back. Look at what's happening in the West. Why do we think we might be different?"

PAP MP Liang Eng Hwa (Holland-Bukit Timah GRC) says the Government's expansion of social spending and redistribution may not keep up with growing public expectations because it must distil a general "call for more" into sustainable programmes.

In his response to MPs after the Budget debate this year, Mr Tharman emphasised that the Government will not attempt "progressivity or redistribution for its own sake"; spending better is as important as how much it spends, he added.

"This 'Government must do more' thing is naturally everybody's call," says Mr Liang. "Every Budget debate, MPs call for more, and that's because we see that there are really those who need more. But it's also the Government's job to make sure that when you do more, you're doing something that's responsible and sustainable."

rchang@sph.com.sg