11 Things to Know at 25 (ish)

For those of you who are facing your quarter-life crisis (yes, there is such a thing), here is an article that hopefully can help you gather your thoughts.

While many of us may have heard of mid-life crisis, the existence of a quarter-life crisis has been largely ignored. Our teachers and parents did not mention it to us. Probably, no one ever did. But it is not very uncommon for someone in their twenties to feel lost and not really knowing what to do with their lives.

The article linked above should give you something to think about. I can't say I agree with everything on that list, but I'd say that some of it are pretty useful.

Is the ATM Cash-Dispensing Sound Fake?

Funny post about fake ATM sounds, in conjunction with the month end for those of us Main Streeters who always seem to be waiting for this time of the month to arrive.

Jerry Seinfeld says:

They really got us trained to use that cash machine now, don’t they? We’re just like chickens in an experiment waiting for that pellet to come down the chute.

You see people at the cash machine; they’re just there. Just, dit dit dit dit dit dit dit, they’re waiting for the sound, you know the sound, you’re waiting for the sound. That’s what we’re trained to hear, the ‘here comes the money’ sound, ya know?

Flip flip flip flip flip flip flip. It’s exciting, don’t you get excited? It’s coming! It’s coming! They’re giving me money!

Breaking 5,000

For many blogs, hitting 5,000 views is easy. For the Main Streeter, its humble beginnings began in July 2009 as Economics @ Home. The postings were irregular in Volume 1 but was maintained at a constant pace of one post per fortnight in Volume 2. This year, we began to increase the frequency of the posts to at least two posts per week, which is more than quadruple the frequency in the past year.

As you can see, as the frequency increased, the number of vists also rose exponentially, which can be said as some sort of an achievement. However, the stats counter began only in July 2010, and in the short period of about one year, the Main Streeter has amassed 5,000 page views. Again, this does not seem like a lot for a newsletter, but for people who have to juggle between work and writing for this non-profit newsletter, 5,000 hits in a year is decent.

The figure below shows the most popular posts so far. It is no surprise that my post on the 100-storey fiasco has the greatest number of views as it was posted during the peak of the controversy. I am pleased to see that the "Love is a Fallacy" post is catching up fast.

Again, no surprises that most of the visitors to the Main Streeter are from Malaysia. What is surprising though, is that we get a pretty diverse crowd. We get people from all over the world and people with all kinds of browsers and operating systems.

In short, the Main Streeter seems to have had a great run and the results appear to be satisfactory and will encourage us here to continue our diligence in making the Main Streeter a better newsletter.

Illogical Thinking - Part 2 (Fallacious Journalism)

As promised in part 1 of "Illogical Thinking", we shall begin to our efforts to tear down amazingly poor arguments that self-proclaimed journalists try to build out of thin air. Refer to the article here.

MULTIPLE expert analyses have now identified Datuk Seri Anwar Ibrahim as the man in the sex video.

(For starters, is this claim really true? Let us examine the argument to corroborate this assumption)

Earlier, a local video professional and a Korean expert had also pronounced the video as genuine and undoctored.

FALLACY NUMBER 1: (Hypothesis Contrary to Fact or "non sequitur") This means that the conclusion is arrived by assuming a false hypothesis.

The professional and Korean expert pronounced that the video is genuine. They did not claim that the man in the video is Anwar. Those are two VERY different things. The man in the video could be Najib for all I care, but they above to "experts" did not make any claim on who was in the video. Hence, their analyses DID NOT identify Anwar as the man in the video. Based on the lesson we learnt in Part 1, this argument commits the "non sequitur" fallacy. This is similar to claiming the following:

Premise 1: Anwar is in the video (false hypothesis, Anwar may or may not be in the video)
Premise 2: The video is genuine
Conclusion: Therefore Anwar is in the video

Now, on with the story:

Now Prof Hany Farid and Asst Prof Lorenzo Torresani of Dartmouth College in New Hampshire concur with those findings. Dartmouth is a top-notch Ivy League institution and among the most distinguished educational establishments in the world.

Prof Farid himself, a leading researcher and chair of Dartmouth’s Neukom Institute for Computational Science, had even developed some of the latest techniques of video analysis.

All the available evidence and all the best forensic science now point overwhelmingly to Anwar.

Farid and Torresani’s findings are said to be of “99.99%” certainty because to be 100% certain, a witness would have to be in the room at the time. That person is Datuk Shazryl Eskay Abdullah, who never had any doubts who was with him in the room.

FALLACY NUMBER 2: (Appeal to Authority or "argumentum ad verecundiam") This is like saying, someone smart and famous says something is true. That is why it is true. We don't have to examine his/her methods.

Prof Farid is a leading researcher and had developed some of the latest techniques of video analysis. Does this mean that he cannot make mistakes? Does this mean that he cannot be motivated by other factors to make "false" claims? Just because he is a leading researcher, does not mean all his work is 100% accurate. The results and methodology of the study needs to be examined before one can make such a claim. This is like saying:

Premise 1: Aristotle was one of the leading thinkers alive (appeal to authority)
Premise 2: Aristotle said that the earth is the center of the universe
Conclusion: The earth is the center of the universe

Next stop:

Reasonable people now know the truth, however much those with desperate political ambitions may deny and distort it.

PKR’s partners in DAP and PAS must also know what they are unable to bring themselves to acknowledge publicly.

FALLACY NUMBER 3: (Appeal to ridicule or "reductio ad ridiculum") This type of argument presents the opponent's position in a way that it appears ridiculous.

When the Star claimed that reasonable people now know the truth, it is suggesting that if you don't believe in what they are proposing (which they claim to be the truth), then you are not a reasonable person. This is like saying:

Evolution is ridiculous! If it was true, there will be no more apes in the world as they would have evolved into humans.

More of the same:

PAS had earlier said it might have to review its Pakatan partnership with PKR if Anwar is the man in the video. Since there is no longer any reasonable doubt that he is, PAS now has to do the honourable thing as a reputedly forthright party with vaunted moral values.

FALLACY NUMBER 4: (Appeal to ridicule) If PAS does not review its partnership with PKR, PAS is not doing the honourable thing.

