Allocating our Finite resources to the test of times.

 Since time immemorial mans have unlimited needs and wants. This makes us desire for everything. However, our desire is limited by the amount of finite cash we have. Therefore, we should allocate our limited cash to fulfill our needs and wants at the optimum level and overcome the opportunity cost involve. Opportunity cost here would mean the loss of opportunity on other asset class as we allocate to one particular asset class. 

I would like to suggest an asset allocation that can withstand the test of time whether it is boom, bust, depression or disaster that will be able to grow with time and conservative in nature as well. Just remember that the dark days are many. 

Therefore, i would allocate my asset class as follows:

1. House and Lands and cash which include insurance policy, foreign cash and retirement saving 30 percent.

2. Stock, bonds and derivatives 30 percent

3. Cars and Collectible 20 percent

4. Gold and Precious metal 10 percent. 

5. Crypto 10 percent

This would make sure that we can withstands the ups and downs of the economy and rebalance our asset class as one asset class outperform the other or when one asset class underperform.

It is better to be ten years early than one day late.

Moral of the story: Fate favors those who are prepared and Murphy law state that calamity that we are prepared for in advance will not come to fruition.

Teach a wiseman and he will be wiser. 

In God we trust, 

Dr. Lion. 

Developing a vibrant country from scratch.

 Say I am the President of Timbaktu or Pulau Belakang mati, a country which is getting out from stoneage. 

How, can i develop my country if i had to start rebuilding my country from stoneage? 

First of all, in order to develop a strong and vibrant country i must have good governance and justice to be the bedrock principle for my country. This is because we cannot break good principle but break ourself going against good principle in life. Those who are good and productive need to be rewarded and those who are lazy or corrupted need to be censored. This would make my country more productive and treasure good value which is godly in nature.

Why must we eradicate corruption? Corruption is worse than the nuclear disaster in hiroshima and nagasaki which ended WW2. Great thinker in an African University had always believe that if you wanted to destroy a country or civilization, you can do it by allowing their students to cheat in exam, lower the passing marks and instill negative value such as corruption. 

As these children grow up they will be corrupted lawyers, corrupted doctors, corrupted engineer, corrupted police and corrupted army. As a result they country legislation is not trustworthy, the doctor is not passionate in his work nor effective, the engineer will build tofu building that can collapse any time, the police and army will be asking for bribe and put their personal interest above the needs to serve the country and all the citizens will only serve self interest. Just imagine whether this scenario is worse than a nuclear disaster that befall hiroshima and nagasaki?

So we need to stem corruption at the bud as the saying goes the fish is rotten at the head. 

Corruption and opium is the cause of the fall of the Chinese Emperor in the Qing dynasty and many other civilization worldwide. If the mighty Chinese Emperor can fall what about my small country in Timbaktu or Pulau Belakang mati?

Furthermore, we need to educate our young generation on good principles and moral values in life as well as creating a judical system that has good corporate governance and stem corruption at its core and at all level of society. Currently, China and Indonesia had strict laws that will execute anyone, that is found to be corrupted after a fair trial in court, be it billionaires, police chiefs, armies or even politicians. So with good governance, the justice system will make sure that everyone is equal in the eye of the law. There must also be division and independence in legislation, executive and judiciary. 

After good governance, what we need is a productive society. We should encourage productivity by rewarding more the productive group in society and encourage the non productive part of society to be productive. China recently have encorage more of their urban dwellers to go to third or fourth urban city to develop modern farming and rewarding those who are willing to work and relocate with higher renumeration that is three or four times higher than the basic income. This policy would encourage people to be more productive and competitive in nature to develop modern farming in their beloved country. 

Next, is to eradicate poverty and to increase the GDP of my country. GDP is refer to the amount of goods or service that my country produce in a year. 

How do we eradicate poverty? In order to eradicate poverty we must make sure our young generation treasure hardwork and success. Success does not come before hardwork even in the dictionary. We should creat productivity month, slogan and seminar. The Indonesian president, Jokowi understand this and he united Indonesian under the slogan "Mari kita kerja" and Indonesia is now setting the tone to be the fourth largest economy in the world. 

If all the strata of society is hardworking, productivity will increase and the GDP per capita will increase and as a result the socio economic and well being of the country will improve as more of the citizens will be free from poverty and out of the rat race.

The best advice that a mother can give to her children is to work hard all their life. In life if you do more than what you are paid for in life, you will be rewarded handsomely as coined by motivational Guru Napoleon Hill. 

You can ask any one that is freed from the bondage of poverty or achieve financial freedom, which is more alluring or motivated? Handouts or financial freedom from poverty due to hardwork on his or her own efforts?

