Unbelievable but true. It is happening in our First-World little
red dot.
Whenver people are questioning why we are losing billions of our
citizens' hard-earned monies in rescuing foreign banks invariably
we are told that such investments are long-term investments.
What is long-term or short-term investment. Any strategic
positioning in order to stay on top of the situation or
opportunities?
There are some who insisted on calling such losses in Shin Corp
once as long-term investments too. They even countered the query
with an question over such losses like "How much does GIC lose in
Citibank"
So far we hear of no basis why certain investments which were
over-hasty or implusive resulting in collapses of share prices such
as citibank were regarded as long-term and if they are long-term
why can't we wait till the dust settle and pick such purchases
really worth the long-term instead of becoming their princely white
knights.
The root of the problem is monies belonging to the citizens or
public trust funds are not GIC or ministers' own monies. As such
they can afford to take the "head I win tail you lose" hazardous
gut feel investment approach shown by Temasek and GIC in all these
earlier investment losses amounting to billions.
In such an approach based on gut-feel ministers could easily gamble
away citizens' monies like Neeson in betting against the market,
Each time he made a wager and lost monies he could easily double
the bet and go for another round hoping the market will turn to his
favor.
It is no different from gambling. Our Temasek losses in Shin Corp
is no different from Neeson's "double-or-quit" gut feel wager. Even
a person as highly intelligent as Mahathir has lost heavily in the
tin market not to mention Neeson partly because the monies these
gutsy people are betting with are not their own monies.
Yet when they lose the bets they could easily come up with an
excuse to explain losses relying on some "head I win tail you lose"
double talk. If they win they will say they win and claim credit
but whey they lose they could easily push the blame to long-term
investment.
This is where the danger is : government may end up behaving like
Neeson or Mahathir betting against the market resulting in heavy
losses.
We need to have people with proven capability or shrewdness like
Buffet to go for this type of investments.
If it is neeson's own monies do you think he dares to throw the
dice in such a rash double-or-quit manner as he has done in losing
the whole of Baring.
Therefore the more pertinent question one should ask is not how
much does GIC lose in Citi but accountability in investing monies
belonging to the citizens.
Do not behave like Neeson or Mahathir. One should not try to use
gut feel but be substantiated by strategic positioning versus the
whole market forces within the control of the decision makers.
Buffet is on top of the situations of risk but not so with GIC as
seen in Shin Corp or Citi.
We should not just ask: "How much does GIC lose" Instead we should
ask can we afford to throw good monies after bad as seen in Shin
Corp, UBS or Citi and please also learn from how Neeson bet against
the market and lost the whole of Baring.
There is of course no pain to MM or GIC to lose such monies. If it
is their own monies it is doubtful if they dare to make this kind
of investments at the onset of major subprime crisis as they have
done.
The short answer is learn from the fiasco in Shin Corp and not lose
any more of people's hard-earn sweat and blood monies in such a
cavaliar manner.
