More than two decades ago, a wise old friend more than twice my age told me that when people most need the credit, banks will suddenly pull it away. He said, the business community called the phenomenon, ‘withdrawing umbrellas when it rains’. He explained it this way.
“Banks freely provide easy credit when you least need it, lending out ‘umbrellas’ so to speak on sunny days. However, just when you run short of money especially during financial storms - an economic or financial crisis - banks will reduce or entirely withdraw the credit leaving the desperate, those who need it most, nowhere to turn to. This phenomenon is known as ‘withdrawing umbrellas when it rains’. “
Sure enough, time and time again, the phenomenon happened. It happened during the Malaysian economic recessions in 1985/86 and 1997/98. The same phenomenon is currently happening in the US and the UK.
According to NYTimes.com on June 21, 2008, after fostering the explosive growth of consumer credit in recent years, banks in the US are cutting (the headline word used is ‘trimming’ – perhaps it sounds softer and nicer than reality) the spending limits on credit cards of millions of consumers often without warning, especially those customers who run up big debts, live in areas that are hit hard by the housing crisis or work for themselves in troubled industries. Sounds familiar?
Remember the sudden 25% reduction on cash withdrawals on credit cards by banks and card companies alike in Malaysia during the 1997/98 Asian financial crisis? A financial crisis is the time when credit card holders or consumers need cash the most to fund their daily living expenses.
Impending crises are the heavy ‘monsoon’ (rainy) seasons where it is better to have your own umbrellas ready for shelter, unless you prefer the banks to withdraw them when you need it most. If you are familiar with monsoons, it does not rain, but pours.
Therefore wherever you are, it pays to start reducing your outstanding amounts in credit cards, overdrafts, or loans where possible. Otherwise when the crunch comes to your country, when the push turns to shove, the banks do not seemed to know you unless you have the money.
If you are cash rich in such times of trouble, banks might still try to lend you money from your term deposits held with them!
And history (read cycle) repeat itself, once again.
Saturday, June 28, 2008
Thursday, June 26, 2008
Difficulty in calling for a major reversal
Global analysts do not seem to learn quickly enough. When bulls stampede, it is alright to recommend a sell, since clients do not mind taking profits and would still thank the particular analyst who recommended the stock or trade, even if the stock price momentarily went higher because of buying momentum after the sale. However clients’ reactions would change if the stock instead of retracing lower, unexpectedly storms up much higher.
It is difficult to call for a major reversal of fortune while a major bull market is still heading higher. Think of the various renowned investment strategists and analysts of global investment banks who kept calling for a major reversal and failed miserably over the past decade.
Therefore in a bull run, one seldom recommends anyone to sell, unless one is really certain that the market will plunge.
However if global analysts think that it would be easier to call for a major reversal during bear markets like in the prevailing situation, perhaps they have much to learn, as some have recently found out to their chagrin. (Refer Bloomberg reports dated June 25, 2008) Rich and angry clients, who lost a lot by following your stock recommendations, are not easy to pacify even with repeated apologies, and most happen to know your bosses!
Therefore, if analysts value their jobs, they cannot simply call a buy without understanding the strong bearish undercurrent in a market or a sector where stale bulls dominate waiting to cut losses at best and where jittery banks start to pull the carpets right off margin players without any leeway given.
In their haste to call buys in the current bear market(s), perhaps they have forgotten the gloom and doom of subprime mortgages, the resultant credit crunch, the sudden but foreseeable withdrawal of credit by banks which literally lost tons of money, rising food and oil prices, the consequent plunge in consumers’ confidence and the similar fall in appetite of equity investors.
What had happened in Australia is happening elsewhere. Some top analysts have lobbed off the target price of the previous recommended stocks by fifty percent in less than a few months, since the particular stocks have plunged by more than that percentage. And if these same analysts ever think their global firm’s rich clients are going to stay happy and quiet over such huge losses, they must have gone bonkers. With global investment banks retrenching staff, analysts who made devastating wrong calls could be among the first to go.
If you happen to be a stock analyst and want to be a hero during a bear market, by calling for a major reversal, prepare to lose your well paid job. Even if you have not heard about Laozi and Confucius teaching those who listen not to be brash, you must have heard of the proverbial saying that ‘heroes die young’?
If you really want to learn how to correctly call a major reversal of fortune, try studying the Book of Changes (Zhouyi) and understand change. Perhaps then, analysts can put their analytical and research skills to better use.
It is difficult to call for a major reversal of fortune while a major bull market is still heading higher. Think of the various renowned investment strategists and analysts of global investment banks who kept calling for a major reversal and failed miserably over the past decade.
Therefore in a bull run, one seldom recommends anyone to sell, unless one is really certain that the market will plunge.
