Wednesday, 26 November 2014

Invest in SGX Companies with Exposures in China OR Japan?

Last week for me, is all about a hectic business travels all over China for me. The trip goes like this, Singapore-Beijing-Tianjing-Nantong-Suzhou-Shanghai-Singapore. Phew….! While in China, I read and heard handful of significant economic news about Japan and China. Hence I decide to blog about the world’s 2nd (China) and 3rd (Japan) biggest economies, and how it affects some companies listed in SGX with exposures in these two countries.

Reading papers and enjoying my coffee on a Saturday morning in China last week

Just two decades ago, Japan is the economic powerhouse with China’s economy still going through its second stage of infant economic reforms. Today, the wheel of fortune reversed as China surpassed Japan as the world’s second biggest economy.

Japan – Short Sunrise! Long Sunset?

In June, I blogged about Japan positive outlook after GDP grow more than expected and Nikkei outperformed after tax hike. Read here. Optimism feels the air for Japan then. Just a matter of months, the once land of the rising sun slipped into recession for 3Q. This prompted Prime Minister Shinzo Abe to call for a snap election to seek a mandate for his decision to delay the sales tax increases, last week.

Abe and Xi Jinping awkward handshake during APEC 2014

Stocks Still Rally
What stays the same is stocks still rally in Japan due mainly to the loose monetary policy. Most Japanese listed companies are export-oriented with overseas factories and dependent on overseas demand. E.g. car giant Toyata and Honda etc. The weak Yen boost their profits and these companies usually larger in size are also less affected by rising cost and falling demand within the country.

Aging Population, Rising Debt and Fading Job Security, Inflation
Japan faced problems of country's rising debt, aging population and fading job security. Young Japanese are pessimistic about their country’s future prospect. The elderly scene clearly outstripped the young due to low fertility rate and extended life expectancies. 

Today, about four in 10 Japanese work in part-time or contract jobs with little job security and scant benefits. For young Japanese, permanent, career-track jobs are the exception, rather than the rule. Ever since the consumption tax was raised from 5% to 8% in Apr this year, real wages and purchasing power of the Japanese are shrinking. People also queue up at supermarket when vegetables and fruits are on sale.

Abenomics Missing Targets
It seems like Abe’s economic 3 arrows are missing targets in up to now.

1) Central bank ultra-easy money depreciate yen sharply, export increased but no real investments into Japan due to the jaded domestic demand. Import prices increased and local SMEs suffered in Japan as costs surges.

2) Japan’s fiscal policy increasing budgets for public works projects also faced with difficulty of rising costs of construction.

3) Policy to promote trade and investments, liberalize monopoly electricity sector, strengthened agriculture and improve career opportunities for women seems promising, but so far there had not been concrete measures to push these policies forward.

Pessimistic Public Sentiments
From Yahoo News:

College student Yuto Tanaka, 19, said he knows that there's millions of yen (tens of thousands of dollars) in debt for every person in Japan. But fretting won't resolve that problem, and neither would an immediate tax hike, he said.

"This is our children's future," said Mai Yamaguchi, a 29-year-old trading company employee heading into the gaudy Shibuya shopping area for an outing with her 4-month-old son and two other young moms and babies. "Child care, elder care, social welfare are all going to be even bigger burdens for us."

China – Consolidates Slower Growth with Rising Charm

On the contrary, China future outlook seems brighter. Chinese people I spoke to are very optimistic about the country and most of them are happy with the efforts of the government so far.

Strengthened Relationships with Rest of World
China President Xi Jinping who started his fearsome campaign clamping down corruption is showing the softer side of him, busy strengthening relationship with the rest of the world recently.

Last week, Xi had successful state visits to Australia, New Zealand and Fiji with agreements to expand their burgeoning trade relationships.

"I have personally felt very privileged these last few days to have spent so much time with President Xi, and to have felt so much warmth personally. These have been some of the most remarkable days of my life. The transition of China from the third world to the first world is a transformation unparalleled in human history. It is the greatest human advance of all time. And we here in Australia are so lucky to have benefited from that rise." – Abbott, Prime Minister of Australia.