FALLACY NUMBER 5: (Appeal to flattery) This is a fallacy that praises someone so that he/she shares your views. By calling PAS honourable and a party that is forthright and has vaunted moral values, the Star is asking PAS to agree with its views, because perhaps the Star believes it is also forthright and has vaunted moral values.

When is it going to end???:

But if nothing changes within PKR or Pakatan, that should also be no surprise.

In politics, doing what is honourable can often be difficult, especially for those who like to accuse their opponents of all kinds of intrigue and plots.

FALLACY NUMBER 6: (Poisoning the well or "ad hominem") This fallacy attacks the opponent's characteristics in order to discredit the opposing arguments.

The above statements are trying to make you believe that PKR will not do the honourable thing. The Star indirectly suggests that the PKR likes to accuse their opponents of all kinds of intrigue and plots, and that is why the PKR will not do honourable deeds. The Star stops short of calling PKR a dishonourable party.

FALLACY NUMBER 7: (Appeal to consequences or "ad consequentiam") This fallacy creates a "desirable outcome" and argues based on the fact that if something leads to that desirable outcome, then that something must be true.

The Star creates this idea that the outcome of PAS reviewing or leaving Pakatan is "desirable" or "honourable". Therefore PAS must review its relationship with Pakatan.

It is simply amazing how a short article of 374 words can contain at least SEVEN fallacies. The flaws in the arguments are so glaring that I just cannot ignore it. This shows the kind of writing that we consider newsworthy and publishable, which some of us even try to pass for journalism.

P/S: Note that the author of the article is just "the Star". This means that this is the view of the publication company as a whole. With such a poorly constructed argument, one must conclude that the Star has ulterior motives in arguing what they did (logically speaking).

How Much Is Your College Degree Worth?

Some of us may have wondered if it really mattered if we went to college or not. Here is a study on the return on investment in a college degree (Where is the Best Place to Invest $102,000 -- In Stocks, Bonds, or a College Degree?). The charts in the link are very interesting and demonstrate the great returns by investing in your education.

However, personally, I feel there are areas that the study misses out on. Do you see any problems with the results? In the spirit of the logical thinking theme that is going on this week (and maybe in the near future), I would like to take this analysis one step further by analyzing what are the problems with such a study. Please feel free to drop comments and I will share my thoughts this Sunday.

10 Things You Probably Don't Know About Introverts

If you are an introvert and you know it, click here.

If you are having a bad day as an introvert, you might even feel better after you read the link above.

Though, I do not claim responsibility for results.

Illogical Thinking - Part 1 (Love is a fallacy)

Logical thinking appears to be harder to come by more and more these days. For an analyst, logical thinking is extremely crucial because it is of utmost importance to be able to determine the link between cause and effect. We have to know that when one event occurs, it will directly lead to another, and not be deceived by the sheer coincidence of two events happening almost simultaneously must exhibit a causal relationship.

Below is an interesting story which demonstrates in a simple, lighthearted, but extremely useful example of how many people fall into logical traps and use fallacious arguments in their daily lives. In this special series, we first start by understanding what are the existing pitfalls in our arguments. Then, we shall proceed to examine several other issues which show the glaring logical mistakes made by very prominent publications (like the Star, one of the lousiest newspapers around). Enjoy the story below:

Love is a fallacy 
by Max Schulman

Cool was I and logical. Keen, calculating, perspicacious, acute — I was all of these. My brain was as powerful as a dynamo, precise as a chemist’s scales, as penetrating as a scalpel. And – think of it! – I was only eighteen.

It is not often that one so young has such a giant intellect. Take, for example, Petey Burch, my roommate at the University of Minnesota. Same age, same background, but dumb as an ox. A nice enough fellow, you understand, but nothing upstairs. Emotional type. Unstable. Impressionable. Worst of all, a faddist. Fads, I submit, are the very negation of reason. To be swept up in every new craze that comes along, to surrender oneself to idiocy just because everybody else is doing it – this to me, is the acme of mindlessness. Not, however, to Petey.

One afternoon I found Petey lying on his bed with an expression of such distress on his face that I immediately diagnosed appendicitis. “Don’t move,” I said, “Don’t take a laxative. I’ll get a doctor.”

“Raccoon,” he mumbled thickly.

“Raccoon?” I said, pausing in my flight.

“I want a raccon coat,” he wailed.

I perceived that his trouble was not physical but mental.

“Why do you want a raccoon coat?”

“I should have known it,” he cried, pounding his temples.

“I should have known it they’d come back when the Charleston came back. Like a fool I spent all my money for textbook, and now I can’t get a raccoon coat.”

“Can you mean,” I said incredulously,” that people are actually wearing raccoon coats again?”

“All the Big Men on Campus are wearing them. Where’ve you been?”

“In the library,” I said, naming a place not frequented by Big Men on Campus.

He leaped from the bed and paced the room. “I’ve got to have a raccoon coat,” he said passionately. “I’ve got to!”

“Petey, why? Look at it rationally. Raccoon coats are unsanitary. They shed. They smell bad. They weigh too much. They’re unsightly. They…”

“You don’t understand,” he interrupted, impatiently. “It’s the thing to do. Don’t you want to be in the swim?”

“No,” I said truthfully.

“Well, I do,” he declared. “I’d give anything for a raccoon coat. Anything!”

My brain, that precision instrument, slipped into high gear. “Anything?” I asked, looking at him narrowly.

“Anything,” he affirmed in ringing tones.

I stroked my chin thoughtfully. It so happened that I knew where to get my hands on a raccoon coat. My father had had one in his undergraduate days; it lay now in a trunk in the attic back home. It also happened that Petey had something I wanted. He didn’t have it exactly, but at least he had first rights on it. I refer to his girl, Polly Espy.

I had long coveted Polly Espy. Let me emphasize that my desire for this young woman was not emotional in nature. She was, to be sure, a girl who excited the emotions, but I was not one to let my heart rule my head. I wanted Polly For a shrewdly calculated, entirely cerebral reason.

I was a freshman in law school. In a few years I would be out in practice. I was well aware of the importance of the right kind of wife in furthering a lawyer’s career. The successful lawyers I had observed were, almost without exception, married to beautiful, gracious, intelligent women. With one omission, Polly fitted these specifications perfectly.

Beautiful she was. She was not yet of pin-up proportions, but I felt that time would supply the lack. She already had the makings.

