Self Mutilating Management Style

I had run into my old friend, Sam, the other day.  It was nice to see him after almost 14 years and to learn that he was doing well, I mean sort of, until recently. During the casual bantering, I sensed that he wanted to unload something on me and I slowly prodded him.

"Say Sam, so has the recent financial turmoil affected you in any way?"

Keeping a straight face, he lamented that his department had outright overdone itself for its 2008 budget.  Before I forget, Sam works in the financial sector and in middle management.  He puffed up his chest and went on proudly to say that despite the crises going around, his department had achieved almost an astounding 200% above the budget given to them. 

Before I could congratulate him and drill him the quantum in terms of months of his seemingly huge bonus, just as quickly, his chest deflated and lowered his eyes and in near whisper, said that his firm on the whole, did not fare too well at all.

Worried, I then asked him if his job was in jeopardy or his firm was going to have huge write downs?

Well, he said that his job was secure. There are no obscene write downs, only that compared year on year, his firm had a marginal 10% increase in profits due to some hits taken.  I assured him that in current scenarios, keeping in the black is an achievement in itself reminding him the age old adage,"if there are no losses, then it is a win already".

He lamented that at last year closing, as a result of the fantastic budget that they had turned in, his superior had told the department not to worry too much about the crisis and that they had not been affected and that they should carry on their planned activities or purchases.  In fact his superior had mentioned that he had already put up the bonus figures and it was not turned down and they would in fact, should be expecting their package to be doubled in 2009. Wow, Sam thought then, quickly counting his eggs.  The next day, he called his broker and arranged to sign the Sales Agreement for the property that he was eyeing on because of the so called announcement from his boss.

Alas, it was not be, as bad news started coming out in January & February. By middle February, Sam learnt that certain units had in fact taken hits and pulled down the aggregate.  Therefore, to "help" out, he was informed by his superior that his 2009 package would be cut by 55%. Ahem, that's a little drastic by any standards, don't you think?.  In fact, at the end, his 2009 package will be even lesser than his 2008 package by 30%.

Then his nightmares began as he now would have severe problems paying for his new house.  Also, he had not  sold off his current house which was losing value rapidly in the declining market.

I tried comforting him and said that at least he still had his job.  I reminded him that a lot of people are jobless and he should be at least thankful for that. On top of that, he still had quite a nice bonus compared to others who had none.

He then rebutted me and said that I didn't understand.  Sam then went on to reveal that in  actuality his management had already given a promise in 2004 that whichever section does well, their bonuses will not be affected by other sections that do not do well. Also, the bonus was to be paid in December rather than the traditional March.  In 2004, that promise was made known verbally to his team members from their superior as a result of a hit taken by one of the units. Bank wide, every one's package were slashed even when it had nothing to do with them.  Then, a lot of talented persons left the firm because of that incident and the promise was given soon after that, to stem the flow of talented people leaving. 

In the 2004 incident, the provision was for a 100% and Sam had countered his management that if, somehow they managed to recover a percentage of it, then could their package be re-adjusted in accordance to the recovery or a percentage of it. He felt that if  all of them had sacrificed greatly, to the tune of 40%, to help out the other section/bank and if they somehow managed to recover something, the management could show its sincerity by doing something for them in appreciation.  According to him, his management never did come back to him on that point. Eventually, they managed to recover about 58% of the provision but they, the staff, were never thanked by having their package adjusted that year.   

It seems that management are a forgetful bunch as they had totally forgotten their promise and doing things like before.  

In fact Sam felt outraged, as, to begin with, they were give a ridiculously high budget to achieve for 2008 and they over-achieved it by almost 3 times.  Even as a third party, I couldn't but help to feel a little outraged myself.

His new package was worse off then the previous year and he was totally relying on it for his new house.

What really made Sam livid was that the promise was totally forgotten and the way the decision was handed down.  The least he felt the management should have done was to at least apologise first as that alone would soothe a lot of ruffled feathers.

Trying to change the subject, I asked him how was business so far in 2009?

He replied that he was now "on" the market. Once there is an opportunity, he would jump ship as, once bitten, twice why and he has been had for thrice.

Also he said, being made fools a few times, he said that his team, himself included, are not as hardworking as previously as they had already heard some units were not doing well and may have taken some hits.  They now only plan to satisfy the fantastically high budget and no more.  So there goes their 2010 package as well and maybe all future years packages as well. I am sure it will not be smooth sailing all the way and bumps are a given.  So what does Sam and his colleagues really have to look out for?