Xi Jinping in front of Government House Wellington Maori nose-rubbing accept

Earlier in Sep, Xi Jinping visited India’s Modi. India and China then signed 12 agreements, with China committed investments worth $20 billion in India over the next five years. Under Xi, USA-China relationship is seeing improvement too. Xi said, "If China and the United States are in confrontation, it would surely spell disaster for both countries."  Xi also developed strong personal relationship with Russia’s President Vladimir Putin in the wake of the Ukraine crisis. Both leaders share strong nationalistic views and are always ready to assert themselves against Western interests. China has also taken on a more critical stance of North Korea, while improving its relationship with South Korea. Even in the light of historical soured China-Japan relations, the recent Xi – Abe’s “Handshake” though awkward is a huge leap of improvements between the two nations’ relationships.

Rising Middle-Class driven by Young Population
Oppose to Japan’s aging population, China had a population of rising middle income class driven by a young population filled with drives and eagerness for success.

Benefits of Centralized Power
While Japan is struggling with internal political opposition, China communist party has centralized power on reforms to ensure continuity. This is especially important to rule a country with billions of people.

New Measures Implemented
To boost growth, China had also announced interest rates cut just a few days ago. The lending rate will lowered by 40 basis points to 5.6% and the one-year benchmark deposit rate lowered by 25 basis points to 2.75%.  The recent Shanghai and Hong Kong stock exchanges link is another move aimed to create and facilitate more investment opportunities within the country.

Rolf’s Summary – How it Affects SGX Companies

It is clear China is having an edge now over Japan in current situation. But it is only fair to give Abenomics more time before discounting its effectiveness. One negative quarter does not spell doomed failure. China is not without its own problems as its economy is seeing slow growth near to contraction, coupled with increasing non-performing loans. This prompted the cut in interest rate.

Companies with China Exposure
A more stable Chinese environment should also benefit Singapore stocks with China exposure. In particular, SGX Capitaland Limited and Keppel Land Limited who have significant property exposure in China should benefit from the more liquid environment resulted from the recent cut in interest.

In view of hardlanding stemming from non-performing loans in China, I am favoring State Owned Enterprise (SOE) who had a more solid financial backing from the central government.  Refer to Motley Fool recent article here on the best value SOE listed in SGX. 

One stock mentioned to have little room for error is China Merchant Holdings. I added this stock, months earlier. Please refer to my blog post here.

Another stock in my portfolio with significant exposure in China is CapitaRetail China Trust (CRCT). Refer here for my analysis on the company. To me, it is nature within Chinese people to love shopping or eating out in retail malls. Hence I am longing CRCT.

Companies with Japan Exposure
As for Japan, two SGX companies with comprehensive exposure are Croesus Retail Trust (CRT) and Saizen Reit. The former invests in Suburban retail malls while the latter place emphasis primarily on residential-related assets.

In its latest results, CRT reported robust financial performance with increasing income for distribution by 8.6% yoy. DPU of 2.08c also outperformed forecast of 1.89c. On the other hand, Saizen Reit is seeing yoy revenue decreased by 1.6%, due mainly to a decrease in occupancy rates and the sale of 2 properties. Higher repair and renovation expenses as well as the increase in consumption tax expenses further contributed to the decrease in net property income of 3.7%

One important thing to note is also both companies’ earnings will be adversely affected if Yen continues to weaken against S$ and economy persists in recession. However the indicated dividend yield of 7.0% for Saizen and 8.8% for CRT are still worth the thoughts of to invest.  

This blog and its contents contain the opinions and views of me. It is not a recommendation to purchase or sell the stocks of any of the companies or investments herein discussed. If a reader requires expert financial advice, a competent professional should be consulted. I cannot guarantee the accuracy of the information contained herein the blog and its contents. Other than being the shareholders of some of the stocks discussed herein at the time of writing, I am not in any way related to the company mentioned within the blog. I specifically disclaim any responsibility for any liability, loss, or risk, professional or otherwise, which is incurred as a consequence, directly or indirectly, of the use and application of any contents of this blog.


