Last Friday Oct 28th 2010 - I attended the NTU Ministerial Forum 2010 in my capacity as a NTU graduate student. I looked around and thought that I am the only one from RSIS, considering tthhe fact at Trimester 1 has just ended. Pity! Security was tight
The title topic of the event was "Singapore: City of Buzz" SM Goh chose this because he thought that this is a 'timely topic'. (maybe elections coming ???)
SM Goh's agenda in coming to NTU was to challenge us - to make Singapore into a global city of buzz and a home for us as well. In my mind, this is a BIG challenge aka a tall order. From what I see anywhere else in the world (or even in history), there are (or were) few cities - global in outlook and local in nature. However, it is not impossible in the case of NYC, Tokyo, London etc. Then again, these global cities have a hinterland to fall back on. Singapore does not have the luxury of a hinterland since 1965. In history, very few cities had ever survived out there on it's own for long. Singapore will be defying the gravity of history if it hits 100 in 2065. Perhaps we can take the analogy of Sparta and Athens given by Mr Ngiam whom I respect a lot for his outspoken views. Mr Ngiam's interview given here in 2006, sparked my interest into looking deeply at politics along with the GE 2006.
Interview with former permanent secretary, Mr Ngiam Tong Dow:
Let’s look at Sparta and Athens, two city states in Greek history. Singapore is like Sparta, where the top students are taken away from their parents as children and educated. Cohort by cohort, they each select their own leadership, ultimately electing their own Philosopher King. When I first read Plato’s Republic, I was totally dazzled by the great logic of this organisational model where the best selects the best. But when I reached the end of the book, it dawned on me that though the starting point was meritocracy, the end result was dictatorship and elitism. In the end, that was how Sparta crumbled. Yet, Athens, a city of philosophers known for its different schools of thought, survived.
My thinking when I read about this statement said by him, was "WOW, what a amazing revelation! You mean that Singapore will stand a better of survival when there is diversity of thoughts?" Thereafter, I gradually started to push myself to develop my own sense of critical thinking without fear for the first time. Initially, I met a lot of brickbats. Nevertheless, I also learned to respect other people's views and be sensitive to others' feelings. I had come a long way till now in 2010.
And Mr Ngiam's answer here Over the last forty years since 1965, Singapore has survived economically without the Malaysian hinterland. In fact, in a WTO ruled world, the concept of economic hinterlands has become redundant. Singapore will thrive as an economy and as a state if we are able to apply knowledge intelligently. This is the challenge for our succeeding generations
Back to SM Goh's talk, he stressed heavily upon Singapore's past difficulties, success in overcoming the obstacles and today's status as a developed country status. He stressed heavily on the Govt's investment in education and training for Singaporeans. amounting to $175k for each university graduate (from primary school to university). Indeed, I am well aware of this and appreciate the 70% subsidy given by the Singapore Govt for my graduate studies in RSIS. Thank you very much. (But Govt also do give the roughly the same subsidy minus 1k to foreign students too.) I am just pointing it out to put things in perspective. Thanks once again.
Now onto the Q & A. I will not go deep into details. Essentially, the 3 usual kinds of Singaporeans appeared ( I had seen these 3 kinds of Singaporeans before in previous forums). The first kind is one who depends on the govt for everything - a crutch mentality. The second kind is one who exceedingly admire the govt, to put it in a very nice way. The 3rd kind is one who really bother to ask the govt to think deeper into it's policies, while at the same time give due credit to the govt for the things that it did well.
The most highlighted question is the one by NTU final year undergrad Mr Lim Zi Rui. http://sg.yfittopostblog.com/2010/10/30/i-dont-know-what-im-defending-anymore I could tell that he was being overly polite due to his officer training. Come to think of it, I did mentioned these lines of thought to DPM DM Mr Teo in a previous forum. I did it during Young NTUC's YCIS Net Forum 2008 when I just returned from the States. But I did it in more crude and much more army barmy manner. Hahahahah ! Let's just say it wasn't pretty on DPM DM Mr Teo's face.
