How much can 10 Lots be worth?

I am wondering, if one is able to be alloted 10 lots of RH Energy after balloting for 70 lots, how much would it be worth just 1 day after its listing? Here's the breakdown:

On the day of its listing (11/7/07), without the benefit of hindsight, if one has sold 5 lots at $0.75, it translates easily to a gross profit of $2,150 or a net profit of ~$2,105.

On the 2nd day of trading (12/7/07), again w/o the benefit of hindsight, if one would sell the remaining 5 lots at $0.905, it translates to another cool gross profit of 2,925 or a net profit of ~$2,880.

Thus, total net profit that one could have made from just 2 days of trading is: ~$4,985!!! Or a Net Profit Return of 156% from an initial invest of just $3,201. The conservative stock price surge to $0.905 was 283% over its issue price of $0.32.

For those who think there's nothing, I'm just talking about 10 lots here, mind you...

I had no idea whether speculators would further drive the stock up...

It turns out Rationalism was thrown out of the window that day and they did.

That's what 10 lots would be worth with a HPR of 2 days...

IPO Review - RH Energy

To Subscribe or Not to Subscribe - That is the question.

And so here I present my fundamental analysis (based on Prospectus dated 2 July 07).

General Info:
Business: Full suite of integrated customised design, engineering, procurement, construction, installation and commissioning services to the oil and gas pipeline and oil companies.
3 Principal activities: (a) Equipment Integration services (contribute to 81% of Revenue)
(b) Manufacture & Procurement services
(c) Consultancy Services
Issue Price: S$0.32

(1) EPS Growth (based on SGD denomination) for past 3 years should be > 25%:
683% from FY2004 - FY2005; and
59.6% from FY2005 - FY2006

(2) Return-on-Equity should be > 30%:
ROE (FY2004): 11.5%;
ROE (FY2005): 47.5%;
ROE (FY2006): 55%
Increasing for the past 3 years.

(3) Current Assets to Current Liabilities Ratio should be > 2
CA/CL (FY2006): 2.15
Company should be able to meet its short term obligations.
Moreoever, there is positive working capital of US$7.9M

(4) Debt-to-Equity Ratio should be less than 1
D/E (FY2006): 0.43

(5) Price-to-Earnings Ratio
Current P/E (based on Issue Price): 10.7X
15X P/E: $0.45 (Target price)

(6) Net Asset Value
NAV (FY2006): 3.92 cents (SGD)
NAV Premium (based on Issue Price): 716%

Issues/Concerns:
(1) Dilution (Pg.43) - Substantial shareholders and Pre-IPO investors paid only 4.95 cents and 11.16 cents per share respectively, so they are sure to sell once the Shares are listed. They are however subjected to a moratorium of 6 months, so that gives us some time for retail investors like us to play around with.
(2) MD&A > FY2006 Revenue VS FY2005 Revenue (Pg.57) - As a result of a strategy change, the Company's contract size decreased in FY2006 while no. of projects more than doubled to 71 (from 33), and this subsequently produced a drop in overall Revenue of 30.8%. However, this also contributed to higher net profits (67% increase) in FY2006 due to higher margins (and lower costs). My concern is: Is this sustainable? The Company doubled its no. of contracts in FY2006, will the Company be able to increase its no. of contracts in FY2007 and beyond (esp. since this strategy is based on quantity rather than contract size per contract)?
(3) Being in the oil industry, RH stock price will undoubtly (but irrationally, to me at least) track the NYMEX sweet crude oil futures which current stands at US$72.81. My take is that as long as prices remain above $70 on its listing day, the stock price will rise.

Recommendation: Subscribe/Buy

Is the property bubble going to burst anytime soon?

10 years after the Asian financial crisis, Asia's real estate markets are bubbling again, led by Singapore. Given the key role overheated property played in that crisis, it bears asking, to what extent the current exuberance is a cause for concern this time around.

