How smart and successful business leaders think: The opposable mind.

The decisiveness and speed with which lucrative leaders work invigorates us, their application of diametrically opposed courses, like when leaders at some point in time insist on market leadership and then abruptly switch to market segmentation always excite and impress us.

We must however remember that the moves that work in one context often make little sense in another even in the same company. We shall try to examine the cognitive processes that produce the actions of great business leaders.

Most successful leaders have the predisposition and capacity to hold in their minds two opposing ideas at once, they are able to creatively resolve the tension between the two ideas by generating a new one that contains elements of the others but is superior to both. This process is termed as INTEGRATIVE THINKING. -This is the ability to hold two opposing ideas in the mind at the same time and still retain the ability to function, which is a sign of a truly intelligent individual. However not all business leaders exhibit this capability and is not the sole source of success for those who do but it improves the odds.

So, are successful business leadership capabilities and integrative thinking abilities you are born with or abilities you can hone?

This ability, which echoes another human trait, is what we call the opposable mind. We are all born with opposable minds, which allow us to hold two contrasting ideas in constructive tension. We can use this tension to think our way towards new superior ideas as the opposable mind provides insights.

Unfortunately many people don’t exercise this capability much, great integrative thinkers are consequently fairly rare. Why is this latent tool used so infrequently?
--It produces anxiety
-- Most people avoid complexity and ambiguity and seek the comfort of simplicity and clarity
-- Most people desire the certainty of choosing between well-defined alternatives and the closure that comes when a decision is made.

Our first impulses are determining which of two models is “right” and which is “wrong” by elimination. In rejecting one model we miss out on all the value, which we could have realized by considering the opposing two, at the same time and finding in the tension clues to a superior model rather than disengaging the opposable mind by forcing a choice between the two.

To take advantage of our opposable mind we must resist our natural leaning towards simplicity and certainty. We must try to resist settling for “either-or” choices especially in business. Everyone can do “either-or” we must strive to be different.

The four stages of decision making by integrative thinking.

Determining salience

Begin by figuring out which factors to take into account. The conventional thinker discards as many factors as possible to avoid complexity. The integrative thinker actively seeks less obvious but potentially relevant factors going beyond the immediate reach of his job or functional speciality. Note that the best answers always come from complexity as crating innovative solutions is allowed.

Analysing causality

Entails determining how the different salient factors relate to one another. The conventional thinker adopts a straight-line causal relationship in which more of A will produce more of B. The integrative thinker is not afraid to question the validity of apparently obvious links or to consider multidirectional or non-linear relationships.

Envisioning the decision architecture

On most occasions, an order in which one can make decisions most easily is derived as decision-making variables are bound to explode. With this comes the desire to establish a strict sequence of considering the variables or distributing them to different corporate functions so that they can work them out separately.

By doing this, the overriding issue is forgotten and a mediocre outcome results. Integrative thinkers don’t break down a problem into independent parts and work then separately or in a certain order, they see the entire architecture of the problem and how the various parts fit together, how one decision will affect another. They hold all those pieces suspended in the mind at once.

Achieving resolutions

After choosing simplicity when making the trade off a conventional thinker will shrug and say, “What else could we have done?”. Holistic thinking is much messier than segmented thinking but when a satisfactory outcome emerges it is due to the leader’s refusal to accept trade offs and conventional options.

Born or bred?

Integrative thinking is a habit of thought that all of us can consciously develop to arrive at solutions that would otherwise not be evident. Integrative thinking is a concept that can even be taught in business schools.

Ref: The Harvard Business Review.

mykenyanmoney@gmail.com

DEMISTIFYING THE GREATEST STOCK MARKET MYTHS

The stock market is the leading source of capital growth and financial wealth. That is where the money is! It’s a prime model of free market capitalism operating on the law of supply and demand. In order for you to buy shares of stock in the secondary market, someone must sell those shares. If the prices rise after you buy, that seller has lost potential profit; you have profited from his mistakes. In essence, you will only profit if others make mistakes and others will profit from your mistakes. So for you to gain from the lost potential profit of a seller, you need to have information, these stock market myths will attempt to show you or strike your conscience on why you do not profit from the mistakes of others.

