Education 2.0 in Singapore: The Bitzu’istic Bamboo Innovator

Education 2.0 in Singapore: The Bitzu’istic Bamboo Innovator

By KEE Koon Boon

12 March 2013

“Can my kid watch how you milk cows?”

“Can my kid see how you print the newspaper?”

As a young boy, Gil Shwed was taken on learning adventure trips by his loving mother – to dairy farm, to printing house, including to his father’s office in 1972 where he saw a computer for the first time when he was five years old. Enlivened, and grounded in the values of sacrificial love since young, Gil pursued excellence in an “education” in computer skills by signing himself up for an afternoon computer class in a religious community center at nine, embarking on a summer job coding for a language-translation software company at twelve, and taking computer science classes at the Hebrew University while in high school.

While his high-profiled peers boisterously chased fashionable dollar-seeking career strategies with their well-endowed grades and holistic CV, Gil diligently and silently persisted in building a computer security software, an idea that he had cooked up during his four-year mandatory military conscript in which he strung together military computer networks in a way that would allow some users access to confidential materials while denying access to others. After leaving the army service, Gil, together with his two friends, Shlomo Kramer and Marius Nacht, would work together on borrowed computers in the cramped and hot apartment that belongs to Kramer’s grandmother without much extrinsic reward, and without the psychological security of a “proper” real job, until 1 a.m., then comforted themselves with companionship and Japanese food or went for a drink on the beach.

Gil’s “education” was made market-relevant when plugged into the unique self-organized ecosystem that constantly searches for and supports innovative ideas and new products. A VC fim shared in Gil’s vision and gave him technical and business assistance. The trio unveiled their product at a computer show in Las Vegas in 1994 and won the best software award. That product was called FireWall and their flagship product has never been breached. Their company, Check Point Software Technologies, went on to list in NASDAQ in 1996 and its market capitalization had since multiplied 12-folds to around US$10 billion presently.

“Education” with that bitzu’ism quality was at the heart of the pioneering ethos that connected not only the trio together but also into the global marketplace, adding on to the social capital that higher “education” brings to society when resilient “Bamboo Innovators” are created. A bitzu’ist is a Hebrew word that loosely translates to “pragmatist” with a resilient quality, like the bamboo that bend but not break in the wildest storms that snapped the mighty resisting oak trees. The bitzu’ist is “the builder, the irrigator, the pilot, the gunrunner, the settler” – all rolled together into one.

Gil thinks of his home country Israel as a “startup nation”: “We managed to create a country from zero. We’ve had an entrepreneurial spirit for over 100 years. Brought in immigrants. Fed them. Created a legal system. Built cities. Set up farms in the desert. Invented techniques like drip irrigation. One thing that really helps us here is that we don’t have a local market. We are thinking of customers who are 6,000+ miles away from home.” Adversity, like necessity, breeds inventiveness. Surrounded by hostile neighbors that makes regional trade impossible and endowed with little natural resources, Israel has the highest density of start-ups in the world with one for every 1,800 Israelis from its population base of 7.4 million with seventy different nationalities as Israelis think globally to create international products. These physical constraints ironically positioned Israel for the global turn toward knowledge- and innovation-based economies and companies. After the US, Israel has more companies listed on the NASDAQ than any other country in the world, including the entire European continent, as well as India, China, Korea, Singapore combined. These agile startups darting between the legs of multinational monsters are hungry global champions, with some long-term entrepreneurs who looked not for the tempting quick flips but stayed the painful course to build and last for the long-term, such as Gil’s Check Point, scaling up to become world leaders, brick by brick.

Warren Buffett, the world’s greatest investor and the apostle of risk aversion, broke his decades-long record of not buying any foreign company with the purchase of an 80 percent stake in Iscar Metalworking, the world’s second largest maker of cutting tools which is founded in 1952 in a wooden garage, for US$4 billion in May 2006 – seemingly vulnerable assets in war-torn Israel. Buffett’s view is that if Iscar’s facilities are bombed, it can go build another plant. The plant does not represent the value of the company. It is the “intangible” – the talent of the management, the international base of loyal customers, and the brand – that constitute Iscar’s value. As Iscar’s founder Stef Wertheimer puts it firmly, “We do not miss a single shipment. For our customers around the world, there was no war.” By responding to threats this way, Wertheimer and his team have transformed the very dangers that may make Israel seem risky into evidence of Israel’s inviolable assets. Israelis, by making their economy and their business reputation both a matter of national pride and a measure of national steadfastness, have created for foreign investors a confidence in Israel’s ability to honor, or even surpass, its commitments.

What is striking about Israel is that the development of human capital is the key to growing the economy. Its “education” was made relevant because it was plugged into the unique ecosystem such that the combination of sacrifices and competence has a performance-based outlet to be converted into longer-term relevance for the global marketplace in building a “Bamboo Innovator” company such as Check Point.

