Try as Investors Might, So Much Depends on Chance

By SAM MAMUDI

Investors saving for retirement can find mutual funds that invest in almost any kind of asset, but they can't buy the one thing that will have the biggest impact on their nest egg: luck.
WSJ Reports

Read the complete Investing in Funds report .

Forget about who's the hottest fund manager, which is the best-performing fund or which sector appears to be the best bet. The biggest factor in long-term returns is how the financial markets happen to perform during the 30 or so years an investor puts money away for retirement.

FACTOR IN THE COST OF SECURITY

For a while now the BBC Knowledge channel on dstv has been airing “Infamous Assassinations”, a series of historical documentaries on high profile killings – successful and unsuccessful, which have changed the course of history.

They have explored the assassinations of the Indira and Rajiv Ghandi, Reinhard Heydrich – the author of the Jewish Holocaust, Che Guevara and Beetle John Lenon.

However the one that struck a code with me was the assassination of US President William McKinley.

Mckinley was the president of the US at the beginning of the last century, a period of great economic growth in the US. A period during which great wealth disparities begun to show themselves in that country.

It was as a protest to these economic disparities that an anarchist, Leon Czolgosz, assassinated McKinley.

The anarchists had the misguided notion that by assassinating the leaders of the western capitalist nations – in the previous year King Umberto I of Italy had been struck down, they could bring down capitalism and cause the emergence of a socialist world.

Fast forward to the 21st century and our new anarchists are called terrorists.

Who is a terrorist?

Many times it depends on who you are talking to – Nelson Mandela was branded a terrorist by apartheid South Africa, the Reagan White House and British Prime minister Margaret Thatcher. But it is generally agreed that these are armed parties that attack civilians with a view to causing disaffection and eventual overthrow of their respective governments.

The world is particularly ripe for these “sovereign individuals” to go to war with whole states. Advances in telecommunications, travel and the proliferation of military technology, following the fall of communism at the end of the last century, means individuals now have the ability to wage war mo re than ever before.

Following the attacks on Kampala on July 11, security has been heightened in and around Kampala.


Long lines of people and cars now snake their way around many corners in the city as people wait in line to be checked.

The delays while understandable are an inconvenience nevertheless and have cost millions of shillings in foregone sales and lost business over the last three weeks.

In this respect the terrorists are winning abetted by our government and local businessmen.

The current situation is unsustainable.

We have to decide as a nation to stop operating in silos – to see challenges as belonging to all of us and not one or another sector of society.

Our businessmen need to look long term. It is in their best interests to keep their premises safe, however the customer wants a safe environment to consume goods and services with minimal hustle. We want to have our cake and eat it.

What the lines are doing is reducing impulsive buying, the situation where a buyer goes looking for milk but buys deodorants, rags and other unrelated stuff in the process. Not good at all for business.

So businessmen are going to have to have to put a bit more thought into their security systems, which will inevitably mean additional investment. Security systems that are less intrusive (accusations of sexual harassment have popped up), not time consuming and at the same time thorough.

That is where the government comes in. This is not an issue for the security services alone.

It would be useful to make security systems mandatory by law for public places, while allowing some tax relief for their importation and sale in the country even if for a limited period of time, say six months to a year.

These systems can set back a businessman several million shillings but are necessary investment because now many people will not patronize places where we feel security is lacking.

Let us not kid ourselves. The terrorists will not give us a break because we were recent victims. If we let down our guard even a little they will hit us again.

The flip side of the issue is that our patience is wearing very thin, albeit after only two weeks of lengthy, intrusive checks. We are going to cut down on our shopping forays (a not all together bad thing) or go to places with less security ( an option too dangerous to contemplate under the circumstances).

This is the cost of security. But if we can all come together, business, government and the people we can find a way to maintain vigilance at the least cost to all money or timewise.

Published in New Vision on 31 July 2010

From Tiananmen Square to Possible Buffett Successor

By SUSAN PULLIAM

Twenty-one years ago, Li Lu was a student leader of the Tiananmen Square protests. Now a hedge-fund manager, he is in line to become a successor to Warren Buffett at Berkshire Hathaway Inc.

Mr. Li, 44 years old, has emerged as a leading candidate to run a chunk of Berkshire's $100 billion portfolio, stemming from a close friendship with Charlie Munger, Berkshire's 86-year-old vice chairman. In an interview, Mr. Munger revealed that Mr. Li was likely to become one of the top Berkshire investment officials. "In my mind, it's a foregone conclusion," Mr. Munger said.more

Shooting the Sacred Cows of Money

Even I think Robert Kiyosaki is becoming a little tired around the edges, but the dude can cut to the chase on money matters better than anyone I know. No frills. No thrills. Just wham, Bham thank you ...

Shooting the Sacred Cows of Money: "Shooting the Sacred Cows of Money is an eye-opening mini-documentary that takes on our cultural myths about money and investing—and shows you how to move from the established mindset to the enlightened mindset about money."