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Saturday, 15 November 2014

To be a Successful Investor, Start Earning First – The Warren Buffett Story

Most people may think a successful investor is one that excels in spotting great companies, invest in it and then get rewarded with high returns.

But the fact is aside from sharpened investment skills, many successful investors either possess remarkable entrepreneurism or had scaled corporate ladders to senior positions in their careers. This allowed them to earn and save enough before embarking in their investment business. Just to name a few - Warren Buffett, Peter Lynch, George Soros, Jim Rogers, Philip Anschutz, Ronald Perelman etc.

Are you a Great Investor Yet?

You may think that you are already a great investor? This is because you read almost all books relating to investments, read about all great investors and know what they are thinking. You are expert in dissecting annual reports, reading charts, timing the entry and exit and earn great returns for every dollar you invested. Almost every stock you picked is potential winner!

BUT, you lack funds! Sometimes you wish you can have millions of the funds to invest to make more sizeable returns? You probably lament that you do not have a wealthy parents with inheritance of funds. Neither are you so lucky enough to profit from property sale during periods of euphoria.

NOW, ask yourself this question, Have you already learn how to Earn and Save enough to make your Investments more effective?”



Warren Buffett Earning Prowess

Today’s focus will be mainly on Warren Buffett who is widely considered the most successful investor in the 20th century. Buffett is not just a proficient investor, he is extremely business savvy and had excellent interpersonal skills with people. The latter two skills allowed him to increase his earnings at a tender age. In turn, his earnings were saved and put into good use in investments.  

Buffett started earning when he was 6 years old in 1936 and bought his first stock at the age of 11. As a boy, Warren Buffett did all sorts of jobs selling chewing gums, coca cola drinks, pitching newspapers etc before starting businesses in pin-ball, stamps, car-buffing and developed many other means of earning money, all before he turned twenty.

Other than growing his stock portfolio, his earning ability at a young age is amazing. At age 16 in 1946, he amassed an equivalent of US$53K of today’s money. At 19 his savings reached more than US$98K of today’s money.

1936, Age 6 - Start selling Chewing Gums and Coca Cola

Buffett started selling Juicy Fruit chewing gum (packs of 5) door to door. He will not sell 1 piece, because he thought he may be left with 4 pieces he could not sell. He made 2 cents profit per pack.

Buffett worked in grandfather store. He would then also purchase Coca-Cola six packs for 25 cents and sold each can door to door for 5c (total for 30c). Profit of 5c per pack.

1941, Age 11 – Bought First Stock

Buffett purchased 6 shares of Cities Service (now known as CITGO – an Oil company) at US$38 per share (total US$3.7k today’s money). He bought 3 for himself and 3 for his sister Doris. The company fell to US$27 shortly but climbs back to US$40 which Warren and Doris sold their stock. Almost immediately, it shot up to US$200 a share. Buffett later cited this experience as an early lesson of patience in investing.

1944, Age 14 – First Income Tax Returns

Buffett filed his first tax return and deducts his bike and watch as a work expense to save US$35.

1945, Age 15 - Delivered Newspapers

Buffett earned US$175 a month (US$2.3k today’s money) from delivering the Washington Post newspapers a couple hours a day. This is more than his teachers’ monthly salary. He also sold calendars to his newspaper clients, bringing in a little extra. By 1947, he had earned over US$5k delivering newspapers. He also invested US$1.2K (US$15.8K today’s money) of his savings into 40 acres of farmland.


1947, By Age 17 – Started Many Different Businesses

Pinball Business
In high school, Warren and a friend Donald started to purchase a used pinball machine at US$25, repaired it (Donald did) and placed in a Barber Shop. Buffett convince the Barber owner that he is representing Wilson’s Coin Operated Machine Company and that the Barber will have no risk putting the machine in his store, which they will split the profits earned. Buffett and Donald made US$50 within a week. Within months, they owned three machines in three different locations. The business is sold later in the year for US$1.2K to a War Veteran.

