What Makes Apple Tick?

Apple no stranger to us, is the most valuable company with a valuation of $341.5 billion, surpassing Exxon Mobil. While Exxon Mobil dealing with fuels, our daily needs, how could Apple magnify the importance of our wants? Their philosophy: Think different....

"Here's to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They're not fond of rules, and they have no respect for the status quo. You can quote them, disagree with them, glorify and vilify them. About the only thing you can't do is ignore them because they change things. They push the human race forward. And while some may see them as crazy, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do."


The iphone and ipad was one of their revolutionary ideas which impact the history of technology. Apple was smart enough to patent their inventions http://www.patentlyapple.com/ . This is a distinction between true innovators and imitators. R&D is part of their inherent flaw in their competitive advantage which from my opinion, will put their long-term economics at risk. Nevertheless as long as Steve Jobs is around, Apple is here to stay to have the bigger pie especially in the tablet business.

Now there is some kind of arms race with Apple and Google. In the midst, Apple has 95% share of global tablet shipments in Q3 2010. It is clear that Apple is the market leader beating Android into second place.

Is It All About The Money?

Values of Life or Money is important? It depends on how your perspective of life. Whenever we speak on the subject of money, some pretend that money is not important. Values of life is important than money indeed but money is important in supporting life. Let's ask ourselves,"Why work so many hours and you can only work so hard. Work so hard for money when you don't even have time for your loved ones. Work so hard when you are going nowhere."

Life is a rat race but shouldn't life be like these...?

1. More time to raise kids
2. More time and money to take care of health
3. Able to travel the world with your loved ones
4. Share life experiences to the community

The bridge of poor getting poorer and richer getting richer keeps widening because we rarely evaluate our thoughts about money. Some say money is the root of all evils and I do agree with them. Without building pillars of understanding about our life, your path of earning money could be different from the conventional way.

The Lazy Pill
Being lazy is not doing something for your money. It is insane to to work so hard for nothing to show for at the end of the day. You come back from home and the next day you get back to your job thinking that you will get far ahead. The correct sentiments that one should have is, "How you spend time", that will decide whether you are rich or poor in thinking.

Due to the lack of financial intelligence, many uneducated people will put themselves into position of high financial risk. These are the people who cling desperately to job security and they are the ones who always say : "Business and investing is risky." Business and investing is not risky is you are misinformed. It is the same as relying on a "safe secure job" is the highest risk anyone can take.


JOB (Just Obey Boss)
A job is really a short-term solution to a long-term problem. Just look around you how many jobs they're cutting in this recession?

Being smart is everything. Unable to control your way of life is not.


Financial Intelligence
When emotions are high, financial intelligence often disappears. People are so concerned with their jobs, the falling value of their property, the crash of the stock market, and the general slowdown of business, they failed to see the massive opportunities right in front of them. Instead of moving forward and beating the bushes, most people went into their caves and hide.

They lacked the technical skills required, just as a doctor must have technical skills developed from years of schooling and then from on-the-job training. Technical skills that include financial literacy, which is knowing the vocabulary, how to restructure debt, how to restructure offering, who your market is, how to raise capital, and other skills.

Mind Your Own Business
When you decide to mind your own business, the next step as the CEO of the business of your life, is to take control of your cash flow. If you do not, making money will not make you richer. In fact, more money makes most people poorer because they often go out and get deeper into bad debt every time they get a pay raise.

What they taught you in school?
It's good that Singapore is constantly restructuring it's education system. Accommodating changes that synchronize with ever changing economy and always moving forward to an innovative future. We are relying on daring youths to drive our economy in this information age. What if they still can't tell between a teacher's good or bad advice? Teachers simply are employees and decide what grades this students receive but they can never guarantee these students will land on good job. That answer lies on the economy, the employer and the company. Seeing  Universities, JCs, polytechnics and ITE students dance gracefully in performances and achieving good grades in school. The real question is, will they dance gracefully in this volatile economy? Are they just studying hard to get into jobs they want without realizing the possibilities of mergers & acquisitions of companies in this rocky economy? These guys are in serious trouble if they're not aware because they do not know how cruel the working world is. Not to spoil the fun in school but aren't they concerned about what they would like to do in the future? Decide on a future is one thing but will the volatile economy be kind enough to adjust to your needs?

If a child leaves school with good grades, does it mean the child will be successful in real life? Does success in academic world insure your child's success in the real world? The value of a person's education is not found in his or her report card. The best measurement to evaluate a person's education is how they fared financially after leaving school. School's do not teach the survival skills needed for today's world. Most students leave school financially needy and looking for security.. security that cannot be found outside. The school system performed its duty by providing a steady stream or employees and soldiers, looking for a job, a job in big business and military. Part of this need for security happens because people never found their new identity and do not trust in their ability to survive on their own.