In the growth of Singapore 1.0 since its self-governance, the system in education is rightly about forging a meritocratic and highly-competitive “standardized” education system to lift the technical competence and social mobility of the masses to the plateau where they will be able to get the rays of the sun emitted by the multinational companies in its export-oriented economic strategies. This is augmented by higher valued-added services from logistics, shipping and maritime support to legal, finance and accounting, generating high-wages to beat inflationary pressures. This was masterful strategic grand-positioning amidst the geopolitical forces of power in the “hard times” era to meet the exigencies of the global forces in order for the population to stay employed and survive.

In other words, Education 1.0 is about plugging in to the needs of capable MNCs, who, in turn, connect the small, open economy of Singapore to the real marketplace. Along the way, short-term transactional-based tangible wealth was collected amongst the individuals through industriousness in work, and passed on when invested in private assets that have the potential for long-term capital appreciation, such as property, to foster a sense of ownership and stability. As the late Dr Goh Keng Swee, the indefatigable economic architect of Singapore, elucidated: “The way to better life was through hard work, first in schools… and then on the job in the work place. Diligence, education and skills will create wealth.”

Yet, the highly-skilled workforce is not able to house whatever of their “intangibles” in know-how into building and even owning “Bamboo Innovators”. The capitalization of tangible “profits” that accrue from these intangible know-how are housed in and owned by the MNCs vehicles. In investing lingo terms, a high-salaried worker in MNC has a “Price-Earnings” (PE) ratio of one while a MNC can have a PE value of 20 times. A productive “Bamboo” worker is one who, when a wind blows away his or her MNC title and position, can still remain resilient innovators to create value because they have that indestructible “intangible” quality. Interestingly, it is the hollow “emptiness” in its center – the “intangibles” – that gives the bamboo great strength and flexibility in a raging storm. In addition, there are growing concerns expressed by the MNCs that the Singapore workforce lacks the initiative and innovativeness that the knowledge-based industries desire, imposing a barrier to a breakthrough in wages and productivity.

Making further economic and social advancements from this blockage by putting guile ahead of industriousness, their “retained earnings” are deployed into scalping, speculative and hedonic activities which can be socially destabilizing. Their accumulated wealth and assets for its own sake evolve to a sense of entitlement, festering into a dangerous liability that erodes character, moral values, and social cohesion. And healing attempts or reform through efforts in “character education” and “creative thinking” alone is not only difficult but also decidedly off-track. As economist David Landes puts it aptly, nothing is more dilutive to drive and ambition than a sense of entitlement, ingraining in the minds of the elites and the population that they are superior, which reduces their “need to learn and do”. This kind of distortion makes an economy inherently uncompetitive.

Thus, even though America consistently ranked far below Singapore and the East Asian nations in educational metrics such as standardized test scores or prizes won in math and science competitions, the U.S. “education ecosystem” with that bitzu’ism quality continuously enabled the emergence of long-term entrepreneurs with a sense of mission, such as Sam Walton (Wal-Mart), Warren Buffett and Charlie Munger (Berkshire Hathaway), Bill Gates (Microsoft), Steve Jobs (Apple), Ray Kroc (McDonald’s), Jim Sinegal (Costco), Howard Schultz (Starbucks), Jeff Bezos (Amazon), the “Google guys”, and so on.

Instead of getting diminishing marginal returns from repeating the strategy of Education 1.0 that treats educational achievements as instrumental, the education system in this “complex uncertain times” era requires enabling the population to grope and reach directly into the global marketplace, to be sensitive and alert to existing anomalies and paradigms of how things ought to function and behave in the marketplace. It is this sensitiveness and alertness that lead to their discovery through their strong conviction and belief that they can do it significantly better by creating “Bamboo Innovators”. A nation of long-term entrepreneurs who are able to burst asunder the limits of existing knowledge to find and exploit the niches of relative advantage when they introduced their new innovations to positively create value for the customers and society.

At the heart of the educational curricula in any discipline and subject is for the educators and teachers to connect and sensitive the students to the chaotic global marketplace. The disengaged students, upon seeing the reflection of their foggy and incompatible images in this grand mirror, would see inside themselves, embarking on a self-discovery and self-learning journey or Work to equip themselves with both the knowledge and character to once again see themselves more clearly in this mirror. They will experience the uncanny: the raw sensual data reaching their eyes before and after are the same, but with the pertinent framework of meaning, the chaotic features and anomalies in the marketplace are visible. Visible for them to experience the burning sense of mission to sacrifice in undertaking the lifelong Work of building durable enterprises with compulsion, persistence and a sense of urgency. The sacrifices and, at times, pain, can break the heart, but doing anything else would be unimaginable. There will be no idle time to waste for every moment has a strategic importance. Sensitized students will be constantly attentive to the possibility that they may be mistaken, and they will be enlivened by a sense of responsibility towards the Work, internalizing the well-working of the Work as an object of passionate concern and personal committment. This is an ethical virtue.