According to the Global Property Guide, Singapore experienced Asia's highest residential property price increases last year, with housing prices rising 9.5% in real terms (although this masks higher percentage increases in prime market segments). Quite likely, it will be a similar story 2007 as well. Real estate markets in China, India, Korea and the Philippines have also witnessed sharp run ups - and in those countries too, prime segments have seen double digit price increases in percentage terms. Indeed, more and more real estate funds and other institutional investors are pouring money into Asian property. Some element of speculative activity is also evident.

How much should we worry about all this? In a study on Asia's real estate markets in April, the IMF took a generally sanguine view - albeit with qualifications. It pointed out that while property prices have been rising more rapidly than inflation, most Asian countries 'are not experiencing unusually rapid housing price hikes'. It noted that in many cases, the increases follow on the heels of extended declines (about eight years, in the case of Singapore). Moreover, housing prices have not risen exceptionally, compared with other asset prices. On average, housing price increases have run ahead of income gains in about half the 12 countries covered, but these average prices might mask affordability problems for some segments of the population.

Apart from income gains, there are other reasons for property price run-ups: the proliferation of mortgage products and a rise in mortgage credit - especially in China and India; higher non-speculative foreign demand for housing and commercial space (which is true in Singapore as well) as well as an element of speculative capital inflows - though less than that in the 1990s.
Given that the run-up in real estate prices represents a rebound after several years of decline or stagnation, it does not, as yet, create cause for concern. The fact that institutional investors are far more active players in Asia's (and particularly Singapore's) property markets this time than they were in the 1990s is also reassuring. They introduce an element of stability and resilience because they have greater financial holding power than individuals, and are less likely to engage in panic selling.

However, having said all that, policymakers and banking regulators across the region need to be vigilant to ensure that lending standards do not become overly relaxed and that housing lenders are adequately provisioned against what the IMF calls 'a reasonable worst-case scenario of falling house prices'. The degree of household indebtedness - particularly in those segments of the population who are vulnerable to income shocks - is also an indicator that bears watching. But as of now, it is difficult to make the case that there are sufficient danger-signs to warrant government intervention in the market with the aim of bringing property prices down.

Fifteen Dollars' Worth of Smug

Totally agree with Daniel on this issue - The whole charitable act doesn't even cost the law firm anything extra!

And I agree with the following statement too - "Only in this new gilded age could a $15 lunch for a 23-year-old student be seen as a self-abnegating act." Converted to Singapore dollars, that is S$22.50, mind you! Some young law punk could be eating ribeye steak or a japanese buffet spread with that kind of money and still proudly proclaim: "This is my sacrifice, so that my company can give S$67 to charity..."

What a New York law firm's charity-lunch program reveals about America.
By Daniel Gross (Source: http://www.slate.com/id/2170561/nav/tap3/)

Sometimes it takes a brilliant, carefully crafted novel, such as Anthony Trollope's The Way We Live Now or Tom Wolfe's The Bonfire of the Vanities, to capture a culture of money, ambition, and corporate avarice. And sometimes it takes just a few paragraphs, as with this 224-word article by Louise Kramer (fourth item down) in the Sunday New York Times business section, which describes a philanthropic trend at big New York law firms. Under the Chow for Charity program, now in its fifth year, summer associates at the giant law firm Simpson Thacher can elect not to enjoy a $60 per person lunch with a firm lawyer. Instead, if they choose to eat with the lawyer at a more down-scale joint and spend $15 or less each, the firm will donate the difference ($45 per person) to a nonprofit legal group like Legal Aid.

How does this small piece neatly encapsulate several important trends?