Like the saying goes if you give a man a fish, you will feed him for a day. If you teach him, how to fish, you will feed him for a lifetime.

Lastly, in order to bring my country into a develop status. I need to bring development to my stoneage country. How to do that? I need to build big ticket items with priority on projects that have high impact on the economy, environment or society well being. I need to differentiate between good debts and bad debts. Good debts are debt that bring in more income and bad debts is the one that leads to leakage or money outflow. In this modern world, connectivity is time saving and time is money. I will build high class internet be it 5G or 6G. Those with higher speed can creat better infrastructure for Internet of Thing and the 4th industrial revolution. Next, connectivity is via highways to connect my strategic towns to ports. A better infrastructure nationwide include better railway tract such as high speed train, better airport and port that can handle bigger tanker such as afromax tanker will help to ease business and shorten my time to transport my goods nationwide as well as worldwide. China's belts and roads initiative to connect country worldwide by building massive infrastructure to creat the new silk route is to be applauded here. This should be follow by development and massive investment in R&D and training. 

Furthermore, why is development important? This is because if we have connectivity, commerce will improve and we will have multiplier effect in our economy. Why is this so? Say we develop highways for our country with a cost of 1 million. The spillover effect is more than 1 million as when the contractor gain more contract, they will hire more worker, worker would than use their income to consume more goods and service and the spillover effect of consumption can reach multiple time my initial 1 million as illustrated by the following examples. When a worker buy food, the food vendors can buy raw materials from the market, the market wholesellers can buy clothes and the clothes' shopkeeper can buy cars and the car dealer can go on holiday making the GDP multiply multiple of time. This is because the demand side of the economy does not only depends on money, M but also on the velocity of money, V. When the GDP increase the main beneficial is the government as the government owns the golden share in all business through a 28 percent taxation. Leading to multiplier effect in economy. Everyone will feel rich and there will be feel good factors spreading throughout the country. 

If i were to do the opposite and tax exorbitantly, i will have a lot of tax income initially but soon the tax income will reduce with time as people will be reluctant to spend nor work hard and the rich will migrate to better country. Japan suffer from stagnation in GDP and stagflation because high tax and high cost of foods and houses make Japan's citizen thrifty and compulsive to saving. This reduce the velocity of money and leads to lower productivity and GDP collectively. As a result, there will be lower tax overtime as in Japan since the 1990s. In the computer stimulation game Sim city if you increase tax rate your income over time will drop as people will migrate to other destination that is more conducive for business and support them and their family well-being. 

When my revenue grow, i can then do more welfare program and CSR as there will be more contribution from my government and other stakeholders be it businessman, Ngos, public organization or governmental bodies working in unison and harmony to achieve the ultimate goals of nation building. 

Sooner or later, with the Grace of God my country can achieve a developed country status as i have set the right guarding principle or compass for my country and fulfill my duty as the president or CEO of my tiny country of Timbaktu or Pulau Belakang mati. 

Moral of the story: You cannot break good principles in life but you can break yourself if you go against good principles in life.

In God we trust. 

God bless you, 

Dr. Lion. 

Brand Awareness is the lifeline of sales as location is for business.

 Proverbs say that a Great wine need no bush.

However, if you ask someone who sit Toyota. He or she will say that Toyota is the best car in the world. 

On the other hand, if you ask someone who sit Honda. He or she will say that Honda is the best car in the world.

Same with those who sit other branded car in the world. 

Say if Toyota and Honda merge. Those who love toyota or honda will be in complete flux and confuse.

So, if Toyota and Honda merge. We will need 3 brands such as Toyota, Honda and a merge brand such as Tohonda to cater for people from different groups and increase brand awareness and loyalty. Thats why we have Lexus brand name for Toyota in America. 

If you go to a bookstore, what will eventually make you decided to buy a book or choose another book? It is the title on the cover of the book. How many books that we buy from a bookstore in our house that we never flip past the first page? This show the important of brand awareness in generating brand loyalty and sales. 

Same in life brand name is essential in this 4th industrial revolution. In instant, the Coke brand name is worth billions and even if Coke go bankrupt the brand name of Coke will ensures its survival and will worth billions. 

Gone is the day whereby great wine need no bush philosophy works but internet marketing is a fight at every inch of marketing place in the internet edge.

Everyone of us surely can make better burger than Mcdonald but we cannot compete with their marketing, sales force and real estate in prime location.

In medival China, wars were won based on the flag and drum beat, which will increase the morale of the soilders in war. It is the same in business, brand awareness will increase sales and brand loyalty. 

Moral of the story: In business it is all about location and in sales it is all about marketing, brand awareness and brand loyalty.

God bless you. 

In God we trust, 

Dr. Lion. 

Building your ark to Financial Wealth: Performance of different asset class during hyperinflation.