“You had to get along with the barbers. That was crucial. I mean these guys could go buy these machines for 25 bucks themselves, so we would always convince them that it took someone with 400 IQ to repair pin-ball machines.” - Buffett

Collect Dumped Horse Track Tickets
Buffett and a friend would go to the race track, and though they were too young to make bets themselves, Buffett quickly found a way to make money: by stooping, which was like dumpster collecting race track tickets. 

Here’s Buffett’ description “At the start of racing season you get all these people who’d never seen a race except in the movies. And they’d think that if your horse came in second or third, you didn’t get paid, because all the emphasis is on the winner, so they’d throw away [second-] and [third-place] tickets. The other time you would hit it big was when there was a disputed race. That little light would go on that said “contested” or “protest.” By that time, some people had thrown away their tickets. Meanwhile, we were just gobbling them up. It was awful; people would spit on the floor. But we had great fun. 

And if they found any winning tickets, Buffett’s aunt Alice would cash them in for the boys. Buffett went a step further: using his love of math and collecting information, he and a friend put together a tip sheet for bettors at the race track. Soon they were out hawking “Stable Boy Selections,” a tip sheet that the boys typed out on an old Royal typewriter in Buffett’s basement.

Sold used Golf Balls 
Buffett’s friends and family thought he scooped the balls out of water and resold them. Instead Buffett ordered from a provider in Chicago. Buffett sold them in Omaha for US$6 (US$64 today’s money) a dozen.

Buffett said “They were classy balls, Titleist, Spalding Dots and Maxlis, which I bought for US$3.5 a dozen. They looked brand new. He probably got them the way we first tried to get them, out of water traps, only he was better.”

Sold Stamps
If you needed a fancy stamp, you could turn to Buffett’s Approval Service, which sold collectible stamps to collectors around the country. 

Buffed cars
The teenage Buffett partnered with his friend Lou Battistone to form Buffett’s Showroom Shine. The car-buffing business ran out of Battistone’s dad’s used car parking lot. The duo later discarded the business when it turned out to be too much manual labour. 

1949, Age 19 – Savings reaches US$9,800 (US$98K today’s money)

1950, Age 20 – Offered to work for Benjamin Graham for Free

Buffett enrolled at Columbia Business School learning from Ben Graham and David Dodd, two well-known security analysts cum professors. Buffett wanted to work on Wall Street, however, both his father and Ben Graham urged him not to. He offered to work for Graham for free, but Graham refused.


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Thursday, 13 November 2014

Invest in a House before a Stock? – Peter Lynch

Peter Lynch (Wikipedia) one of the most enviable fund manager of all time written in his Book “One Up on Wall Street” that we should buy a house before we invest our money into the stock market.

Do I own a house? Lynch suggests that you buy a house before you invest your money in the stock market because, "in 99 cases out of 100, a house will be a money-maker." 


Is this True?

The way he sees it, a house is rigged in your favour. You can acquire one for 20% down (without having to make the cash call like you would with a stock bought on margin), the leverage you use increases your returns, and the interest on the loan is tax deductible.

In addition, people generally do more research when they buy a home than when they buy a stock, which further increases the chances that the investment will turn out well.

One of the most successful fund managers of all time, advocating public to invest in a house taking advantage of leverage before investing in a stock? 

Let us see why.

Property better than Stocks? It depends

Peter Lynch said that when people look at a house, they're very careful. They look at the school system. They look at the street. They look at the plumbing. When they buy a refrigerator, they do homework.

But when it comes to stock people are so convinced that the small investor has no chance, the stock market's a big game and then they act accordingly to the masses. "they'll put $10,000 in some zany stock that they don't even know what it does that they heard on a bus on the way to work and wonder why they lose money, and they do it before sunset."

A DTZ research showed that property prices have outpaced equities between in the last 5 years. (Q3 2009 to Q3 2014). Using compound annual growth rate basis, property price increased 6.1% Vs STI’s growth of 4.2%

Does that really mean that property is better than shares?

An article from Motley Fool also addressed this topic. Read “Are Properties Really Better Investments Than Shares?”

Hmmm…. Or probably it is a function of how much effort or hours you put into research?