Gracious she was. By gracious I mean full of graces. She had an erectness of carriage, an ease of bearing, a poise that clearly indicated the best of breeding. At table her manners were exquisite. I had seen her at the Kozy Kampus Korner eating the specialty of the house – a sandwich that contained scraps of pot roast, gravy, chopped nuts, and a dipper of sauerkraut – without even getting her fingers moist.

Intelligent she was not. In fact, she veered in the opposite direction. But I believed that under my guidance she would smarten up. At any rate, it was worth a try. It is, after all, easier to make a beautiful dumb girl smart than to make an ugly smart girl beautiful.

“Petey,” I said, “are you in love with Polly Espy?”

“I think she’s a keen kid,” he replied, “but I don’t know if you call it love. Why?”

“Do you,” I asked, “have any kind of formal arrangement with her? I mean are you going steady or anything like that?”

“No. We see each other quite a bit, but we both have other dates. Why?”

“Is there,” I asked, “any other man for whom she has a particular fondness?”

“Not that I know of. Why?”

I nodded with satisfaction. “In other words, if you were out of the picture, the field would be open. Is that right?”

“I guess so. What are you getting at?”

“Nothing , nothing,” I said innocently, and took my suitcase out the closet.

“Where are you going?” asked Petey.

“Home for weekend.” I threw a few things into the bag.

“Listen,” he said, clutching my arm eagerly, “while you’re home, you couldn’t get some money from your old man, could you, and lend it to me so I can buy a raccoon coat?”

“I may do better than that,” I said with a mysterious wink and closed my bag and left.

. . .
“Look,” I said to Petey when I got back Monday morning. I threw open the suitcase and revealed the huge, hairy, gamy object that my father had worn in his Stutz Bearcat in 1925.

“Holy Toledo!” said Petey reverently. He plunged his hands into the raccoon coat and then his face. “Holy Toledo!” he repeated fifteen or twenty times.

“Would you like it?” I asked.

“Oh yes!” he cried, clutching the greasy pelt to him. Then a canny look came into his eyes. “What do you want for it?”

“Your girl.” I said, mincing no words.

“Polly?” he said in a horrified whisper. “You want Polly?”
“That’s right.”

He shook his head.

I shrugged. “Okay. If you don’t want to be in the swim, I guess it’s your business.”

I sat down in a chair and pretended to read a book, but out of the corner of my eye I kept watching Petey. He was a torn man. First, he looked at the coat with the expression of waif at a bakery window. Then he turned away and set his jaw resolutely. Then he looked back at the coat, with even more longing in his face. Then he turned away, but with not so much resolution this time. Back and forth his head swiveled, desire waxing, resolution waning. Finally he didn’t turn away at all; he just stood and stared with mad lust at the coat.

“It isn’t as though I was in love with Polly,” he said thickly. “Or going steady or anything like that.”

“That’s right,” I murmured.

“What’s Polly to me, or me to Polly?”

“Not a thing,” said I.

“It’s just been a casual kick – just a few laughs, that’s all.”

“Try on the coat,” said I.

He complied. The coat bunched high over his ears and dropped all the way down to his shoe tops. He looked like a mound of dead raccoons. “Fits fine,” he said happily.

I rose from my chair. “Is it a deal?” I asked, extending my hand. He swallowed. “It’s a deal,” he said and shook my hand.

I had my first date with Polly the following evening. This was in the nature of a survey. I wanted to find out just how much work I had to get her mind up to the standard I required. I took her first to dinner.

“Gee, that was a delish dinner,” she said as we left the restaurant.

And then I took her home. “Gee, I had a sensaysh time,” she said as she bade me good night.

I went back to my room with a heavy heart. I had gravely underestimated the size of my task. This girl’s lack of information was terrifying. Nor would it be enough merely to supply her with information. First she had to be taught to “think”. This loomed as a project of no small dimensions, and at first I was tempted to give her back to Petey.

But then I got to thinking about her abundant physical charms and about the way she entered a room and the way she handled a knife and fork, and I decided to make an effort.
I went about it, as in all things, systematically. I gave her a course in logic. It happened that I, as a law student, was taking a course in logic myself, so I had all the facts at my fingertips. “Polly,” I said to her when I picked her up on our next date, “tonight we are going over to the Knoll and talk.”

“Oo, terrif,” she replied. One thing I will say for this girl: you would go far to find another so agreeable.

We went to the Knoll, the campus trysting place, and we sat down under an old oak, and she looked at me expectantly.

“What are we going to talk about?” she asked.

“Logic.”

She thought this over for a minute and decided she liked it. “Magnif,” she said.

Logic,” I said, clearing my throat, “is the science of thinking. Before we can think correctly, we must first learn to recognize the common fallacies of logic. These we will take up tonight.”

“Wow-dow!” she cried, clapping her hands delightedly.

I winced, but went bravely on. “First let us examine the fallacy called Dicto Simpliciter.”

“By all means,” she urged, batting her lashes eagerly.

“Dicto Simpliciter means an argument based on an unqualified generalization. For example: Exercise is good. Therefore everybody should exercise.”

“Polly,” I said gently, “the argument is a fallacy. Exercise is good is an unqualified generalization. For instance, if you have heart disease, exercise is bad, not good. Therefore exercise is bad, not good. Many people are ordered by their doctors not to exercise. You must qualify the generalization. You must say exercise is usually good, or exercise is good for most people. Otherwise you have committed a Dicto Simpliciter. Do you see?”

“No,” she confessed. “But this is marvy. Do more! Do more!”

“It will be better if you stop tugging at my sleeve,” I told her, and when she desisted, I continued. “Next we take up a fallacy called Hasty Generalization. Listen carefully: You can’t speak French. Petey Burch can’t speak French. I must therefore conclude that nobody at the University of Minnesota can speak French.”

“Really?” said Polly, amazed. “Nobody?”

I hid my exasperation. “Polly, it’s a fallacy. The generalization is reached too hastily. There are too few instance to support such a conclusion.”

Know any more fallacies?” she asked breathlessly. “This is more fun than dancing, even.”

I fought off a wave of despair. I was getting nowhere with this girl, absolutely nowhere. Still, I am nothing, if not persistent. I continued. “Next comes Post Hoc (false cause). Listen to this: Let’s not take Bill on our picnic. Every time we take him out with us, it rains.”

