Thought I should share a good post.
Written by someone by the forum nick of Bane.
Dear friends, I have been to their company and listen to their
presentations and proposal. After considering many factors, I did
not invest this company. Yes, this company guarantees you will not
lose the principle amount. Moreover, you have been pledge by this
company that you will earn more over the time, and the more you
invest with them, which also mean the more you trust them, the more
you earn. (Thus the GP, SP and the BP system is to give the trust
reward) It sounds like a great deal! I mean, which financial entity
guarantees 100% principle secure?
Before I carry on, I wish to let everyone know that is solely on my
opinion. I have facts, black white and professional help which
helped me in making my decision. But, Cash flow Quadrant, what I
type here is considering an opinion, till you saw the facts or
black and white; then it is consider a fact or a principle.
The investment returns are excellent! 300% if you are a GP, wow!
And if the Emcom collapse, the other businesses that are under
Sunshine Empire will pay back to you, your entire principle amount
plus a little bonus, therefore your investment is very safe. That
sounds good, too good to be true too. But that is the least of my
concern because , I was told by a trust worthy friend, that there
is a time that Mircosoft buy back its public shares 44 times on
what is listed on the stock exchange (probably when the price is
low, and the Ceo is very confident). So, good deal does come along
and let you earn unexpectedly, but same goes of expenses
The financial report shows the health and status of the business.
Even if the business is making money, financial report will show
how efficient the business is using the money. (For example, for
simple terms, Business A uses 10k to earn 5k per year, but Business
B uses only 8k to earn 5k per year. Business B is more efficient in
using their money, thus Business B is a better investment.)
Well
when I asked for the financial report, they mentioned the
company is just started, therefore there isnt a financial report.
Ok, that is reasonable. So I asked for the financial reports of the
other businesses that are under the Sunshine Empire. They were
unable to produce them to me, explaining to me that private
limiteds financial report are restricted to only shareholders of
the company.
Reason why I want to look at other businesses under Sunshine Empire
because when Emcom were to collapse, the other businesses are the
ones will pay you back the principle amount. Therefore, the other
business under Sunshine Empire health and status are under my
decision considerations.
I called 3 friends, a lawyer, a financial planner and very good
businessman friend. They told me that even for a private limiteds
financial report is public knowledge, not just the ones listed in
SGX.
Hmmm
maybe my friends were wrong. There is still a possibility
right? But how do I make an investment if I cant get hold of a
financial report? All master investors wrote or mentioned that it
is a good move that the financial report must be read before
investing the company.
Risk comes from not knowing what you are doing Warren
Buffet
From what that successful old guy, I do know what kind of business
they are doing, but I have no idea how well they are doing in all
their business
Therefore my first point of reason I do not invest with Emcom; do
not know how well their businesses are doing.
For those who have read Rich Dad Poor Dad series, both in Cashflow
Quadrant and Guide to Investing, these 2 books have mentioned
that the business system is very crucial to its vitality. This
company uses the binary system to aid in their MLM
business.
On 24th of January 2007, on the Chinese newspaper My Paper
published that such system like binary system is impractical. It
is because if you manage to recruit up to 11th generation, the
number of agents has exceeded population of USA, if you manage to
recruit up to 13th generation, then you have agents more than the
world population.
The system is flawed. It is heading to high risk of failure. It has
very little room of expansion. Is this the business you wish to
invest?
Therefore my second point of reason I do not invest with Emcom; the
business system is flawed.
Has anyone heard of pyramid scheme? This is what I learn, in
simple, a pyramid scheme is concept selling, which means, you get
no physical products, only an idea. In the system too, you are
unable to out earn the one who recruited you, even though you work
harder and recruited more members than he does. MLM system on the
other hand, allows you to earn more the one who recruited you if
you bring more sales or recruitment than him if you reach the MLM
Companys requirement. You get your fair share, based on your hard
work. It is also an obligation for an MLM company to sell you a
physical product.
On Emcom side, well
they are selling phantom shares, presenting
that they build wireless network in certain parts of Taiwan, where
it is hard to confirm, unless you fly to those parts and confirm
it.
On the agreement, they mentioned that if I have to sue them, I have
to sue them at Taiwan. Hmmm
this is kind of odd, since this
company is register in Singapore, why do I have to go to Taiwan to
sue them?
Therefore this is my first point of doubt; why do I have to sue
them at Taiwan if they are register in Singapore already?
To summarize the whole thing,
The advantages:
Fourth player in Singapore telecommunication industry
Capital Assurance plus a little bonus if you invested more if Emcom
collapse.
High returns
The points of doubt:
I do not know how well their businesses are doing.
The business system is flawed.
Why do I have to sue them at Taiwan if they are register in
Singapore already?
It fits perfectly as a pyramid scam (but doesnt mean it is a
pyramid scam ok?)
Haiz
honestly speaking, I seriously wish they can satisfy my
reasons of doubt because the offers they give are seriously very
good. If this is successful, they can be possibly being the fourth
major player in Singapore telecommunication industry.
But, based on what I discovered, their business seems risky to me.
Very risky. Therefore, if you are a very HIGH RISK investor, this
is perfect for you. But, this isn't for me.
Thank you everyone.