The Myths are as follows;

MYTH #1 INVESTING IN STOCKS IS JUST LIKE GAMBLING.

This reasoning causes many people to shy away from the stock market. To understand why investing in stocks is inherently different from gambling; we need to review what it means to buy stocks. A share of common stock is ownership in a company. It entitles the holder to a claim on assets as well as a fraction of the profits that the company generates. Too often, investors think of shares as simply a trading vehicle, and they forget that stock represents the ownership of a company. In the stock market, investors are constantly trying to assess the profit that will be left over for shareholders. This is why stock prices fluctuate. The outlook for business conditions is always changing, and so are the future earnings of a company. Assessing the value of a company isn't an easy practice. There are so many variables involved that the short-term price movements appear to be random (academics call this the random Walk Theory); however, over the long term, a company is only worth the present value of the profits it will make. In the short term a company can survive without profits because of the expectations of future earnings, but no company can fool investors forever - eventually a company's stock price can be expected to show the true value of the firm.

Gambling, on the contrary, is a zero-sum game. It merely takes money from a loser and gives it to a winner. No value is ever created. By investing, we increase the overall wealth of an economy. As companies compete, they increase productivity and develop products that can make our lives better. Don't confuse investing and creating wealth with gambling's zero-sum game.

MYTH #2 :THE STOCK MARKET IS AN EXCLUSIVE CLUB IN WHICH ONLY BROKERS AND RICH PEOPLE MAKE MONEY.

Many market advisors claim to be able to call the markets' every turn. The fact is that almost every study done on this topic has proven that these claims are false. Most market prognosticators are notoriously inaccurate; furthermore, the advent of the Internet has made the market much more open to the public than ever before. All the data and research tools previously available only to brokerages are now there for individuals to use. Actually, individuals have an advantage over institutional investors because individuals can afford to be long-term oriented. The big money managers are under extreme pressure to get high returns every quarter. Their performance is often so scrutinized that they can't invest in opportunities that take some time to develop. Individuals have the ability to look beyond temporary downturns in favor of a long-term outlook.

MYTH #3: BUY STOCKS ON THE WAY DOWN AND SELL ON THE WAY UP.

There’s an old adage that says the way to make money in the stock market is to buy low and to sell high. That, of course, is an irrefutable truth. The only problem is that many investors confuse this bit of conventional wisdom with the assumption that if the price of a stock is going down it is low, and if it is going up it is high. Consequently, they buy stocks on the way down and sell on the way up. There’s hardly a worse thing an investor could do.Stocks are bought on the expectation that they will go up. If a stock is going up in price, it is fulfilling that expectation. When the price is going down, it is denying that expectation. Therefore, it is logical to buy a stock when its price is going up.

MYTH #4: FALLEN STOCKS WILL ALL GO BACK UP EVENTUALLTY.

Whatever the reason for this myth's appeal, nothing is more destructive to amateur investors than thinking that a stock trading near a 52- week low is a good buy. Think of this in terms of the old Wall Street adage, "Those who try to catch a falling knife only get hurt."Suppose you are looking at two stocks:

XYZ made an all time high last year around shs 150 but has since fallen to 100 per share.
ABC is a smaller company but has recently gone from shs 15 to 20 per share.

Which stock would you buy? Believe it or not, all things being equal, a majority of investors choose the stock that has fallen from shs. 150 because they believe that it will eventually make it back up to those levels again. Thinking this way is a cardinal sin in investing! Price is only one part of the investing equation (which is different from trading, which uses technical analysis. The goal is to buy good companies at a reasonable price. Buying companies solely because their market price has fallen will get you nowhere. Make sure you don't confuse this practice with value investing, which is buying high-quality companies that are undervalued by the market.