“I know somebody just like that,” she exclaimed. “A girl back home – Eula Becker, her name is. It never fails. Every single time we take her on a picnic…”

“Polly,” I said sharply, “it’s a fallacy. Eula Becker doesn’t cause the rain. She has no connection with the rain. You are guilty of Post Hoc if you blame Eula Becker.”

“I’ll never do it again,” she promised contritely. “Are you mad at me?”

I sighed deeply. “No, Polly, I’m not mad.”

“Then tell me some more fallacies.”

“All right. Let’s try Contradictory Premises.”

“Yes, let’s,” she chirped, blinking her eyes happily.
I frowned, but plunged ahead. “Here’s an example of Contradictory Premises: If God can do anything, can He make a stone so heavy that He won’t be able to lift it?”

“Of course,” she replied promptly.

“But if He can do anything, He can lift the stone,” I pointed out.

“Yeah,” she said thoughtfully. “Well, then I guess He can’t make the stone.”

“But He can do anything,” I reminded her.

She scratched her pretty, empty head. “I’m all confused,” she admitted.

“Of course you are. Because when the premises of an argument contradict each other, there can be no argument. If there is an irresistible force, there can be no immovable object. If there is an immovable object, there can be no irresistible force. Get it?”

“Tell me more of this keen stuff,” she said eagerly.

I consulted my watch. “I think we’d better call it a night.

I’ll take you home now, and you go over all the things you’ve learned. We’ll have another session tomorrow night.”

I deposited her at the girls’ dormitory, where she assured me that she had had a “perfectly” evening, and I went glumly home to my room. Petey lay snoring in his bed, the raccoon coat huddled like a great hairy beast at his feet. For a moment I considered waking him and telling him that he could have his girl back. It seemed clear that my project was doomed to failure. The girl simply had a logic-proof head.

But then I reconsidered. I had wasted one evening; I might as well waste another. Who knew? Maybe somewhere in the extinct crater of her mind, a few embers still smoldered. Maybe somehow I could fan them into flame. Admittedly it was not a prospect fraught with hope, but I decided to give it one more try.

Seated under the oak the next evening I said, “Our first fallacy tonight is called Ad Misericordiam (appeal to pity).”

She quivered with delight.

“Listen closely,” I said. “A man applies for a job. When the boss asks him what his qualifications are, he has a wife and six children at home, the wife is a helpless cripple, the children have nothing to eat, no clothes to wear, no shoes on their feet, there are no beds in the house, no coal in the cellar, and winter is coming.”

A tear rolled down each of Polly’s pink cheeks. “Oh, this is awful, awful,” she sobbed.

“Yes, it’s awful,” I agreed, “but it’s no argument. The man never answered the boss’s question about his qualifications. Instead he appealed to the boss’s sympathy. He committed the fallacy of Ad Misericordiam. Do you understand?”

“Have you got a handkerchief?” she blubbered.

I handed her a handkerchief and tried to keep from screaming while she wiped her eyes. “Next,” I said in a carefully controlled tone, “we will discuss False Analogy (a form of forgetful induction). Here is an example: Students should be allowed to look at their textbooks during examination. After all, surgeons have X rays to guide them during a trial, carpenters have blueprints to guide them when they are building a house. Why, then, shouldn’t students be allowed to look at their textbooks during examination?”

“There now,” she said enthusiastically, “is the most marvy idea I’ve heard in years.”

“Polly,” I said testily, “the argument is all wrong. Doctors, lawyers, and carpenters aren’t taking a test to see how much they have learned, but students are. The situations are altogether different, and you can’t make an analogy between them.”

“I still think it’s a good idea,” said Polly.

“Nuts,” I muttered. Doggedly I pressed on. “Next we’ll try Hypothesis Contrary to Fact (non sequitur).”

“Sounds yummy,” was Polly’s reaction.

“Listen: If Madame Curie had not happened to leave a photographic plate in a drawer with a chunk of pitchblende, the world today would not know about radium.”

“True, true,” said Polly, nodding her head “Did you see the movie? Oh, it just knocked me out. That Walter Pidgeon is so dreamy. I mean he fractures me.”

“If you can forget Mr. Pidgeon for a moment,” I said coldly, “I would like to point out that the statement is a fallacy. Maybe Madame Curie would have discovered radium at some later date. Maybe somebody else would have discovered it. Maybe any number of things would have happened. You can’t start with a hypothesis that is not true and then draw any supportable conclusions from it.”

“They ought to put Walter Pidgeon in more pictures,” said Polly, “I hardly ever see him any more.”

One more chance, I decided. But just one more. There is a limit to what flesh and blood can bear. “The next fallacy is called Poisioning the Well.”

“How cute!” she gurgled.

“Two men are having a debate. The first one gets up and says, ‘My opponent is a notorious liar. You can’t believe a word that he is going to say.’ … Now, Polly, think hard. What’s wrong?”

I watched her closely as she knit her creamy brow in concentration. Suddenly a glimmer of intelligence — the first I had seen — came into her eyes. “It’s not fair,” she said with indignation. “It’s not a bit fair. What chance has the second man got if the first man calls him a liar before he even begins talking?”

“Right!” I cried exultantly. “One hundred per cent right. It’s not fair. The first man has poisoned the well before anybody could drink from it. He has hamstrung his opponent before he could even start … Polly, I’m proud of you.”

“Pshaws,” she murmured, blushing with pleasure.

“You see, my dear, these things aren’t so hard. All you have to do is concentrate. Think-examine-evaluate. Come now, let’s review everything we have learned.”

“Fire away,” she said with an airy wave of her hand.

Heartened by the knowledge that Polly was not altogether a cretin, began a long, patient review of all I had told her. Over and over and over again I cited instances, pointed out flaws, kept hammering away without letup. It was like digging a tunnel. At first, everything was work, sweat, and darkness. I had no idea when I would reach the light, or even if I would. But I persisted. I pounded and clawed and scraped, and finally I was rewarded. I saw a chink of light. And then the chink got bigger and the sun came pouring in and all was bright.