1) A Touch of Conscience.
These days, any company that markets to or needs to hire well-educated proto-yuppies must take bold action on topics of concern ranging from global warming to poverty. Or, if it doesn't actually want to take the action, it must at least appear to be concerned. Doing good isn't a serious commitment or an end in itself. Rather, it's an ornament, like a wall sconce, that makes consumers or employees feel good about themselves and the company. The Times paraphrases a recruiter who notes that such efforts "are part of an emerging trend to add a touch of social conscience to lavish recruiting practices for top students in a competitive market." The greatest desideratum of firms is to undertake publicity-generating good works that don't require them to spend extra money or change the way they do business. Buy some renewable energy, by all means, but continue to maintain that fleet of corporate jets. Chow for Charity is a perfect case, since it doesn't cost the firm a dime.

2. The New Gilded Age. This is a golden age for corporations, and for the professional firms that service them, such as Simpson Thacher. According to the American Lawyer, Simpson racked up profits of $2.5 million per partner in 2006. (Given that, loudly trumpeting a program that generates about $50,000 in charitable donations seems a little gauche.) But this style of philanthropy neatly encapsulates the frequent obliviousness of the very rich, and of the publications that cater to them, to the nation's glaring income inequality. (Last week, the New York Times ran largely unironic articles about $60,000 beds and $225,000 parking spots.) Only in this new gilded age could a $15 lunch for a 23-year-old student be seen as a self-abnegating act. I can assure you that it is quite easy to gorge yourself on excellent food in New York for $15—a fine all-you-can-eat Indian buffet, a sublime pastrami sandwich from Katz's Deli, four street-side schawarmas. And plenty of New Yorkers would be thrilled to have $15 a day to spend on food. In the recent congressional food stamp challenge, several solons tried, without much success, to live for a week on the average food stamp budget: $3 a day.

3) Defining Public Service Down.
For more and more of us, public service is something that other people do—other people with lower incomes, smaller apartments, and less nice stuff. (For the Iraq war version of this trend, see National Review columnist Jonah Goldberg.) The Times article quotes a recruiter who says law firms do this sort of charity because their recruits are really interested in community work. Now, law school is very expensive, and students take on large sums of debt to pay for it. So it may well be that many of Simpson Thacher's summer associates are just working there for the summer so they can go toil as community organizers upon graduation without excessive debt loads. But most are there because law firms such as Simpson pay massive salaries ($160,000 to start) and provide entree to even more-lucrative gigs at consulting firms, private-equity firms, and investment banks. Today, thanks to the benevolence of Simpson Thacher, you can pursue community work by taking your lunch at Pret a Manger instead of Le Bernardin.

4) It's Good To Be the King.
In this economy, management and owners of capital always win. The partners of law firms have been among the most fortunate owners in this economy. They don't face competition from China. They mark up the labor of junior associates and then pass on the costs associated with that labor—copying, car services, long-distance phone calls—to their deep-pocketed clients. Summer associates are already a great deal for law firms—their hours are billed out to clients at hourly rates of between $200 and $300, but the firms don't have to pay any benefits. Not surprisingly, this charitable endeavor presents the partners with yet another opportunity to profit. "Lawyers like having lunch with a summer associate because it means a faster meal, not the typical time-sapping 1.5 hours," the article notes. Translation: It's a double-winner when kids pick the cheap meals over leisurely lunches. First, senior lawyers don't have to spend as much time feigning interest in the ambitions of 23-year-olds. And it leaves one more hour of daylight in which they can bill out their own time—and that of the community-minded summer associates.

Trading With Confidence: How You Can Develop More Confidence In Your Trades

Confidence is contagious. So is lack of confidence.
~Vince Lombardi

Have you ever opened a magazine and seen a full-page ad of some luminary sporting a "milk mustache"? I like the question, too. "Got Milk?" Everyone from Wentworth Miller to Jessica Alba has appeared on a print or TV ad with the milk mustache and the famous tag line. The ads insinuate that the success of these stars is attributed to drinking the nutritious liquid.

So, if we lined up the finest traders and had to put a tag line under their picture, what would it be? There is one characteristic that distinguishes the "haves" from the "have-nots" - a quality that's decidedly different for a top trader when he's at the height of his game versus when he's struggling (all traders have times of struggle)… What would the tag line be? Got Confidence?