And being rich or poor is irrelevant in the bitzu’istic education ecosystem without that delusive and destructive chase towards instrumental educational achievements, such as creating “input” in “grades” or “output” in “checklist-based holistic CV” or “high graduation salary”, for it is now plugged into the marketplace. This experience of the uncanny does not reveal itself to idle spectators; to “get it” is an ethical virtue. The poor can beat the rich because they can be more virtuous. Both the poor and the rich can rise through the marketplace by staying productive as diligent builders of enduring enterprises, “Bamboo Innovators” such as Check Point which remain relevant no matter how the uncertain world around us changes as they hold fast to the resilient principles in value creation.

In a rendition of Dr Goh’s view on the spirit of education as both “a search for truth” and “the way to better life”, the mother of purpose and progress in Education 2.0 is to center around the understanding of how and why resilient companies continue to create value in uncertain and difficult times – and educating students to dare greatly to become “Bamboo Innovators” at an individual level like Gil Shwed in building enduring creations can originate that “indestructible intangible” quality which they carry within themselves as an inner compass to navigate the world. After all, as former Israeli President Shimon Peres puts it, “the most careful thing is to dare”, which also articulates the pioneering definition of the Singaporean trait of kiasuism to scale new heights, just like the expression “the bamboo blossoms at ever higher nodes”.

GOD 1, MAMMON 0; Religious-based family firms were common in the west in the 19th century, and with the rise of the new economies faith is once again driving businesses



If you stick around long enough, most things will come back into fashion. Until recently, the family-owned firm with a religious ethos would be regarded in fashionable western business schools as vaguely 19th century, conjuring images of earnest Quakers in sober attire, building model villages and fretting over the character of the working man.

Pioneers such as Joseph Rowntree and George Cadbury are known for their philanthropy and their faith; it is often overlooked that they were brilliant businessmen. By the late 20th century and early 21st, good works had been nationalised by the state and philanthropy was seen as dated. The “modern” way of doing business had become secular, orientated around financial data and aggressively rational – or at least, rational-sounding.

The only value was maximising shareholder value, and it was assumed that deviation from this quest would lead only to loss of focus and waste. In recent years, however, the absence of values other than profit maximisation – standardised around the ludicrously short-term indicator of the quarterly return – has been exposed as catastrophically unfit for purpose, in business and economic terms as well as politically and socially.

We now know that amoral business comes at an economic as well as a social cost. Accounting scandals, mis-selling of financial products, Libor-rigging, trading in securitised products that traders themselves did not understand (the list goes on) are practices that have destroyed entire businesses and much shareholder capital, and pitched western economies into an avoidable crisis.

To underline the point, throughout this whole period hundreds, perhaps thousands, of companies run on “old fashioned” principles of honest conduct with customers, provision of good careers for loyal staff and managing for the long term, are left standing. Read more of this post

Why China just can’t quit producing aluminum, despite a global glut

Why China just can’t quit producing aluminum, despite a global glut

By Naomi Rovnick — March 12, 2013

Aluminum is a perfect reminder that China does not have a market driven economy. The price of the metal has been seriously weak for the last five years due to a global supply glut, yet China ignores that glut —pumping out a record 1.78 million metric tons in January, according to figures released today—and makes the oversupply worse. Stockpiles of the metals in Chinese warehouses also hit a record high in late February.

It all comes down to jobs and pride

In much the same way that the US and Russia lavished cash on their space programs in the 1960s, China since the late 1980s has worked tirelessly to perfect its aluminum production skills. And China’s economic planners like new aluminum smelters because they are mostly coal fired (pdf, p.175) and thus are useful consumers of the black stuff. The Beijing government has pushed for massive development of new coal mines in Xinjiang in Northwest China for example, and the aluminum plants will be natural customers for the mines. China now has the world’s best aluminum production technology, according to Michael Komesaroff, principal of Australian commodities consultancy Urandaline Investments. But its over production hurts global miners. Rio Tinto has written down the value of Alcan, an aluminum company it bought in 2007, by an estimated$28 billion.

“Aluminum prices won’t do well for the next ten years,” says Komesaroff.

So China’s aluminum  industry is a great window on how its economic planners think. New smelters create jobs for construction workers, smelter staff and miners, and aluminum gives China’s politicians some world class technology to feel proud of in a nation that is best known for making low value consumer goods. Supply and demand is neither here nor there.

The Holocaust: FDR’s indelible failure

The Holocaust: FDR’s indelible failure

By Richard Cohen, Tuesday, March 12, 7:31 AM

On April 12, 1945, my grandfather approached me as I played outside the house and asked where my mother was. He looked stricken, and so I quickly followed him inside and heard him say words that made my mother burst into tears: President Roosevelt had died. My mother’s grief and panic were so palpable — her brother was fighting in the Pacific, her brother-in-law was fighting in Europe — that it scared me. In our house, FDR was not merely the president. He was a god.