 Let us look at hyperinflation in Venezuela and Zimbabwe and see how each asset class perform in moderately inflated country such as Turkey. 

Here, we will define what is hyperinflation first. Hyperinflation occurs when the local currency devalue against US dollar until it is basically useless and worthless. In Zimbabwe, 1 US dollar is worth 100 Trillion dollar and In Venezuela 1 US dollar worth 13 zeros on the Venezuela bolivar. Here, i might not be exact as the currency exchange rate differ with time and state of the economy. However, basically the currency is worthless. Take Zimbabwe for instance 100 Trillion dollars cannot buy you a chicken. This is extreme case in history of mankind with Hungarian Pengo also as a prime example.

As the more we delve into the past the more we can see the future. 

Here, we will study Turkey as a prime example.

Turkey in 2018 have an exchange rate of 5 Turkey Lira to current rate of 25 Turkey Lira to the dollar or roughly we can say Turkey Lira devalue around 5x.

We will study the effect of Turkey Lira devaluation on buying power of imported goods, export goods, commodity, property, collectible, gold and crypto.

Effects on imported goods, will increase 5x making importer to increase price accordingly but the demand of the goods will decrease. Those who stock alot of non perishable imported goods during good times will profit extensively. Those who export will also benefit extensively as they get more money for their goods and their margin will be bigger most likely around 5x. This is also good for tourism of Turkey as more foreign tourist will have better exchange rate to cushion their purchase and expenses during their trip in Turkey. Tourism will enjoy a brisk business. 

Next, we will talk about commodity. Commodity such as palm oil, rubber, dates, olive oil, rice, cocoa, coffeeand sugar will increase by 5x as well if it is traded in US dollar. However, the cost of production will also increase accordingly especially fertilizer, pesticide, transport and labour. So business, need to recalibrate their business so that they can increase their margin of profit accordingly.

Property price should also increase 5x accordingly in Turkey. However, property is a big ticket item. So, there will be price but no buyer. As local buyer is unable to get bank loan to purchase properties. Unless you sell your prime property to foreigners or you sell it at a firesales price to rich locals. If you decided to keep your property the price of maintenance, tax and repair will increase accordingly by 5x in Turkey. This can transform property rental from a good debts to bad debts as there will be more cashflow going out per month than coming in, unless you increase the rental price and risk losing your tenance. Those who cannot pay their monthly bank loan will be subjected to foreclosure.

Collectible such as rare antiques, wines, watches, papernotes, baseball cards, amulets, stamps and toys should also increase by 5 times. However, the increase is not proportionally 5x as there will be price but no buyer as the buying power of the masses will be reduced massively unless the masses are doing business that is at the right time and right place which is export or tourism industry in nature. Worse still, some of the collector might be in dire street of money due to cost of living such as food and house or emergency such as health issue, car repair or house repair making them to sell their collectibe at a firesales price or whatever price the buyer offer, making it a buyer market. Unless, you are able to sell to collector in neighbouring country or worldwide in the neighbouring country currency such as Euro denomination in Greece or worldwide in US dollar denomination. Basically, selling in neighbouring country or worldwide is export oriented in nature.

Gold and precious metal on the other hand will increase 5x accordingly in Turkey as it is a limited commodity and is traded worldwide in US dollar. However, the weakness of Gold and precious metal is hammer down by the spread that goldsmith or bank will charge you when you decided to sell which can be as high as 5 to 20 percent from the current international price making it profitable only if the price in Turkey have appreciate by 20 percent from your purchase prise in the minimum scenario. 

Crypto on the other hand, is traded in USD denomination. So, it will increase 5x in Turkey. However, crypto is subjected to bank run and rug pull worldwide. Therefore, we need to be selective when chosing crypto and buy only those in limited supply, ideally below 1 billion in curculation and those which is not subjected to be replenish via mining or reward once the selling pool or admin max out their selling. As the saying goes in the short term buying is based on a voting machine or preference but in the long term it is based on weighing machine or quality. In everything, price is what you pay and value is what you get. 

In hyperinflation, the biggest loser is currency hoarder as the currency devalue due to inflation and will be worthless toilet paper over time. Have you seen any currency survive to this day? Be it China, Greece or Federated notes in US. All i can say is a thing is worth how much a buyer willing to pay coined by Adam Smith and if supply outsmart demand during hyperinflation due to massive printing of currency, currency which is akin to storage of value for the citizen be it pensioner, saver, businessman, trader or employee will cease to function and be worth only on its tangible value which is the weight of the paper we call money.

The only respite is that borrower can repay with cheaper money.

Those who are not prepare and swim naked will be exposed. 

Hopefully we are at the right side of the equation when the inevitable happen.