Does trading success develop confidence, or is it the other way around? It's a fair question, but probably not the "right" one. A better question would be, "Have you ever seen a consistently profitable trader who lacked confidence?" Or, "When you have had a string of trading excellence, did you feel more or less confident than usual?" Here's why trading with confidence is crucial to your trading success, and how you can get it by focusing on three key elements…

Forming A Foundation For Confident Trading
As applied to the world of trading, let's call confidence the ability to act without reservation. Confidence is developed when key underlying characteristics have been put into place. One needs to have his trading psychology in place, a strategy or system that is proven, and execution proficiency.
When these three elements come together, they form a foundation upon which a trader can act with great confidence. Let's look at each of them, and see what steps you can take to help put them in place…

Confidence In Your Personal Trading Psychology
We'll start with the most important item - your personal trading psychology. To have confidence when you trade, you will need to develop a keen sense of who you are and how you will react to both common and extraordinary trading situations.
For example, how will you feel after losing six trades in a row? How will this affect your performance on trade seven of this string? What will be your plan to develop the patience, discipline and other attributes needed to provide consistent performance while trading? If you are not completely satisfied with your psychological state of readiness, your confidence as a trader will constantly be in doubt.

Confidence That Your Trading Strategy Works
The second area that you need to develop is your trading system or strategy. While this is an area that traders spend most of their time on, I find that they spend very little time developing confidence that the strategy works. This takes time and patience.

Can you state succinctly why your system works? Do you know what types of market conditions are best for your system's performance? In what types of markets does it perform poorly? What kind of losing streaks can you expect every month or quarter with your strategy? What size drawdowns will these loosing streaks produce? Too often, people buy a strategy or quickly develop one over a weekend and then start trading it without getting to know why, how and when the system works. So be prepared to spend the time required to really know the "nuts and bolts" of your trading strategy.

Confidence In Your Own Definitive Trading Plan
Once you have developed your trading psychology, and taken care to build a strategy that you know works, you need to be able to execute it consistently. There is a psychological element to this part of your trading (many traders have trouble "pulling the trigger"), but there are also some key logistics that you need to take care of in order to trade with confidence.

If you are worried that your trading software won't work or that you don't understand it, or if you're concerned that power outages and Internet issues will keep you from executing your exits, or if you think that the market makers and specialists are "out to get you," then you are definitely going to have trouble trading with confidence. The tool that can help you overcome these concerns is a well-defined trading plan that includes a "disaster plan" and a good understanding of how your trades are executed.

Confidence is not an end in itself, but it is a desired result of having a comprehensive trading process that works. If you struggle with achieving a state of confident trading, I suggest that you dissect the three areas that we talked about in this post. If you find one or more areas that need upgrades, then put together a plan to increase your mastery in that area - a psychology investment plan or a system upgrade plan, etc. Look toward improving your confidence to improve your trading.

Managing Risk

Lessons From Warren Buffett: Two Ways To Avoid Getting Burned By "Competition-Style" Investing

By D. R. Barton, Jr.
Quantitative Analyst, Mt. Vernon Research

When this guy speaks, economists, investors, and the financial media across the globe sit up and take notice. He's one of the most well-known, successful, and respected investors in the world - and with a personal fortune of $44 billion, one of the wealthiest.

So it's not surprising that his investment decisions almost always make news. Most of them simply notch up more wealth for him, his shareholders, and the folks who take heed of him.

I'm talking about Mr. Warren Buffett, the 76-year old brains behind Berkshire Hathaway. But some people are questioning the merit of one of his recent decisions. Are they right, will we be learning lessons from Warren Buffett, or will he prevail? Let's take a look…

"The Apprentice"… Warren Buffett Style

What would you do with $5 billion in two years?
At the annual Berkshire Hathaway shareholder meeting earlier this month, Buffett surprised attendees by announcing that he will search for his successor by jumping on the reality show bandwagon.

