Warren Buffett's 'business gene' built an empire that changed history

As he celebrates his 80th birthday, Warren Buffett shows no sign of slowing down. Stephen Foley looks at the secret behind the philanthropist's global success.

Warren Buffett has never revealed when he had his ego surgically removed, but it must have been at a very young age. As he turns 80 today, the billionaire investment guru remains as cheerfully good-hearted, funny and self-deprecating as ever – so much so, in fact, that it is easy to miss just how significant a figure he is in the history of American business. He has been lucky beyond his dreams, he said in his more recent letter to shareholders in his conglomerate Berkshire Hathaway. He and his business partner, Charlie Munger, were born with "a 'business' gene that allows us to prosper in a manner hugely disproportionate to that experienced by many people who contribute as much or more to our society's well-being". Indeed. His net worth of $47bn (£30bn) makes him the third-most wealthy person on the planet, according to Forbes magazine.

Forgive the highfalutin claims (Mr Buffett would choke on them), but while other corporate legends might spend their 80th birthday surveying a long career that peaked decades before, Mr Buffett celebrates his at the height of his powers, with a reputation that is stronger than ever, and cementing a legacy that will live for generations. Why?

He has created the fourth-largest company in America

Berkshire Hathaway is the name of a small Massachusetts textile firm that Mr Buffett acquired in the Sixties. By that time he had already been investing for half his life. The son of an Omaha stockbroker and politician, he had first expressed that business gene in his teens by installing pinball machines in local venues. By the time he alighted on Berkshire, he had established a strong local following for his investing nous, using principles he learned at the knee of Ben Graham, the father of value investing, who tutored Mr Buffett at Columbia University and gave him an early job.

While Berkshire itself eventually failed along with most of the US textile industry, Mr Buffett had long since turned the company into a mini-conglomerate, adding businesses in insurance and retail, and stakes in all-American staples such as Coca-Cola and McDonald's. Today it is one of the world's largest reinsurers and owns the largest US railways business, and has a market value of $200bn, eclipsed only by Exxon-Mobile, Apple and Microsoft. General Electric, the icon among American conglomerates, is worth only $160bn.

He has educated generations of investors

Mr Buffett is a teacher, by explication and by example. His homespun investment philosophy delivered in pithy bon mots – "Rule No 1, don't lose money. Rule No 2, don't forget Rule No 1" – and his determination to avoid the investment fads of Wall Street and the business school crowd won him the moniker the Oracle of Omaha and inspired a whole industry of Buffett-watching. You can find dozens of books from "How to build a business Warren Buffett would buy" to "The Tao of Warren Buffett".

But his own legacy will be those annual letters to shareholders, where he teases out the difference between short-term accounting tricks and long-term value, and makes good jokes. Meanwhile, a record 40,000 Berkshire shareholders now attend the annual meeting in Omaha, for a one in 1,500 chance of getting an answer from their guru to a question.

He proves that human relations matter in business

Author Andy Kilpatrick – whose contribution to Buffettology is Of Permanent Value: The Story of Warren Buffett, which runs to 2,000 pages over three volumes and was described by the man himself as "puny, but at least it's a start" – says Mr Buffett's winning personality is a key to his financial success.

"You can't help but be attracted to him because of the way he speaks and the way he writes. His sense of humour is what makes him different from other brilliant businessmen. It gets him in a lot of doors.

"And he can judge people well – he can look and someone and size them up – a lot of his deals are handshake deals, done by looking someone in the eye and judging whether they just want the money or whether they really want to run the business at Berkshire. That human factor has become very important, and if you look at the top of Berkshire, seldom has there been any firings, or even anyone leaving. Buffett is the glue that holds all these human relations together."

He helped saved the world economy

Under-appreciated is the role that Berkshire played in keeping the world economy from the brink during the panic of 2008, in the weeks after the failure of Lehman Brothers. "We poured $15.5 billion into a business world that could otherwise look only to the federal government for help," Mr Buffett pointed out, in a single reference in his 2009 letter. "Berkshire was a supplier of liquidity and capital to the system, not a supplicant."