He is a god no more. His New Deal is no longer solely credited with ending the Great Depression — World War II did that — and the war in Europe was not won, as we all once thought, primarily by the United States but more so by the Soviet Union. Yet these, to my mind, are trifles compared to the criticism that Roosevelt was passive in the face of the Holocaust. It’s not that he did nothing, it’s that he did nothing much.

This accusation of immense moral failure — or indifference — is now being addressed by a new book, “FDR and the Jews,” by Richard Breitman and Allan J. Lichtman. It sets out to find a middle ground and instead makes things worse. It is a portrait of a president who, in the authors’ own words, “did not forthrightly inform the American people of Hitler’s grisly ‘Final Solution’ or respond decisively to his crimes.” This is a Roosevelt who almost always had a more pressing political concern — American isolationism, American anti-Semitism, a fear and hatred of immigrants — and who stayed mum while a bill to allow 20,000 Jewish children into the United States died in Congress.

Roosevelt inattentively also permitted a cabal of heartless anti-Semites in the State Department to control the country’s visa policies. Desperate Jews, fleeing from the Nazis, were denied asylum in the United States. One of them was Otto Frank. His daughter Anne perished at the Bergen-Belsen concentration camp. Read more of this post

How Google makes money from mobile

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‘Despite All the Money, I’m Not Happy.’ Startup Lessons from Sohu CEO Charles Zhang; 张朝阳精神危机:我什么都有 但居然这么痛苦

‘Despite All the Money, I’m Not Happy.’ Startup Lessons from Sohu CEO Charles Zhang

Mar 12, 2013 at 14:00 PM by C. Custer, in OpinionStartups


Sohu founder and CEO Charles Zhang is, by the standards of most tech entrepreneurs, doing very well. His startup has long since blossomed into a full-blown tech giant, and success has brought him both prestige and heaps of money. Yet in a recent interview on Yang Lan One-on-OneZhang told the host that he is actually miserable:

I think there’s something wrong with me. I truly have everything, and yet I am so miserable. Happiness is totally unrelated to how much money you have.

Zhang has reportedly removed himself from the day-to-day operations of the company and has stayed out of the public limelight (for the most part) over the past year. In the Yang Lan interview, he revealed that this was because his anxiety was making it impossible for him to work. He also said that he had found his success was changing him:

Successful people often have this need to do things their own way. [After I became successful] I became more of a perfectionist; I wanted to control the outcome of everything, and even felt that I could live to the age of 150.

More details and quotes from the interview are here for those who can read Chinese, but instead of speculating about Zhang’s mental state, I just want to highlight a couple of the things we can learn from this interview. Many of us are entrepreneurs searching for that big breakthrough or investors working hard to turn money into more money, and Zhang’s reminder that money cannot buy happiness might be cliche, but it’s important to remember. Of course, that’s not to say that having lots of money isn’t nice (or at least I imagine it’s nice; if anyone wants to send me a huge sum of money I’d be happy to give that lifestyle a try and review it here). But if money is your endgame, it’s possible you’ll end up like Zhang, standing at the top of a pyramid and wondering why bothered to climb it in the first place. The other thing Zhang’s interview reminds is that success can and does change people. Maybe Zhang’s issues are deeper than that and maybe they aren’t — I’m not qualified to speculate on anyone’s mental state one way or the other. But it’s important to keep an eye on your own psyche as you move through the entrepreneurship process and make sure that you’re OK with any changes that are happening. Becoming more of a perfectionist might be a good thing to some people, but others may want to avoid becoming a domineering control freak (and let’s be honest, there are plenty of startup founders who fit that description even before they’re successful). We wish Zhang the best, as we do to all entrepreneurs at every stage of the game from bootstrappers to billionaires. At the same time, though, I wish that everyone in the startup scene would spend a little more time thinking about their own definitions of happiness and the effects being an entrepreneur can have on their psyche. We spend so much time talking about what technology is innovative, and yet many of us are chasing the exact same goal: make a globally relevant product and get rich. Perhaps sometimes we should approach our own thinking patterns with the same spirit of disruption and innovation we bring to hackathons and tech conferences.

张朝阳精神危机:我什么都有 但居然这么痛苦

2013年03月05日 01:59  新浪科技 爱文

“我觉得我出问题了,我是真的什么都有,但是我居然这么痛苦。幸福跟钱的多少真的是没关系。”经过一年多的“闭关”,搜狐董事局主席张朝阳在接受《杨澜访谈录》专访时首次披露内心的精神危机。 Read more of this post

Smokescreen: How Managers Behave When They Have Something to Hide

Smokescreen: How Managers Behave When They Have Something to Hide

Tanja Artiga Gonzalez University of St. Gallen

Markus M. Schmid University of St. Gallen – Swiss Institute of Banking and Finance

David Yermack NYU Stern School of Business

March 6, 2013

We study financial reporting and corporate governance in 216 U.S. companies accused of price fixing by antitrust authorities. We document a range of strategies used by these firms when reporting financial results, including frequent earnings smoothing, segment reclassification, and restatements. In corporate governance, cartel firms favor outside directors who are likely to be inattentive monitors due to their status as foreign or “busy.” When directors resign, they are often not replaced, and new auditors are rarely engaged. Cartel managers exercise their stock options faster than managers of other firms. While our results are based only upon firms engaged in price fixing, we expect that they should apply generally to all companies in which managers seek to conceal poor performance or personal wrongdoing.