However if global analysts think that it would be easier to call for a major reversal during bear markets like in the prevailing situation, perhaps they have much to learn, as some have recently found out to their chagrin. (Refer Bloomberg reports dated June 25, 2008) Rich and angry clients, who lost a lot by following your stock recommendations, are not easy to pacify even with repeated apologies, and most happen to know your bosses!
Therefore, if analysts value their jobs, they cannot simply call a buy without understanding the strong bearish undercurrent in a market or a sector where stale bulls dominate waiting to cut losses at best and where jittery banks start to pull the carpets right off margin players without any leeway given.
In their haste to call buys in the current bear market(s), perhaps they have forgotten the gloom and doom of subprime mortgages, the resultant credit crunch, the sudden but foreseeable withdrawal of credit by banks which literally lost tons of money, rising food and oil prices, the consequent plunge in consumers’ confidence and the similar fall in appetite of equity investors.
What had happened in Australia is happening elsewhere. Some top analysts have lobbed off the target price of the previous recommended stocks by fifty percent in less than a few months, since the particular stocks have plunged by more than that percentage. And if these same analysts ever think their global firm’s rich clients are going to stay happy and quiet over such huge losses, they must have gone bonkers. With global investment banks retrenching staff, analysts who made devastating wrong calls could be among the first to go.
If you happen to be a stock analyst and want to be a hero during a bear market, by calling for a major reversal, prepare to lose your well paid job. Even if you have not heard about Laozi and Confucius teaching those who listen not to be brash, you must have heard of the proverbial saying that ‘heroes die young’?
If you really want to learn how to correctly call a major reversal of fortune, try studying the Book of Changes (Zhouyi) and understand change. Perhaps then, analysts can put their analytical and research skills to better use.
Friday, June 20, 2008
More write offs to come?
According to Goldman Sachs’ analysts on June 17, 2008, US banks could need another US$ 65 billion of fresh capital injection as losses and write downs extend into the first quarter of 2009.
That could mean further losses and write offs of US$ 100 billion or more to come from US banks alone. Together with the recent accumulated US$ 400 billion plus global write offs reported by Bloomberg news, the expected losses to the first quarter of 2009 would increase the total to more than US$ 500 billion.
Since the estimated US$ 100 billion losses do not include any further substantial write offs by European and Asian banks or other financial institutions worldwide, which are probably still busy providing subprime loans related losses quarterly going forward, despite the confident sounding rhetoric of financiers, central bankers and politicians that the worst is over, many top US and global banks are possibly just treading water.
In fact, some are waiting for a further capital injection from sovereign wealth funds, their shareholders, or possibly a national bail out eventually.
There is nothing wrong with government officials ratcheting up confidence in the financial systems of a country and twitching statistics, if any; it is for the common good; no one of sound mind would prefer to see a bank run or a depreciation of the country’s currency which will bring on more pain to her people. But investors will soon tire of constant rhetoric that paints a rosy picture to camouflage the real gloom and doom in a country, or of a company/bank promising that the worst is over, when it is not quite over.
So far, the accounting profit and loss results say it all. And there will be more write downs to come. (Remember the worst case scenario losses of US$ 900 billion plus forecast provided by Allan last year, followed by the subsequent US$ 945 billion, and the US$ 1 trillion forecasts of the World Bank, and Goldman Sachs respectively?)
Unless investors have a rather huge appetite for high risks amidst plunging realty and stock market prices in the US and several other countries, the continual unfolding of huge quarterly losses of financial and highly geared corporations, a depreciating US dollar which helped raise commodities, food and oil prices pushing up inflation worldwide, instead of what the US authorities had desired, it could be better to stay on the sidelines or hold cash. But then how would I know?
That could mean further losses and write offs of US$ 100 billion or more to come from US banks alone. Together with the recent accumulated US$ 400 billion plus global write offs reported by Bloomberg news, the expected losses to the first quarter of 2009 would increase the total to more than US$ 500 billion.
Since the estimated US$ 100 billion losses do not include any further substantial write offs by European and Asian banks or other financial institutions worldwide, which are probably still busy providing subprime loans related losses quarterly going forward, despite the confident sounding rhetoric of financiers, central bankers and politicians that the worst is over, many top US and global banks are possibly just treading water.
In fact, some are waiting for a further capital injection from sovereign wealth funds, their shareholders, or possibly a national bail out eventually.
There is nothing wrong with government officials ratcheting up confidence in the financial systems of a country and twitching statistics, if any; it is for the common good; no one of sound mind would prefer to see a bank run or a depreciation of the country’s currency which will bring on more pain to her people. But investors will soon tire of constant rhetoric that paints a rosy picture to camouflage the real gloom and doom in a country, or of a company/bank promising that the worst is over, when it is not quite over.
So far, the accounting profit and loss results say it all. And there will be more write downs to come. (Remember the worst case scenario losses of US$ 900 billion plus forecast provided by Allan last year, followed by the subsequent US$ 945 billion, and the US$ 1 trillion forecasts of the World Bank, and Goldman Sachs respectively?)