MYTH #5: HAVING JUST ALITTLE KNOWLEDGE ,BECAUSE IT IS BETTER THAN NONE IS ENOUGH TO INVEST IN THE STOCK MARKET

Knowing something is generally better than nothing, but it is crucial in the stock market that individual investors have a clear understanding of what they are doing with their money. It's those investors who really do their homework that succeed. Don't fret, if you don't have the time to fully understand what to do with your money, then having an advisor is not a bad thing. The cost of investing in something that you do not fully understand far outweighs the cost of using an investment advisor.

MYTH #6: STOCKS ARE A HEDGE AGAINST INFLATION

For many years stockbrokers and mutual fund salesmen have been saying that stocks are a hedge against inflation. Well, they are and they aren’t. It depends on how you look at it
A true inflation hedge is one that goes up in value with higher inflation...like a house, or gold, or collectibles. But, the fact is, inflation is the stock market’s number one enemy. When inflation goes up, interest rates go up and two things happen. For one thing, investors say, "Golly, I can make all that money on high interest rate bonds so why should I invest in stocks." So they take their money out of the stock market, and stock prices go down. The second thing that happens is that the cost of doing business goes up. So corporate earnings go down, and stock prices go down.So why in the world would anybody say that stocks are a hedge against inflation? It’s because they can make money in stocks faster than inflation will eat it up. All they have to do is invest in stocks which have earnings growth rates higher than the sum of inflation and long-term interest rates. When they do that, the price of the stock will go up faster than inflation. And they will be whipping inflation by staying ahead of it.

MYTH #7: YOUNG PEOPLE CAN AFFORD TO TAKE HIGH RISK

Of all the myths in the market, this may be the cruelest and the most foolish. Everyone knows that the elderly are not supposed to take risks. They must be very conservative because their earnings power is limited. They can’t afford to lose their money! Well, who decided that young people could afford to lose their money?If any group needed to watch every penny, it’s the young. They need money to start a family, buy a house, buy furniture, save for the future and on and on. Furthermore, young people usually are at the low end of the earnings scale. They have precious little disposable income.Young people have an invaluable asset on their side, however. Time. They don’t need to take risk. They can invest in tried and true companies that make money year in and year out. At 10%/year growth, their investments will double every seven years. By the time a baby is off to college, that initial safe investment has increased by a factor of eight.

When you have time, you can afford patience. Patience pays off in the market

A partially informed investor is about, as effective as a partially informed surgeon; he or she will only hurt themselves and those around them

So Which part of the puzzle do you fit in

BE INFORMED

The Editor,

My Kenyan Money,

Alex Bunde

mykenyanmoney@gmail.com

‘It was a way of life. You'd wake up in the morning, and you'd trade until you had enough money for breakfast. Then you'd trade some more until you had enough for lunch. If you wanted dessert, you kept trading until you had enough for pie. Then you'd trade 5% extra to pay the sales tax. After that, you'd keep on trading to get cab fare home. A lot of guys made a comfortable living doing that.’

The legendary stock trader Leland Filch, known everywhere as the notorious Shmendrick of Wall Street- on stock trading in the 1920s

Kenya-Re IPO and thestrategies for investing in IPOs

Greetings,

Strategies for taking advantage of IPOs are;

