Christmas Song for 2008

You'd better watch out
You'd better not cry
You'd better keep cash
I'm telling you why:
Recession is coming to town.

It's hitting you once,
It's hitting you twice
It doesn't care if you've been careful and wise
Recession is coming to town

It's worthless if you've got shares
It's worthless if you've got bonds
It's safe when you've got cash in hand
So keep cash for goodness sake, HEY

You'd better watch out
You'd better not cry
You'd better keep cash
I'm telling you why:
Recession is coming to town!

Finance products are confusing
Finance products are so vague
The banks make you bear the cost of risk
So keep out for goodness sake, OH

You'd better watch out
You'd better not cry
You'd better keep cash
I'm telling you why:
Recession is coming to town.

OPR cuts 0.25%

It means that i am going to pay less for interest of my housing loan, but also means that my FD interest also drop.

From The Star:

PETALING JAYA: Bank Negara has cut its benchmark Overnight Policy Rate (OPR) by 25 basis points to 3.25% from 3.50%, and signalled it was ready to cut the rate further.

This was the first rate cut in over five years. The move, which can be considered well-timed as the economy slows, will result in a lower cost of funds for banks. This, in turn, brings down the cost of borrowing for consumers.

To inject more liquidity into the banking system, Bank Negara also cut the statutory reserve requirement (SRR) for banking institutions for the first time in a decade - from 4% to 3.5% - effective Dec 1. Read more .......


For Bank Negara reports click here

An Act of Coward

photo from Kwong Wah

Only coward will do that. Anything wrong with the signboard? Narrow minded!!!

GEORGE TOWN: Two signboards with directions in Bahasa Malaysia and Arabic were defaced with red paint, barely 48 hours after they were put up at Lebuh Acheh on Friday.

Try Qi Gong

If Yoga is not allow to practice by Malaysian muslim brother & sister, then maybe they can practice Qi Gong from China instead on India, to live healthy in this Boleh-Land. I believe Qi Gong will not influence muslim to change their faith, unless some one from lacal university can prove it will, again..... as you know, this is Boleh-Land!!!!

Crude Oil Below USD 50

Crude oil closed at USD 49.62 yesterday, so is Shahrir still insist to put the minimum fuel price of RM1.92/liter? Fair to us when the actual price is below RM1.62/liter. I don't mine if government want to recover some "loss" due to the subsidy they paid to us, but not setting the minimum selling price. What is crude oil drop to USD 40 per barrel?

Ka Chuan Resigns

Since "Kankong" combination become the new leaders in MCA, MCA never has a peaceful time. With open quarrel between Ong and Chua as Chua seem to be neglected in the party though he is 2nd man. Now Ka Chuan resigns as minister, what is next?

They need more time to talk......

10% discount for night riders at PLUS

Good news for night riders at PLUS. It is between 12am till 7am. Read more details in Malaysiakini report. But to travel to work seem still too early unless you wanna sacrify your sleep and avoid the jam! Why not start the discount after 8pm to encourage people to work more while able to avoid peak hour jam between 5 - 8pm.


Passenger car owners will now enjoy a 10 percent discount for traveling between midnight and 7am on the North-South Expressway (Plus) and North-South Expressway Central Link (Elite).

At a joint press conference by Plus and the Works Department this morning, it was also announced that during the festive season, motorist traveling during the same non-peak midnight-7am period would receive an additional 10-percent discount.

A six-day additional discount period will take effect during festive seasons like Hari Raya Aidilfitri, Chinese New Year, Deepavali and Christmas.

It was also announced that users of the two highways who spend more than RM200 would be given an additional five percent rebate. This is, however, limited to Touch N' Go card holders and Smart Tag users.

The new system will take effect from Jan 1, 2009 and end in Dec 31, 2010.

南北大道公司（PLUS）今日与工程部联合召开新闻发布会，宣布3项优惠给予上述两条大道的轻型车辆或私家车主：

1）轻型车辆（一级轿车）在凌晨12点到早上7点的非高峰时段，可以获得10%过路费折扣。

此优惠只限2009年1月1日到2010年12月31日。

2）4大佳节期间，包括开斋节、华人新年、屠妖节及圣诞节期间，从凌晨12点到早上7点的非高峰时段使用大道的轻型车辆，将额外获得另外10%的过路费折扣。

此优惠只限2009年1月1日到2010年12月31日，处于大道公司所择定的6天佳节期间。

3）每月至少使用200令吉的大道使用者，将会获得5%的过路费折扣。

此优惠只限向南北大道公司登记的顾客，从2009年1月1日落实，对象是“一触即通”卡和精明通行卡（Smart Tag）。

Highway contracts to be declassified

Finally it happens, after the 308 General Election, after Mr Samy lost his Sg Siput seat, after BN suffered the greatest loss. Read more on MalaysiaKini.


All highway concession contracts, except for the KL-Putrajaya Expressway (KLPE), will be declassified, said Works Minister Mohd Zin Mohamad.