Berkshire pumped $5bn into Goldman Sachs and $3bn into General Electric when they were desperate for funds. He extracted a price, of course, but Mr Buffett's vote of confidence helped stave off disaster for two companies whose collapse would have had unthinkable consequences.

And now he is raising the bar for philanthropy

A century ago, John D Rockefeller, after a pioneering life in business, was revolutionising philanthropy, establishing the modern principles for targeted donations and well-endowed foundations. Mr Buffett's friend Bill Gates (with whom he has long tussled for title of world's richest man) has retired from Microsoft to concentrate on his own foundation. Since Mr Buffett does not plan to retire ("I plan to work past 100," he said this weekend), he is blazing a trail in philanthropy in a different way.

In 2006, he pledged to give 90 per cent of his wealth away to the Bill and Melinda Gates Foundation. With typical absence of ego, he said that the organisation was already doing more effective work in areas of health and education than any foundation with the Buffett name on could hope to achieve on that scale. "What can be more logical, in whatever you want done," he asked at the time, "than finding someone better equipped than you are to do it?"

Now, he is exhorting other billionaires to pledge similarly to give away a majority of their wealth, and has induced 40 of America's richest so far to agree. It's only fair, he says – and his three children will be just fine. As he wrote in 2006: "They've had a gigantic headstart in a society that aspires to be a meritocracy. Dynastic mega-wealth would further tilt the playing field that we ought to be trying instead to level."

EVEN BECKHAM WATCHES HIS MONEY

Last week it was announced that soccer’s David Beckham and family had been advised to cut back on their staff.

According to the report the Beckhams have had to layoff 14 workers at their three of their four residencies.

“David and Victoria are multimillionaires but that doesn’t mean they have to waste money – and they were hemorrhaging,” a friend told reporters.

But wait a minute.

In July Forbes magazine listed Beckham as the best paid footballer in the world racking in at least $43.7m last year in salary and endorsement fees. To put in perspective the nearly sh100b he earned last year is almost the amounted our own Stanbic bank counted as profit after tax last year.

It is almost inconceivable that Beckham can blow all his money and retire to a life of destitution, but as a friend of mine keeps saying, “There is no money that is too much to finish.”

It is useful to note which expenses Beckham’s advisors have urged him to take a knife to – the staff expenses at his various mansions.

Beckham has earned top dollar all through his career but he is only 35, on the verge of retirement and likely to live past his 80th birthday, so his advisors are telling him to invest more while the going is good. The idea being, that when his earning power diminishes, seeing as it is based on his youthful good looks, he can sustain his current standard of living off the proceeds of his investments.

You can tell the potential or lack of thereof, of a person or company’s financial future by looking at their expenses.

An individual headed for a life of financial hardship has his expenses slanted towards consumption or instant gratification, while an individual with a chance of a bright financial future has his expenses biased more towards investment or delayed gratification.

An interesting survey was done of millionaires in the US in the 1980s, the results of which were published in the book “The Millionaire Next Door”, it showed for example that the average millionaire in America owned a car whose value was seven per cent of their net worth. If you think about it if this criteria was adhered to, to the letter in Uganda most of us would be riding bicycles or on foot.

What it means is that when you see a truly rich man own a luxury vehicle it has barely dented his balance sheet as opposed to the rest of us whose cars constitute a significant part of our net worth. To try an emulate the lifestyles of the rich and famous is like trying to grow a tree by planting leaves.

Given our largely Christian backgrounds aspiring to wealth is generally frowned upon, so let us think about it another way – Let us all aspire to financial security in our lifetime.

Where financial security is the ability to live without a salary, only earning income from our investments, without compromising our current standard of living.