1. Multiple applications,

Especially for IPOS with huge demand you can never go wrong in investing in these IPOs since there is usually a huge positive perception about the share prices going up since the value of the shares are under priced to attract many investors, so as an IPO investor you are guaranteed of at least a yield of 20% when you sell of your shares on the first day.
So now since many investors are investing in the IPO and there is a huge likelihood of oversubscription (the likes of Kengen, Eveready etc), how do I make sure I maximise the funds invested in the IPO- for example, you applied for Access Kenya at minimum- 5,000 shares at sh10. per share you end up getting a refund of shs41,000 and 900 shares, you sell on the first listing day at market and you get 900*shs.12= shs.10,800 which when you add to 41,000 to calculate the yield on total investment base you get a return on investment of 1,800/50,000=3.6% - you could have been better of loaning the money to your local business man who would have given you a return of 10% tops.
The strategy to use in this case is to open as many CDS accounts as possible i.e. you open one with your ID number, with passport, with your wife/husband (boy/girlfriend), your business, investment club, village group, your wife’s’/husbands’ business, your 3 cousins, 4 sisters/brothers as creative as you can be – you get at least 10 CDS accounts, now through these CDS accounts you can make one application per CDS account and you apply at minimum,
For example, for Kenya-Re make 10 applications costing shs. 190,000, an application of 20,000 shares, after the pro-rata you get lets say 9,000 shares so the refunds will be shs 104,500, then you sell the shares allocated for shs. 20 each (an estimate figure), this will make it shs.180, 000 if you add it to the refunds you get a total of shs, 284,500 a profit of shs. 94,500 with return on investment of 94,500/190,000= 49.74%

2. Shorting the market

From past experience in the Nairobi Stock Exchange, Whenever an IPO is issued the market becomes bearish as the prices usually go down since investors sell shares they hold in the other counters in order to free their cash flows and invest in the IPOs.
Since you know that the prices of most shares will go down during the IPO in what is called shorting the market, you borrow shares from your stockbroker or friend or whoever and sell those shares then like some time prior to the IPO (a month and more) when the IPO comes you buy back those share and return them to their owner and you pocket the difference, for example, you borrow 10,000 shares of National Bank of Kenya whose price is shs. 48 per share, so you sell now assuming it’s a month prior to the closure of Kenya-Re IPO application then you sell immediately at that price you get shs. 480,000 you maintain the funds and wait for the price to drop during the IPO, so it drops to shs.39, you buy 10,000 shares at shs. 39 each you use shs. 390,000 and pocket the difference of shs 90,000 without removing any cash ( for this strategy to work you would have to borrow many shares which you will expose you to risks, but the more risks the more rewards- at least its better than DECI)

3. Longing the Market

A friend of mine once explained to me this logic, when you have lost shs. 50, 000 in a casino game, you have 3 options;
a) you walk away with your tail between your legs and accept defeat
b) you add shs. 50,000 to attempt to get back your money
c) You spend more than shs. 50,000 to try and get your money( probably shs. 100,000 and more)

What option would you choose, the option you have chosen says a lot about how you deal with your losses in shares, I would chose option c) since it increases the probability of getting back my money and more.
The same case applies to shares, only that it is less riskier than the casino game , look at it from this example, you bought 1,000 shares of Mumias at shs. 49.50 per share during the SPO spending shs. 49,500, so what do you do now because the prices have been going down ever since when the market became bearish.
Simple, you buy more shares at the less price given the market fluctuates and will eventually be bullish how much you spend to buy more of these shares will determine how faster you sell them- meaning, assuming you read this article 2 months ago and you had bought the Mumias shares at that price, since 2 months ago they were trading at sh. 26 per share you borrow a loan or you spend some of your own shs. 260,000 to get 10,000 shares which will lower the average price to shs. 28.14 per share( (260,000+ 49,500) / 11,000) then you sell now at shs. 31 per share you get shs. 341,000 from a total investment of shs.309,5000 a profit of shs.31,500 a profit where you had made a loss.
This is what is called longing the market and applies for IPOs since an IPO suppresses the share prices


So what are you going to do about Kenya-Re


You can share your experiences and give your comments by posting your comments by clicking the link below.

BE INFORMED
The Editor,
My Kenyan Money,
Alex Bunde
+ 254 725 906 473
mykenyanmoney@gmail.com


There is a tendency to think stock trading is cool if you're making money but morally corrupt if you're losing it. It can't be both. Is "good" defined by success?
When your broker asks, "How are you?" You say to yourself, "You tell me."