Buffett will select three or four top candidates for the position and give them $5 billion to manage for two years. The winner of the $5 billion challenge will get the nod to run Berkshire Hathaway.

On the surface, it sounds like a nifty idea. And while it won't be on TV (at least not yet), Buffett's "reality show" has the makings of great drama. But if you look a bit deeper, this type of selection strategy has some serious flaws, because of the mistakes and rash decisions that such "competition-style" investing can trigger. And it's got some important lessons for us, too…

Win At All Costs? Not So Fast…

Warren Buffett's selection process has obviously caught the eye of the media, most notably in Austan Goolsbee's New York Times article, where he likens Buffett's tactics to Donald Trump's reality show, "The Apprentice."

There's certainly one aspect of this that is a big concern: Is a "win at all costs" reality show strategy the appropriate way to invest or choose an investment manager - especially one running the massive Berkshire Hathaway operation?
After all, if one of the contestants makes $3 more (on a $5 billion investment portfolio) over the course of the two years, is that significant? But the key issue here is that this type of competition easily encourages participants to take undue risks in order to be first past the post.

For the record, I'm sure Mr. Buffett and his staff has taken these issues (and plenty more) into consideration. But investors would do well to avoid the pitfalls inherent with competition-style investing. Here are some things to watch out to make sure you don't fall into one of these traps.
Monitor Your Risk When Seeking Higher Returns

If you want higher returns, you usually have to take on a little more risk to get them. But one of the most prevalent investing concerns is that investors don't fully understand these risks often dazzled by the potential upside and ignoring the downside when evaluating opportunities. Stay disciplined.

Don't Increase Your Risk Just To Make Pre-Determined Performance Goals

It's one of the classic mutual fund manager mistakes. They're notorious for taking inordinate risks to attract new clients or make a certain amount of money. If a fund has a chance to make a top 10 list at the end of the year, they know that such acclaim and publicity will lead to much greater capital inflows - with higher fees and bonuses to follow. That means managers can be tempted to take bigger risks with existing investors' money. If the risk works out, they reap some fat rewards. But if the wheels fall off, the fund will lose capital and credibility.

If you find your investment returns lagging your goal for any given month, quarter, or year, don't fall into the trap of hiking up your risk to make up the shortfall. Doing so, just to get to an arbitrary performance mark, will more than likely put you on the fast-track to lose money, not make it.

Basics in Equities Investing

There are basically 2 schools of thought when it comes to investing in Equities - Technical Analysis & Fundamental Analysis. What are they?

Technical Analysis (TA) is the study of historical price movements through the use of charts. The 3 main charts that most Technical Analysts use are the Line chart, Bar chart and Candlesticks. Personally, I prefer the use of Candlesticks for its more descriptive visuals. Technical analysts look for patterns in the charts and using the basic assumption that "History repeats itself" to forecast future price movements. They look for signals or indicators within graphs to tell them if a stock will continue its upward/downward trend or is heading towards a reversal. Proponents of TA will tell you that it is simple to use, signals can be quickly detected and the investor psychology is incorporated within the analysis. Some arguments against TA are that the indicators/signals are highly subjective to the user and that the value of indicative values will change over time (since they are dependent on a large number of variables)

Fundamental Analysis (FA), on the other hand, is the determination of a company's underlying value by analysing the company's financial statements, business model, its future prospects, management team and internal controls. Fundamental Analysts invest on the assumption that "an undervalued stock will always catch up to its underlying value in the future". Proponents of FA will tell you that since financial ratios such as Net-Asset-Value (NAV), Earnings-per-Share (EPS) and Return-on-Equity (ROE) are rigorously calculated, estimate of a company's underlying value will not differ too far from such tangible quantifications. Criticisms of FA are that even if the undervalued stock will rise to its underlying value, investors will never know when this will happen (via TA).

If you ask me, I suggest the use of both analysis - Use FA to identify which stocks to invest in, and use TA to determine when to do so (Timing).