Unless investors have a rather huge appetite for high risks amidst plunging realty and stock market prices in the US and several other countries, the continual unfolding of huge quarterly losses of financial and highly geared corporations, a depreciating US dollar which helped raise commodities, food and oil prices pushing up inflation worldwide, instead of what the US authorities had desired, it could be better to stay on the sidelines or hold cash. But then how would I know?
Sunday, June 15, 2008
One who betrays his father is a criminal
Something for father’s day:
In the Commentary on the Decision of Hexagram 37 Jia Ren / The Family, it is said,
‘Among the members of the family there are strict rulers; these are the parents. When the father is in truth a father and the son a son, when the elder brother is an elder brother and the younger brother a younger brother, the husband a husband and the wife a wife, then the house is on the right way.’
The relationship between father and son is that of love, the relationship between husband and wife is that of chaste conduct and the relationship between elder and younger brother is that of correctness.
Mang I asked what filial piety was. The Master said, ‘It is not being disobedient’. [Analects 2. 5i]
Consistent with what he taught, Confucius did not approve of a son opposing his father -
The eldest son of duke Ling of Wei had planned to kill his mother (stepmother?), the notorious Nan-tsze. For this he had to flee the country, and his son, on the death of Ling, became duke, and subsequently opposed his father’s attempts to wrest the state from him. [Analects 7. 14ii]
A more serious case that of a son’s betrayal of his father occurred a hundred years earlier than the time of Confucius:
[At a conference involving, among others states, Qi and Zheng, the heir to the earl of Zheng proposes to undercut his father and become subservient to the marquis of Qi.]
'The marquis was about to agree to his proposal, but Guan Zhong said, "You have bound all the princes to you by your propriety and truth [LI, XIN], and will it not be improper [JIAN] to end with an opposite policy? [Here] we should have propriety in the form of no treachery between son and father, and truth in that of the son's observing [his father's] commands according to the exigency of the times. There cannot be greater criminality [JIAN] that that of him who acts contrary to these two things."
"We princes," replied the duke, "have [tried to] punish Zheng, but without success. And now when such an opportunity is presented to me, may I not take advantage of it?"
"Let your lordship," said Guan, "deal gently with the case of Zheng in kindness and add to this an instructive exposition of it, and then, when you [again] lead the princes to punish the state, it will feel that utter overthrow is immanent and will be consumed with terror. If [on the contrary] you deal with it, adopting the counsel of this criminal [JIAN], Zheng will have a case to allege and will not be afraid. Consider too that you have assembled the princes to do honor to virtue, and if at the meeting you give place to this villain, [and follow his counsel,] what will there be to show to your descendants? And further, the virtue, the punishments, the rules of propriety, and the righteousness displayed at the meetings of the princes, are recorded in every state. When record is made of the place given to such a criminal [JIAN], there will be an end of your lordship's covenants. If you do the thing and do not record it, that will show that your virtue is not complete. Let not your lordship accede to his request. Zheng is sure to accept the covenant. And for this Hua, [the earl of Zheng's] eldest son, to seek the assistance of a great state to weaken his own--he will not escape without suffering for it. The government of Zheng, moreover, is in the hands of Shu Zhan, Du Shu, and Shi Shu, those three good men. You would find no opportunity now to act against it."
[On this] the marquis of Qi declined the proffers of the prince, who in consequence of this affair was regarded as a criminal in Zheng. The earl begged from Qi the favor of a covenant.'
[Duke Xi, year 7, 652 BC, Legge p. 148, col. 10, & p.149] [More stories from ‘Zuozhuan’ is a click away under Resources]
If the father is in truth a father and the son a son, then the house is on the right way, otherwise harmony within the family breaks down.
Therefore a father should be loving and protective of the son while a son should be loving and obedient to the father, not only just for the happy occasions on father’s day, but 24/7.
However if you have not spoken to your father or your son for a while, why not pick up the phone and call him now?
Cheerio!
In the Commentary on the Decision of Hexagram 37 Jia Ren / The Family, it is said,
‘Among the members of the family there are strict rulers; these are the parents. When the father is in truth a father and the son a son, when the elder brother is an elder brother and the younger brother a younger brother, the husband a husband and the wife a wife, then the house is on the right way.’
The relationship between father and son is that of love, the relationship between husband and wife is that of chaste conduct and the relationship between elder and younger brother is that of correctness.
Mang I asked what filial piety was. The Master said, ‘It is not being disobedient’. [Analects 2. 5i]
Consistent with what he taught, Confucius did not approve of a son opposing his father -
The eldest son of duke Ling of Wei had planned to kill his mother (stepmother?), the notorious Nan-tsze. For this he had to flee the country, and his son, on the death of Ling, became duke, and subsequently opposed his father’s attempts to wrest the state from him. [Analects 7. 14ii]
A more serious case that of a son’s betrayal of his father occurred a hundred years earlier than the time of Confucius:
[At a conference involving, among others states, Qi and Zheng, the heir to the earl of Zheng proposes to undercut his father and become subservient to the marquis of Qi.]
