b.The Hope in Stupidity

I have always wanted to write this post for the longest of time.

Now is a good time.

I have asked a colleague to source for a suitable vendor.

She began sourcing. As usual she hit road blocks all the way. Some of the quotations she got was so ridiculous, we seriously either doubt her communications skills in handling the task at hand or the vendors were too fat and complacent that they don't need any more new business. She showed no sign of despair and gave a very dry smile whenever we question her about the progress of the ongoing task during board meetings.

Three months later, she found 2 really suitable vendors of reasonable costings and the process was smooth henceforth.

Deep down I knew that she was sad and unhappy with herself. She didn't seem to blame us for giving her no morale support. This I must apologise for our insensitivity. We should have been a lot more supportive of her hard work and industry.

This is truly a very fine example of stupidity won us all. Indeed we have disrespected her. Her wit in fact is beyond the normal range.

In another instance, I have asked another colleague to source for property for purchase.

She found property after property ceaselessly for 3 solid months too. Some of the properties she listed were so interesting that even I have to reach my deepest pockets to get the cash so that I don't miss out on the opportunities.

During her search, she was ridiculed to the maximum by people around her as unrealistic and impossible. She has nothing but a pure grit of her teeth. Not an easy thing to do. Finally, even estate agents took their hats off to her when she mentioned the deals she has put together. It only showed her extreme dedication to the task at hand. Although she has zero training in real estate sourcing, she has unusual zeal in pursuing her task.

This is another super nice example of stupidity won us all. 

Conclusion

There is no such thing as a newbie to the task. As long as one is willing to learn and humble to his/her assigned task, with perseverance, there is no task too difficult to fulfill. There is always hope for stupidity. In fact, the final laugh belongs to the humble and hard worker. 若非一番寒澈骨 那得梅花撲鼻香

b.Bank Lelong (Auction)

[USD1 = RM3.04, today's rate]

I have the privilege to learn about Malaysia's Bank Lelong (open auction) system over the whole of last week.

It was quite an eye-opener.

In bank lelong, the property is first launched at market value minus 10%. If there are no takers, the next lelong is at 3 months' time marked at last auction price minus 10%. This will go on until the property is sold. Some property lelong can go on for years.

Every malaysian new to property investment can buy one low-cost housing and limited to one. If he/she needs more, he/she needs to apply for permission. Usually, subsequent property purchase cannot be low-cost housing.

Due to limited space, I shall focus on low-cost housing first. When I get to normal property investment, I will then go into its details.

Low-cost Housing

Condition -   The condition of some of these low-cost houses on lelong are so bad that no one is willing to bid for them.

Roof -   The roof is normally goner. So a brand new roof is needed. 

Purchasers -   Interestingly, there are 2 groups of low-cost housing purchasers - investors and normal first-time buyers.

Well ... Malaysia always boleh ...

Some of these investors can buy up to tens of such low-cost properties. I wonder how? But, the amount of money to be put up to improve the house is normally quite prohibitive. So even investors are also extremely cautious about buying the next one. 

As for individual first-timers, they wouldn't dare to try as they usually don't have the cash to renovate the house after buying.

Rent -   For properties that are on the bank lelong for a while, they are normally not rentable, even if the condition of the house is tip-top. It is only good for owner occupation.

Location -   Location is everything. Many such lelong properties are in very good location. But, its current condition puts many people off.

Price -    Some of the prices can go as low as RM16 psf in very good location (much better than Penang). While their neighbours are still try to get RM130 psf with good or reasonable house condition. Even some normal properties are going at RM7.5 psf in not too bad location.

Penang's chief minister has just sold a 105-acres land for RM240 psf. So since these properties are much better located than Penang's properties, it can't really go very wrong.

Normal sub-sale prices are marked at market value plus 33%.

Title -   The title is good as it is the high court that allows such auctions to be carried out by the bank. Freehold.

Transaction -  Normally full cash position is the safest. It takes 10% and 90% three months later. Bank forbids such financing as they fear the next purchaser of such ill-repute purchase.

Advice -   Even my datuk partner advised me against such purchases. 

Contradiction -   Why then if the property is in good location, then it should rightfully be rentable. Although some of these properties are in very good location, its neighbourhood is still in general state of disrepair, hence causes the said property to be quite unwelcoming to the renting community. One has to wait for a while for these other properties in the neighbourhood to be in better shape, before the rental demand goes up. Therefore, property investment is never for the faint-hearted, but deep pockets. 

Saleable -   If the property is not rentable, usually it will not fetch a good price. One has to wait.

Utility -   It is usual for such property to engage in some form of industry.       

Conclusion

Don't let the physical look of the property deceives you. It has deceived even the best investors. See value where no one can appreciate. Don't be the herd but be the leader. Dare where no one dares. Even if it is a total loss. It is only RM16 psf for a very small piece of landed freehold property, i.e., 1k land = RM16k, 2k land = RM32k, 3k land = RM48k, 5k land = RM60k, 10k land = RM160k. What more if it is only RM7.5 psf?

p.UBAH - The Change

Went to Sarawak there and back.

Bought this tee and wore it through the streets and customs. Then, read the news that a guy was caught wearing such a tee while driving a car registered for that little island. He was released only after he was established as a not-that-little-island-dweller. If he were to be that-little-island-dweller, he would be jailed for interfering with domestic politics of another land. Membership with that-little-island is indeed a curse.

Luckily, I was not caught.