Five grueling nights with this book was worth it. I had made a logician out of Polly; I had taught her to think. My job was done. She was worthy of me, at last. She was a fit wife for me, a proper hostess for many mansions, a suitable mother for my well-heeled children.

It must not be thought that I was without love for this girl. Quite the contrary. Just as Pygmalion loved mine. I determined to acquaint her with feelings at our very next meeting. The time had come to change our relationship from academic to romantic.

“Polly,” I said when next we sat beneath our oak, “tonight we will not discuss fallacies.”

“Aw, gee,” she said, disappointed.

“My dear,” I said, favoring her with a smile, “we have now spent five evenings together. We have gotten along
splendidly. It is clear that we are well matched.”

“Hasty Generalization,” said Polly brightly.

“I beg your pardon,” said I.

“Hasty Generalization,” she repeated. “How can you say that we are well matched on the basis of only five dates?”

I chuckled with amusement. The dear child had learned her lessons well. “My dear,” I said, patting her hand in a tolerant manner, “five dates is plenty. After all, you don’t have to eat a whole cake to know that it’s good.”

“False Analogy,” said Polly promptly. “I’m not a cake. I’m a girl.”

I chuckled with somewhat less amusement. The dear child had learned her lessons perhaps too well. I decided to change tactics. Obviously the best approach was a simple, strong, direct declaration of love. I paused for a moment while my massive brain chose the proper word. Then I began:

“Polly, I love you. You are the whole world to me, and the moon and the stars and the constellations of outer space. Please, my darling, say that you will go steady with me, for if you will not, life will be meaningless. I will languish. I will refuse my meals. I will wander the face of the earth, a shambling, hollow-eyed hulk.”

There, I thought, folding my arms, that ought to do it.

“Ad Misericordiam,” said Polly.

I ground my teeth. I was not Pygmalion; I was Frankenstein, and my monster had me by the throat. Frantically I fought back the tide of panic surging through me; at all costs I had to keep cool.

“Well, Polly,” I said, forcing a smile, “you certainly have learned your fallacies.”

“You’re darn right,” she said with a vigorous nod.

“And who taught them to you, Polly?”

“You did.”

“That’s right. So you do owe me something, don’t you, my dear? If I hadn’t come along you never would have learned about fallacies.”

“Hypothesis Contrary to Fact,” she said instantly.

I dashed perspiration from my brow. “Polly,” I croaked, “you mustn’t take all these things so literally. I mean this is just classroom stuff. You know that the things you learn in school don’t have anything to do with life.”

“Dicto Simpliciter,” she said, wagging her finger at me playfully.

That did it. I leaped to my feet, bellowing like a bull. “Will you or will you not go steady with me?”

“I will not,” she replied.

“Why not?” I demanded.

“Because this afternoon I promised Petey Burch that I would go steady with him.”

I reeled back, overcome with the infamy of it. After he promised, after he made a deal, after he shook my hand!

“The rat!” I shrieked, kicking up great chunks of turf.

“You can’t go with him, Polly. He’s a liar. He’s a cheat. He’s a rat.”

“Poisoning the Well ,” said Polly, “and stop shouting. I think shouting must be a fallacy too.”

With an immense effort of will, I modulated my voice. “All right,” I said. “You’re a logician. Let’s look at this thing logically. How could you choose Petey Burch over me? Look at me — a brilliant student, a tremendous intellectual, a man with an assured future. Look at Petey — a knothead, a jitterbug, a guy who’ll never know where his next meal is coming from. Can you give me one logical reason why you should go steady with Petey Burch?”

“I certainly can,” declared Polly. “He’s got a raccoon coat.”

The Future Isn't What It Used To Be

Volume 3 Issue 26: Two-Cent Economics

The Chinese Bubble?

For about a year now, many people are hyping up the supposed property bubble in China. Many people have been waiting on the sidelines for China's property market to fall, and then condemn the Chinese economy for "over-investing".

Personally, I think the people above have been over-exposed to the Western media. They read from Bloomberg, the Wall Street Journal, Reuters and what not. How many of those reporters actually know what they are talking about China? To really understand what is going on in China, we should consult the experts on China. Also, to avoid the Asian bias, we should not immediately take the word of a Chinese economist.

So what do we do? How about this? Let us look at the following views by two prominent Western experts on China. First up is Mr Howard Davies, who is the former Chairman of Britain’s Financial Services Authority and a former Deputy Governor of the Bank of England, and is currently Director of the London School of Economics. His latest book is Banking on the Future: The Fall and Rise of Central Banking. See his article entitled, "Chinese Finance Comes of Age".

I particularly like this quote from the article:

It would be flattering to think that this turnaround in China’s financial system been attributable to the wise counsels of foreign advisers. But, while external influences have been helpful in some ways – the stimulus of Basel 1 and 2 strengthened the hands of those in Beijing determined to clean up the banking system – the Chinese now, not unreasonably, treat advice from the City of London and Wall Street with some skepticism.

For example, recent criticism of Asian regulators by US Treasury Secretary Timothy Geithner is viewed across the region with scorn, not to mention incredulity. A little more humility is in order, given US regulators’ performance in the run-up to the crisis. People who live in glass houses should not throw even rhetorical stones.

The next article is from someone even more famous. Stephen S. Roach, is a member of the faculty of Yale University, and is also Non-Executive Chairman of Morgan Stanley Asia and author of The Next Asia (Wiley 2009). He gives us "Ten Reasons Why China is Different".

In short, here is what Stephen Roach has to say:

Yale historian Jonathan Spence has long cautioned that the West tends to view China through the same lens as it sees itself. Today’s cottage industry of China doubters is a case in point. Yes, by our standards, China’s imbalances are unstable and unsustainable.  Chinese Premier Wen Jiabao has, in fact, gone public with a similar critique.

But that’s why China is so different. It actually takes these concerns seriously. Unlike the West, where the very concept of strategy has become an oxymoron, China has embraced a transitional framework aimed at resolving its sustainability constraints. Moreover, unlike the West, which is trapped in a dysfunctional political quagmire, China has both the commitment and the wherewithal to deliver on that strategy. This is not a time to bet against China.

While it is good to be skeptical in your approach to reading, we should always apply our skepticism at all times, and not selectively. I think both the articles above reflect a deeper insight on what is truly happening in China's transformation.