Renting beats buying a home? It depends

Read an article from Business Times earlier titled “Renting beats buying a home? It depends”

It reported that in USA, a study said that home ownership is still 38% cheaper than renting. In Australia, another study said that home prices are unlikely to keep growing at a rate they had from the past 60 years. A research found that if prices stay constant or appreciate 2% or less over the next 4-5 years, renting could prove more cost-effective than buying a property. Below is the example

Renting is More Feasible According to a Research?
Example – Purchase. Assume below:
  • Condo unit purchased at ~ S$1.28 million near upper Bukit Timah area.
  • Sell 4 years later
  • Price appreciation less than 2%.
  • Fixed interest 2.18% for next 4 years over 30 years.
  • No inflation and no discount rate.
  • 2 year holding period in the loan
  • Minimum required down payment plus other miscellaneous fees all paid.

Overall a Loss of S$149,000/- conducted by a research company.

Example – Rental. Assume below:
  • Rental S$2,800 per month
  • Rental for 4 years
Overall loss of S$134,000/-

Hence according to this research, renting is more feasible over 4 years. However if property appreciate more than 2%, then the reverse may be true instead.

Not Just Profit and Loss
R’ST Research director said owning a property goes beyond profit and loss, but also personal and psychological factors. For instance, pride of owning a property and also owners do build up equity as they pay down the mortgage.

Financial security such as regular income had to be taken into account also. Also consider maintenance fees of property over time (wear and tear), condo monthly fees, property tax, hassle of finding tenants, and troubles you will encounter with troublesome tenants.

Why Buying Over Rental
“If Singaporeans buy a flat or private property, they will surely enjoy capital appreciation in the long term.” Ong Kah Seng, R’ST Research Director.

Mr. Ong also mentioned that rental money essentially goes to nowhere, merely helping landlord to pay off the mortgage, nor yielding one any returns. Singapore housing policies such as CPF are also inclining towards home ownership instead of rental. The absent of Capital gains tax in Singapore also encourage foreigners to invest their cash in property here.

Rolf’s Summary

Property or Stocks? Ask yourself which is better for you? Which one interests you more to perform hours of research? Which investment class makes you can sleep better?

Personally I will like to agree with Peter Lynch that invests in a house over your head to stay first. Do not rent a house to stay if you intend to be in the country for long.

Additional real estate investments then are just like stock investments. It requires hours spend in research until you become adept in it, before you unleash your buy call.

I also cannot agree more that Property and Shares are two different asset classes. They are different and you cannot really proclaim that one is better than another.


I currently invest in both asset classes to diversify my portfolio. This can provides me with different streams of income. Do remember that before you invest, you require building up your warchest of money. This requires years of regular savings as well as immense efforts in career/business to increase your earnings.

Remember that Warren Buffett work many jobs as a teenager and also started a “Pin Ball” business” to increase his earnings, save and invest.  

So next time, when you hear a friend saying that “Property is better than Stocks” or “Stocks is better than Property”, there is no need to be agitated and start arguing against it. Just have to remember that both asset classes are different and both require hours of research before you reap your rewards.


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Saturday, 8 November 2014

Book Review: LKY The Big Ideas (Part 2)

This post continues from previous post (Part 1)...

As extracted from the book, below article depicts summary of Lee Kuan Yew’s philosophy expressed in his own words.

To be Correct
“I am not interested in being politically correct. I am interested in being correct.”

Stood firmly for what you believed
“.. If you want to be kind to your people, then you have got to be firm. And at times, stern to those who have a duty to perform to see that the duty is performed.”

Strength and Determination
"If I decide that something is worth doing, then I'll put my heart and soul to it. I'll give everything I've got to make it succeed. So I would put my strength, determination and willingness to see my objective to its conclusion."

"I do not classify myself as a statesman. I put myself down as a determined, consistent and persistent. I set out to do something. I keep on chasing until it succeeds. That is all... "

Man of Action - Get things done
"I am not great on philosophy and theories. I am interested in them, but life is not guided by philosophy or theories. I get things done!”


Confront the Problems
"If things go wrong, do not sweep aside. Confront the problems, get to the root of difficulties and wrestle with them resolutely. Go for long term success and do not be deterred by criticism.”