Kenya's Equity Bank H1 profit up 46 pct,sees growth

NAIROBI (Reuters) - Kenya's Equity Bank posted a 46 percent rise in first-half pretax profit on Tuesday and its chief executive forecast earnings would rise further on easing costs and economic growth in the region.

Equity, which has operations in neighbouring Uganda and Sudan, said profit rose to 3.88 billion shillings during the first six months of the year.

Depositors jumped by 400,000 to nearly five million, mainly due to a new mobile phone service called M-Kesho, run jointly with Kenya's biggest mobile operator Safaricom, which allows users to access credit, earn interest on deposits and buy insurance. .

Equity's CEO James Mwangi told investors the bank's recent expansion costs had started to taper off and combined with better economic growth prospects in the region this signalled further profit gains.

"The profitability of the bank is likely to accelerate because of costs. Most of the costs are now fixed," Mwangi said.

Equity's loan book expanded by just over a quarter during the period while bad debt provisions rose 211 percent to 920 million shillings to clean out the threat of defaults, Mwangi said.

THERE WILL BE A NEXT TIME

This week started off on a somber note. The bomb attacks on World Cup fans in Kabalagala and at Kyadondo Rugby grounds have had us holding our breaths through out the week as the extent of the tragedy became fully known. 

 At the time of writing the official death toll was 74 with scores more wounded and hospitalised. Somali insurgents al-Shabaab, have claimed responsibility for the attack. They want our troops in Somalia, there to guard the capital Mogadishu out. 

Their links to Al Qaeda are well documented. In the immediate aftermath of the explosion our health system came under enormous strain. Mulago and Kampala’s other health facilities were overwhelmed with casualties. Given the already wanting state of health system they acquitted themselves well. But was it well enough? 

 Ghana and Brazil went out of the World Cup at the same stage, but the reception of both teams at home were as different as night and day. Whereas the Black Stars were feted and adopted by all of Africa, Brazil’s multi-million dollar stars were brutally criticized and Dunga’s days as coach are numbered. The difference between the two is one of expectation. 

Ghana and Africa, were content with a quarterfinal finish but for five time winner Brazil, its population wanted nothing less than a return of the cup to their shores. In soccer as in life, your expectations will determine whether you are satisfied with world class results or are content to with much less. 

 We know that already patients at Mulago – our national referral hospital, are enduring less than ideal conditions, one shudders to imagine what happened on Sunday night when more than 50 patients,  many in critical condition descended on our health system. 

 This is not the first time –we survived by a whisker the 1998 bombings of the US embassies in Nairobi and Dar es Salaam, nor will it be the last time that Uganda will be a terrorist target. Beyond that lets put things in perspective. 

The 2001 bombings of New York’s World Trade Center has produced the highest death toll of any terrorist attack in history. Almost 3,000 people died during that attack. Nearer to home 237 people died in the attacks on Nairobi and Dar es Salaam. Sunday’s attacks have already been logged and we come a distant 73rd in the list of deaths by a terror attack. 

Invariably the magnitude of the death toll has direct correlation on the victims hospitalized. If the health system of the capital has been overwhelmed by less than 200 casualties, God forbid when the casualties double? An ongoing audit of the health services provision is ongoing and throwing up some disturbing instances of inexplicable negligence of duty and outright corruption in the health system. 

But it is also showing that government needs to better address issues of staff welfare, procurement procedures and overall capacity inadequacies. The upgrading of our health system now more than ever, should become an issue of national security. To continue living at the mercy of god as we have been doing for so long, is not only foolhardy but downright suicidal.

Our centrality in a region of historical instability means that we will inevitably get our share of tragedy, that is a fact and we should not bury our heads in the sand about. Lets organize not agonise. 

Currently Uganda’s health sector budget amounts to an average of $7 per person compared to the $28 per person we require to provide very basic health care for all. That budget needs to be reexamined as a matter of urgency. If we thought we can continue to get by with our less than adequate health service system, let Sunday be our wake up call. 

Published in 17 July New Vision

SHOULD UGANDA PULL OUT OF SOMALIA? THINK AGAIN

Today Uganda's leading daily the New Vision made the succinct case for why the country's continued presence in the horn of Africa is necessary now more than ever.

"...To believe that if Somalia goes to the dogs it will have no impact on Uganda, is to ignore the big picture... Recent conflicts in eastern Congo, Burundi, Southern Sudan, Chad, the Central African Republic, Ethiopia, northern Uganda and the continued cattle rustling in north-eastern Uganda and north-western Kenya all have a direct link to the insecurity in Somalia.

It is estimated that there are up to 50,000 illegal small arms in Uganda today because we are right in the middle of a gun corridor that stretches from Somalia to Chad.

It does not take a brilliant mind to work out then, that the lawlessness in Somalia is the engine that drives this trade and this same trade feeds the continued destabilisation of the region.

Beyond altruistic considerations Uganda’s strategic interest dictates that Somalia or any neighbouring country should remain stable and peaceful..."