What is taught about Money
The primary reason many people seek job security is because that is what they are taught to seek, at home and at school. Millions of people continue to follow that advice. Many of us have been conditioned from our earliest days to think about job security, rather than financial security or financial freedom. Most of us learn little to nothing about money at home or at school, it is only natural that many of us cling even more tightly to the idea of job security. It is often true that money is not as important as security. They make great risks in other areas of their lives, such as sport parachuting, but not when it comes to money.
Without a basic financial education, long-term financial security is impossible.
I've often marveled at the lack of financial education in our modern school system. At best, our children are taught to balance a checkbook, speculate in the stock market, save money in banks, and invest in a retirement plan for the long term. In other words, they are taught to turn their money over to the rich, who supposedly have their interest at heart. Every time an educator brings a banker or a financial planner into their classroom, supposedly in the name of financial education, they are actually allowing the fox to enter the hen house. I am not saying bankers and financial planners are bad people. All I am saying is that they are agents of the rich and powerful. Their jobs is not to educate but to recruit future customers. That is why they preach the doctorine of saving your money and investing in mutual funds. It helps the banks, not you. Again, Ireiterate this is not bad. It's good business for the bank. It is no different than Army coming on campus when I was in school and selling students on the glory of serving our country.

One of the causes of this financial crisis is that most people do not know good financial advice from bad financial advice. Most people cannot tell a good financial advisor from a con man. Most people cannot tell a good investment from a bad one. Most people go to school so they can get a good job, work hard, pay taxes, buy a house, save money, and turn over any extra money to a financial planner.

Most people leave school not knowing even the basic differences between a stock and a bond, between debt and equity. Few know why preferred stocks are labelled preferred and why mutual funds are mutual, or the difference between a mutual fund, hedge fundm exchange traded fund, and a fund of funds. Many people think debt is bad, yet debt can make you rich. Debt can increase your return on investment, but only if you know what you are doing. Only a few know the difference between capital gains and cash flow and which is less risky. Most people blindly accept the idea of going to school to get a good job and never know why employees pay higher tax rates than the entrepreneur who owns the business. Many people are in trouble today because they believed their home was an asset, when it was really a liability. These are basic and simple financial concepts. Yet for some reason, our schools conviniently omit a subject required for a successful life-the subject of money.

Problems We Are Facing

• Failure=Loaded with liabilities, with no real assets to generate income.
• People struggle financially because they think cheap and buy cheap. Little effort is the best replacement for excuses.
• Good grades are not as important as finding your genius.
• One job for life is an Industrial Age idea.
• The future does not belong to the child who leaves school with the best grades.

Inflation Buster

Ever heard if you are lazy on your money, your money will be lazy with you. Many who don't realize especially the baby boomers is that devaluation of hard earned savings is real. Remember when your parents tell you to consistently save up money in the bank, so you can go to University or for your marriage. No doubt, they are basically giving the right advise but there is more to it. About 70% or more of the the working class understands what inflation is. Having the intention to save for the future, they don't understand the effects of inflation.

Simply, whatever you saved up for Marriage function about 10 years ago could possibly be enough  to pay for a Birthday party now. It could be a joke but considerably possible in this decade. Inflation is too many dollars chasing too few goods.  Let's say the inflation rate is 3%, a single can of coke which cost $1 will be $1.03 in a year. You thought that by working so hard and having enough savings to retire comfortably would pay off  but only to realize later that everything around you doubled in price. That speaks out why we see so many senior citizens still working at food court cleaning up tables or collecting tin cans. These people who were born in the industrial age didn't realize that their prospect of spending golden years is still working. Perhaps when they were at their first quarter of their age, during the booming industrial era they did not have diminish thoughts about a safe secure jobs. Unfortunately, they gave the same advise to their children about money. At this information age, giving such industrial age advise is costly.

Getting informed is the best hedge against an uncertain future. That is the reason why, my daily racing thoughts are published in this blog for sharing. I do not have a formal education on economics, business and finance but setbacks in my life have encouraged me to attain every knowledge through books, experiences and learning from failure. Everybody is free to post questions and I will try my best to answer or perhaps spare a thought to build a substantial and fundamental discussion on economics, business and finance. I hope this platform serve as an information exchange vault.