I will now wear this tee during sleep and in white land.

A guy from another land once told me that he will always be voting for the opposition. I questioned him why?

He said power always corrupts. After a few years in power, one would be tempted to corrupt to his very core. It is therefore good to UBAH (change) all the time so as to minimise pain to the ordinary folks. He and his family were wise beyond their years.

Change is indeed the only permanent ingredient to success in business.

My partner and I have instituted change permanently in our product life-cycle. Every time we reproduce a new order of the same product range. We always incorporate some improvements and changes into the products. Interestingly, our customers love the new products so much that, they overhaul their entire wardrobe to accommodate our newly "improved" products.

Effectively, our products have taken on the new mode of sale - subscription. So instead of trying out other competitive products, our customers look eagerly forward to our new revamped products for their fixes.

The  incorporated change is minimal, but it works fine with our customers. Our customers are willing to "invest" in our latest range even though they are not too much different from our older range. They use our products for trade. We have finally become willing partners to the trade. Our products have integrated with our customers in one seamless weapon-of-choice.

Our sales has again improved further this year. With additional play budget, we now will invest more towards magazine advertising and other feel-good-gadgets.

Some wrong samples in time:

iPhone 5 (USA) has no more improvements after Steve Job has moved on. Apple stopped to become the largest company on earth.

Nokia (Finland) has fallen from the top dog position after failing to play less golf and have more product improvement meetings.

Sony (Japan) is becoming more and more dull with no more new product launches.

Some good samples in time:

Samsung (SKorea) is very strong now with new product launches every other month. but, they have to be careful, their newer product lines such as camera-on-the-go are getting off-the-beaten-track.

Asus (Taiwan) has beaten Msi (Taiwan) in the notebook business. They are becoming interestingly strong. Very sexy.

p.The Need for Loneliness

I have mentioned earlier: To be a leader of man is a pure waste of time. There is no value in investing time in man. Men are not motivated. They are just opportunists. They are hunters by nature. They hunt all the time. They are not cooperative. They seek destruction and they seek selfish and lone gratifications.

For years I have advocated cooperative hunting. But, I failed miserably. I simply don't understand why I have failed in such a clear-cut concept. By cooperating, the benefits to all who participate are abundant. So easy, follow the Lanchester's Laws -

"Lanchester's laws are mathematical formulae for calculating the relative strengths of a predator/prey pair. This article is concerned with military forces."

"The Lanchester equations are differential equations describing the time dependence of two armies' strengths A and B as a function of time, with the function depending only on A and B."
 
"In 1916, during World War I, Frederick Lanchester devised a series of differential equations to demonstrate the power relationships between opposing forces. Among these are what is known as Lanchester's Linear Law (for ancient combat) and Lanchester's Square Law (for modern combat with long-range weapons such as firearms)."

"With firearms engaging each other directly with aimed shooting from a distance, they can attack multiple targets and can receive fire from multiple directions. The rate of attrition now depends only on the number of weapons shooting. Lanchester determined that the power of such a force is proportional not to the number of units it has, but to the square of the number of units. This is known as Lanchester's Square Law."

It simply means for a force of just two cooperatives, the force-multiplier would have been 2x2=4 individuals, i.e., a force of just two cooperatives has the capability of handling 4 individuals at parity.

Extending the concept further, for a force of three cooperatives, the force-multiplier would have been 3x3=9 individuals, i.e., a force of three cooperatives has the capability of handling 9 individuals at parity.

This concept of cooperation is simply too marvellous, but, sadly no one appreciates.

So leave the idea of leading man. They are fucking waste of time.

How about leading women?

Unfortunate for women is that they are not creative. They have almost zero creativity. They are however great followers, i.e., in short, they are great managers of rules. Give them a rule, they will follow to the letter T. But, that makes them poor sales people. Although they are great accounts managers, they are poor at knocking a creative win-win package together. They lack directions when there are none to start with.

The other bad point I already have highlighted before is they always like to jump the business owner all the time. They simply don't understand why the business owner is always so unwilling to jump them even if the hints are so obvious.

They simply don't get it or merely trying their luck all the time. I believe they know that there is a limit to how many a business owner can manage at any one time. Being a business owner, obviously he has choices. Choices beyond his wildest dream, so he automatically becomes choosy and still can play hard-to-get. This situation drives the gals even more eager to please. Sigh ... How I wish I have more capacity.

Back to the topic:   The Need for Loneliness

Because men fail us and women are next to zeros. We will be most of the time lonely. So instead of fighting it, might as well welcome loneliness as a friend. At a start, loneliness is a nasty little fellow. It gives pain. It gives anxiety. It drives confidence to the ground. It creates doubt in our scheme of things.

Ignore each and every one of these pains. Slowly loneliness becomes a true friend. In fact, sometimes I am sick and tired of attention that I crave for loneliness to return.

Interestingly, from time to time, it will return. During these times, it will create another round of loss of confidence. But, fear not, it will build more character into the person and drive businesses to the next level.

Today, I feel lonely again, but, I have arrived at 1.5% of my target. They are currently armies waiting for my deployment. Once deployed, they in turn will become force-multipliers on my behalf. Is there a hurry? NO. The white land will have another 15 years of pain. I can afford to take my time.

What if I am wrong? Well, with 1.5%, I have already outperformed my wildest dream. But, I am not happy as I am still too young to retire. Let me play the game further and report back.

My hope is to hit 3.0% in five years' time. By then, I would even be more lonely.