Now I am more mindful of the cultural constraints that we generally have in Asia. In America where people are more opinionated and not afraid to challenge politicians. As I pointed out to my facebook friends; in my alma mater SUNY Buffalo, Republican Karl Rove got jeered by students during his debate with General Clark (Democrat) in the run up for US Presidential Elections 2008. http://www.youtube.com/watch?v=cA08-JzcHXU
Tony Blair got hit with a tough question about the Middle East by a UB political science student Nick Kabat. http://www.youtube.com/watch?v=r-KH-QtH40Y&feature=player_embedded
http://mondoweiss.net/2009/10/univ-of-buffalo-student-forces-tony-blair-to-respond-to-and-dodge-the-goldstone-report.html
Therefore, my style now is always to add some sweetness first before adding the sourness and bitterness into the dish to be served.I would like to ask this question " Why not let foreigners serve some form of national service, accelerating their application for PRs/citizenship as incentive ? This can serve as a common platform for locals and foreigners to bond together in the common goal of defending Singapore and having a stake in this island. http://www.rsis.edu.sg/publications/Perspective/RSIS1252009.pdf
Just too bad that the moderator cut people off by saying time running out : (
Another noteworthy question came from the last student. His question was about how to strengthen the sense of belonging in Singaporeans with Singapore as home. This is the best question of the forum. Personally, I am a assistant organizer of Returned Overseas Singaporeans in Singapore (ROSS) meetup club for this purpose; to find out how do our Singaporeans who lived overseas and returned, still living overseas or living overseas on a long term or permanent basis (still come back to Singapore once a while) - what are our feelings about Singapore ? I collated a lot of viewpoints. Very interesting. Personally, I started my own 10 to 15 year project to see whether Singapore is still worthwhile to be my home. Till 2018 to 2023, I will make my final decision and pass judgement on Singapore.
Monday, November 1, 2010
Tuesday, July 20, 2010
The Relative Profitability of Analysts' Stock Recommendations: What Role Does Investor Sentiment Play? by Assoc Professor Michael CLEMENT, University of Texas at Austin
Abstract: This study investigates whether analysts who respond to investor
sentiment issue more or less profitable stock recommendations than their peers. We find
that, on average, analysts issue more favorable stock recommendations when recent and
future sentiment is more bullish. Additionally, we show that, on average, analysts who
respond to investor sentiment issue relatively less profitable stock recommendations.
However, analysts who follow stocks that are most sensitive to investor sentiment and
who follow recent trends in sentiment are able to offer more profitable recommendations
than their peers. Our results suggest that analysts recommend stocks based, in part, on
signals that may affect price but that are not theoretically related to firms’ intrinsic value.
Moreover, our results may help explain findings within the literature that suggest analysts
fail to fully incorporate their own earnings forecasts into their stock recommendations.
To be updated with a research summary
sentiment issue more or less profitable stock recommendations than their peers. We find
that, on average, analysts issue more favorable stock recommendations when recent and
future sentiment is more bullish. Additionally, we show that, on average, analysts who
respond to investor sentiment issue relatively less profitable stock recommendations.
However, analysts who follow stocks that are most sensitive to investor sentiment and
who follow recent trends in sentiment are able to offer more profitable recommendations
than their peers. Our results suggest that analysts recommend stocks based, in part, on
signals that may affect price but that are not theoretically related to firms’ intrinsic value.
Moreover, our results may help explain findings within the literature that suggest analysts
fail to fully incorporate their own earnings forecasts into their stock recommendations.
To be updated with a research summary
Saturday, July 10, 2010
NYU Profs research findings : Does the Stock harm investment incentives ? Behavioral corporate finance research paper commentary #1
How this idea of academic paper commenting came to my mind
Hi Everyone ! On 7th July, NYU Prof Alexander Ljungqvist came to NTU to publicize his research findings. I saw this flyer about this while at NTU on July 6th doing my registration procedure. But I was unable to come to NTU again for this because of my prior fixed work meeting with my non-academic mentor John. As a alternative, I got hold of this Prof's paper on SSRN and decided to make this as my first foray into research commentary. Looking at Prof Alex's profile on NYU http://pages.stern.nyu.edu/~aljungqv/, he certainly has a impressive record and looks pretty suave. He is said to be the youngest tenured track faculty member while he was at Oxford. The other 2 contributors are Assoc Prof John Asker and Phd Candidate Joan Farre Mensa (both from Econs Dept). Ok I am done with citation for courtesy's sake. By doing this, I hope to train myself to be more meticulous in my way of looking at issues. Eventually, I also hope to reach this high level of research standards. So this is to inspire and motivate me. Last but not least, I would like to share with people the knowledge I gathered.
Introduction to this research study
This research study examines the differences between public and private companies in terms of investment behaviour. The sample is provided by Sageworks Inc which has a sizable database on U.S private companies. In this paper, empirical research is done to see if stock market listings harm investment incentives. The researchers did so by comparing the investment decisions of U.S. public companies to those of similar-sized private U.S. firms in the same industry. They found some evidence that public firms invest less compared to private firms and strong proof of public firms being less responsive to changes in investment opportunities. These results are most evident in industries in which stock prices are most sensitive to current profits. These behavioural patterns are more in tune with managerial myopia rather than empire-building. Public firms tend to smooth their earnings growth, maintain or increase their dividends and avoid reporting negative earnings, unlike private firms. From a investment viewpoint at least, it seems that the agency costs of a stock market listed firm outweigh the benefits of a reduced cost of capital, at least for the fast-growing entrepreneurial firms in the sample.