Survival of the fittest as in Darwin's Theory.

You cannot break good principle in life but break yourself going against good principle in life.

In God we trust and God bless us all. 

Moral of the story: It is better to be 20 years early than 1 day late in the quest to be financially independent. 

God's Mercy endures forever, 

Dr. Lion. 

Peril and collapse of a Capitalist Society.

 Capitalist Society is a society that encourage productivity, growth, motivation to excel and novel creation.

However, the goal of the capitalist society is their main weakness. Capitalist society is always motivated by maximization of profit. 

Maximization of profit leads to greed and lost of noble humanity trait such as benevolence, pity, love, patience and most important Godly in nature. 

The Greed here is always about maximization of profit or what we say to be richer and richer. Just ask any businessman in the capitalist society how much money would be adequate for them. Billion? Trillion? Decalion? 

Money is not the problem here but Greed is the problem as the Proverbs said the Love of Money is the root of evil and those who love silver will never be satisfied with silver. 

Money will transform us from a lovely human into a menacing machine that will churn as much money as possible. 

Maximization of profit is good, but not on the expense of your health, family and friendship. 

Fools are make in house of merry and wisdom is make in the house of mourning with the countenance the heart is make pure. 

Try to be more humane and smell the lovely flower in your garden or spend time with your pet. Capitalist society will tend over time lose their human nature and be burecratic in nature. 

Moral of the story: Money is a blessing but Love of money is the root of evil

Every member of capitalist society will be motivated by money leading to collapse of civilization such as the Babylon. They prefer personal gain rather than patriotic, love, sacrifice or nation building leading to evil empire and collapse of capitalism worldwide in a vicious cycle.

I hope to be proven wrong but the more you delve into the past the more you can see the future as future always repeat itself. 

In God we trust. 

God's mercy endures forever,

Dr. Lion. 

Characteristic of a doom country with Venezuela as a benchmark

 What is the sign and symptom of a doom country? 

The sign of a doom country is when the country spend more than what it earns and have massive leakage. 

Why does a country spend more than what it earn? This is because the country tend to become a welfare state without the resources to support it. A welfare state is a country whereby the masses is subsidizes or given handout. While, the productive part of society is taxed massively, this happen to Sri Lanka, Venezuela and Pakistan bringing them to the brink of bankruptcy and a failed state. Welfare state is akin to robbing Peter to pay Paul or what we say in economic there is no free lunch, when someone get it for Free someone have to pay for it. 

What is the leakage in a doom country? Corruption, whereby a leader's only goal is to enrich themselves, making personal goal top priority than to develop the country, for the betterment of the next generation, this happen to many country with dictators like leader such as Zimbabwe, Venezuela, Sri Lanka and Pakistan.

We have talk about the sign of a doom country. Let us talk about the symptom of a doom country. The symptom of a doom country is low foreign reserve, worthless exchange rate and massive printing of worthless currency leading to hyperinflation whereby money is worthless. History recorded that 100 trillion dollar in zimbabwe cannot buy you a chicken in zimbabwe in 2008. This happen to country like Hungary, Venezuela and Wilmar Republic in Germany as well.

We have seen the signs and symptoms of a doom country. Is your country having the sign and symptom of a doom country? 

If yes. So, what is the prevention? Prevention is better than cure and I always believe if you fail to plan, you plan to fail and it would be better if you are 20 years earlier than one day late.

The best prevention strategy is to exchange worthless fiat money with God's money that stood the test of time since immemorial or People's money which is the money of the future like what Adam Smith coin it, a thing is worth how much a buyer willing to pay.

What is God's money, God's money is precious metal such as Gold, silver, platinum and rare earth that is finite in number on earth and will always rise in price with time and withstand the devaluation of fiat money with time. In God we trust as the American dollar proclaimed.

What about people's money? People money is money that is universal and accepted worldwide without government intervention or jurisdiction such as Crypto and things for barter trade such as grab, ground, gasoiline, gold, gourd and gun.

If we delve into crypto? We must select the high grade crypto which is crypto with limited number in circulation not exceeding 1 billion unit and not easily reproduced as time is a friend of a good business and enemy of a mediocre and you can fool people once but not everyone everytime. High grade crypto include bitcoin and ethereum and their descendants.

I hope that i am proven wrong and all these signs and symptoms will not happen to any other country like what happen in Zimbabwe, Venezuela, Argentina, Sri Lanka and Pakistan but may these countries trod on the path of prosperity sooner or later. 

Moral of the story: Murphy law stated that the sorrow of what we are prepare for will seldom happen. So, if we fail to plan, we plan to fail. 

May God's Grace and Mercy with us forever. 

God's Mercy endures forever,

Dr. Lion.