Disclaimer--------------------------------------------
This article is not intended to act as investment advice, when investing consult your investment adviser or feel write to the editor to be referred to one.

Food For Thought

This is a MUST READ....
The Abundance versus the Scarcity Mentality in Professional Development and Growth
A speech delivered by Eric Kimani to the Kenya Institute of Bankers,
Mombasa Chapter on 1st December 2006.
When the Kenya Institute of Bankers, Coast chapter invited me to come and speak to you they gave me ample notice. One would therefore imagine that it is very easy to have chosen what to speak about- It is not!, I thought for weeks what it is that I can speak to you that would add value both ways away from the usual advise you might find in the newspaper. But I continually drew a blank. Then I thought to myself why not be controversial and speak about something as basic as how our mentality affects our professional careers. I decided to talk about how our attitudes and mentality affect our career growth or stagnation- The Abundance versus Scarcity mentality.
Let us start with some long winded definitions;

What is an abundance mentality- this is a deep belief that there is enough for all- enough work, enough jobs enough resources. It is living with a favor-minded attitude. One can define it also as optimism. Seeing the glass half full rather than half empty. Thinking big and expecting big. I will draw very many examples which I seek your indulgence if they sound like self-praise- they are only meant to help clarify the message.

I recently led a group of some passionate Kenyans in a charity fundraising. Some of them thought I was out of my mind to suggest that we can ask Kenyans to donate Ksh. 7m. This initiative realized close to 12m! The barriers are in our minds and we will not go beyond the barriers in our minds.

By contrast the scarcity mentality is a belief that your success will imply someone else's failure; that there are scarce resources and if you get them you must deny someone else; that there is scarcity of jobs; that the cake is not enough and I must grab my share. The scarcity mentality is one of our biggest problems in this country today with politicians believing that they have gone to parliament to ensure get the largest share of the national cake for "their people/electorate" .This was also epitomized lately by a senior executive friend of mine whom I approached in September to donate money to the national charity cause I referred to above that incidentally helps more people from his village than anywhere else in Kenya . He responded that he could not help because they have a similar initiative to help his village.
His scarcity mentality- that there is not enough for his village and the national initiative blinded him in seeing that he could achieve what he is doing for the village in a more far-reaching manner.So much for the definitions.I hope to show you by the end of my talk that the difference between successful people and the less successful is largely their mentality of abundance or of scarcity

People with an abundance mentality have an internal security based on a principled centered living.Their value system is self-anchored. They are not too worried of saying/doing the wrong thing because they ordinarily talk from a point of truth. This frees their mind to bigger/better thoughts because they have nothing to cover. What they said yesterday is what they will repeat today without contradiction.This internal security enhances their humility. It allows them to enjoy professional freedom. They can choose what they want to do. By contrast people with a scarcity mentality seek their validation from groups. They will rarely want to take action on their own. The group must validate what they do.To draw an example from my own career, I have left employment 3 times in the last decade and at no time have I ever felt that there would be scarcity of opportunities. I believe strongly that there is something better out there awaiting you to discover. I have always relied on my sense of internal security to anchor myself. Do not owe your employment to your boss's favor or anyone for that matter. Believe you are the best there is and you will work towards it and become it!

People with an abundance mentality seek solitude and enjoy nature.By taking time out in solitude and nature, you allow yourself to access your deepest thoughts and hence your human spirit with which we are all equally endowed. Most successful people I know will take time out to reflect. I try to take a solitary one or two night retreat away from family and work once every year and try and access my human spirit. You have to experience it to believe it. It re-energizes you.
People with an abundance mentality keep their mind and body tuned through wide reading and exercise.It is a pity that most of us stop reading on graduating. Most successful people read voraciously- they are in sync with what is going on around them. They are current. They do not spend an hour reading newspapers or watching TV but will spend hours reading the latest management thoughts for example. I try to read as many books in year as I can. I have tried to keep fit for over 10 years and my wife who is my jogging and walking partner can attest to that- we call exercise our lifeline! Without the mental and physical fitness we would not have survived the vagaries of disease and the challenges of everyday life!

