Rich Dad, Poor Dad (Robert Kiyosaki)

[Jacmar]

Just read this on the internet that this R Kiyosaki has file for bankruptcy.

http://www.dailymail.co.uk/news/article-...ement.html

Amazed? Not really. I am not really a fan of his but I know a lot of people are. this guy was riding on a high during the property boom in USA and has leverage a lot in his properties. So when the downturn hits, the leverage works in reverse. Timely reminder to those gung-ho property investors in Singapore...enjoy when the music is playing but watch out when the music stops. Lately he was also involved in some hairy seminars. sign of desperation??

[KopiKat]

Just read this on the internet that this R Kiyosaki has file for bankruptcy.

http://www.dailymail.co.uk/news/article-...ement.html

Amazed? Not really. I am not really a fan of his but I know a lot of people are. this guy was riding on a high during the property boom in USA and has leverage a lot in his properties. So when the downturn hits, the leverage works in reverse. Timely reminder to those gung-ho property investors in Singapore...enjoy when the music is playing but watch out when the music stops. Lately he was also involved in some hairy seminars. sign of desperation??

From the link you posted, seems like it's one of his company that's filing for bankruptcy, not him. Extracts,

The financial guru behind New York Times bestseller Rich Dad, Poor Dad has filed for bankruptcy on one of his companies after losing a $24 million judgement.

.

Mike Sullivan, CEO of Kiyosaki's Rich Dad Co., told reporters Kiyosaki would not put personal assets towards the judgement and claimed the judgement was far more than Rich Global LLC's value.

'The dealings we had with the Learning Annex were with a company that hasn't been in business for a number of years,' Sullivan said.

'I am not surprised Learning Annex is upset and angry, the money doesn't exist in that company, and we can't bring money out of the group.
'We have a few million dollars in this company, but not 16 or 20. I can't do anything about a $20 million judgment. We got hit for what we think is a completely outlandish figure.'

[CityFarmer]

Just read this on the internet that this R Kiyosaki has file for bankruptcy.

http://www.dailymail.co.uk/news/article-...ement.html

Amazed? Not really. I am not really a fan of his but I know a lot of people are. this guy was riding on a high during the property boom in USA and has leverage a lot in his properties. So when the downturn hits, the leverage works in reverse. Timely reminder to those gung-ho property investors in Singapore...enjoy when the music is playing but watch out when the music stops. Lately he was also involved in some hairy seminars. sign of desperation??

I read the link, the bankruptcy arises due to dispute from other investment than properties. Too early to conclude its investment strategy IMO

He may be good in property investment, but poor in other investment or poor manager for its seminar venture. He lose control on them and hurt by backfire from partners.

[specuvestor]

I think I agree with about 50% of the book but one important thing I learnt from the book is how he explained the difference between an investor and a business owner. And suddenly it dawned upon me that was actually what Buffett is talking about.

[csccc]

Care to share more specuvestor?

[specuvestor]

I used to think "investors" and business owners look at the same asset the same way. That is not true.

Firstly, business owners or majority shareholders control the cashflow. Minorities don't. So in a sense it is not totally correct to say that value investing should be like buying a piece of business and thinking like business owners. We can't unless we control the cashflow, by exercising management control. We have to assume that management continue to be competent and that is also Buffett's assumption when he buys businesses, and that is even when he has management control. He seldom changes management. Other than this, I agree value investors should think in terms of business rather than piece of security.

2ndly ask around your SME friends if anyone knows the P/E of their business? ie total cost of starting business vs accounting P/L. Business owners don't look at P/E, they look at how to pay bills/ wages, manage working capital, plan capex etc. In short what is paramount is cashflow. But suddenly once this business goes listed, the prime focus becomes a heuristically simple number called P/E, so that "investors" can understand.

3rdly the timescale is very different. Business Owners have long term vested interest in the success of the business, or are passionate about it. There is big tangible and intangible incentive to make it work in the long run, despite sometimes deploying short/mid term strategies. "Investors" come and go, contributing only to the psyche of Mr Market. I've heard ridiculous suggestions to management to wind up their business/ spin off etc because it is trading below book so as to benefit "shareholders"... SERIOUSLY? Business owners' focus is to quit when Mr Market is having mood swing and to be out of job at the same time?

What business owners and "investors" look at are very different. By extension, value investors should be different from "investors"

[KopiKat]

My interpretation is that we ought to invest only in companies that are run in the same way that we would be running it if we were the owner. So, for eg., based on my own thinking of how I'd run a business (need some imagination or extrapolate from running my household budget + investment), I'd look out for good mgmt who're vested and committed, growth / flat (depending on my stock category - growth for capital gains ; Flat for dividend yield), low debts (can be high for biz in matured phase), High cash,... etc.

That's probably why Warren Buffett is mostly hands off in the running of the biz that he acquires (either wholly or partially in shares) as they're already running it the way he'd have run it himself... or even better...

[specuvestor]

The idea is there but the problem is that in general we do not have the expertise to run the business as well as the lousiest guy in the industry Buffett would hardly know how to run power or rail company. He was fortunate that he was asked to run a financial company ie Solomon Brothers, and only for a very short time with mostly oversight role, and mainly to lend credibility to the business. That's why he kept emphasizing his role is asset allocator.

So good management track record and management with vested interest (hence thinking like business owners) is paramount. It always confounds me when "investors", all the more "professional investors", tell management how to run their business. I mean, giving advice and suggestions are well and good... but how to run it?

[KopiKat]

It's like RPG (Role Playing Games)....

We need not be great warriors, magicians, archers,... to be able to understand (by reading up) on how to use the different characters to play the game and even do well with good strategies.

We need not be Kings/Queens, tycoons,.. to be able to run empires...

If you'd done a Biz / Mktg module before in school, some of the teaching aids used are Case Studies, Simulations, Role Play,...etc. Same for many other subjects.

So, we don't actually need to be able to physically run a biz. Fortunately for us 'arm-chair' biz owners, we just need to read widely and learn how successful biz are run, build up our knowledge base and 'experience' (fm losing / making $$ when we invest in the right / wrong biz). Over time, we ought to be able to 'think' like biz owners and zoom in to invest only in biz that're run the way we'd want to run it ourself. Easy? Takes a lifetime to learn, but not impossible...

[Jared Seah]

During my previous corporate life, I often poke fun at my colleagues who think they know more about production than our suppliers.

We are retailers. Buy and sell is our core competence.

But when we start to tell suppliers what to do... LOL! I'm sure our suppliers are laughing at us. Some have told me so
(That's one of the good reasons I don't drink)

As a buyer, there are 2 schools of thought: the bargain school and the cost simulation school.

The cost simulation school (single sourcing) has fancy spreadsheets that try to input all the costs of the suppliers - they even "trust" the open book costing from suppliers. It's the base for their price negotiations.

Those more practical oriented tend to belong to the bargain school (let suppliers compete). No prizes on guessing which school I belong to. We often get the "cannot be true or possible" look from our cost simulation colleagues when we managed to get prices below than their "assumed" total cost.


It's a bit like that sovereign wealth fund who thought they can "invest" in foreign banks on the "cheap" during the early days of the 2008 financial crisis. I assumed they are big enough "investor" to be able to go through the books of the banks and talk to the top management directly before they invested.

Well, it turned out many other smaller investors (without access to top management and books of the banks) were able to get much lower prices than that sovereign wealth fund soon after.

Knowing the numbers and making sense of the numbers are not the same. People on the inside, we on the outside.


And yes, I do invest with active mutual funds in sectors or industries I've no clue about