'The marquis was about to agree to his proposal, but Guan Zhong said, "You have bound all the princes to you by your propriety and truth [LI, XIN], and will it not be improper [JIAN] to end with an opposite policy? [Here] we should have propriety in the form of no treachery between son and father, and truth in that of the son's observing [his father's] commands according to the exigency of the times. There cannot be greater criminality [JIAN] that that of him who acts contrary to these two things."
"We princes," replied the duke, "have [tried to] punish Zheng, but without success. And now when such an opportunity is presented to me, may I not take advantage of it?"
"Let your lordship," said Guan, "deal gently with the case of Zheng in kindness and add to this an instructive exposition of it, and then, when you [again] lead the princes to punish the state, it will feel that utter overthrow is immanent and will be consumed with terror. If [on the contrary] you deal with it, adopting the counsel of this criminal [JIAN], Zheng will have a case to allege and will not be afraid. Consider too that you have assembled the princes to do honor to virtue, and if at the meeting you give place to this villain, [and follow his counsel,] what will there be to show to your descendants? And further, the virtue, the punishments, the rules of propriety, and the righteousness displayed at the meetings of the princes, are recorded in every state. When record is made of the place given to such a criminal [JIAN], there will be an end of your lordship's covenants. If you do the thing and do not record it, that will show that your virtue is not complete. Let not your lordship accede to his request. Zheng is sure to accept the covenant. And for this Hua, [the earl of Zheng's] eldest son, to seek the assistance of a great state to weaken his own--he will not escape without suffering for it. The government of Zheng, moreover, is in the hands of Shu Zhan, Du Shu, and Shi Shu, those three good men. You would find no opportunity now to act against it."
[On this] the marquis of Qi declined the proffers of the prince, who in consequence of this affair was regarded as a criminal in Zheng. The earl begged from Qi the favor of a covenant.'
[Duke Xi, year 7, 652 BC, Legge p. 148, col. 10, & p.149] [More stories from ‘Zuozhuan’ is a click away under Resources]
If the father is in truth a father and the son a son, then the house is on the right way, otherwise harmony within the family breaks down.
Therefore a father should be loving and protective of the son while a son should be loving and obedient to the father, not only just for the happy occasions on father’s day, but 24/7.
However if you have not spoken to your father or your son for a while, why not pick up the phone and call him now?
Cheerio!
Monday, June 09, 2008
Asian stock markets reminisce 1997?
Quite a number of investors who held onto Asian stocks since the spring of 2007 until now could feel the same as those who had lost their life savings during the Asian Financial Crisis in 1997. In case readers do not follow the Asian and global financial news reports on a regular basis, many stocks in emerging and major Asian stock markets (inclusive of Australia) have been badly battered. Just like in 1997, these stock markets have fallen like ten pins; life savings and fortunes have been lost; owners of public quoted companies have their substantial shareholdings forced sold by margin lenders; reports of punters committing suicide because of share trading losses; and investors holding onto huge paper losses in never ending downward spirals.
Then and now, the lax or lack of regulation by Central Bankers on the loose lending practices of commercial banks and other financial institutions put paid to the Bull Runs of 1996 / 1997, and that of 2006 / 2007. The only difference is the twist.
Instead of the financial crisis starting from an emerging economy like Thailand back in 1997, it started on the other side of the world, in the most sophisticated and largest financial market, the US, ten years later. By coincidence, the stock markets started their often wild plunges in August of 1997 and that of 2007. Also by coincidence, my teacher, the Yi had given prior warnings of both decimations of stocks quoted on the Kuala Lumpur Stock Exchange.
If we go by indices, the Vietnamese stock exchange suffered the worst fall among the Asian markets. Its index has experienced a horrendous two thirds fall from its peak of 1170 points reached in March 2007, because of the change in sentiments and rampant inflation in that country. According to Yahoo Finance reports, the stock market upheavals started around October 2007 despite the communist government’s effort to keep it on track and continuing a non-stop decline since early May 2008, dealers said. The VN Index at the Ho Chi Minh Stock Exchange dropped by 5.54 points to close at 395.66 points on Wednesday, June 4, 2008.
Since October 2007 till now, while the Vietnamese stock market led the way, the Shanghai stock exchange index fell by a stomach churning 45%, Hang Seng fell 25%, and Bombay SEI fell 24% with the Singaporean, Japanese, New Zealand and Australian stock indices giving up between 17.5 to 20% of its previous markets capitalization. By comparison, the Malaysian, Taiwanese, Indonesian and South Korean stock indices fall were relatively mild – in between 12.5 % to 14%. (Remember my forewarnings in the related entries on ‘Stand not in the middle of the mountain’ and 'Missing the return' of these falls?)