While everyone in the West is ready waiting to pounce on China by blaming it for the next global recession due to its asset bubble, it would only confirm what the West has been fearing all this while. China has arrived at the global stage. The West needs China more than ever to pull themselves out of their sluggish economic recovery.

With China (and the rest of the emerging economies) tighten its screws on its economy, the West will feel the pinch, as their export growth will slow down, while domestic demand remains lukewarm at best. I like how Howard Davies puts it:

People who live in glass houses should not throw even rhetorical stones.

Volume 3 Issue 26: Intelligent Investing

Why The ETP Will Fail

Many of you have praised Najib's initiative to transform Malaysia and most of the time, you would be correct to do that. When the New Economic Model was launched, I must admit, I was quite optimistic about Malaysia's prospects. However. as time passed, the New Economic Model decayed when the 10th Malaysia Plan was launched and it totally deteriorated when the Economic Transformation Programme was announced.

Why do I say this? Just a few weeks ago, I saw this piece of news. Here is an extract:

KUALA LUMPUR, June 16 — Asia Petroleum Hub (APH), a private company to develop and operate a multibillion-dollar oil terminal in Johor, has been placed under receivership by CIMB Bank, Singapore’s Business Times reported.

According to BT, the latest development could spell the end for a development once billed as one of the world’s largest fully integrated terminals with storage capacity of 924,000 cubic metres, large trans-shipment capacity and multiple jetties — all located on a 40-ha reclaimed island off the coast of Johor.

I would say that this is the first sign of many things to come in the next ten years. APH is a private company, just like how many of the projects in the ETP are supposed to be private ventures. As you can see from the extract above, they were trying to construct an ambitious project that sounds superbly promising, just like many of the projects in the ETP. So what happened? Here is what happened:

APH drew down RM840 million for project costs. But the executives said that project costs had escalated and APH was looking for investors for a further RM2 billion in new financing, the report said.

Surprise, surprise! The cost of the project was much higher than estimated, and they didn't have enough money. So now that they don't have enough money, what is going to happen to the half-baked oil terminal in Johor? Someone has to bail them out.

I am not saying that every ETP project is going to turn out like this, but let us assume, on the conservative side, about 20% of the projects run into cost overruns. That would mean that out of the RM1.4 trillion in projects that was planned under the ETP, about RM280 billion (YES, BILLION) worth of projects would end up in deep shit. Let's not kid ourselves. I don't even remember a time where an announced project did not meet cost overruns. So the figure would probably be a lot higher than 20%.

While Najib is out announcing all these impressive sounding projects all over town, let us ask ourselves, how is that going to improve our country? Pause for a moment and think about 10 years from now. With so much investment, let us even assume that our GDP would end up reaching the goal that was set out in the ETP. Do we honestly believe that our quality of lives would improve automatically without us having to work hard or improve at all?

This is precisely the self-denying, atrocious attitude that many Malaysians have. We think that just because the government announces 131 Entry Point Projects, our lives would automatically be better 10 years from now. We still need to improve our skills and knowledge and productivity and efficiency and competitiveness. Wealth isn't going to just drop down from the sky onto our laps. And since the key factor is to become competitive and productive and what not, why not make that our main goal instead of conjuring up 5001 acronyms to mislead the people into thinking that our lives will automatically be all right if we do all this big projects?

You really have to know your investments before you even start to investing.

Volume 3 Issue 25: Intelligent Investing

Can You Trust Your Favorite Analyst?

Check out this brief summary on what happened to Muhibbah in the recent 20% drop in its share price. You should be insanely pissed off at CIMB Research for their call. It just shows massive negligence. If you are still not convinced why you need to think carefully before you trust your favorite analysts, read this uber comprehensive analysis on Muhibbah and then perhaps you will then think twice before you trust your brokerage reports again.

A while ago, I wrote about the sheer negligence in some analyst's research and also about how some research houses have the tendency to get you to Buy High and Sell Low.

In short, don't jump into the water just because someone else tells you it is safe. There really is no free lunch. If you want to profit from investing, you simply need to do your homework.

Volume 3 Issue 25: Two-Cent Economics

European Lesson for Malaysia

Here is an article from the Chief Economist at the Centre for European Reform.

If you read through the entire article, it explains how sustained improvement in standards of living can be achieved in an economy via productivity growth. The article briefly discusses why many of the Eurozone economies are in trouble right now, and also why many of them are stuck in a rut.

The article serves as a premonition of what is going to happen to Malaysia in about 10-20 years if we don't start focusing on productivity growth. In fact, if you replaced anything "European" in the article with "Malaysia", I would say the article would still be 90% accurate. Here are some examples:

Governments obsessed with national competitiveness are likely to pursue damaging economic policies. If economic growth is seen as being dependent on the cost competitiveness of exports, governments will focus on things that might make sense for exporters, but not for their economies as a whole, such as labor-market policies aimed at artificially holding down wage growth, which redistributes income from labor to capital and exacerbates inequality.

Does this remind you of the massive import of cheap foreign labor in Malaysia?

...An individual firm can cut wages without undermining demand for whatever good or service it produces. But if all firms cut wages simultaneously, the resulting weakness of overall demand undermines companies’ incentives to invest, in turn depressing productivity growth.

The article makes it sound so obvious, yet our government has failed to see the point after 40 long years of the NEP.

...Without stronger productivity gains there, economic growth will prove elusive...

But improvement presupposes diagnosing why Europe’s productivity performance, with a few notable exceptions, has been so bad. There are two core problems. The first is inadequate skills levels, aggravated by complacency.

If you replaced "Europe" with "Malaysia", you wouldn't miss a thing. It is exactly the problem Malaysia is facing right now.

The second problem is inadequate competition. In too many sectors, incumbents are protected. This is justified in terms of upholding “social justice” or defending “national champions.” But it merely fuels rent-seeking – the ability of particular groups in society to extract disproportionate rewards for their work. Where this tendency is strongest, productivity levels are weakest.

This is the clincher for me. What more needs to be said?

Birthday

In memory of my birthday. See here.

Calvin and Hobbes (The Malaysian Dilemma)

No Additional Cost

 
I want to laugh at this, but I just can't.

CYBERJAYA: The construction of the RM800mil new Istana Negara complex will be completed by the end of August without additional cost, said Works Minister Datuk Seri Shaziman Abu Mansor.