How do you do this starting right here, right now? Shift your expenses towards investment and away from consumption. It’s simple. The initial shift away from consumption will be hard – I need my daily beer or I have to have those shoes or what will people say if we do not go on our annual holiday… I said it was simple I did not say it would be easy.

The point is, as many pensioners have discovered to their peril, no one is going to maintain your current lifestyle for you.

And if Beckham who collects his salary twice year ( when you are collecting millions of dollars in salary you don’t get paid per month) is preparing for the future by shifting his expenditure away from consumption who are you and I not to do t he same.


pbusharizi@newvision.co.ug

15 Characteristics of Highly Successful Investors

They always invest with a planned exit strategy

“Go to the mouse you foolish investor and learn. A mouse never entrusts its life to only one hole.” — Ajaero Tony Martins

Successful investors know that there are always two sides to an investment. They know that the future is unpredictable so they prepare in advance for it. Average investors try to predict the future of their investments; they count their chickens before they are hatched. Successful investors do the opposite; they prepare for the best while still preparing for the worst.


15 Characteristics of Highly Successful Investors

UGANDA’S BUSINESSES NEED TO STEP UP THEIR GAME

Uganda’s business community is facing serious existential issues with the opening up the East African common market.

When the common market is in full flow people, goods and services will traverse the region without barriers. At a very basic level it means – in terms of goods and services, that goods that of better quality and are better value for money will compete with the best and worst, of what we have to offer.

Consumers do not have nationalistic considerations in their spending habits, we will buy what has shown to be good value in the past regardless of where it comes from.

First let’s make a distinction between patriots and nationalists. Both have a great love of their countries the difference is, that a nationalist thinks his country is better than all others while a patriot wants the best for his/her country.

So consumers may be patriots but they are not nationalistic – believing that their countries make the best products in the world, unless of course where that is true.

And hence Uganda Inc’s dilemma. It is already happening with Kenyan commodities making a big push in our market and vying more than favourably for shelf space with our very own. The knee jerk reaction is to say, “Shut them out while we develop capacity to compete on even footing.”

But that time is past. The competition is here and it is not just beating on the door, it has knocked the door down and now heading for pride of place at the head of the table.

Faced with this challenge Ugandan business has to be come more efficient.

Last week world reknown speaker Larry Hochman was in town at the invitation of the British Council to talk to businessmen and leaders about success in their respective enterprises.

The Success of any enterprise Hochman says, will depend on how central customer service, courageous leadership and talent management to the management’s thinking.

The customer is king is now cliché, but like all cliches they tend to get only lip service.

“Customer relations is the single most important ingredient for success, without putting the customer at the heart of every enterprise it is hard to be successful,” he said.

This linked invariably with leadership, which is “Courageous to take the actions to make any enterprise ever more responsive to its clients”

Hochman questioned the relevance of customer relations departments, as if customer care is the responsibility of one department and not the whole enterprise.

“We are in the information age, what that means that it gives people choice, power and control, the necessity to keep promises to the customers will be clear to leaders because the customer will punish them for talk and no action and they can spread the word,” he said.

His opinion on talent management would sound even more radical for our business leaders, “Your goal: To be an attractor of talent. All the best people should be knocking at your door and if they are not you should wonder.”

And understandably so. The leader can have the best vision centered around obsessive customer relations up and down the enterprise, “But if you don’t have the people to deliver the vision it does not matter.”

We treat our human resource like they are dispensable but a useful measure of the happiness of our customers can be established by judging the happiness of our workers, because our staff can only look out for the clients interests if theirs are being catered for adequately. And here he was not talking about pay but the whole environment in which our workers operate in.

If our business can work on this they might have a fighting chance, especially since the focus on these three things will ensure that our businesses can develop a unique value proposition.

“Customer relationships are the unique value your business will develop, it takes days, weeks, years to building relationships based on trust, relationships which cannot be replicated by anybody … of course it does no t take as long to jeopardize,” Hochman said.

Our businessmen will need to step up their games if they are not only to survive but to thrive in an increasingly hostile environment.