People with an abundance mentality serve others.Like one writer put it and I quote "Service is the only rent to pay for the privilege of living in this world" Are you paying or are you robbing the landlord? Service enhances internal security and fuels the abundance mentality- at the beginning of this year I pledged to donate ksh. 2m to a cause....I chair the Disciplinary committee of the Accountants; I chair Help Age Kenya, I chair The Palmhouse Foundation among many others. Nothing gives me greater joy! People ask me where I get the time- some of my friends have asserted that I have a 25-hour day! I tell people you have time for what you value. An abundance mentality gives you time and opportunity to serve others.

People with an abundance mentality let those below them grow and hence give themselves the opportunity to grow even faster and higher. I keep saying to people that if you are good at what you do, the only place those who want your job can push you is upwards. They work with the best minds. They seek out those who are better than them! A scarcity mentality tells you it is dangerous to let your junior became as good or better than you- nothing could be further from the reality! My career success would not be what it is without those who worked under me.

People with an abundance mentality know when to get out before they get stale. I have left some of my previous jobs as soon as I realized that my best was no longer good enough. Some of us stay too long on jobs we do not enjoy hoping that our boss will get out of the way sooner! My advise to professionals who do not enjoy what they do is - for heavens sake move on elsewhere! At one time I left a job that was so well paying at the time that my wife thought I was crazy- You cannot excel where you do not enjoy!

People with an abundance mentality have a long term view of life and hence are visionaries-they are able to see what many cannot discern.They create uncharted territories. This is because they already believe everything is possible- How many times have you wondered how come that many times that successful guy/lady is ultimately right? Many say he/she knew what they were doing. The truth is that such people operate from a paradigm of abundance.

People with an abundance mentality are problem solvers and are hence popular with their superiors. They provide unusual solution to problems.They are able to separate people from the problems. They attract others into the team with their sincerity. I lead many volunteer teams in very successful initiatives. I love looking for the third alternative to problems and hence my popularity with employers. The scarcity mentality on the other tells us we should not stick our necks out and should remain as passive followers.

People with an abundance mentality are courageous. One must however remember that courage is not to absence of fear but more the mastery of fear. I have experienced fear in my life- I cannot for example remember anything as fearful as changing jobs. A friend of mine told me recently that a herd of sheep led by a lion will defeat a pack of lions led by a sheep! The courage to take action is one of the greatest attributes of great leaders. Courage is a consequence of the abundance mentality.

People with an abundance mentality understand and respect the law of the Farm or the law of the harvest.They know how/when to forego immediate gratification in favor of delayed and long term satisfaction. They appreciate that you will reap what you planted! They understand the need to prepare the ground, plant, weed, water and tend before you can harvest. They are not moved by peer pressure. I still marvel at some of my friends who I grew up with who tried to violate the law of the harvest - they are or have already paid dearly for this. Imagine if at the age of 18 you have your own chauffeur driven Mercedes? What would you be working for at 50? Does it surprise us that many of our kids are on drugs? We have not exposed them to the law of the farm! Those who do not know me for example may not know the painstaking effort I have put in my career, like many of you, to get where I am today- seven years ago I was still studying! I still take time today to learn new technology and read widely to keep myself relevant. An abundance mentality reinforces the law of the harvest. The scarcity mentality fools us that we can cheat the law of the harvest and short-circuit it- it never works!

People with an abundance mentality are passionate about everything they take up.They live their short lives in greater harmony than mediocre people. They are ordinarily positive about much in life and this seem to produce a self-fulfilling prophecy of success. When they see a mountain they think of how best to climb it and not about the dangers of climbing. They see opportunity where others see no hope. An instructive story is told of two shoe salesmen sent to Africa to see what opportunities there were. One came back saying he was disappointed that there was no market for shoes because the natives do not wear shoes.The other came back and saying there was a huge opportunity because the natives do not have shoes!