In 1997, the biggest losers in terms of magnitude were those of low liners and second board counters in the KLSE. Some were hit by several limit downs effectively losing 70 to 95% of their market values within days. The only difference from spring 2007 till now is that these categories of stocks and others which had lost 70 to 95% of their market values at their peaks had almost a year to do so. Others include Centro Properties Group of Australia and Bear Stearns of the US, for example.
A bitter lesson learned from 1997 is that investors may think that stocks are cheap after a fall of 30 to 50% from their year highs. Stock prices would then slide lower after a small rebound – termed bear traps - since sentiments have changed; for the bull had already turned into a bear market. When foreign and/or local fund managers start selling down their substantial holdings for a reason or other, like those witnessed in 1997, small investors better learn not to buy unless they have boatloads of money to lose. (Think of declining stock prices of Centro Properties Group and Bear Stearns in 2007 and the first quarter of 2008.)
Goldman Sachs has recently recommended their clients to underweight or to reduce holdings of shares in several emerging Asian stock markets including that of Malaysia, for one reason or another. Looking at my Yi Chart for 2008, Goldman Sachs’ timing of the call is about right. Since their clients could move much slower than small fry.
Obviously the few readers, if any, who sold some of their stocks in the KLSE after my May 13, 2008 entry on ‘Raising cash levels’ could consider themselves lucky as the prices of quite a number of low liner stocks have fallen by 10 to 20%, if not more, since then. And we have exited the market before Goldman Sachs’ call.
How bad the KLSE will fare after Malaysia’s surprised and shocking 40% hike in fuel (gas) prices on June 5th remains to be seen. But no matter how badly local market stocks will fall this June because of surging inflation, soaring oil prices, or anything else, you ain’t seen nothing yet!
Some investors in the KLSE have recently resorted to seeking advice from Daoist deities and heavenly immortals (ShenXian). Apparently, the advice and hints given by the divinities is not dissimilar to my entry on May 13 and in this one. While the world’s best stock analysts had been proven wrong time and time again so far this year according to Bloomberg reports, there is no doubt that the Daoist gods and heavenly immortals already know what is going to happen in the second half of 2008 to the KLSE and perhaps to the global stock markets.
Therefore, I suggest regular readers cum investors in the KLSE to exercise extreme caution in the coming months. Of course there is nothing wrong with a bit of trading since stocks will rebound after sharp plunges, just try not to lose your shirt, the house you live in, your entire fortune, your life or whatever, okay?
Take care.
Then and now, the lax or lack of regulation by Central Bankers on the loose lending practices of commercial banks and other financial institutions put paid to the Bull Runs of 1996 / 1997, and that of 2006 / 2007. The only difference is the twist.
Instead of the financial crisis starting from an emerging economy like Thailand back in 1997, it started on the other side of the world, in the most sophisticated and largest financial market, the US, ten years later. By coincidence, the stock markets started their often wild plunges in August of 1997 and that of 2007. Also by coincidence, my teacher, the Yi had given prior warnings of both decimations of stocks quoted on the Kuala Lumpur Stock Exchange.
If we go by indices, the Vietnamese stock exchange suffered the worst fall among the Asian markets. Its index has experienced a horrendous two thirds fall from its peak of 1170 points reached in March 2007, because of the change in sentiments and rampant inflation in that country. According to Yahoo Finance reports, the stock market upheavals started around October 2007 despite the communist government’s effort to keep it on track and continuing a non-stop decline since early May 2008, dealers said. The VN Index at the Ho Chi Minh Stock Exchange dropped by 5.54 points to close at 395.66 points on Wednesday, June 4, 2008.
Since October 2007 till now, while the Vietnamese stock market led the way, the Shanghai stock exchange index fell by a stomach churning 45%, Hang Seng fell 25%, and Bombay SEI fell 24% with the Singaporean, Japanese, New Zealand and Australian stock indices giving up between 17.5 to 20% of its previous markets capitalization. By comparison, the Malaysian, Taiwanese, Indonesian and South Korean stock indices fall were relatively mild – in between 12.5 % to 14%. (Remember my forewarnings in the related entries on ‘Stand not in the middle of the mountain’ and 'Missing the return' of these falls?)
In 1997, the biggest losers in terms of magnitude were those of low liners and second board counters in the KLSE. Some were hit by several limit downs effectively losing 70 to 95% of their market values within days. The only difference from spring 2007 till now is that these categories of stocks and others which had lost 70 to 95% of their market values at their peaks had almost a year to do so. Others include Centro Properties Group of Australia and Bear Stearns of the US, for example.
A bitter lesson learned from 1997 is that investors may think that stocks are cheap after a fall of 30 to 50% from their year highs. Stock prices would then slide lower after a small rebound – termed bear traps - since sentiments have changed; for the bull had already turned into a bear market. When foreign and/or local fund managers start selling down their substantial holdings for a reason or other, like those witnessed in 1997, small investors better learn not to buy unless they have boatloads of money to lose. (Think of declining stock prices of Centro Properties Group and Bear Stearns in 2007 and the first quarter of 2008.)