It is said as if there were cause for celebration that the new Istana Negara costs ONLY RM800 million to build. With RM800 million, you could have commissioned 400+ Facebook pages. Oh wait... that's free.

Volume 3 Issue 24: Two-Cent Economics

The Downside of Being a High Achiever

This is one of the best articles that I have read recently. It is a very long article, so be forewarned. It is definitely worth the time.

Here is one of my favorite parts:

Focus on the Long Term

Major goals can withstand interim setbacks. When you are looking at the big picture, you often give yourself more latitude to make a few missteps.

One lawyer with a passion for civil liberties, Steven, told us of an experience writing a brief that was in an area of law that lay outside his experience. He was paralyzed by the prospect of looking incompetent to the members of the legal community he admired most. That the subject matter was only slightly out of his area of expertise made it all the more daunting—he felt he should know instinctively how to respond.

Steven realized that he had to grant himself the permission to be mediocre—an appalling prospect for achievers.

He weighed the possible consequences of a subpar brief against the broader benefits of expanding his expertise and making an influential contribution to the case. As it turned out, his work on the brief garnered him additional respect from his colleagues. It was a solid effort that demonstrated his ability to stretch beyond his comfort zone.

Long-term success requires some willingness to commit to necessary short-term risks. High achievers often let their fear of failure stop them from taking those chances.

That was the case with Rick, a respected professor but a dismal team player. His students loved him, but his peers were increasingly vocal about his refusal to contribute at an organizational level. He couldn’t be counted on to complete any work other than what was on his own to-do list. Rick consciously ignored his colleagues’ feedback, in part because he knew he was less talented at organizational tasks.

Mostly, though, he was just too self-absorbed to pay attention to anything other than his own teaching, research, and publishing agenda. Unfortunately, Rick’s inability to see the big picture was his undoing, and his contract was not renewed.

In his next position, Rick resolved to do things differently. He invested time and effort in shoring up his organizational abilities. Though he worried initially about not focusing his all energies on teaching, his farsightedness paid off: He’s now one of the most highly regarded professors in his department—on all counts. He still feels anxiety about his weaknesses—that’s who he is—and in a way it’s what makes him great. He’s never satisfied.

Doing the right thing poorly is painful for high achievers. It’s much more satisfying to do something well, even if it’s not the best use of your time.

Moving your A game to a new level or in a new direction takes humility, it takes practice, and it takes patience (not necessarily your strong suit). But it’s a necessary step on the road to doing the right thing well.

I have been preaching about long term thinking for a while now. This article just puts it aptly, among other amazing things.

Volume 3 Issue 23: Two-Cent Economics

Transport Minister that takes the Bus

Singapore's Transport Minister

I've been wanting to post this up for a while. This is a picture of Singapore's transport minister, Mr Lui Tuck Yew, taking their very own bus.That makes perfect sense because if he is assigned to improve the transportation system in Singapore, he must damn well be a user.

Just like, why would you believe a real estate agent about stock market advice? If you want to become a real expert at something, you literally need to get your hands dirty on that thing.

What about our own transport minister? Mr Kong Cho Ha, when are you going to lead by example? The ball is in your court.

Perhaps I am wrong, but I believe all the ministers in Singapore do not have funky titles like Datuk, Tan Sri, Datuk Seri or any other kind of funky title in front of their names. It probably has something to do with how they are actually doing their jobs properly. Perhaps that is why they can bring themselves to take the public transport like the rest of us. But I could be speculating.

Volume 3 Issue 24: Intelligent Investing

More Sucky IPOs

Here is another reason why you seriously can't trust IPOs. You may make a quick buck off the first two days, but in a grand scheme of things, IPOs are hardly investment plays, whether you like it or not.

Here is an extract:

The S-1 filing shows that Groupon had 83m subscribers at the end of March and its revenues rose from a total of $713m in 2010 to $645m in the first quarter of 2011 alone.

Meanwhile, it made a loss according to Generally Accepted Accounting Principles of $390m in 2010 and $103m in the first quarter of 2011.

Do not fear, however, Groupon has worked out a way to smarten up its figures – it has devised its own measure of profitability called “adjusted consolidated segment operating income” or “adjusted CSOI”.

A strong profitable company will still be around 5-10 years from now. It also does not need to make up a way to measure its own profitability. In other words, let the numbers speak for themselves.

1pengguna Boleh

Another RM1.4 million down the drain.

Even if the website was up and running without a glitch, it would serve as a mere toy for the first few months. No one is going to take it seriously for the longer term. For example, my shopping list includes, shower cream, shampoo, toothpaste, apples, orange juice and liquid detergent. There is NO WAY that all of the items mentioned will be cheaper at one place. So, I would have to key in all the items that I wanted and compute the overall price to see at which hypermarket or supermarket that I can get them for the lowest price. There are a few problems that arise from that.

1. How many of us make exact shopping lists before going shopping and adhere to it 100%. Sometimes we buy more, sometimes we buy less. That changes the overall price paid.

2. OK, so we find out from the price checker that we can save about RM2-3 at a particular hypermarket. What if that hypermarket is 5 km further from my house compared with a competing outlet? Assuming the cost per km for driving to that hypermarket is RM0.20, the drive to and from that place would cost an additional RM2.00, reducing my cost savings from using 1pengguna to almost zilch.

3. What about the 15-20 minutes taken to key in all the goodies that I intend to get? Assuming my time costs about RM20 per hour (low estimate), 15 minutes would cost about RM5.

4. The worst part about the 1pengguna website was that you can only compare outlets of the SAME type. This means that you can compare Jusco with only... Jusco, because it is classified as a supermarket. You can't compare Jusco against Giant or Tesco because they are hypermarkets.

Still feel like using 1pengguna? Like I said, it is a short-term toy at best.

However, I see a way to salvage this failed project. Convert it to a 1antirasuah (anti-bribery) website. Allow registered users to input detailed accounts of occurrences of bribery issues in government departments, ranging from petty bribery to large-scale graft. Allow the users to key in the name of the department, name of the officer involved, the amount involved, service involved etc. We will then compare the "prices" of the "services" offered on a large scale to see how much it takes to get things done. See if that reduces corruption. I think that would actually save the people more money than this  useless 1pengguna website.