Agency Problems - happens everywhere
Why Private firms have lesser agency problems ? An Agency problem is defined as an conflict of interest arising between creditors, shareholders, suppliers, employees and management due to opposing aims of the various parties. First, the
My initial impression of this paper
This is a review of the pros and cons between the public and private firms which are clear to all.
For a public listed firm, the advantages are having a lower borrowing cost, bigger recognition and having more room for growth. The disadvantages are having to deal with increasingly complicated corporate structures as the company grows bigger, risk of losing control by takeovers and additional public accountability standards (which can be exploited by rivals for information gathering).
For private firms, the advantages are a flatter corporate structure which make it more nimble for decision-making, no fear of being forced to come under another company's banner and the right to keep it's information away from rivals. The disadvantages are higher cost of borrowings, smaller recognition and limited room for growth.
The paper has several equations to predict managers' behaviour whether short-termism (overly cautious, only after short term gains so as to maintain or brighten the quarterly earnings report) or empire-building (expansionary investments which needs huge capital outlays and long term commitment). I shall not disclose these equations for the sake of simplicity and not making laypeople confused. After all, I am just commenting because I had not reached the high level like these esteemed researchers yet.
End of Sample size statistics
Public and private firms also differ systematically in their profitability, cash holdings, and use of debt. Private firms have significantly higher return on assets (ROA), defined as operating income before depreciation scaled by beginning-of-year total assets. In the matched sample, average ROA amounts to 0.084 for private firms versus -0.06 for public firms (median: 0.123 versus 0.051). At the same time, private firms hold significantly lower cash balances (beginning-of-year cash and short term investments) and have significantly higher leverage (beginning-of-year long-term and shortterm liabilities divided by beginning-of-year total assets). A greater reliance on borrowing is not
surprising considering that, by definition, private firms have no access to the stock market and so face a higher cost of raising equity capital.
Finally, note that matched-sample firms grow significantly faster than full-sample firms. For public firms, annual sales growth averages 18.3% in the full sample and 25.6% in the matched sample. For private firms, the corresponding numbers are 17.7% and 32.7%. This suggests that the empirical focus on small public and large private companies identifies fast-growing entrepreneurial firms where making optimal investment decisions is particularly important.
U.S.
Closing Comments
This paper's research methods are very comprehensive. The sample size is more than sufficient to be convincing enough. Besides, the time periods are also long enough to be quantifiable. On average, it is 4.4 years of pre-IPO accounting data. Looking at this research working paper, I really understand that I still got a long way to go before reaching such a high level. To do a Phd, it is really not for everyone. First of all, the time cost is a big turn off, not to mention loss of potential higher income as what Sgt Kelvin said. Even I myself am still wondering if I really want to go all the way to it. It is gonna take more than just courage, luck and intellectual curiosity to complete the whole course from attending research seminars, finding your original research idea, oral and written examinations and finally writing the research thesis. Oh well, I shall see how it goes for me at the upcoming Msc course at NTU. Whatever it is, I find meaning in being a bridge between academia and industry in whatever I do as a aspiring intellectual researcher and consultant in my chosen life's calling.
Hi Everyone ! On 7th July, NYU Prof Alexander Ljungqvist came to NTU to publicize his research findings. I saw this flyer about this while at NTU on July 6th doing my registration procedure. But I was unable to come to NTU again for this because of my prior fixed work meeting with my non-academic mentor John. As a alternative, I got hold of this Prof's paper on SSRN and decided to make this as my first foray into research commentary. Looking at Prof Alex's profile on NYU http://pages.stern.nyu.edu/~aljungqv/, he certainly has a impressive record and looks pretty suave. He is said to be the youngest tenured track faculty member while he was at Oxford. The other 2 contributors are Assoc Prof John Asker and Phd Candidate Joan Farre Mensa (both from Econs Dept). Ok I am done with citation for courtesy's sake. By doing this, I hope to train myself to be more meticulous in my way of looking at issues. Eventually, I also hope to reach this high level of research standards. So this is to inspire and motivate me. Last but not least, I would like to share with people the knowledge I gathered.