Goldman Sachs has recently recommended their clients to underweight or to reduce holdings of shares in several emerging Asian stock markets including that of Malaysia, for one reason or another. Looking at my Yi Chart for 2008, Goldman Sachs’ timing of the call is about right. Since their clients could move much slower than small fry.
Obviously the few readers, if any, who sold some of their stocks in the KLSE after my May 13, 2008 entry on ‘Raising cash levels’ could consider themselves lucky as the prices of quite a number of low liner stocks have fallen by 10 to 20%, if not more, since then. And we have exited the market before Goldman Sachs’ call.
How bad the KLSE will fare after Malaysia’s surprised and shocking 40% hike in fuel (gas) prices on June 5th remains to be seen. But no matter how badly local market stocks will fall this June because of surging inflation, soaring oil prices, or anything else, you ain’t seen nothing yet!
Some investors in the KLSE have recently resorted to seeking advice from Daoist deities and heavenly immortals (ShenXian). Apparently, the advice and hints given by the divinities is not dissimilar to my entry on May 13 and in this one. While the world’s best stock analysts had been proven wrong time and time again so far this year according to Bloomberg reports, there is no doubt that the Daoist gods and heavenly immortals already know what is going to happen in the second half of 2008 to the KLSE and perhaps to the global stock markets.
Therefore, I suggest regular readers cum investors in the KLSE to exercise extreme caution in the coming months. Of course there is nothing wrong with a bit of trading since stocks will rebound after sharp plunges, just try not to lose your shirt, the house you live in, your entire fortune, your life or whatever, okay?
Take care.
Tuesday, June 03, 2008
Was it fate?
This particular story of how a wise and renowned personality who had planned to save his second son but was thwarted by his own family may have something to do with fate.
The Daoists, Confucians and Buddhists can probably use it as a means to teach their respective doctrines since the story, taken from the Shiji, covers many aspects of life including that of loyalty, justice, diligence, philanthropy, wisdom, rule of law during the Spring and Autumn period, and why most of the time, children should listen carefully to their parents.
On the family aspect, there will be times when we think that our parents really do not know what they plan to do for their children. Being older and wiser, parents often do know especially where such plans are made based on knowing each of their children’s character and how they would deal with things.
Fathers can be said to be a bit more discerning than mothers in some ways, not because mothers are not wise, but mums perhaps more doting and/or soft hearted often easily succumb to the demands and antics of their children. (Think of the third line of Hexagram 37 Chia Ren / The Family)
Most loving parents keep their children’s best interests at heart. If you happen to have loving and wise parents, try not to be too headstrong having it your own way. Unless you have strong reasons or have prior experiences to believe otherwise, you have to learn to trust, if not revere, your parents’ judgment and actions.
Since Father’s day happens to fall this month, perhaps this entry on how an eminent ancient, Fan Li later known as Lord Chu of Tao tried his best to save a son of his but failed, is apt to show the times when a father knows best. Or was it fate? Read on.
“For more than twenty years Fan Li had toiled without sparing himself in the service of Gou Jian, advising the king till at last he overthrew Wu and avenged the disgrace of Kuaichi. When Gou Jian dispatched troops north of the River Huai to threaten Chi and Tsin, lorded it over all the central states and exhorted them to respect the House of Zhou, he became Lord Protector with Fan Li as his supreme commander.
After his return Fan Li realized that he was too prominent now for his own safety, for Gou Jian was a good companion in danger but not in time of peace. Sending a letter to Gou Jian, Fan Li gathered his jewels and precious possessions and together with his followers left Yue. Fan Li went by sea to Chi, where he changed his name and called himself Master Wine-skin. He worked hard with his sons as a farmer on the coast, and amassed considerable property. Soon he had tens of thousands. The men of Chi, knowing his great ability, made him their prime minister.
Then Fan Li said with a sigh, ‘For a private citizen to make thousands of pieces of gold or for an official to become a minister are the highest attainments of ordinary men; but no good can come of a long period of fame and nobility.’ So he returned the minister’s seal, gave all his money to his friends and neighbours and left quietly with his jewels to settle in Tao, a great commercial centre where a man could grow rich by trading. He now called himself Lord Chu of Tao. Here once more he and his sons tilled the soil, bred cattle, stored goods and sold them at the right season to make a ten percent profit. In a short time he had amassed tens of thousands again and his name was known throughout the land.
While in Tao, Lord Chu had a third son. When this boy grew up, the second son was arrested for murder in Chu.
‘It is right that a murderer should die,’ said Lord Chu. ‘But I have heard that the son of a wealthy family need not die on the execution ground.’ He ordered his youngest boy to go and make inquiries, packing one thousand yi of gold in sacks and loading these on an ox-cart. But as he was sending the young man off, his eldest son insisted on going instead.