Inside The Entrepreneur's Brain

Have you ever wondered what's inside the brain of an entrepreneur? Associate Professor Sarasvathy from University of Virginia's Darden Business School conducted a research on the subject. The following conclusion concludes the distinction between an entrepreneur and the worker types


"Sarasvathy concluded that master entrepreneurs rely on what she calls effectual reasoning. Brilliant improvisers, the entrepreneurs don't start out with concrete goals. Instead, they constantly assess how to use their personal strengths and whatever resources they have at hand to develop goals on the fly, while creatively reacting to contingencies. By contrast, corporate executives—those in the study group were also enormously successful in their chosen field—use causal reasoning. They set a goal and diligently seek the best ways to achieve it. Early indications suggest the rookie company founders are spread all across the effectual-to-causal scale. But those who grew up around family businesses will more likely swing effectual, while those with MBAs display a causal bent."


effectual reasoning : Given a set of means and allows goals to emerge contingently over time from the varied imagination and diverse aspirations of the founders and the people they interact with.


Grindstone Lobes
What bothers them the most are the infinite thoughts of what has to be done.


Dreamer
Setting their sights on that Maserati Gran Turismo to going for an elite first class holidays. The goals are always extraordinary and differ from the normal Just Obey Bosses people. No dream of theirs is impossible


Ahead of The Curve
They don't follow the crowd and they don't do what most people would do. Belonging to the 1% of the total population they give thoughts, long considerations and observations on trends. Two words, 'truly unique'


Creativity Sphere
Ideas keep spitting out from their minds. Given a problem they will definitely find an opportunity. This engine simultaneously keeps running on steroids.


Power Pondering
Always giving that perfect sales pitch. The obsession of giving a lasting impression. Toastmasters Elites.


Gadget Ganglion
Device savy and willing to go great lengths to own it.


Brain Stalk
Tired, Tomorrow, Lazy and Fear were never in their dictionary. No mental block causing analysis paralysis. Guts to act take them where normal people wouldn't go.


Richard Branson Envy Nodule
Richard Branson Kingdom and his quote is their divine pledge, "My interest in life comes from setting myself huge, apparently unachievable challenges and trying to rise above them...from the perspective of wanting to live life to the full, I felt that I had to attempt it.


Fuhgettaboutit
They see that teachers are teaching bullshit in school. A formal education do not suit their paradigm. The word 'risky' is in violation of the education system.


Dow Jonesing
Squeezing out juice from information that matters til they are satisfied. DJIA, S&P500, NASDAQ are part of their vocabulary and they put financial planners to shame.


M. I. A.
The thing they would find fascinating and charming to talk about is the power of trial and error and the importance of mistakes. Spending no time to think about failure, their fear receptors are turned off. It was never illustrated in their mind to begin with.


I think, Therefore I am... The Best
Confidence is key. They were never born but trained to think that no challenges are impossible. Ordinary people will think that it was their ballooning ego but that is not the case. Their level of confidence are misunderstood as normally this substance was never given much thought. Their ego is an improvised challenge to themselves which strike their awakening ability, an engine to deliver maximum results.

Opinion From The Bottom of My Heart
It is delayed gratification through a noble undertaking. Those are the perfect words to describe it. It puts a test on your people's skill, management, emotional, psychological, intelligence of improvisation and never quit attitude. All these tests will eventually bring the best of you and you will discover that this world is limitless. The start is the most difficult part and if you truly believe there will be light at the end of the tunnel, getting emotionally prepared is the best advise. You will have to accept that what you are doing is something no ordinary person would do. Losing moral support from friends, families and rejection from the society is part of the test. One way of surviving through the whole ordeal is to believe in yourself and your passion. Once you reach the pot of gold over the rainbow, you will discover that it isn't so much of the fortune. It is about achieving more than what you initially thought you are capable of. Mistakes and disappointments are necessary. This is a true discovery of human spirit. Normal people would realize that it's about the money, well in fact if you are an entrepreneur yourself, a fortune is purely to support life, giving yourself freedom to enjoy the wonders this world offers. In fact, an entrepreneur's perception of life is a mystery. A mystery you have to act on to fully understand...

Entreprenuers

Entrepreneur Mind

Being an entrepreneur is one of the mentally and emotionally challenging path. Most cynics never realized the key importance of having entrepreneurs in this world. One example, without existence of entrepreneurs, Bill Gates couldn't have created Microsoft. Without Gates, the operating system called Microsoft, used around the globe would never exist. But what is the missing factor between Gates and Microsoft? It's the true and tried way, the entrepreneurial spirit. To begin with, if there wasn't any entrepreneurial spirit within us, civilizations can never evolve, no human can elevate the standard of living and explore the boundaries of creativity.