They will have to look beyond physical infrastructure – buildings, plant and machinery, to spur them on to success, but to the “soft-soft” issues of customer relations, leadership and talent management.

pbusharizi@newvision.co.ug

5 Money Rules for Pessimists

When it comes to personal finances, pessimism gets a bad rap. “The one exception where pessimists might have a leg up over optimists is money management,” says Colorado Springs, Colorado financial planner and CBS MoneyWatch blogger Allan Roth. “They worry more, so they tend to save more.”

Pessimists are also more cautious. In studies that looked at optimists, pessimists, and gambling tendencies (a good parallel to the stock market), researchers found that pessimists tend to bet less and expect less when the gaming isn’t going their way, so they lose less. That’s right, pessimists, fret not (if you can help it): Seeing the glass half-empty might net you a fuller glass at the end of the day. That’s because pessimists have some characteristics on their side, such as caution, that can translate into more stable financial portfolios and larger retirement nest eggs. If you’re a pessimist by nature, the key is to harness your realism — while tempering the negativity. Sure, it’s good to keep in mind that black swans occur and stock markets can crash, but it’s counterproductive to assume that no risky investments will ever pay off. Here are five rules to help:
1. Get Control of Your Fear

There’s a basic principle called loss aversion that influences our financial decisions: the high you get from winning isn’t as powerful as the low you feel from losing. This phenomenon is exacerbated for pessimists. “When losses happen, pessimists are miserable, and when gains happen, they’re not as happy as they think they will be,” says Dan Ariely, a professor of psychology and behavioral economics at Duke University and author of The Upside of Irrationality. Pessimists should try to view risk as the cost of doing business, and remind themselves that it makes sense to take some risk. For example, consider all the probabilities when investing for retirement: The odds of the stock market going nowhere for 30 years are fairly low, while the odds of money markets lagging inflation over the next 30 years are fairly high.

2. Give Yourself Permission to Spend

“I have to tell my pessimist clients: You have permission to spend some of your money,” Roth says. “Even the ones with huge nest eggs are afraid they’ll wind up with nothing somehow.” There is a big difference between frugal living and withholding your spending to the point that your quality of life suffers. The huge nest egg when you’re 80 won’t wipe out the regret you feel for not taking those vacations you could have well afforded when you were 50. Set aside a cache of spending money — in a separate account even. Ignore that savings when it comes to calculating your future needs; that should help you get comfortable with the idea that you’ll be spending it.

3. Partner Up

“Having a financial companion to talk things over with can be really helpful,” says Moshe Milevsky, a finance professor at York University. Ideally, it’s someone who neither echoes your pessimism nor counters everything with optimism. Pessimists can really benefit from a neutral sounding board, whether it’s a spouse, friend, or financial planner.

4. Assess Your Insurance

“Pessimists tend to be over-insured, especially for life insurance,” Milevsky says. Those premiums can be wasted money if the value of your policy is out of line with your financial responsibilities. “Do a rational, analytic assessment of your insurance and what you’re spending in premiums,” he says. The point of life insurance is to provide your dependents with a replacement income stream if you should die. So buy enough insurance to cover their needs, nothing more.

The same is true for extended warranties, which tend to be expensive. They’re worth it sometimes — but not all of the time, especially since the chances of multiple items breaking at once is low. Channel your realism (not your negativity) to weigh the probabilities, and then self-insure by diverting the money you would otherwise have spent on warranties into a savings account instead.

5. Stop Watching Your Portfolio

“If you tend to only see the negative, don’t look too frequently at your investments because you will only be miserable,” Ariely says. Even more important, don’t be reactive. It goes back to loss aversion: Be careful of doing something spur of the moment (like pulling all of your money out of the stock market) because you want to avoid the misery you fear is coming. “It’s good to evaluate, but don’t evaluate based on emotion,” he says, especially if you’re in a doom and gloom mood. Instead, take the long view. If the market has just crashed, for example, ask yourself: a year or two after a market crash, is it usually higher or lower?