MCPXSpeaking at a press conference this morning at the Works Department headquarters in Kuala Lumpur, Mohd Zin said the cabinet decided on the matter on Oct 17.

Following this, the government managed to obtain an agreement on the declassification from all highway operators except Maju Expressway Bhd, which manages the KLPE

Asked if Maju Expressway had refused to comply with the cabinet directive, Mohd Zin said he was unsure, adding that the company had yet to reply.

He assured that the declassification would take place by Jan 1 next year at the latest. However, it has been undecided if members of the public would have to buy the documents or would be able to read it for free.

Opposition parties have often criticised the government for the clandestine nature of the highway agreements and leaked documents have often pointed to ‘lop-sided' contracts which benefited concession holders.

Lampung, Sumatra (2)

Day 2:

Start my busy travelling schedule. Wait up at 5am as i still used to the Malaysia time, Sumatra and Jawa is one hour earlier than Malaysia. Surf some net, checking my email. Go to lunch at 7 am and left hotel at 7.45am. It is a nice and peaceful hotel, Sheraton. However, to enter the hotel area, cars need to be scanned for any bomb threat.


The journey took 3 hr to reach the site and 3 hour is equivalent to <100km superb over taking skill, i think the journey will took more than 4 hr then.


Spent some time at site, eating groundnuts and mandarine oranges while auditing. Then go to bath under the hot sun for hour, checking the ponds, bioreactor and get to know how is soya plant look like.


Finished the audit and took another 3 hour journey back to city. Took our dinner at hotel, sea foods!


Night live in Lampung? Not really know, but i think the city is not really alive at night as to compare to Jakarta.

At least i saw the Poorest and the Richest, great different in wealth distribution. Imagine you need to sell 22 kg (~ 5,000 rupiah) of ubi kayu to enable you to buy a High-5 type of bread while in Jakarta, people are eating a 100,000 Rupiah dinner which is equivalent to > 1/9 of total income for rural folks in a month.

Lampung, Sumatra

Still wondering in Lampung, Sumatra and will fly to Jakarta on Thursday evening flight. The travelling schedule is killingn me.

Day 1:
From my Serdang house, took my taxi at 8.20am, boarding at 10.45am and reached Jakarta international airport 2 hour later (12.00 pm Indonesia time). Took a shutter bus to domestic airport, FOC. Wait for Sri Wijaya air for Lampung, Sumatra at 4.40pm. In the airport, a lot of kids asking for shoes polishing services, i means they are young kids, less than 10 maybe, not going to school, or too poor for school. Also there are people selling buaya L**C***, that is the word he used when approaching us.

Reached Lampung 25 min later and jammed all the way to city (40 min). The driver has a special skill, he will never stop overtaking vehicles infront of him, no matter is uphill, downhill, left or right corners, "double line"...... Superb, but just kesian the motor bike drivers, always kena squeze left and right. Furthermore, these bikes always carry baby with them and drive very slow while the cars are farking fast.

Free shutter bus
5,200 rupiah only = RM 1.80
waiting for my transit flight
From Jakarta to Sumatra

Crude Oil Below USD 60

Crude Oil today below USD 60 per barrel at USD 58+, so are we expecting another round of petrol price reduction in this mid November (end of this week)? A BIG one?

Wait & See, the ball is now with our Cakap-Tak-Serupa-Bikin-minister.

Off to Jakarta & Lampung, Sumatra

I will fly to Jakarta later 10.45am and transit to Lampung, Sumatra in the noon and will spend 3 days there. Shall be back to Jakarta on Thursday evening, meeting on Friday and fly back to KL at night.

What a tiring trip, imagine just back from Sabah days ago. Anyway, i am a bit excited to be truth since this will be my 1st trip to Jakarta, a BIG city compared to KL in term of population, not sure about facilities, let me check it out dude. Any pesanan from you guys?

Photos - Around my house

Every time i go back to hometown at Batu Ferringhi, i will take a lot of photos from insects till the building structures as i know soon this will become a memory only. But somehow, it still not happen yet. My kampung supposed to be cleared out and high end condo/bungalow will be built. Maybe again & again the economic crisis slowing down to process (since i was in Uni time). For my own reason, i hope this will not happen....... Batu Ferringhi somehow need to preserve its original style, the kampung style......

Cousin's Wedding

One of my triplet cousin just married last week (31st Oct Dinner, 1st Nov Ceremony)in Penang. Congratulation to her. My HH also very excited for this trip back to Penang where he can played with the cats and behave like a kampung boy. Somehow we don't have time for the hiking that i want to do. Next time la.

RPK Freed

Congratulation to RPK and it is a vistory to all Malaysian except BN. In the same time Anwar's case will continue to be heard in Sessions Court.

In the mean time, more groups are asking Syed Hamid to resign, as abusing of power!