The New Power of Memory; Sharp Recall Skills Prove Key to Future Success; Some Excel at ‘Mental Time Travel’

March 11, 2013, 7:12 p.m. ET

The New Power of Memory

Sharp Recall Skills Prove Key to Future Success; Some Excel at ‘Mental Time Travel’


A key purpose for memory isn’t to just remember the past, but to be able to imagine the future. Shirley Wang reports on Lunch Break. Photo: AP.

Memory allows for a kind of mental time travel, a way for us to picture not just the past but also a version of the future, according to a growing body of research.

The studies suggest that the purpose of memory is far more extensive than simply helping us store and recall information about what has already happened.

Researchers from University College London and Harvard University have made strides charting how memory helps us draw a mental sketch of someone’s personality and imagine how that person might behave in a future social situation. They detailed their latest findings in work published in the journal Cerebral Cortex last week.

What the scientists showed could have implications not just for those who suffer memory loss, like the elderly, but young adults and their ability to plan and socialize. The researchers are also following up what they’ve found by trying to see whether the ability to recall past events may be related to creativity and imagination.

The body of work is “broadening out our view of how we use memory,” says Daniel Schacter, a psychology professor at Harvard.

This ability to imagine or anticipate what may come is important to our ability to plan and problem-solve and helps us make better decisions in social situations. The researchers also hope to uncover new ways of improving human memory.

“Using past experiences to anticipate possible future happenings” lets people weigh approaches to a coming situation without needing to try out the actual behaviors, Dr. Schacter says.

Little is known about why some people might naturally have better abilities to recall experiences or imagine future ones. Read more of this post

CLAY CHRISTENSEN: Jeff Bezos, Scott Cook, And Steve Jobs Got Disruption Right; “Data is heavy. People want to solve problems and tell their bosses they solved it, not bring them issues all the time. As a result, the higher you get, the less real information you receive

CLAY CHRISTENSEN: Jeff Bezos, Scott Cook, And Steve Jobs Got Disruption Right

Max Nisen | Mar. 11, 2013, 6:31 PM | 1,255 | 1

It’s been some 16 years since Clay Christensen published “The Innovator’s Dilemma” and brought the concept of disruptive innovation to the wider world. Despite that, many companies and executives still haven’t managed to take its core lesson to heart, that it’s not enough to just look at the data. You have to constantly ask questions and look to the future. In an interview appearing at strategy+business, Christensen argues that many executives are pushed to make decisions that are quick and profitable, and they frequently rely heavily on incomplete data. “Data is heavy,” Christensen says. People want to solve problems and tell their bosses they solved it, not bring them issues all the time. As a result, the higher you get, the less real information you receive.

The most successful executives think about why things might turn out differently, have a theory, and constantly update it. Few people are good at that. They don’t ask the right questions, and they aren’t paranoid enough.  Read more of this post

Solving the Puzzles of Mimicry in Nature; Analyzing the DNA of dangerous butterflies who copy other unpalatable species, scientists have found that some shared color-controlling genes, signaling past interbreeding

March 11, 2013

Solving the Puzzles of Mimicry in Nature



The wing patterns of two unpalatable butterfly species, Heliconius erato, top row, and Heliconius melpomene, show striking similarities. DNA studies suggest that some species generated similar patterns independently; others share color-controlling genes.

Perhaps no destination has attracted and inspired more great naturalists than Brazil. Charles Darwin, on his epic voyage on the H.M.S. Beagle, first made landfall at Bahia in 1832; two fellow Englishmen, Alfred Russel Wallace and Henry Walter Bates, arrived at Pará in 1848. Wallace roamed the Amazon for four years, and the indefatigable Bates for 11.

In 1852, a naturalist named Fritz Müller arrived from Germany. Much less known today, Müller, unlike his English contemporaries, moved to Brazil with his wife and young child and had no intention of ever returning to Prussia. A freethinker who refused to swear an oath to God required for his medical graduation, Müller traded a medical career in Europe for a mud-floor hut at the edge of virgin forest in the Blumenau colony in Santa Catarina.

While Darwin and Wallace would conceive of the theory of evolution by natural selection, its acceptance was aided greatly by Bates and Müller. And thanks to Bates and Müller, perhaps no group of animals contributed more to the early growth of evolutionary science than butterflies. Their ideas continue to inspire naturalists today and have led to surprising new insights into how evolution works.