Microsoft Corporation

• Facebook
• Google
• Ferrari
• Levi's
• Microsoft
• KFC
• Macdonalds
• Virgin
• Apple
• Vogue................. and the list goes on

Find out more on how these multi-billion to trillion dollar businesses and how they came about. Listen to their stories and struggles. Importantly how they shape our world. I recommend watching Bloomberg Game Changers. A documentary series exploring the careers of the most influential people who defined the world of technology, culture, finance and politics.

Game Changers on Bloomberg every Thursday

An entrepreneur uses his skills to run a business as an insider, operate and provide earnings for shareholders. As for the investors, he invest in good businesses as an outsider and having skills of an entrepreneur is an advantage to understand the business from the inside. Usually investors only invest based on desired information which entice them. The ability to understand a solid business system from the inside provides a key to solid earnings as well. There's two different side of the coins her but it is very much the same. Having run a business and understanding business fundamentals is necessary in becoming the most sophisticated investor. When chance upon a company which looks interesting perhaps it's wise to apply your brakes and start analyzing on their business system because that is the root of all their earnings

Epicenter Holdings Evaluation

Epicenter 5MQ

Epicenter is the premium reseller for apple products and complimentary accessories. This company was in my watchlist for about 3 months and after going through it's financial reports, It passed my criteria. I waited for a price correction to take effect before buying it recently and indeed I got it at somewhat bargain.

Epicenter Shop

I rated this as one of my momentum stocks and after going through some analysis, it has some value over a period of time. It has some durable competitive advantage compared to the other resellers like iStudio and Nubox. I still remember that Epicenter was established way before the iphone and ipad boom. In the early years Epicenter was the only Apple reseller at Wheelock Place.


As we know, wherever you go and for sure you will definitely see somebody holding on to an iphone or ipad. I like to think of companies as owning a piece of the consumer's mind, and when a company owns a piece of consumer's mind, it never has to change its product and you will find out why. Apple products has somehow monopolize our tech savy civilization. Epicenter main role is just to sell a apple products. So I'll leave the R&D to Apple to crack on year to year because R&D is a black listed expense in my stock picking criteria.

Apple Products

Money raised from it's stock are used for future working capital and overseas expansion. They are looking into China for expansion and I have no problem with that. Only thing I'm concerned is whether they know that Cybermart, a retail arm of Hon Hai which also owns Foxconn (controversial company producing world's supply of iphone and ipad) got an approval to become an Apple licensed retailer. They plan to put about 500 stores in China, Hong Kong and Taiwan. Worst case scenario is that Epicenter might have barriers to entry in the Chinese market compared to the big boys there who has a foothold on supplies. I hope Epicenter will stick to their business mantra which makes it unique.


Nevertheless I'm sure everybody has faith in Apple products. Of course we are waiting for iphone 5!!

Global Decline

2008-2011 STI Chart

2011 STI Chart

I don't really have a crystal ball to predict the future. The only thing I did was an awfully a lot of research. I've been studying about business and finance for a decade and currently this is what I got to show. I am not a bachelor or degree student and I do not have a formal education to show that I am a genius.

I'm sure everybody knows sentiments are strong that global recession is near or should I say at our door step. History does repeat itself again. Remember 2008/2009?  In March, there was European Sovereign Debt Crisis. What happened to them? It means borrowing money you can't pay back. So simple. Greece was the start. Greece being in the European Union, gave me a reason to believe that some how the other nations within EU could be following the steps of Greece and indeed, Italy, Portugal and Ireland.

PIIGS: Portugal, Ireland, Italy and Greece

Rather known as PIGS as they are often in regard to matters relating to sovereign debt markets. The term was used by some bank analysts.

Then came the US Debt Problem. The US debt had reached to 14.3 trillion and they were facing a time crisis with their political wrangling to decide whether or not to raise the debt ceiling. It's either US default without raising the debt ceiling or approve a deal to avoid default. The result of these 2 choices? A predictable global recession to come from my opinion from either one of the choices

Even though US manage to clinch a deal, just look at what is happening now. News keep repeating that it's possible that US will lose the AAA credit rating and yes it did. First it was fear on the possibility and now it resulted in investors causing major sell-offs in global markets. That seals the deal right?

So, little chicken starts running scared believing the the world is kicking into another recession.

S&P500

Just take a look at the S&P data above, diving further. This is called panic selling, where the pigs get slaughtered.

Are we expecting a global recession? Or is this just a temporary panic? I let the financial analyst decide.