Life insurance as a savings account

Question: I'm 33, make about $150,000 a year and am starting from scratch to plan for retirement. A person close to me wants to sell me life insurance with a cash value feature as a way to save. Can you help me here? What do you think is my best option? --Carlos R., Houston, Texas

Answer: I'm not sure what "a person close" to you means. A relative? Friend? An acquaintance or co-worker? But whoever it is, the first thing I suggest you do is put some distance between you and that person, at least as far as your finances are concerned.

Life insurance as a savings account

"Obstacles are those frightful things you see when you take your eyes off your goal." - Henry Ford

Stay away from people who belittle your ambitions...the really great, make you feel like you can become great ~ Mark Twain

You may be rich, but are you wealthy?

Many of us struggle because we are unable to differentiate between riches and wealth, we acquire liabilities in the belief that they are assets, we put our money into schemes and claim that we are investing, we participate in savings groups yet we call them investment groups, we read and hear opinions and take them as advice.

You may be rich, but are you wealthy?

Africa is richer than you think

“At the highest level, Africa is similar to any other private investment – investors must take on risk to pursue an addressable market opportunity. What makes Africa unique is that incremental dollars invested into Africa will begin to unlock a previously inaccessible market of equal or greater size than Africa today,” says The Africa Group, emphasising that potential returns could be extraordinary. more

How to Be Productive: Stop Working

Industrial companies put a lot of effort into “asset integrity” — which really just means protecting critical plants and machinery from damage and wear and tear. At companies like BP, it’s clearly more of an aspiration than a reality, but anyone trained in a manufacturing environment learns that asset integrity is a top priority. But what about service industries — companies where the only assets are the brains of the people who work there? Shouldn’t they worry about asset integrity, too? Astonishingly, most of them don’t. Instead, financial services, consulting, the law and even the medical profession perpetuate working hours where all-nighters are heroic, driving with jet lag is the norm and anyone who actually has lunch risks becoming lunch.

But, they argue, we’re in the midst of an economic downturn, the worst recession in our lifetimes. Shouldn’t we all be working as hard as we can? Who has the luxury of time? What do you mean weekends aren’t for working?

Well, for the last 100 years, every productivity study in every industry has come to the same conclusion: after about 40 hours in a week, the quality of your work starts to degrade. You make mistakes. That’s why working 60 hours may not save you time or money: you’ll spend too much of that time fixing the mistakes you shouldn’t have made in the meantime. That’s why software companies that limit work to 35 hours a week need to employ fewer QA engineers: there isn’t as much mess to clean up.

In a knowledge economy, where thinking and creativity are the raw materials from which products and profit flow, brains are assets. They need to be cherished, nurtured and protected, not abused.

Leaders need to take seriously a century’s evidence that 1) overwork doesn’t make us productive, it makes us stupid, 2) looking away from a problem is often the best way to solve it, and 3) burnout is what happens when people are asked to work in ways that obliterate all other parts of their lives.

Also: we need to hammer the last nail into the coffin of multi-tasking. No, you can’t safely drive and hold conference calls, nor can you text while driving. And checking emails while in meetings means you may as well not be there. What modern businesses need isn’t distracted Blackberry addicts but human beings who haven’t forgotten the gifts of focus, concentration and mindfulness.

When the cognitive scientist Dan Simons looked at the vast mountain of evidence that demonstrates the futility of multitasking, he was inevitably asked whether there were anything we could do to enlarge the capacity of our minds. The answer was an emphatic “no.” There are hard limits to what our brains will do, and no amount of Baby Mozarts or Brain Trainers will alter that. Practice, Simons says, will improve specific skills but not general abilities. Doing Sudoko will make you better at Sudoko; it won’t raise your GMAT scores.

Is there anything that truly enhances cognition? Yes, says Simons:exercise.