When Lord Chu would not agree, his first-born said, ‘The eldest son of a family is the guardian of the house. Now my brother is charged with murder, yet you want to send my younger brother instead of me – I must be a bad son!’ he threatened to kill himself.
His mother put in, ‘Sending the youngest may still not save the second, while the eldest dies first. What use is that?’
So Lord Chu was forced to send his eldest son. He wrote a letter to his old friend Master Chuang and told his son, ‘On your arrival, leave the thousand yi of gold with Master Chuang to dispose of as he thinks fit. Mind you don’t argue with him!’
The eldest son set off, having added several hundred pieces of gold of his own. Upon reaching the Chu capital, he found that Master Chuang lived in the suburb in a very humble way, his gate choked with brambles. Still, he gave him the letter and gold as his father had told him.
‘You may go straight back,’ said Chuang. ‘Don’t stay here. And if your brother is released, don’t ask the reason.’
The eldest son withdrew but stayed on in the city, not calling upon Chuang but using the gold which he had brought separately to bribe a powerful noble of Chu.
While Master Chuang lived in a poor neighbourhood, the whole state knew that he was incorruptible and he was respected by everyone from the king downwards. He had no intention of keeping Lord Chu’s gold, but meant to return it as soon as he had succeeded.
Lord Chu’s eldest son did not know this, however, but thought Chuang rather lacking in discrimination.
Chuang had an audience with the king of Chu and told him that a certain star in a certain quarter of the heavens boded harm to the state. The king was advised to do good to avert danger. The king agreed and sent a man to seal up the treasury.
Then the noble told Lord Chu’s eldest son that the king was going to declare an amnesty. The eldest son reflected that if there was to be an amnesty his brother would be released anyhow, and all the gold given to Master Chuang would be wasted. So he went to see Chuang again.
Chuang was surprised to see him but knowing what he wanted, he told the young man to take the gold and leave.
The young man took the gold and left, very pleased with himself.
But Chuang, annoyed at being tricked by this youth, went back to the king and said, ‘Last time when I spoke of the stars, sir, you decided to avert bad luck by doing good. But now it is the talk of the town that the son of wealthy Lord Chu of Tao is in prison here for murder and his family has given your ministers substantial bribes. They say you are not declaring an amnesty out of goodness of your heart but for the sake of Lord Chu’s son.’
The king in his anger ordered the execution of Lord Chu’s second son and a general amnesty was proclaimed the next day. So the eldest son had to take back his brother’s corpse. When he reached home, his mother and the rest of the household mourned. Only Lord Chu laughed.
‘I knew he would kill his brother,’ he declared. ‘Not that he did not love him, he just could not help himself. He went through hard times with me when he was young, knows how difficult it is to make a living, and therefore hates parting with money. His younger brother has never seen me as otherwise than wealthy, riding in carriages or on fine horses to hunt the hare. Because he has no idea where money comes from, he is prodigal with it and never counts the cost. That is why I wanted to send him. But the eldest is incapable of that, and so he ended up killing his brother. This is the nature of things, not a cause for mourning. I have been waiting day and night for his corpse to be brought back.’ “
[Records of the Historian – HY and Gladys Yang]
Therefore try to respect your parents’ wishes and not to remonstrate too much. Unless you really know how to change the fate of self and others! For that you may need the guidance of the Yi.
The Daoists, Confucians and Buddhists can probably use it as a means to teach their respective doctrines since the story, taken from the Shiji, covers many aspects of life including that of loyalty, justice, diligence, philanthropy, wisdom, rule of law during the Spring and Autumn period, and why most of the time, children should listen carefully to their parents.
On the family aspect, there will be times when we think that our parents really do not know what they plan to do for their children. Being older and wiser, parents often do know especially where such plans are made based on knowing each of their children’s character and how they would deal with things.
Fathers can be said to be a bit more discerning than mothers in some ways, not because mothers are not wise, but mums perhaps more doting and/or soft hearted often easily succumb to the demands and antics of their children. (Think of the third line of Hexagram 37 Chia Ren / The Family)
Most loving parents keep their children’s best interests at heart. If you happen to have loving and wise parents, try not to be too headstrong having it your own way. Unless you have strong reasons or have prior experiences to believe otherwise, you have to learn to trust, if not revere, your parents’ judgment and actions.
Since Father’s day happens to fall this month, perhaps this entry on how an eminent ancient, Fan Li later known as Lord Chu of Tao tried his best to save a son of his but failed, is apt to show the times when a father knows best. Or was it fate? Read on.
“For more than twenty years Fan Li had toiled without sparing himself in the service of Gou Jian, advising the king till at last he overthrew Wu and avenged the disgrace of Kuaichi. When Gou Jian dispatched troops north of the River Huai to threaten Chi and Tsin, lorded it over all the central states and exhorted them to respect the House of Zhou, he became Lord Protector with Fan Li as his supreme commander.