We soon parted ways and promising to keep in touch and telephone numbers being exchanged, but I doubt it.  Maybe I will bump into him another time and re-experience meeting an old acquaintance, and feel warm and fuzzy inside.

I felt sorry for Sam and his predicament.  I also feel even sorrier for his company as a result of their own doing, they will certainly lose many valuable and talented people, and very soon too.

A totally personal view of gold fluctuations in 2009

Normally, at the beginning of each new year, I will make a personal forecast of the likely gold range.



However, due to constraints of accessibility to charting software and real time feed, my forecast for 2009 has been delayed somewhat.



Having pored over the charts for almost a day, it would seem that the range for this year is, if it comes true, it will be between 680 on the low side and 1300 on the high side. That being said, it does not mean that the top is at 1300, but rather, there is some possibility of reaching there this year. Usually, it exceeds my "tops" by around 15%. I know most people after hearing that will be totally sceptical. Who can imagine prices heading there?



Gold prices are in a dilemma at the moment as it is not sure yet whether it is going up or coming down. Or, that's what the hedge funds expect us to think. On one hand, most commodities should be weakening right now as they are in a deflationary phase and keeping a lid on prices. However, looking at the dire nature of the world economy, is a strong enough reason in itself to cause the other hand to push it higher still.

There are 2 important windows in the near term. The first window will be the week of 26 January. If prices can maintain above 830 for the week will be telling as it would be deemed to have gained sufficient inherent strength in the short term to seek further gains. The second window, will of course be more compelling and it happens the week of 6 March. If prices can maintain above 855, will portend to prices being able to sustain the rally for a longer period of time, like say, between 2 to 4 months time frame.

As with any rally, there will be obstacles placed in its path. Nearby resistance will be 890 levels and then thereafter 908. If these have been cleared successfully, it should easily open up back to 980. For now, that is how I view the market and of course, it will be influenced by 101 things that is yet to come and I could change my views from time to time.

Please note that the above is only my personal view and must not be the deciding factor of what your strategy will be. If you can not decide on your own accord, then it is better not to do anything rather then doing something on others hearsay.

Profiteers & Punishment

It never fails to amaze me the depths to which fellow humans could descend to, for the sake of riches that can never be taken with us when we go. Often, it leaves a trail of catastrophic destruction and thousands, even millions of innocent persons could be affected.


I am not a saint and if I want to have money, I prefer to earn it the honest way, through my own personal brilliance or diligence. According to the sayings, all of us will get our chance. The only problem is, when the time comes, will we take it or prefer to forgo the risks. Being in my line of work, I do get to see more opportunities than the average man. Sometimes, giving a pass to these opportunities is not my personal choice but a forced choice.




At least 50% of the world's dire problems seem to stem from this group of profiteers, who seem to have no conscience or soul. Prime examples of these will be the group in charge at San Lu Milk, the Madoff scam, and the sub-prime perpetrators. The repercussions of their actions will long be continued to affect all of us in some way or other.




While one group will be saying that, we the innocent affected, had in some way helped or even encouraged these profiteers. We the discerning buyers, did we not choose to save a few pennies and opted for the cheapest brands of milk? We are so savvy (greedy) that, did normal yielding investments appeal to us or we had preferred to park our funds in all the supposedly high yielding funds, investments? To add to our burden, when we we saving a few pennies or when we were getting higher yields, did we not spread the good news to our friends? So all of us, each in our own ways, had also contributed to the success of the profiteers, thereby bringing greater harm to ourselves.




For the other group, they tend to blame everyone else but themselves. They feel that these harbingers should be severely punished and putting these people to death should also be one of the options. For the perpetrators at San Lu, it was felt that death maybe even too good for them and they should actually be sentenced to death by melamine tainted milk. So that they could also suffer as many of their victims had suffered before their demise. That is, if they were found guilty. Then for those that caused irreparable financial disasters, they should be made into slaves and their next three generations as well to repay back to society the great damage they had done.


The world will continue to see more good and bad. Although devastating, the human spirit will somehow manage to always rebound and put it all behind us. That is the miracle of our resilience. The world will continue along its path and eventually, all these will be behind us one day and we will recover back to the point as if we were never affected by these incidents in the first place. Most of the time, when something that seems too good to be true, take a moment back and carefully reflect if at all that is possible without future devastation, is too good to be true. Not all will be duds and very rarely do we come across true gems as there are some genuine bargains out there. However, in my experience, true gems rarely occur and one off kind of things, not something that is offered to the masses.