Introduction to this research study
This research study examines the differences between public and private companies in terms of investment behaviour. The sample is provided by Sageworks Inc which has a sizable database on U.S private companies. In this paper, empirical research is done to see if stock market listings harm investment incentives. The researchers did so by comparing the investment decisions of U.S. public companies to those of similar-sized private U.S. firms in the same industry. They found some evidence that public firms invest less compared to private firms and strong proof of public firms being less responsive to changes in investment opportunities. These results are most evident in industries in which stock prices are most sensitive to current profits. These behavioural patterns are more in tune with managerial myopia rather than empire-building. Public firms tend to smooth their earnings growth, maintain or increase their dividends and avoid reporting negative earnings, unlike private firms. From a investment viewpoint at least, it seems that the agency costs of a stock market listed firm outweigh the benefits of a reduced cost of capital, at least for the fast-growing entrepreneurial firms in the sample.
Agency Problems - happens everywhere
Why Private firms have lesser agency problems ? An Agency problem is defined as an conflict of interest arising between creditors, shareholders, suppliers, employees and management due to opposing aims of the various parties. First, the
My initial impression of this paper
This is a review of the pros and cons between the public and private firms which are clear to all.
For a public listed firm, the advantages are having a lower borrowing cost, bigger recognition and having more room for growth. The disadvantages are having to deal with increasingly complicated corporate structures as the company grows bigger, risk of losing control by takeovers and additional public accountability standards (which can be exploited by rivals for information gathering).
For private firms, the advantages are a flatter corporate structure which make it more nimble for decision-making, no fear of being forced to come under another company's banner and the right to keep it's information away from rivals. The disadvantages are higher cost of borrowings, smaller recognition and limited room for growth.
The paper has several equations to predict managers' behaviour whether short-termism (overly cautious, only after short term gains so as to maintain or brighten the quarterly earnings report) or empire-building (expansionary investments which needs huge capital outlays and long term commitment). I shall not disclose these equations for the sake of simplicity and not making laypeople confused. After all, I am just commenting because I had not reached the high level like these esteemed researchers yet.
End of Sample size statistics
Public and private firms also differ systematically in their profitability, cash holdings, and use of debt. Private firms have significantly higher return on assets (ROA), defined as operating income before depreciation scaled by beginning-of-year total assets. In the matched sample, average ROA amounts to 0.084 for private firms versus -0.06 for public firms (median: 0.123 versus 0.051). At the same time, private firms hold significantly lower cash balances (beginning-of-year cash and short term investments) and have significantly higher leverage (beginning-of-year long-term and shortterm liabilities divided by beginning-of-year total assets). A greater reliance on borrowing is not
surprising considering that, by definition, private firms have no access to the stock market and so face a higher cost of raising equity capital.
Finally, note that matched-sample firms grow significantly faster than full-sample firms. For public firms, annual sales growth averages 18.3% in the full sample and 25.6% in the matched sample. For private firms, the corresponding numbers are 17.7% and 32.7%. This suggests that the empirical focus on small public and large private companies identifies fast-growing entrepreneurial firms where making optimal investment decisions is particularly important.
Closing Comments
This paper's research methods are very comprehensive. The sample size is more than sufficient to be convincing enough. Besides, the time periods are also long enough to be quantifiable. On average, it is 4.4 years of pre-IPO accounting data. Looking at this research working paper, I really understand that I still got a long way to go before reaching such a high level. To do a Phd, it is really not for everyone. First of all, the time cost is a big turn off, not to mention loss of potential higher income as what Sgt Kelvin said. Even I myself am still wondering if I really want to go all the way to it. It is gonna take more than just courage, luck and intellectual curiosity to complete the whole course from attending research seminars, finding your original research idea, oral and written examinations and finally writing the research thesis. Oh well, I shall see how it goes for me at the upcoming Msc course at NTU. Whatever it is, I find meaning in being a bridge between academia and industry in whatever I do as a aspiring intellectual researcher and consultant in my chosen life's calling.
Thursday, July 8, 2010
Tuesday, July 6, 2010
NTU - a official graduate student , in the midst of drafting my hippocratic oath of honour as a person who seeks to create value to people who trust and believe in me. I will be a competent financial adviser, innovative mgt consultant, a inspiring life educator plus motivational trainer & outstanding behavioral sciences researcher .
Yeah I finally got into graduate school ! This is one significant milestone for my dream to become a established name in the research field. No, not just that. I also want to be a significant player in the industry - well known as a capable person who stand by his words with solid research evidence. When People see me Bernard Leong, they will know that my words are as good as a ton of gold.