Experiments by his colleague Arthur Kramer showed that walking for a few hours a week led to large improvements on cognitive tasks. Stretching and toning exercises had no cognitive benefits, but aerobic exercise, which increases blood flow to the brain, did.

Seniors who walked for just 45 minutes a day for three days a week showed better preservation of their brains in MRI scans. Exercise, Simons concludes, improves cognition broadly by increasing the fitness of your brain.

Care about asset integrity? Get out of the office and go for a walk. And make sure the people who work for you do, too.

“Filthy Stinking Rich” — A Moral Lesson

Here’s a quick exercise for you.

Finish this phrase: “Rich people are______________.”

How did you complete this phrase? Are your answers mostly positive or negative? Did you think of words like successful, accomplished, and disciplined? Or did you come up negative words like greedy, snotty, or ruthless?

Whether you admire or despise the wealthy, how you feel about money and the people who have it will determine–more than the knowledge in your head or the situation you grew up under–whether you will be financially successful or not.

You cannot be wealthy if you feel wealth is bad. If you have negative associations with money you will repel it rather than attract it.

This concept is nothing new, but the ramifications are huge.

I hope you want to become wealthy. More than that, I hope you want to be filthy stinking rich.

I’ll tell you why in a moment.

But first realize that if you’ve been telling yourself “I’d like to have enough to live on and do what I want, but I don’t need more than that” then you’re missing the point.

The point of becoming wealthy isn’t so that you can gorge yourself on expensive things, live fat and happy, and tell the rest of the world to go to hell.

If you’ve seen “Batman Begins” you’d seen how Bruce Wayne’s father, Dr. Thomas Wayne, had left Wayne Enterprises in the hands of “more interested” individuals so that he could volunteer at the hospital. I’m sure he, speaking as if he were a real person, touched the lives of hundreds of people through his simple service.

But more than just the services he provided I’m sure that, because of the billions of dollars he had from business, he was able to provide needed medical equipment to the hospital, allow people to get surgeries that they couldn’t afford, and a lot of good was done because he had the resources to back up his volunteer work. Good people can do so much more good in the world if they have money.

Somewhere along the line many people developed the idea that being poor is holy, and that if you live in poverty amongst the poor you can do the greatest good.

I think that’s ridiculous.

I think scratching to make a living keeps people from serving others, and living paycheck to paycheck is so time consuming that it keeps people from reaching their full potential. If you can barely help yourself, it’s going to be hard to really help someone else.

“Playing little” doesn’t do anything to help the world. If that’s your game, you’re going to need a whole lot more ambition than that to make it in the real estate investing business. Only those who want to do big things with their lives are going to have the drive and vision to make it in real estate.

Get it in your head that you are going to be very wealthy, because it’s the wealthy that have the time and resources to really make a difference in the world.

Even Mother Theresa, sworn to poverty, could not have accomplished a fraction of what she did without the financial backing of wealthy donors. She raised millions in her lifetime, and hard-working individuals had to earn enough money to take care of themselves first and then earn more money so they could give it away.

That is why I hope you want to be wealthy.

By the way, why do people use the term “filthy stinking rich?” Answer: Jealousy.
-Jarom Adair
Real Estate Investing for Beginners

Will Rogers Cup become Roger's Cup?

The dream final for organizers would be a Nadal-Federer showdown. They have a chance to renew their rivalry since they're on opposite sides of the 64-man main draw. They have played only once this season, when Nadal defeated Federer in the Madrid Open final last May to improve his head-to-head record against him to 14-7.

Will Rogers Cup become Roger's Cup? -

AGRICULTURE AND AFRICAN DEVELOPMENT

There are many barriers to improving agriculture in rural Sub Saharan Africa, but, Africa has 60 percent of the world’s unused arable land and the low crop yields on the land in use suggest they could be much higher. Poverty reduction efforts that include agricultural development are a natural.

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HOW RICH IS RICH?

Some people can make a million a year, but be spending a million and a half. They are not rich.

"Income relates to lifestyle, wealth relates to balance sheets."