Professionals with an abundance mentality treat whatever they take on as a project.A project to be executed so well that it guarantees extension or another project. I like reminding people that like Tom Peters, the great management guru keeps telling us - the life of indentured servitude is over! You must treat your job as a project to be executed meticulously and create a brand name for yourself in the banking industry and believe me before long people will be looking for you to do other lucrative projects. From Tom Peters masterpiece "the Circle ofInnovation in 1998, I discovered this ground breaking truth that convinced me to leave my job then and never to be employed again! Every work I do is a project. I endeavor to complete my projects successfully.I will endeavor to finish my Sameer/Yana project as successfully as possible. I will give it my best. Some projects will take longer than others but this does change the fact that they are projects. I appeal to all of us present to stop considering ourselves as permanent employees- the 21st century has no place for this! Only successful team players working on deliverable and measurable projects will survive the white collar revolution! If you are under 40 and hoping to retire in your current job, then something is wrong with your project! Seriously re-examine your options. If there is one industry that has been the victim of change and technology, it is banking! More retrenchment has been seen in this sector that any other I know- and in my view we have not scratched the surface!! Learn how to be a project contractor - there is no longer room for employees in the 21st century!


I would like to conclude my talk with a favorite quotation often wrongly attributed to Nelson Mandela but is actually by Marriane Williamson and I quote;
"Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our light not our darkness that most frightens us. We ask ourselves who am I to be brilliant, gorgeous, talented, fabulous? Actually who are you not to be? You are a child of God.Your playing small does not serve the world. There is nothing enlightened about shrinking so that other people won't feel insecure around you. We are all meant to shine as children do. We were born to make manifest the glory of God that is within us. It is not just in some of us; it is in everyone. And as we let our own light shine, we unconsciously give other people permission to do the same. As we are liberated from our own fear, our presence automatically liberates others." Marianne Williamson
I hope you have enjoyed my talk. Thank you and God bless you



+So do you have a scarcity mentality or abundance mentality.

bundealexander@gmail.com

The Story of Ug

Know your Money
The Story Of Ug
Once upon a time there was a poor caveman named Ug. He was poor because he didn't know how to count past 5.You see, Ug's counting ability was limited o counting on the fingers of one hand. For any number bigger than 5, he ran out of fingers and he just said there were many. Ug thought that his system was just great- easy and not too much thinking.

There were times, though, when he had an inkling that not being able to count higher was costing him something. Even though poor Ug couldn't count past 5, he was an excellent fisherman. He was hardworking and patient and almost everyday he caught 20 to 30 fish. Ug's neighbor, Slik, wasn't nearly as good a fisherman; he only caught six or seven fish per day. But Slik did know how to count!

This evening as every evening after the day's fishing, Slik showed up at the entrance to Ug's cave holding six fish. He always timed his appearance to be there just as Ug came back from the lake with his big string of fish.
" Many for many," offered Slik. " Fair trade."

Poor Ug made the same deal with Slik every day of his working life. He couldn't figure out why he and his wife, Nag, and his son, Ig, were always feeling hungry. After all, they had " many" fish to eat, just like Slik's family, who always seemed to be fat and contented. Poor Ug suspected that the problem might have something to do with counting past " many". He was never able to figure it out until his dying day, which came quite a bit earlier than it should have because of malnutrition.

" Fair trade," said Ug, handing over 27 fish and accepting 6 fish in return.
Poor Ug made the same deal with Slik every day of his working life. He couldn't figure out why he and his wife, Nag, and his son, Ig, were always feeling hungry. After all, they had " many" fish to eat, just like Slik's family, who always seemed to be fat and contented. Poor Ug suspected that the problem might have something to do with counting past " many". He was never able to figure it out until his dying day, which came quite a bit earlier than it should have because of malnutrition.

