A wonderful message

A reader of my blog sent me this wonderful message:

Dear Mr Tan

Thanks for putting in the extra effort in writing a blog. Yours is very informative and straight to the point. No nonsense, short and sweet. It's the best I have ever come across.

Fuel Subsidy

Poor countries face a dilemma with rising oil prices.

If the government keeps the domestic price low, they bear the cost of the subsidy. Their people can take advantage of the subsidised price and buy more and make a profit from re-selling the fuel.

If they adjust the price to reflect the world market price, the ordinary people cannot afford the higher price.

What should they do?

Trading in Structured Warrants

Dr Larry Haverkamp wrote an article in Business Times. He said:

- many people are trading a lot of money in structured warrants
- last month the amount was $1 billion, representing 20 per cent of the stock exchange’s total trading volume
- structured warrants are a "zero-sum" game; for every $1 million won by some people, others will lose $1 million.

Dr Haverkamp also told me separately:

- the structured warrants are created by the issuing banks
- they set its price at issuance
- issuing banks are also the market-makers
- they do not reveal how much they charge for issuing the warrants OR for market-making

I have never invested in structured warrants, structured deposits and other complicated products. Without full disclosure of their costs, I prefer to avoid them.

I favour to invest in unit trusts that offer low charges. The investments are likely to earn an average of 5% to 8% per annum over the future. If the charges are less than 1%, I will be able to keep most of the profit for myself.

Handle issues at the proper level

As the CEO, I am available to my customers. I give my e-mail address for them to contact me directly.

Some of our customers are not considerate. They will ask me to handle an issue that can be handled through my colleague.

Here is an example. A policyholder receives a bill that he has already settled. He sends me a complaint that "the bill has already been settled".

My reply to the customer: "I believe that the bill tells you where you can call to make an enquiry. Frankly, I am the CEO but not the person who handles every enquiry. I will pass your enquiry to my officer. "

I hope that people can be more considerate.