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.

Super stock returns: ROE/PTB vs ROE vs PTB (Part 1)

The following article is a good read for all Fundamental Analysts out there!

By TEH HOOI LING SENIOR CORRESPONDENT (Source: Business Times)

LAST week's article - In Search Of Super Returns In Stocks - struck a chord with readers and investors out there, judging by the number of emails I received.
For those who missed it, basically I screened all the stocks listed on the Singapore Exchange from 1990 until 2006 based on their return on equity and price-to-book ratio.
I then grouped the stocks into 10 portfolios with equal numbers of stocks, starting from those with the highest ratio when we divided ROE by price-to-book, to the lowest. This screening process can help us identify some mispriced stocks.

A company that is able to generate a high return on equity - one that exceeds its cost of equity - should trade at a higher price than the book value of its equity. And vice versa. But if a company generates a relatively high ROE, yet is trading at a relatively low price-to-book ratio (PTB), careful analysis is warranted.

There could be legitimate reasons for the low valuation. For example, the earnings were due to exceptional items. If not, the stock may be under-priced.
But without any detailed analysis other than simply grouping stocks based on ROE/PTB, I found that investors can actually generate super returns.

By investing in the 10 per cent of stocks with the highest ROE/PTB every year between 1990 and 2006, and holding each portfolio for a year, one could have turned $100 into $34,000 over the past 17 years. That's a compounded return of 41 per cent a year. All the calculations exclude transaction costs.

If we assume that the investor had lost 10 per cent of the portfolio value to transaction costs every year, the return is still a respectable 27 per cent a year. But in absolute terms the portfolio value today, at $5,678, is significantly less than the $34,000 which excludes transaction costs.

From the above, we can see that ROE/PTB is a good screening tool.

Super stock returns: ROE/PTB vs ROE vs PTB (Part 2)

By TEH HOOI LING SENIOR CORRESPONDENT

Separate rankings

If we pick stocks just based on ROE or just based on PTB, do we get results that are as good?
I decided to test this based on the same set of data last week. This time around, I ranked stocks based purely on their ROEs first. Again, I grouped them into 10 portfolios, with the first 10 per cent or first decile being stocks with the lowest ROEs. The 10th decile was made up of stocks with the highest ROEs.

As can be seen from the above chart, screening stocks using just their ROE still yields good returns. $100 invested in the highest ROE portfolio every year would grow to $8,752 today. That's a compounded annual return of 30 per cent.

But it would lag the performance of the basket of stocks with high ROE yet low PTB.
For both the first and second screening, I excluded loss-making companies.
Next, I ranked the stocks based on their PTB ratios. For this, I did not remove loss-making companies. The first decile is made up of stocks with the lowest PTB ratios. Some could even have negative PTB ratios. And the 10th decile consists of stocks with high PTB ratios.
As you can see from the third chart, there is a clear distinction in performance as well. The lower the PTB, the higher the return. And conversely, the higher the PTB, the lower the return. The lowest PTB stocks generated about 15 per cent return a year, while the highest PTB stocks chalked up a 7.3 per cent loss a year.

However, the returns of portfolio ranked purely on PTB ratio lagged those screened by ROE/PTB or purely on ROE.
One of the reasons for the under-performance could be the continued poor performance of loss-making companies. Other studies previously have found PTB to be the best predictor stock performance. Particularly so when there is a turnaround in the economy. This is also evident in five portfolios that The Business Times tracks every Monday.
But it takes guts to go against the crowd and buy into downtrodden stocks.

So perhaps, the ROE/PTB is a more comfortable approach for many. And as the results above indicated, it is rather rewarding as well.
It does, however, require a little more work. The use of ROE/PTB takes into consideration not only the underlying earnings capacity of a company, but also how much of that has been factored into its stock price.
So if a company can rake in good earnings and good growth and its share price has fully reflected that, it may not be a good stock to buy. What one wants is good earnings growth that is not recognised by the market.

Variations

A reader pointed out that with some simplifications, ROE is earnings per share (EPS) divided by net tangible assets (NTA). And PTB is price per share divided by NTA.
Dividing the former by the latter gives us EPS divided by price per share, which is earnings yield. So stocks with high ROE/PTB are also those with high earnings yield.
And we could go one step further. Earnings yield is the inverse of price-earnings (PE) ratio. So stocks with high earnings yield are also low PE stocks.