Happy investing!

The Commonplace Temptation

Starting on the 22nd of July 2007, I will dedicate 1 post each week to my Christian Faith. Here is the first. The words in bold below are so very true to me. Is it the same for you?

Source: http://blogs.polvero.com/index.php?id=b&name=JesuSpeaks&post=2602

The Commonplace Temptation

Matthew 4:1-11
(1) Then was Jesus led up of the spirit into the wilderness to be tempted of the devil.
(2) And when he had fasted forty days and forty nights, he was afterward hungry.
(3) And when the tempter came to him, he said, If thou be the Son of God, command that these stones be made bread.
(4) But he answered and said, It is written, Man shall not live by bread alone, but by every word that proceedeth out of the mouth of God.
(5) Then the devil taketh him up into the holy city, and setteth him on a pinnacle of the temple,(6) And saith unto him, If thou be the Son of God, cast thyself down: for it is written, He shall give his angels charge concerning thee: and in their hands they shall bear thee up, lest at any time thou dash thy foot against a stone.
(7) Jesus said unto him, It is written again, Thou shalt not tempt the Lord thy God.
(8) Again, the devil taketh him up into an exceeding high mountain, and showeth him all the kingdoms of the world, and the glory of them;
(9) And saith unto him, All these things will I give thee, if thou wilt fall down and worship me.(10) Then saith Jesus unto him, Get thee hence, Satan: for it is written, Thou shalt worship the Lord thy God, and him only shalt thou serve.
(11) Then the devil leaveth him, and, behold, angels came and ministered unto him.

I've read this scripture so many times before as I'm sure many of you have. And I'm sure that you've heard a number of sermons and teachings on why exactly Jesus was victorious against the enemy at this point. There are, however, key things that God has pointed out to me that make Jesus successful here. Simply quoting the Word is not enough and is not what caused Jesus to walk out victoriously.

The first thing we must realize is that Jesus was led up by the Spirit into the wilderness. Romans 8:13 teaches us that if we live by the dictates of the flesh, we'll die. But if, however, we live through the Spirit, knowing when and how to tell our flesh no and bring it into subjection, we shall surely live. In the previous chapter of Matthew, recognize that Jesus had just undergone a profound spiritual experience. I've come to recognize in my own life that anytime a profound spiritual experience occurs, I am tested on it almost immediately. In order to live a holy, righteous, resurrected life, we must, as Jesus said, "suffer now." It's important to take note of the dialogue between God and Satan in Job 1. (If you haven't read Job 1, I encourage you to do so). The Spirit of God will never take you where it can't keep you.

The second thing we realize is that Jesus flowed right from one spiritual experience into the next (Matthew 1:2). He went from being baptized, to the Spirit descending on Him, to hearing God declare is pleasure in Him, to being led by the Spirit into the wilderness for temptation, to a forty day fast. While the fast is important, I want to draw your attention to something else: is there an area in your life in which you know you are weak? After forty days without food, Jesus was weak in the area of hunger and the enemy took complete advantage of that. If there's an area in which you are weak, it's important to note how the enemy tries to influence. The enemy didn't command Jesus to turn stones into bread. No. He simply made a "harmless" suggestion. It was the equivalent of saying, "Well Jesus, I know you've fasted and you're hungry now. Your human. You have to eat. Why don't you just, well, I don't know, turn some stones into bread so you can eat? I know you're hungry." Now it's important to realize that Jesus replied confidently with the Word. There had to be some Word in Him for Him to give out. Not only did there have to be some Word in there to get out, His life had to match that which was in Him, which it had up until this point. This is an important life lesson for every believer.