Discussions with Knowledgeable People
"You must not overlook the importance of discussions with knowledgeable people. I would say that is much more productive than absorbing or running through masses of documents. Because in a short exchange, you can abstract from someone who has immense knowledge and experience, the essences of what he had gained."

Personal Relationship.
LKY has his way with words and put things succinctly and with the right nuance.
President Clinton first meeting with LKY in 2000 during Michael Fay incident. Mr. Clinton said "why have I not met this man before?"

Courageous - 3 Examples

CIA Bribe 1961- Display courage to fight opponents
In 1961, CIA tried to bribe an officer at special branch. PAP laid trap and caught CIA officer red handed. Then the CIA officer tried to bribe Lee to cover up, offering US$1 million to PAP. LKY reveal the letter written by American Secretary of State Dean Rusk apologizing to him and expose the USA government who denied the incident.

Lee said "remember all the time that we are not dealing with an enemy but the bloody stupidity of a friend"

First China Official Visit 1976 -  We respect people but we are not subordinate of them
In 1976, on first official visit to China, China Prime Minister Hua Guofeng presented him with a copy of Neville maxwell India's China war, a pro-China history of sino-Indian war in 1962. Lee handed book and said "'Mr. Prime minister, this is your version of the war. There is another version, the Indian version. And in any case I am from Southeast Asia - it's nothing to do with us."

Michael Fay 1995/6 - Stick to Principle especially Rule of Law
1995-6, Michael Fay incident of vandalism. Singapore proceeded with the canning of Mr. Fay despite USA government Bill Clinton pleaded not to. USA is very angry and froze several aspects of bilateral ties. However the gains were much bigger as Singapore firm stand against the strong American pressure. This incident also helped to expand Singapore geopolitical space in the region.

Vladimir Lenin'd famous maxim "probe with a bayonet: if you meet steel, stop. If you meet mush, then push."



Rolf’s View

Again, I emphasize that this article is by no means trying to take sides politically. The main purpose is to reflect the important factors contributing to what we are today, as a nation. Most importantly is to learn from one of our country’s most prominent figures.


Leaving a deep impression to me are the following points, which I felt are also applicable in our life, career/business or investment journey. 




  • Before you start anything, be honest, have integrity and non-corruptible
  • If something is worth doing and what you firmly believe, chase till the end.
  • Size does not determine our destiny.
  • Stay relevant always. Adapt and Change if necessary.
  • Be courageous. Respect is always mutual, despite your size disadvantage.
  • Taking calculated risk is necessary at times, as long as you plan thoroughly.
  • Learn from the best including their errors. 
  • Be attentive to detail but keeping big picture in mind.
  • Theories and Philosophy are important, but please also “Take Action.”
  • Confront problems, not escape from it.
  • Develop and maintain external relationship
  • Think ahead and think long term

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Friday, 7 November 2014

Book Review: LKY The Big Ideas (Part 1)

I am on leave today from work. Since I finished reading Lee Kuan Yew (LKY)’s latest book “The Big Ideas” last week, I decide to write a book review today.

Courtesy of Rolf Suey's Photography

This is a book that compiles accounts of people who had worked closely with our first Prime Minister on the road to Singapore nation building. Topics covered include law, politics, society, economics, governance and foreign affairs. Read news about the book here.  

Anyway this article is not meant to take sides or views politically. Primarily, it is a book review to reflect the important factors contributing to what we are today, as a nation. Most importantly is to know what we can learn from one of our country’s most prominent figure.

Singapore



Singapore is not an ordinary country. We are tiny, with no natural resources, and one of the most densely populated countries in the world. Since our society is multiracial and multi-religious, the potential for disorder and racial discord is high. Also, Singapore is situated in a turbulent region with two large neighbours, each of which had quarters resentful and envious of our independence.

Our Success (If we will like to call it)

Singapore success is attributed to getting the fundamentals right. Political stability, meritocracy, an incorruptible administration etc.

Below are excerpts of Mr. Lee’s perspective towards building a successful nation.

Political will must be very strong

Incorruptible

Honest Stewardship

Pragmatic
Believe in pragmatism not ideology. Pragmatic but still guided by some deeply held values.
Pragmatic approach did not stop Singapore from working wih Malaysia and Indonesia to pursue common interest.