How rich is rich?

IS UGANDA PROGRESSING FAST ENOUGH

The privatization process had just survived a determined effort to scuttle it by the National Resistance Council. Celtel was labouring under the projection that Uganda was good for under 5,000 mobile phone subscribers. The production of beverages had more than doubled since 1986 but chronic shortages persisted around Christmas time. The New Vision sold for sh500 and to get connected to dstv would set you back more than $1,500.

Fast forward 15 years to today. Privatization is done and over with (we did not have much to sell anyway). There are more than 10 million mobile phone subscribers in Uganda all told today. Shortages of soft drinks and alcohol have not been experienced this century. The New Vision sells for sh1,200 and I saw the other day you can get hooked up to dstv for about sh300,000.

It is safe to say that the standard of living for Ugandans on average has improved somewhat but more significantly for those on top of the food chain – the urban elite.

Just one caveat, you know what they say, if your head is in the fridge and your feet are in the oven on average you are ok.

Our consumption choices have widened and deepened but as we have seen with the west, consumption can only go so far in driving economies.

But some key things have changed little or not at all during the period.

Most of our trade with the world is ferried by expensive road transport. Our power generation falls significantly short of peak hour demand. Our agriculture is mostly subsistence. Credit is expensive and we remain a largely cash economy.

As a result raw materials remain our predominant exports. We have no multinational concerns, either state enterprises or private concerns. Our output has shifted away from agriculture to service provision. And corruption, which cost business as mush as 30% of turn over in 1995, is more pervasive.

Economic growth is imperative especially if your population is one of the fastest growing in the world. Sustainable economic growth will come with the increasing application of technology to coax more and more out of the ground and the people. With application of more technology, value addition we can earn more for less. It is linear logic.

One thing you can say has happened over the last 15 years is that the government has given the private sector free reign to decide in its own helter skelter way what the priorities are, hence our shift away from production to services.

No doubt services are useful, after all if you are a manufacturer you need transport, financial and telecommunications infrastructure, but service provision also has a major attraction for business men, the capital outlay is small compared to potential returns. And in the event that the politics goes south you can up and go having recouped your initial investment and more.

Of course people are saying economics has changed we need not go through the process of industrialization before we join the knowledge economy – where services come in.

Two things I can see wrong with this argument in our context. To begin with our whole education system is geared towards producing workers for industry and the civil service and secondly, a development of industry especially agro-processing is the fastest way to create employment all through the value chain for a country in which up to 80 percent live off the land.

With that in mind you have to wonder then when share of agriculture in the economic out put is dwindling while that by services is more than 50 percent today.

The point is, from where I am standing we have gone as far as we can go on letting the private sector grow like a weed. No country in the world has developed like that.

There are certain investments that only governments can make, long term investments whose returns would not turn on the private sector.

Beyond maintaining law and order and infrastructure development, governments need to invest in more than strategic planning and even more in execution of these strategies – after all what’s a plan if it does not work.

Our development record over the last 15 years is not much to write home about and this is a function more of poor execution of strategy

To illustrate in 15 years of economic growth, from as low a base as we started in 1986 Singapore was a middle income country by 1980 and is now considered a developed country.

And meanwhile in the initial years of its existence there was a real danger of it being overran by Malaysia, so our numerous wars are no excuse, as Singapore too had to divert a lot of resources to building up an army from scratch.

Published in the New Vision on 7 August 2010

Warren Buffett's Mr. Fix-It: Full Version

Warren Buffett's Mr. Fix-It: Full Version

Of all Berkshire's lieutenants, David Sokol, 53, is mentioned most often as Buffett's heir, although Sokol shrugs off such speculation. Buffett likes Sokol just where he is, getting deals done, boosting profits, and turning around ailing businesses. In the foreword to Sokol's book, Pleased but Not Satisfied, Buffett writes, "He brings the business equivalent of Ted Williams' .406 batting average to the field of business management."

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.