The third thing to notice is that the enemy took Jesus to a holy place (or rather, Jesus of His own accord went along with the enemy to a holy place). A ploy, no doubt that would remind Him of the profound spiritual growth He had just undergone in the wilderness and the deeper spiritual connection He had with His Father at this point. It was this that the enemy was hoping would distract Jesus just enough to hear him out. Again, the enemy suggested something like, "Well Jesus, I know you just came off this spiritual high and you're feeling closer to God than ever and rightfully so! You've just fasted and prayed and everything. You and God are close. So, why don't you let Him show you just how great He is and just how much He loves and cares for you? Come on! Jump! He said that He'd send His angels to catch you so you're not harmed. Come on, Jesus! What do you have to lose?" Although this logic sounded great, Jesus was unmoved by it and undistracted by the holy place. And again, He let the Word that was in Him come back out of Him to fight the enemy off.

The fourth thing we notice is that the enemy becomes desperate. The enemy has studied mankind since it's inception, so he knows how he can get to the flesh side of man and what makes it tick. Indulgence makes it tick, and if it doesn't, surely making you believe that God owes you something will. If that fails, offer to tickle that flesh--offer riches. The enemy told Jesus as they were upon a high mountain, "I'll give you everything you see! Anything you want--anything--it's yours! Just name it. Just serve me. I mean, you only live once! Enjoy your life now! Worry about God and your future later!" And Jesus, unwilling to give His praise and worship to anyone but God commanded the enemy to leave Him, again quoting the Word that was in Him. And when the enemy left him--when he fleed because Jesus resisted, not of His own strength, power, or accord, but by the Word in His heart and lifestyle--God sent ministering angels to Jesus.

The enemy knows you. He knows what makes man tick. He knows how to get him. If he can just suggest one thought long enough for you to roll it around in your mind, even for a second, then he knows he has a good chance at having you. He has a good chance in ruining your progress with God. But notice, if we're persistently stubborn in the Word with the enemy, he will flee. I encourage you: stay strong in the Lord and the power of His might and may your lifestyle reflect the Word you read.

"Heavenly Father,Lord, I thank You! I praise You for the Word which is continually changing my heart, mind, actions, and lifestyle. Lord, give me the strength and allow me to walk in the strength at the appropriate time to resist the enemy that he might flee from me. Lord, I'm determined to go all the way with You, no matter what anyone says! AMEN!"

One of the most charismatic person I know - Michael Jordan

This first video reminds me that there's nothing wrong with mistakes or failures; It's just part of the journey. The important thing is to learn from them and move on. Never repeat the same mistake. Persevere and you will succeed in the end.





If these are Jordan's own words, then I am like him in this respect. I always want people to challenge me. I enjoy proving my critics wrong. Their silence is reward to my ears.

Relationship Management in Private Banking

The explosive growth in wealth throughout Asia adds to the fact that the region now accounts for one-in-five ultra high net worth individuals. It has fuelled a war for private banking talent across Asia. Competition for private bankers and clients in Asia's main financial capitals - Singapore and Hong Kong - will intensify as the number of private banks providing differentiated products and services increases.

In 2005, the rate of growth of the industry was 12-14% with some private banks reporting growth of 20-25%. This trend is expected to continue with the increase of individual's wealth. While poaching talent from competitors appears to be the priority for many private banks, the main game is still to offer the best service for one's clients. The ability of private bankers to develop long-term relationships with their clients will determine ultimately who can achieve succeed. Private banking clients look for relationships based on trust, a sound understanding of their investment needs and constraints, and an ability to link those needs to personal life goals within the constraints. With private banking products becoming increasingly commoditised, it is the relationship management abilities, not the technical know-how, which will differentiate high-performing private bankers from the mediocre. As competition intensifies, private bankers must be able to distinguish their offerings.

My personal experience in banking has shown that many private bankers are unable to answer the most important client question of all: 'Why should I hire you as my private banker out of the other thousand choices?' Banker training programmes that sharpen client relationship skills will lead to increased referrals from existing clients and greater share of wallet, while laying the foundation for 'trusted advisor' status. Poaching may help private banks achieve scale in the short-run, but only an investment in training and development (esp. in the area of relationship management) can ensure the company's long-term success.