Intelligence vs Good Judgement

This story is about a man who once upon a time was selling Hotdogs by the roadside. He was illiterate, so he never read newspapers. He was hard of hearing, so he never listened to the radio. His eyes were weak, so he never watched television. But enthusiastically, he sold lots of hotdogs. He was smart enough to offer some attractive schemes to increase his sales. His sales and profit went up. He ordered more a more raw material and buns and use to sale more. He recruited few more supporting staff to serve more customers. He started offering home deliveries. Eventually he got himself a bigger and better stove. As his business was growing, the son, who had recently graduated from College, joined his father.

Then something strange happened. The son asked, "Dad, aren't you aware of the great recession that is coming our way?" The father replied, "No, but tell me about it." The son said, "The international situation is terrible.
The domestic situation is even worse. We should be prepared for the coming bad times." The man thought that since his son had been to college, read the papers, listened to the radio and watched TV. He ought to know and his advice should not be taken lightly. So the next day onwards, the father cut down his raw material order and buns, took down the colorful signboard, removed all the special schemes he was offering to the customers and was no longer as enthusiastic. He reduced his staff strength by giving layoffs. Very soon, fewer and fewer people bothered to stop at his hotdog stand. And his sales started coming down rapidly, same is the profit. The father said to his son, "Son, you were right". "We are in the middle of a recession and crisis. I am glad you warned me ahead of time."


How many times we confuse intelligence with good judgment? Its not esy to evaluate which one is better, between 'book smart' and 'street smart'. Sometimes, 'street smart' guy is more succesful than 'book smart' guy. The tragedy today is that there are many walking encyclopedias that are living failures.


What say you...?

Bull S#*T!!......

A turkey was chatting with a bull. 'I would love to be able to get to the top of that tree' sighed the turkey, 'but I haven't got the energy.' 'Well, why don't you nibble on some of my droppings?' replied the bull. They're packed with nutrients.'

The turkey pecked at a lump of dung, and found it actually gave him enough strength to reach the lowest branch of the tree. The next day, after eating some more dung, he reached the second branch. Finally after a fourth night, the turkey was proudly perched at the top of the tree. He was promptly spotted by a farmer, who shot him out of the tree.

So, Bull Shit might get you to the top, but it won't keep you there.

What say you...?

the fable of the monkeys.....

Once upon a time, there was a kingdom that was famous for its banana production. The bananas were so good and tasty that they were even used for money.

One day, a monkey came and made an offer to look after the bananas. The people said, "but we never let monkeys look after bananas!". But this monkey was differnt. He said, "I have got a physics degree Summa Cum Laude from Bantech, I got an MBA from Chiacaton, I have worked for Simian and Simians, the best firm in the business and look, I wear an Armani suit." People thought - "he is right, we should not be prejudiced." So they allowed him to look after a small plantation.

This monkey was very able and clever and under his charge, the plantation prospered. He noticed that bananas ripened very fast and could rot easily, and they were good bananas and bad bananas. The best bananas were gold in colour and were very valuable. Some were hard and not easy to sell. This non-standardisation of bananas was a great loss to the plantation and they was no liquidity in the market.

So this clever monkey called Ah Yuen invented the first derivative, using one banana leaf (called one Ye) to represent a bunch of 10 bananas. And people thought, how clever. We don't have to carry bananas - banana leaves are so light and so convenient. Anyway, whenever we need bananas, we just exchange Ye's with Ah Yuen, who is always willing to buy and sell bananas in exchange. After this, Ah Yuen became the richest person in the country and establsihed banana bank called Yebank! Yebank's slogan was "Ye's we have bananas."

Ah Yuen was so entrepreneurial that he expanded through mergers and acquisitions, first through an IPO and then issuing banana shares to acquire more plantations. Everyone was happy - because they were now trading Ye's instead of bananas and they felt they were growing richer and richer.

One day, Ah Yuen had a brain wave. Instead of trading one leaf for 10 good bananas, why couldn't he package the good an bad bananas into a super leaf called Banana Debt Obligation or BanDO. He persuaded a Banana Rating Agency to give AAA rating for these BanDOs and persuaded an insurance company called BIG (Banana Insurance Group) to insure these BDOs or Banana Decay Swap. If the banana decays, you swap for another banana. For his success, he got 20% bonus and alos options to more future profits.

One day, the King sent his Grand Vizier to check on the market. Ah Yuen gave a dazzling powerpoint presentationon how the whole market was self-regulating. He showed how he had created a huge market on BanDOs with complete swap and futures markets based on what was formerly a primitive market of real bananas. The country was prospering and everyone seemed happy. The Grand Vizier did not want to show everyone that he did not understand waht the BanDOs and BanDS were and as long as everyone looked happy, he did not ask any more questions. After all, they were all rated AAA. Moreover, his nephew worked with YeBank.

The market in BanDOs was so successful that some asset managers claimed that they would sell their mother-in-laws first before they sold BanDOs. One clever asset manager even created a PonBan scheme, whereby he guaranteed steady high returns because he could hedge everything in the BanDO market through options, hence the name Put On Bananas scheme. His sales principle was simple - if you have to ask questions on how the scheme works, you can't afford it.

One day there was a banana blight and some people decided to cash in a few BanDOs. A few bold hedge managers even had the temerity to short the BanDO market, causing market nervousness. So, to stop the panic, the Banana Echange Commission decided that short-selling should be temporarily banned in order to vicious market rumours. However, because the premium on BanDS had gone up, the Banana Rating Agency had no alternative except to downgrade BanDOs from AAA to BBB or junk status. Overnight the market collapsed and YeBank had a bank run causing it to be nationalised. the investigators found lots of leafs, but no bananas in the bank.

There was a royal commission to investigate the collapse. The first question to Ah Yuen was: What happened to the bananas? Well, he replied, "I ate a bit as I was entitled to my bonuses and options. I paid the lawyers, the distributors and the Banana Rating Agency quite a lot of bananas. I gave you all a banana split called BanDOs because you wanted more bananas. everyone had a good time, so why blame me? Dont't forget that I am still entitled to my retention bonus under my employment contract."

After days of hearings, the royal commission reached tow basic conclusions: Never trust monkeys with bananas; and a monkey in an Armani suit is still a monkey!

- (a great masterpiece from economist, Datuk Seri Panglima Andrew Sheng)-