Both men found Brazil ablaze with colorful butterflies. Bates noticed among his collections certain species whose bright wing patterns closely resembled those of other butterfly families in the area. In puzzling out why one species would mimic another, he realized that harmless butterflies were mimicking noxious species that were unpalatable to birds and lizards, and therefore not attacked by predators.

Only a few years after Darwin published “On the Origin of Species,” Bates suggested that this sort of mimicry — now called “Batesian” — was timely proof of the principle of natural selection. Read more of this post

The Fashion Retail Competition Should Be Terrified Of Forever 21

The Competition Should Be Terrified Of Forever 21

Kim Bhasin | Mar. 11, 2013, 1:31 PM | 3,529 | 4

Forever 21 is growing like crazy, and the fast fashion retailer is becoming a major threat to the rest of the industry.

Analysts Lorraine Hutchinson, Paul Alexander, and Jessica A. Lebo at Bank of America warned that competitors need to start paying attention to the privately-held retailer right now.

They declared Forever 21 “the most transformative retail concept” in a note to clients.

“Forever 21 is becoming too big for the specialty retailers to ignore,” the analysts wrote. “At this size, rapid growth could have ripple effects on the other retailers as Forever 21 takes more share.” Read more of this post

Korea’s binge drinking culture changes toward tasting

2013-03-11 17:45

Binge drinking culture changes toward tasting

By Cho Mu-hyun

Following increased awareness among the public about the benefits of living a healthy lifestyle, Korea’s infamous binge drinking is slowly but steadily changing toward consuming less alcohol while savoring flavor more.

Many Koreans, especially younger consumers, prefer brand name drinks such as Glenfiddich, Remy Martin or Matarromera, while ignoring soju, Korea’s rice distilled liquor.

Firms are advertising their products in a different way due to the rise of amateur connoisseurs with increasingly diverse tastes. Makers of beer are now responding to this demand.

The Oriental Brewery (OB), known for brands Cass and OB Lager, is pushing its Golden Lager brand with two words in mind _ young and tasty. Read more of this post

Pepsi, The No.1 Soda In Thailand, Just Had Its Market Share Wiped Out By A Lookalike Brand as market share plunged from 48% to 15%

Pepsi, The No.1 Soda In Thailand, Just Had Its Market Share Wiped Out By A Lookalike Brand

Jim Edwards | Mar. 11, 2013, 10:42 AM | 2,602 | 4


For years, Pepsi was the No.1 soda in Thailand, with a 48 percent market share. Coke was only the second most popular drink there, with 42 percent.

But all that changed late last year when PepsiCo failed to renew a distribution contract. Pepsi’s main retail distributor withdrew all Pepsi products from its shelves and replaced them with “Est,” its own Pepsi-lookalike brand.

By the end of the year, it became difficult to find Pepsi in Thailand, Reuters reports.

Now, Pepsi has only a 15 percent share of the market. Coke is No.1. Est is probably the No.2 brand, with a 19 percent share, and something called “Big Cola” had a 16 percent share at the end of 2012, according to the Bangkok Post. Read more of this post

Henan peasants ask local environmental officials to drink the “pure underground water” in his village; 河南农民请环保厅长喝地下“纯净水”


China launches probe on banks’ wealth management products

China launches probe on banks’ wealth management products: paper

Mon, Mar 11 2013

SHANGHAI (Reuters) – China’s banking regulator has launched a nationwide probe of banks’ wealth management products, the China Securities Journal reported on Tuesday, citing unidentified sources. The inspection by the China Banking Regulatory Commission (CBRC) is focused on those products that channel depositors’ money into a pool of assets, rather than a single account, according to the newspaper. Such products are not transparent and could create room for illegal operations, it said. CBRC is urging banks to stop selling wealth management products that don’t conform to rules by the end of April, the newspaper said. China has strengthened supervision of its fast-growing wealth management sector since late last year, when one wealth product sold through Hua Xia Bank (600015.SS: QuoteProfileResearchStock Buzz) failed to pay its annualized return.


Dead-Pig Tide and the Ongoing Danger of China Epidemics

Dead-Pig Tide and the Ongoing Danger of China Epidemics

The dead pigs started appearing on the riverbanks of Shanghai’s iconic Huangpu River on March 4, and by the weekend, state media were reporting that 900 had been found floating in the river, the source of much of the city’s water supply. The reports didn’t offer an explanation for where the dead pigs had come from or how they had died. Still, one thing was absolutely certain in the articles and the social- media chatter: Nothing good comes from a dead-pig tide.

Early today, Shanghai Daily reported that the number of dead pigs floating in the river had increased to 1,200. Later in the morning, the Global Times, a national paper, reported that the number had crossed “at least 2,200” and was expected to rise. By early evening, the government had retrieved 3,323 carcasses from the river, with more still floating toward downtown.