'Notwithstanding the mathematical accuracy, ROE relative to value is an interesting approach to investing,' he wrote. 'I have been using something similar for some time to good effect (ROE divided by PE coupled with some other criteria like minimum dividend payout and low debt to equity).

'A variation was also suggested in the book The Little Book That Beats The Market by Joel Greenblatt which uses ROE divided by return on invested capital (to correct for the use of excessive financial leverage). He even has a website www.magicformulainvesting.com to automatically select US stocks that meet the criteria.'

The reader added that the most comprehensive book he has come across on this is What Works On Wall Street by James P O'Shaughnessy.

So anyway, for the many who have asked, I have generated a table (above right) - using data from Bloomberg - showing 30 stocks with high ROE/PTB. Some of the numbers may be skewed by one-off items, so some analysis is advised before any action is taken.

Stock Review - YHI International

REVIEW OF Q107 FINANCIAL RESULTS

You can obtain the financial results here.

The Group’s turnover for Q1'07 (of S$96.0 mil) was S$0.2 mil or 0.2% higher than the S$95.8 mil recorded in Q1'06. Turnover from the manufacturing business increased by ~S$8.6 mil or 36.6% from S$23.5 mil in Q1'06 to S$32.1 mil in Q1'07. The increase was primarily due to increased output from additional production capacity in Suzhou, PRC.

Turnover from the distribution business decreased by approximately S$8.4 mil or 11.6% from S$72.3 mil in Q106 to S$63.9 million in Q107. The decrease was primarily due to exclusion of sales from Yokohama tyres in the PRC region as a result of formation of a joint venture entity in which the Group has a 49% stake. Distribution and administrative expenses were lower in Q1'07 as compared to Q1\'06 mainly due to lower advertising and promotional expenses and lower allowance for impairment of doubtful receivables.

Finance costs in Q1'07 were higher as compared to Q1'06 attributable to higher borrowing costs incurred.Total Group’s GPM Q1\'07 decreased by about 1.8% as compared to Q1'06 attributable to lower gross margin from manufacturing business which was mainly affected by the rising aluminum prices and also operating losses due to diseconomies of scale in the Malaysia plant which is currently operating on a single production line. The Group’s PBT increased by ~S$0.3 million or 3.7% from S$6.8 million in Q1'06 to S$7.1 mil in Q1'07. Total current assets increased by ~S$13.1 mil due to increase in receivables of ~S$12.5 million, and in inventories of ~S$4.4 mil together with a reduction of S$3.5 mil in cash. The increase in trade receivables was due to timing differences and this is in line with normal trading activities.

The increase in inventories was primarily due to higher stockholdings in view of price increases from suppliers. The reduction in cash was primarily due to working capital changes. The increase in available-for-sale financial assets of ~S$0.4 mil was due to additional investments in Hangzhou Yokohama Tire Co Ltd. The increase in investment in associated companies of ~S$0.9 mil was due to share of profits contributed by the associates in OZ S.p.A and Yokohoma Tire (Shanghai) Sales Co Ltd.

The increase in current liabilities of ~S$8.5 million was primarily due to increase in trade payables of ~S$2.6 million from higher trading activities and an increase of ~S$5.0 million in current bank borrowings. Our cash flow for the period showed a net decrease in cash of about S$4.2 million in Q1'07 as compared to a net decrease of ~S$8.0 mil in the same period last year primarily due to lower capital expenditure spendings.

Disclosure Policy

This policy is valid from 12 October 2007.

This blog is a personal blog written and edited by me.

This blog accepts forms of cash advertising, sponsorship, paid insertions or other forms of compensation.

This blog abides by word of mouth marketing standards. We believe in honesty of relationship, opinion and identity. The compensation received may influence the advertising content, topics or posts made in this blog. That content, advertising space or post will be clearly identified as paid or sponsored content.

The owner(s) of this blog is compensated to provide opinion on products, services, websites and various other topics. Even though the owner(s) of this blog receives compensation for our posts or advertisements, we always give our honest opinions, findings, beliefs, or experiences on those topics or products. The views and opinions expressed on this blog are purely the bloggers' own. Any product claim, statistic, quote or other representation about a product or service should be verified with the manufacturer, provider or party in question.

This blog does contain content which might present a conflict of interest. This content will always be identified.

To get your own policy, go to http://www.disclosurepolicy.org/