Your Life Sucks?

Next time you think your life sucks, please remember this video:

They Beat Me To It

I tried out the 1pengguna website this morning and found that it did not work.

The Malaysian Insider beat me to reporting it. Not that I was in any race or anything, but the real joke is on the government, again.

3rd Best or 3rd Worst in English?

Normally, I am an optimist, but the headline in this article is simply unacceptable. It is simply misleading to say:

Third best in English language


KUALA LUMPUR: When it comes to English proficiency, Malaysians are not at par with their neighbouring counterparts. The country ranks third out of five countries in the English Language Assessment (ELA).

In the headline, we are the third best, but in the first paragraph, we are told that Malaysia ranks third out of five. Maybe I am wrong, but isn't that also third worst? What misleading headlines. 

Goldman Sachs Made a Boo-Boo

Here is why proofreading is important:

On February 11th Goldman issued four warrants tied to Japan’s Nikkei index which were described in three separate filings amounting to several hundred pages. Buried in the instructions to determine the settlement price was a formula that read “(Closing Level – Strike Level) x Index Currency Amount x Exchange Rate”. It is Goldman’s contention that rather than multiplying the currency amount by the exchange rate, it should have divided by the exchange rate. Oops.

Pretty much the smallest mistake you can get, but it is going to cost about HKD350 million. So next time, do not belittle any proofreading job. It could cost you millions. 

Volume 3 Issue 23: Intelligent Investing

Goatzilla vs Traffic Jams

Today marks another step down the slippery slope in the Star's reporting standards.

Check out this traffic jam report in JB. The new bio-metric scanning junk forced people who were travelling from Singapore to JB to wait between ONE to FOUR hours at the checkpoint, and most of this is done STANDING. The queue began in Singapore and lasted all the way to the Tuas checkpoint.

What were the customs people thinking? How can they ever think it is OK for so much productive time to be wasted? If they did not foresee this, then it makes them look even more stupid.

The best part of this is, it is totally not reported in the Star at all. I think this is a major issue and warrants immediate attention. I guess the Star believes this story about a giant goat is more important

Volume 3 Issue 22: Intelligent Investing

Buy High, Sell Low?

Even though I hate quoting the Star, but it does have the most convenient example of why IPOs suck. Just from the following paragraphs, it is already clear:

One company that comes to mind is Malaysian hard disk-drive component maker JCY International Bhd, which was listed on the Main Market over a year ago. The company promised a good growth story and was touted at one point during its fund raising exercise as potentially being South-East Asia's largest technology IPO exercise since 2000.

Based on previous news report, YKY Investment Ltd, controlled by Malaysian businessman Y.K. Yong, had originally wanted to sell some 530.2 million existing shares, or 25.9%, of the company to institutional and non-institutional investors at RM1.60 to RM2.20 per share.

Since listing in late February 2010, the company has seen its share price take a beating, losing 62% of its listing price value and ending at 61 sen as at last Friday. The lacklustre appeal in the stock has been mainly due to declining profits although analysts had said then that the company was likely to do well on the back of the technology industry having a bright future.

Can you imagine losing 60% of your money in one year? It is mind-blowing. If you had RM10,000 invested in JCY, you would be left with about RM4,000. That's not the worst part. The worst part is, to get from RM4,000 back to RM10,000, you would have to make a total return of 150%. But but but.... all you lost was 60%. Why do you now have to make 150% to break even? That is the unfairness that is life. That is why it pays to be prudent, and to have a huge margin of safety.

To rub it in, check out that last paragraph above:

...The lacklustre appeal in the stock has been mainly due to declining profits although analysts had said then that the company was likely to do well on the back of the technology industry having a bright future.

ANALYSTS had said that the company was likely to do well. So, it is all the analysts' fault then? So what happens next? Can we claim our money back from those analysts? Well, here's the kicker:

Many of the “buy” calls recommended by research houses covering the stock have been switched as of late last year to a “sell” or “hold” due to the company's poor earnings. From the six quarterly results announced by the company after its listing in February last year, two quarters reported growth in revenue and earnings, one quarter saw revenue and net profit somewhat plateau while the last three quarters recorded a decline in revenue and earnings.

Hey, that's easy. Once the company has already tanked, let us all switch our calls to "SELL". We often here all the analysts telling us, "BUY LOW, SELL HIGH". But what? Wait... did I hear wrongly? What happened with JCY was, they asked you to BUY AT RM1.60, but then now, they ask you to SELL AT AROUND RM0.60. Isn't that "BUY HIGH, SELL LOW"?

So, there are two lessons to take away from this:

1. I hate IPOs. They may be good on paper, and may promise a lot, but at the same time, it could be a lot of hot air. My take is, if the company is a good one, it will still be around five to ten years from now, and it would not be too late to buy then.

2. Many analysts do not have accountability. One one hand, they preach a "Buy Low, Sell High" mantra, but what they are essentially doing is to get you to "Buy High, Sell Low". Some stockbrokers are even worse. They will tell you to "Buy High, Sell Higher"!!!!! And when the stock tanks, they don't even have the guts to tell you that they are sorry. They are not accountable. You will hear reasons like:

a) Oh, no one can predict the market. (Then why the hell did you tell me that it will go up when you asked me to buy? Were you not trying to predict it?)


b) Oh, the information has changed, so it changes our analysis. (No shit. You change your advice AFTER the fact of the price drop (change in information?). My boss would say that that person is not an analyst. He/She is a historian.)

Because of nonsense analysts like the ones mentioned above, us Main Streeters have to analyze the analysts. We need to analyze which analysts can be trusted, and which can't. And the easiest way to do that, is to look at long-term results. Who gives you the most consistent performance, through the longest time period?

The Real History of Melaka?

Melaka revisited – Shaun Tan

I believe Shaun Tan is also the author of the essay, The Migrant's Eye, which is a finalist in the World Bank's International Essay Competition. I will be posting that essay up at a future date.

More Useless Reporting by the Star?

Before you think that I have any vendetta against the Star, please stop. I just write in hopes of raising awareness so that Malaysia can have a high quality newspaper that it deserves.

Here is another blogger who demonstrated the fact that the Star is another useless piece of junk. I guess I am not alone.