Most disturbing of all was news — first reported by local suburban papers and spread through microblogs — that upstream pig farms had been struck by an epidemic that had killed 20,000 pigs in January and February. According to these reports, as far back as January, dead pigs were appearing on the sides of roads in suburban Shanghai. News of the epidemic was partly confirmed by state media today. Read more of this post

Pull the Plug on Bailouts for Power Companies; The government gave billions in public funds to state-owned firms, a practice that would end if the market set electricity prices

03.11.2013 18:58

Closer Look: Pull the Plug on Bailouts for Power Companies

The government gave billions in public funds to state-owned firms, a practice that would end if the market set electricity prices

By staff reporter Pu Jun

(Beijing) – Last year reports that the State-owned Assets Supervision and Administration Commission (SASAC) might give 10 billion yuan to five major state-owned power companies started to circulate. On March 5, we learned the bailout happened. Read more of this post

On the Brink in Italy; Among Italy’s estimated six million companies, businesses of all sizes have been going belly up at the rate of 1,000 a day over the last year

March 11, 2013

On the Brink in Italy


GUIDONIA, Italy — Emanuele Tedeschi wiped sawdust from his hands and gestured around the cavernous woodworking factory that has been in his family for two generations. The big machines, which used to run overtime carving custom furnishings for private homes, Roman palazzi and even the Vatican, sat idle on a shop floor nearly devoid of workers.

“A year and a half ago, the noise from production was so loud that you had to shout to be heard,” said Mr. Tedeschi, walking amid pallets of cherry and other fine woods stacked up and waiting for a purpose.

Since a government austerity plan took hold last year, the Italian economy has tumbled into one of the worst recessions of any euro zone country. Mr. Tedeschi’s orders have all but dried up. His company, Temeca, is still in business, but barely.

Businesses of all sizes have been going belly up at the rate of 1,000 a day over the last year; especially hard hit among Italy’s estimated six million companies are the small and midsize companies that represent the backbone of Italy’s $2 trillion economy. Read more of this post

Western Firms Rethink Asia Approach

March 11, 2013, 4:55 p.m. ET

Western Firms Rethink Asia Approach

Industrial Titans GE, Honeywell Boost Presence in Region to Prevent Market-Share Erosion


JAKARTA—After 60 years supplying locomotives to Indonesia’s state-owned railway,General Electric Co. GE -0.63% faced a serious threat to its dominance in the country’s locomotive market last year.

Indonesian railroad operator PT Kereta Api needed 100 locomotives to alleviate overcrowding on trains where riders often spill into the aisles and climb on the roofs. European and Canadian companies offered competitive technology, while a Chinese company promised low prices.

GE won the $250 million contract—thanks, in part, to its long relationship with the railroad operator—but “we had a very close call,” says Stuart Dean, the Fairfield, Conn., conglomerate’s chief executive in Southeast Asia. “When a railroad buys five or six locomotives, no one cares, but when it wants 100 engines, everyone comes to play.”

The rapid advance of competitors isforcing one of the world’s largest companies to change the way it does business across Asia and emerging markets.

“Historically, we’ve taken global solutions and sold them all over the world,” says Mr. Dean. “But we’re competing with local companies and we need to fine-tune our strategy.”

Multinationals have been increasing their footprint in Asia for years, as they have moved from selling into the region to also investing here. But the transformation is gaining critical mass as Western companies’ market-share leads in Asia over cash-flush local competitors narrow, forcing Western firms to invest more, tailor their products and transfer top executives to Asia. Read more of this post

China’s nightmare scenario: By 2025, air quality could be much, much worse

China’s nightmare scenario: By 2025, air quality could be much, much worse

By Lily Kuo — March 12, 2013


China’s myriad plans to deal with pollution don’t look so promising. In a research note today, Deutsche Bank analysts gloomily conclude that, barring extreme reforms, Chinese coal consumption and increased car ownership will push pollution levels 70% higher by 2025. Even if China’s economy slowed to 5% growth each year, its annual coal consumption would still rise to 6 billion tons (5.4 tonnes) by 2022, from the current 3.8 billion tons. Car ownership is expected to increase over the years to 400 million in 2030 from the current 90 million. With those two figures, it will be very difficult for the government to reduce the national average of PM2.5, or air pollution that is small enough to enter the bloodstream. The current national average is 75 micrograms per cubic meter. In January, PM2.5 levels in Beijing reached 900 micrograms per cubic meter. Read more of this post

There is a new move initiated by major consumer goods and retailer groups to completely avoid using palm. Norway’s $710 billion sovereign wealth fund has pulled out of 23 Asian palm oil companies

Tuesday March 12, 2013

Market access poser for palm oil, new move by major consumers to completely avoid using palm oil

Commodities Talk – By Hanim Adnan

There is a new move initiated by major consumer goods and retailer groups to completely avoid using palm.

THE market access for palm oil has become a growing debate of late, especially since global palm oil inventories from major producers are bursting at the seams.