All the Math You Need you Need to Get Rich- Thinking numbers for Financial Success, Robert L. Hershey Open Court Publishing Company, 2002
Lessons- Know your money
- Think with both sides of the brain when dealing with money

Quote; Rule No.1: Never Lose Money
Rule No. 2: Never forget Rule No.1

~ Warren Buffet~

BE INFORMED
bundealexander@gmail.com

Investing In Business

Greetings,
Its been quite a while since i sent my last article, but anyway thinks happen and we need to move on.Am back now and will be sending articles every friday.
i recently came across an investors handbook an inititiative of UNDP about making a handbook for local investors about the rules,regulations, procedure and process about how to go about starting your business in kenya and how to go about it.
with the current reforms in the SME sector for example the availability of funds, it is no longer an option for you as an opportunity seeking, wealth creating kenyan to desist from starting your own business, but a right , you have the right as a kenyan to start your business given the available funds.
Look at it from this point of view, if 30% of university graduates started their businesses and employed their fellow graduates, we would no longer be talking about the problem of yout unemployment and poverty, since most people who grumble about the common mwananchi not feeling the effects of economic growth, its onl because the common mwananchi has not been ssavy enough to start his business and take advantage of the economic reforms.
Among the funds available for business startups and SMEs are;
-Business Partner International( a private equity and business support firm)
-Equity Womens Business Club
-Kenya Industrial Estate(Youth Fund)
-Family Bank(Youth Fund)
-MSME Indigeneous fund(by Ministry of Trade and Industry)
-Kenya Youth Business Trust (KYBT)
- International Finance Corporation, SME Solutions Centre

You can get more info from the following links;
http://www.ieakenya.or.ke/
http://www.kepsa.or.ke/
http://www.ke.undp.org/InvestorsHandbook.pdf
http://startupskenya.blogspot.com

Be Informed
bundealexander@gmail.com

Why Vision 2030 could just be a pipe dream-Kenyan monetary policy

Why Vision 2030 could just be a pipe dream-Kenyan monetary policy

Big infrastructure projects in Kenya fail to kick off and materialize due to lack of ingenuity in Kenya’s monetary policies.

Think of the huge expenditure budgets like;

KAA expansion- Kshs. 10billion

EASSY project

Vision 2030

Sondu Miriu project

These are just some of the grand projects that could jump start Kenya’s and Africas economy to the extent of being a big stakeholder in global trade talks and gain recognition as an emerging market.

The only poison that kills africas growth potential is the inability to utilize their present resources.

Think of it these way, why do African countries come up with such ground breaking projects then get overwhelmed by the magnitude of the funds required to finance these projects resorting to begging for handouts from developing countries, IMF and World Bank who impose their policies and hold the borrowers at ransom compounded by the fact that these countries fail to raise enough tax revenue from the public especially from the usurious/unorganized money market of MSMEs, ponzi and pyramid schemes investors, multi-level marketers .

Other sources that they resort to such as loan syndication from multinational banks and develpment banks do not make sense especially for projects which are for social capital like road construction where the government is not able to generate direct revenue to pay off these loans forcing the government to seek for further funds to pay off these loans like raising income tax and constructing a more unfair multi- tax system that will generate revenue for them to sink the funds further into a bottomless pit since they will lack more funds to maintain these projects and fund more projects.

What if; -

the Kenyan government could be printing more money specifically for such development and infrastructure projects. For example, tendering the KAA kshs. 10 billion contract to foreign firms then printing money at different phases of the construction to settle the construction costs, since these money will be used to pay workers, buy materials and other expenditure that will boost the local economy, this new moneys released in the market can then be recovered by the government through issuing T- Bills, and/or these foreign companies buying their currency from the central bank, saving the Kenyan government a tremendous amount of baggage that they would have had they acquired a loan

The only issue that ties African countries down is changing mindset- to solve a problem you think at a higher level than when you had the problem-

We need to realize the power of our money

what do you think