After his return Fan Li realized that he was too prominent now for his own safety, for Gou Jian was a good companion in danger but not in time of peace. Sending a letter to Gou Jian, Fan Li gathered his jewels and precious possessions and together with his followers left Yue. Fan Li went by sea to Chi, where he changed his name and called himself Master Wine-skin. He worked hard with his sons as a farmer on the coast, and amassed considerable property. Soon he had tens of thousands. The men of Chi, knowing his great ability, made him their prime minister.
Then Fan Li said with a sigh, ‘For a private citizen to make thousands of pieces of gold or for an official to become a minister are the highest attainments of ordinary men; but no good can come of a long period of fame and nobility.’ So he returned the minister’s seal, gave all his money to his friends and neighbours and left quietly with his jewels to settle in Tao, a great commercial centre where a man could grow rich by trading. He now called himself Lord Chu of Tao. Here once more he and his sons tilled the soil, bred cattle, stored goods and sold them at the right season to make a ten percent profit. In a short time he had amassed tens of thousands again and his name was known throughout the land.
While in Tao, Lord Chu had a third son. When this boy grew up, the second son was arrested for murder in Chu.
‘It is right that a murderer should die,’ said Lord Chu. ‘But I have heard that the son of a wealthy family need not die on the execution ground.’ He ordered his youngest boy to go and make inquiries, packing one thousand yi of gold in sacks and loading these on an ox-cart. But as he was sending the young man off, his eldest son insisted on going instead.
When Lord Chu would not agree, his first-born said, ‘The eldest son of a family is the guardian of the house. Now my brother is charged with murder, yet you want to send my younger brother instead of me – I must be a bad son!’ he threatened to kill himself.
His mother put in, ‘Sending the youngest may still not save the second, while the eldest dies first. What use is that?’
So Lord Chu was forced to send his eldest son. He wrote a letter to his old friend Master Chuang and told his son, ‘On your arrival, leave the thousand yi of gold with Master Chuang to dispose of as he thinks fit. Mind you don’t argue with him!’
The eldest son set off, having added several hundred pieces of gold of his own. Upon reaching the Chu capital, he found that Master Chuang lived in the suburb in a very humble way, his gate choked with brambles. Still, he gave him the letter and gold as his father had told him.
‘You may go straight back,’ said Chuang. ‘Don’t stay here. And if your brother is released, don’t ask the reason.’
The eldest son withdrew but stayed on in the city, not calling upon Chuang but using the gold which he had brought separately to bribe a powerful noble of Chu.
While Master Chuang lived in a poor neighbourhood, the whole state knew that he was incorruptible and he was respected by everyone from the king downwards. He had no intention of keeping Lord Chu’s gold, but meant to return it as soon as he had succeeded.
Lord Chu’s eldest son did not know this, however, but thought Chuang rather lacking in discrimination.
Chuang had an audience with the king of Chu and told him that a certain star in a certain quarter of the heavens boded harm to the state. The king was advised to do good to avert danger. The king agreed and sent a man to seal up the treasury.
Then the noble told Lord Chu’s eldest son that the king was going to declare an amnesty. The eldest son reflected that if there was to be an amnesty his brother would be released anyhow, and all the gold given to Master Chuang would be wasted. So he went to see Chuang again.
Chuang was surprised to see him but knowing what he wanted, he told the young man to take the gold and leave.
The young man took the gold and left, very pleased with himself.
But Chuang, annoyed at being tricked by this youth, went back to the king and said, ‘Last time when I spoke of the stars, sir, you decided to avert bad luck by doing good. But now it is the talk of the town that the son of wealthy Lord Chu of Tao is in prison here for murder and his family has given your ministers substantial bribes. They say you are not declaring an amnesty out of goodness of your heart but for the sake of Lord Chu’s son.’
The king in his anger ordered the execution of Lord Chu’s second son and a general amnesty was proclaimed the next day. So the eldest son had to take back his brother’s corpse. When he reached home, his mother and the rest of the household mourned. Only Lord Chu laughed.
‘I knew he would kill his brother,’ he declared. ‘Not that he did not love him, he just could not help himself. He went through hard times with me when he was young, knows how difficult it is to make a living, and therefore hates parting with money. His younger brother has never seen me as otherwise than wealthy, riding in carriages or on fine horses to hunt the hare. Because he has no idea where money comes from, he is prodigal with it and never counts the cost. That is why I wanted to send him. But the eldest is incapable of that, and so he ended up killing his brother. This is the nature of things, not a cause for mourning. I have been waiting day and night for his corpse to be brought back.’ “
[Records of the Historian – HY and Gladys Yang]
Therefore try to respect your parents’ wishes and not to remonstrate too much. Unless you really know how to change the fate of self and others! For that you may need the guidance of the Yi.
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