In the European Union (EU), there is a new move initiated by major consumer goods and retailer groups to completely avoid using palm oil on the stale grounds of deforestation and biodiversity often championed by non-government organisations.

The biggest fear now is that big names like Unilever, Carrefour, Sainsbury, Wal-Mart and Kraft in the EU could also influence and jeopardise stronghold markets like China, India and Asean in the near term, given their big presence there. Read more of this post

Fear rising with rates; Bond market sell-off likely a question of when, not if, and investors ‘have no idea what’s about to happen’; Bond bomb survival guide; New investment strategies that are intended to thrive in a rising-rate environment are fast emerging

Fear rising with rates

Bond market sell-off likely a question of when, not if, and investors ‘have no idea what’s about to happen’

By Andrew Osterland

Mar 10, 2013 @ 12:01 am (Updated 4:58 pm) EST

Fear among financial advisers of a bond market crash that could devastate the portfolios of millions of investors is growing amid improving economic news and rising U.S. bond yields.

The yield on the 10-year U.S. Treasury note is climbing after hitting an all-time low of 1.43% last July. As bond prices move in the opposite direction of yields, the rise in market yields could spell huge losses for investors — especially for those in bond mutual funds, where portfolio managers would be forced to sell their holdings at a loss to meet redemption demands.

Over much of the past three decades, falling interest rates have fueled a rally in the bond market. In the years following the 2008-09 financial crisis, investors — lured by the perceived safety of bonds — poured billions of dollars in retirement and other assets into bond funds.

In 2012, for example, net inflows into bond funds totaled $304 billion, compared with outflows of $153 billion for stock funds. Investors’ enduring appetite for bonds is particularly striking in light of the fact that the Barclays U.S. Aggregate Bond Index gained 4.2% in 2012, versus the S&P 500’s 16% advance.

Over the past five years, net inflows into bond funds topped $1 trillion, while outflows from stock funds totaled $421 billion, according to the Investment Company Institute.


For many, if not most, it’s a question of when the bond market sells off — not if.

“Bonds are a big problem, and most people don’t understand that yet,” said Harry Clark, chief executive of Clark Capital Management Inc. “The public thinks bonds are safe, but they’re not. They have no idea what’s about to happen to them.” Read more of this post

The Dark Side of ETF Investing: A World-Wide Analysis

Si Cheng National University of Singapore (NUS) – Department of Finance
Massimo Massa INSEAD – Finance
Hong Zhang INSEAD – Finance
March 8, 2013
INSEAD Working Paper No. 2013/39/FIN
We study conflicts of interest in the exchange-traded fund (ETF) industry around the world. We provide evidence that ETFs provide cheap funding resources to benefit the other members of the financial groups to which they belong. We identify three channels via which this happens. First, the ETF’s assets are used by the affiliated bank to leverage its (lending-related) information. Second, ETFs subsidize affiliated banks when the latter are in need, i.e., unprofitable or poorly rated. Third, the ETFs help affiliated OEFs through cross-trading, that is, they load up on unnecessary (to track the benchmark) volatility that will expose them in the event that the affiliated bank becomes distressed. The effects prevail in ETFs that do not fully replicate their benchmark holdings and that domiciled in Europe. Market awareness of this risk is reflected in reduced flows and a lower ETF price premium. These results have important normative implications for both consumer protection and financial stability.

Mutual Funds Win and Investors Lose

John A. Haslem

University of Maryland – Robert H. Smith School of Business

February 25, 2013
Journal of Index Investing, Vol.3, No. 4 (Spring 2013), pp. 31-40 

This study provides in-depth coverage of important findings surrounding the question of why investors continue to buy underperforming actively managed mutual funds. This issue is complicated by the finding that active managers have skill that allows them to add fund value, but that is not shared with investors, who continue to earn negative alphas. So why do investors persist in earning below market returns? Four possible answers are discussed: 1) investor overconfidence; 2) strategic fund repricing decisions; 3) fund “sentiment contrarian behavior;” and 4) investor dependence on brokers with agency conflicted incentives.

Equity Manager Selection and Portfolio Formation: Interviews with Investment Staff

F. Douglas Foster

University of Technology, Sydney

Geoff Warren

Australian National University (ANU) – School of Finance & Applied Statistics; Financial Research Network (FIRN)

January 24, 2013

We interview professional institutional investors to generate insights into how they choose between active and passive management, select active equity managers and construct multi-manager portfolios. We find that subjective judgment plays a central role in decision-making. Particularly important is the evaluation of people when selecting managers, the role of confidence in retaining managers, and self-perceptions about capability to identify skilled managers. Key evaluations are often made conditionally, notably including the response to past performance where the aim is to understand return sources. Stated reasons for preferring active management relate to whether a handful of skilled active managers can be identified and combined to generate a better expected portfolio outcome; and are only vaguely associated with the performance of the average manager.

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