At Tawau now

Off to Tawau this afternoon for a stakeholder presentation and shall be back to KL Friday night. Had my dinner at one of the seafood restaurant........ See the foods i ate!

In these troubled times do you hold stocks or cash?

From The Star:

the past few weeks, as a result of the sharp plummet on the stock market, some investors regret not selling their stocks early as almost all of their stocks have been incurring huge losses.

However, the market recovery over the past few days caused some investors to again regret — not buying stocks when the market hit the bottom.

The decision to hold more cash or stocks is one of the most difficult decisions to make.

According to a study by Gary P. Brinson, L. Randolph Hood and Gilbert L. Beebower in 1986, 95% of the variance of fund returns was the result of the asset allocation decision.

Hence, the right asset allocation between cash and stocks plays a very important role in determining the returns of a portfolio.

In this article, we will look into two key strategies in asset allocation, namely the constant mix (CM) and the constant proportion portfolio insurance (CPPI) strategy.

The key principle behind the CM strategy is to buy stocks when the market drops and sell them when the market recovers.

As for the CPPI strategy, it is the reverse, which is to sell when the market plunges and buy when it recovers.

We should continue selling stocks until the portfolio drops near our pre-set floor level. Once the market touches our floor level, we will hold all cash and no stocks.


Under normal market conditions, the CM strategy is an excellent tool for rebalancing our portfolio.

This strategy requires us to rebalance our portfolio based on a constant mix, where we set a constant ratio of stocks to total assets.

Assuming we have only two asset classes, namely stocks and cash, we will maintain the desired invested portion in our portfolio regardless of market conditions.

If we have a portfolio value of RM100,000 and intend to maintain a stocks to total asset ratio of 60%, we invest RM60,000 in stocks and hold RM40,000 cash.

If the overall market drops by 10%, our stocks will drop by RM6,000 (10% of RM60,000) to RM54,000. Now, our portfolio will be RM94,000 (RM54,000 + RM40,000 cash)

Our invested portion will drop to 57.5% (RM54,000 of stocks divided by our new portfolio value of RM94,000).

In order to maintain a 60% investment, we need to have an invested portion of RM56,400 (0.6 x RM94,000).

So we will use RM2,400 in cash to buy stocks (RM56,400 - RM54,000).

After this portfolio rebalancing, our new invested portions will be RM56,400 in stocks and RM37,600.in cash.

This will bring the invested portion back to 60% with the total portfolio value of RM94,000.

The CM strategy will cause us to buy more stocks when the market drops. We will be able to acquire a lot of quality stocks at cheap prices.

However, we will continue buying more stocks while the overall market continues to plunge.

During a bear market, we will see our portfolio shrink in value as our earlier purchase price may get cheaper.

Unfortunately, not many investors can tolerate a drop in their portfolio value.

The CPPI strategy is appropriate for use in either a super bull or a super bear market.

It is not suitable for use on normal market periods as we need to sell stocks when the market drops and buy when the market is on the way up.

We may end up buying at high prices and selling them at low.

Under the CPPI strategy, the portion of money in stocks is based on the formula that:

Money in stock = M x (TA - Floor) Where M = stock investment multiplier (proportion), TA = total assets held in the portfolio, Floor = the minimum allowable portfolio value (zero risk level) and TA - Floor = cushion or funds that can be put at risk.

Assuming we have a portfolio value of RM100,000, if we set our minimum allowable value (Floor) = RM70,000 and stock multiplier (M) = 2, we will invest RM60,000 in stocks [2 x (RM100,000 – RM70,000)].

If the overall market drops by 10%, our stocks will drop by RM6,000 (10% of RM60,000) to RM54,000. Our portfolio will be RM94,000 (RM54,000 + RM40,000 cash).

Our invested portion needs to be reduced to RM48,000 as 2 x (RM94,000 – RM70,000).

We need to dispose of RM6,000 worth of stocks (RM54,000 – RM48,000) and bring the cash level to RM46,000.

Following this portfolio rebalancing, the portion invested in stock is RM48,000 with cash of RM46,000.

The total portfolio value is RM94,000.

We will continue to sell stocks and hold more cash as the market drops.

We will stop investing in stocks when our total portfolio hits the floor level (TA – Floor= 0).

The strength of the CPPI strategy is that our lowest portfolio value at any point in time will be RM70,000 whereas the CM strategy may cause our portfolio value to drop much lower if the market crashes further.

In conclusion, the choice of strategy will depend on the overall economic outlook.

Unless we know our economy will not drop into recession, otherwise — based on our current situation, the CPPI strategy has the advantage of protecting our minimum portfolio value at the floor level.


Ooi Kok Hwa is an investment adviser licensed by Securities Commission and managing partner of MRR Consulting.

Obama The President of USA

Obama won against McCain and will become the next President of America. He is the 1st African-American president of the United States.

Current votes 338 vs 156.

When can Malaysia have this kind of moment of joy where everybody is colour-blind!