Experimentation and Innovation
Early policies had no precedent. No blueprint prior. Good deal of trial and error.

Adapt and Change – Nothing is static
Reasonable Men adapt, unreasonable men change the world. - paraphrased from George Bernard Shaw.

So while you may work towards an ideology, but you must stand firm on basic principles, you settle for what is practical at any point of time, rather than embark on quixotic quests.

Thinking Ahead, Think Long Term
Look at the world strategically with a broad and long-term vision, even though the purpose may not always be immediately apparent to everyone.

Learning from the Best as well as others’ Errors

Attention to Detail, but Big Picture in Mind
Never be Micro-manager. But be attention to detail, while keeping the big picture in mind.

No Short Cuts – Pure Hardwork and Persistence
Of course, it is not about taking reckless risks. Many of these projects could have been stillborn if not for hardwork and persistence.

Small but Relevant
Small countries have little power to alter the region. They must seek maximum friends, while maintaining its freedom as a sovereign and independent nation.

Friendship in international relations is not a function of goodwill or personal affection. We must make ourselves relevant so that other countries have an interest in our continued survival and prosperity as a sovereign and independent nation.

Size does not determine our destiny
Small countries need big friends. Though we are small, but we cannot be pressured by bigger powers.

People, Leadership and Vision
A leader without vision to strive to improve thing, is no good. Then you'll just stay put, you won't progress.

A government can only as good as people who run it.

Recruit the best and leadership renewal - Let us get younger men and women in their 30s and 40s. Get them to take on responsibilities of helping to train our young graduates in their 20s.

Order and Law
Good laws lead to good order. But without order, the operation of law is impossible.
Low crime rate - you can go jogging at 2 o'clock in the morning and feel safe.

Anybody whether he is Chinese, Indian, Malay or Eurasian or any other race, whoever starts trouble we smack him down. And the police and army will carry out the orders in a discipline and fair way.

Moral Education
Moral education - it is simple. You do good, you will be rewarded. You do wrong, you will be punished.

Multiculturalism
..the perquisite of Malayan independence is the existence of a Malayan society, not Malay, not Chinese, not Malay Indian, Malayan Eurasian, but Malayan, one that embraces the various races already in the country.”

Bilingualism
English is the language of workplace or administration, but our mother tongues help us retain our core cultural values as Chinese, Malay or Indian.

Not simply about language - it's about finding our culture.

If you know only one language, then in this society you will find yourself a problem for yourself and for your society. And invariably, you will find that with knowledge of another language, which means an understanding of a different culture, a different civilization and more windows in the mind, come inevitably, tolerance and understanding.

Thoroughness in Preparation

Boss’s Attention to Detail
Attention to detail by the boss matters. If the boss cares, everybody else up and down the line cares. If the boss does not care, standards can begin to slip.

Clear communication
When you write notes, minutes or memos, do not write in code, so that only those privy to your thoughts can understand. Write so simply that any other officer who knows nothing of the subject can understand you."

Frugality
Get the economics right. This includes living within one's means; getting value for money from our purchases; keeping subsidies limited; not protecting weak performers; frowning on cross-subsidies which fudge true costs.

Non communist

Diplomacy
It is not about being nice, polite of agreeable. It is more fundamentally about protecting and promoting the country's interests, preferably by being nice but if necessary by other appropriate means.

SAF - 2 things we learnt from Israel. 1. How to be strong. 2. How not to use our strength; meaning that it was necessary to get along with neighbors and that no country can live in perpetual conflict with its neighbours.

Link between Domestic and Foreign Policy
The most striking fact is how Mr. Lee sees the inextricable link between domestic policy and foreign policy for our survival as a nation state.

Maintain Good USA China Relationship
USA economy is resilient one since wealth of creative talents and open to the world of talents.
China growth is real and cannot be stop will be the biggest thing to happen in recent history.
Singapore often also acts as mediator between the two countries.

Stay tuned to Part 2 ….

Courtesy of Rolf Suey's Photography


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