This is my promise to my prospective clients, my RSIS classmates and professors, my friends and family, last but not least - myself with my conscience. I will never seek to be a crook who exploit people for his own selfish gains. Bernard Leong - a trusted management adviser. I will never create Cannot Work Business Problems ! I will practise management on the straight and narrow path, away from the crooked and broad path so that I can sleep peacefully at night with a clear conscience. I will recommend to my clients based on rigorous research standards and ethics. No Churning on my books !
Next, I will also seek to digitize the vast amount of information on various subjects I collected over the years on this blog. I also intend to inspire people and myself who are down and out in life - to rise up above the challenges. My life story is a poignant and inspiring one which I will tell in time to come. Right now, I will tell a bit by bit. After all, I am still on this journey seeing how it goes. Last but not least as a researcher, I seek to share my knowledge with people for the betterment of society as a whole.
Yours Truly,
Bernard Leong
P.S I used to be a hardcore military man. So I chose the name Bernard from British Army Field Marshal Bernard Law Montgomery when I was preparing to go to ubsim where 60% of the lecturers are Americans ( thought better to make things easier for me and them rather than twist my chinese name. I was also aware of Dr Bernard Leong aka the pragmatic idealist who was educated at Cambridge. Now he is a techno entrepreneur. A good role model I thought to myself in 2005. Now I am even more sure that this is what I want and will become - hopefully taking over from him as well. Only time will tell and I will work hard on it.
This is my promise to my prospective clients, my RSIS classmates and professors, my friends and family, last but not least - myself with my conscience. I will never seek to be a crook who exploit people for his own selfish gains. Bernard Leong - a trusted management adviser. I will never create Cannot Work Business Problems ! I will practise management on the straight and narrow path, away from the crooked and broad path so that I can sleep peacefully at night with a clear conscience. I will recommend to my clients based on rigorous research standards and ethics. No Churning on my books !
Next, I will also seek to digitize the vast amount of information on various subjects I collected over the years on this blog. I also intend to inspire people and myself who are down and out in life - to rise up above the challenges. My life story is a poignant and inspiring one which I will tell in time to come. Right now, I will tell a bit by bit. After all, I am still on this journey seeing how it goes. Last but not least as a researcher, I seek to share my knowledge with people for the betterment of society as a whole.
Yours Truly,
Bernard Leong
P.S I used to be a hardcore military man. So I chose the name Bernard from British Army Field Marshal Bernard Law Montgomery when I was preparing to go to ubsim where 60% of the lecturers are Americans ( thought better to make things easier for me and them rather than twist my chinese name. I was also aware of Dr Bernard Leong aka the pragmatic idealist who was educated at Cambridge. Now he is a techno entrepreneur. A good role model I thought to myself in 2005. Now I am even more sure that this is what I want and will become - hopefully taking over from him as well. Only time will tell and I will work hard on it.
Monday, May 31, 2010
My life to this date 27 years in this world
Hi Hello world ! I am Bernard Leong who officially started blogging again. I hope to use blogging as a avenue to share and publish my ideas, keep in touch with my friends from Singapore and America and find new friends. : )
I found that knowledge is meant to be shared especially in today's globalized and borderless world of information age. Besides, I am a aspiring scholar despite of all my overwhelming odds against me. I intend to focus on behavioral sciences of finance, marketing and politics - behavioral finance, consumer behavior and behavioral politics. One day, I hope to write a book about my life journey as a parting gift to this world to inspire future generations. Right now, I am a independent financial adviser at Promiseland Independent after 5 months of training and seminar studies. I am also a part time graduate student application (shortlisted and pending - hopefully for approval) at NTU Singapore.
Bernard Leong the rugged intellectual professional (professor in future). As time goes along, I will tell my story and experiences as I go along in the field of my work and studies. Don't worry, I shall be diplomatic but truthful to myself, my readers and whoever you call up there.
I found that knowledge is meant to be shared especially in today's globalized and borderless world of information age. Besides, I am a aspiring scholar despite of all my overwhelming odds against me. I intend to focus on behavioral sciences of finance, marketing and politics - behavioral finance, consumer behavior and behavioral politics. One day, I hope to write a book about my life journey as a parting gift to this world to inspire future generations. Right now, I am a independent financial adviser at Promiseland Independent after 5 months of training and seminar studies. I am also a part time graduate student application (shortlisted and pending - hopefully for approval) at NTU Singapore.
Bernard Leong the rugged intellectual professional (professor in future). As time goes along, I will tell my story and experiences as I go along in the field of my work and studies. Don't worry, I shall be diplomatic but truthful to myself, my readers and whoever you call up there.
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