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I heard a lot of things about UOL from Suliana and one or two year 3 students. From their comments, i realised why it is the case. No wonder, it was so slacking and relaxing from the start of the course till end of the course. Then you see serious alarm blaring to your ear by the time you do exam paper in May. Fortunately, there is preliminary exam to raise alarm early before it is too late!
All i need is to get myself into deeper analysing these theories and fit them into the right puzzles. I get gist of the UOL examination. It seem that examiners like to set the questions to scrutiny your knowledge, in particular foundation ones. I believe it is the same story for CFA, CPA and probably ACCA.
Foundation knowledge indeed build your understanding into complex ones. From there you will be able to write. Without it, you just learnt(most likely memorise) complex ones. It is sure fire path to failure. Definitely, i am quite convinced why so many people fail year by year. From what i see, it is not so hard as well as not so easy.
As you can see from my past blog entries, my effort to study is really that relaxing. At least it allow me to pick more things to develop the bigger picture. During past 2 weeks, it was HELL!Fucking HELL!I studied so aggressively in order to write something on all 4 preliminary paper. I feel that one or two days is not enough to study before taking paper. It is huge different from what you would perceived in your own diploma course. The content of each subject is really massive and on top of that, the questions, say 4 chosen questions in a certain subject paper, are really equivalent taking 4 diploma exam papers. It is no joke if you slack here and there.
My schedule for this month and next month is like studying 7am-11.30pm.
1)use my hand to write a lot of answers on paper for Microeconomics,PBF's quantitative questions, and CF's quantitative questions.(purpose:speed up my proper and legible handwriting.
2)crack my brain at home rather than at exam hall.(purpose:save time and allow me to write 4 questions for PBF,4 questions for CF,8 questions for Microeconomics, 9 questions for POA.). It enables me to think much faster during real-time exam.
3)if it is essay based questions, i just use laptop to type and type without consuming too much time.
4)after attending every UOL lesson within this month, i make sure that i revise at night to understand further of what lecturers(UOL and local) teach.
5)Increase my understanding on foundation knowledge. Right now i has about half of it. Some of my former classmates would know that i could breeze through a lot of accounting questions. Just look at me in last monday POA prelim. I can't even finish whole 8 questions because it is really bloody taking too much time (doing FIFO,LIFO,Income Statement,Balance Sheet,Cash Flow,NPV project, theories). Worse of all, i don't even have time to check where i make mistake if i cannot 'balance'!
It is really dark contrast to what i would have done long time ago back.
Now i know why Suliana has no time to think (during exam) even if she is exceptional lady whom I would think very highly than anyone i know of(other than Melvin). it is really fast and furious 3 hours act in the exam period. You imagine that! *Slap forehead*
Honestly, i got my finger burnt when doing CF,PBF and POA prelim papers because i focus on few certain chapters. Certainly, it has the benefit but i didn't think of the risk until i had first hand experience. What is happening to me? I used to study everything. Sigh..this time I am not going to do that way. The best thing is to study 80% of the chapters even if there are questions to choose. Who knows the topic you like the most may appear in the paper but it turn out to be one of those toughest questions!It implies that you have to take a lot of time to think before jotting your answer. It is really waste of them especially when the questions for other topics are relatively simple and straight-forward. That is why we must learn how to think and answer right away rather than do the ones you like the most!That is danger which many students are doing that way! Judging my performance for all 4 papers, i guess i settle for 2nd upper score. To obtain first class score, I need to complete all the questions i have chosen within 3 hours!
Good thing is that Major Season 4 came out just nice to keep my morale up. Banzai Shingeno Goro!Time to take on all the toughest battles we are going to face.
Looking at Mick's msn nick, it remind me of an idea regarding intertemporal choice.
-Save now and spend more later(known as savers-lenders)
-Spend now and spend less later(known as spenders-borrowers)
This kind of pattern varies from one human to another. The former certainly has a lot of patient to save(negative rate of time preference) and the latter is extremely impatient kind who prefer to spend NOW to spend later(positive rate of time preference). The question is that how they do maximise their welfare. Every financial adviser needs to know where their preference are and then you offer the opportunity for them to maximise their welfare. Of course both types of people I have mentioned just now can be attracted to it. Such advices must be golden and clearly defined to anyone.
I have drawn three diagrams to have an idea of what intertemporal choice(not full complete set but I chosen the ones solely as an interpretation to Mick's msn nick.
I can't convert some letters into subscript size because of blogspot's inability. So, you will easily have an idea of each denotation of each letter in all 3 pictures.
t0 stand for present period,
t1 stand for future period,
C0 stand for consumption period now,
C1 stand for consumption period in the future period
Y0 stand for individual income now
Y1 stand for individual income in the future period
I0 stand for invest now
U0 stand for Utility 0
U1 stand for Utility 1
I wrote in my way of what i know and understand. Such representation may not be 100% accurate but nevertheless it is good enough for you to understand in the simplest form.
Assume a scenario where there is no capital market. Individual in this picture consume now.
In this picture (above), the concave-shaped curve is known as production possibility frontier(PPF)and convex-shaped curve that is tangent to PPF is known as indifference curve. Indifferent curve represent the individual preference. Any point representing his choice of preference inside the PPF curve is inefficient because he do not maximise his utility. I will explain why it is so after the third picture. By then you will have idea of why. Likewise, if the point represent his choice of preference above PPF is impossible to obtain. The reason why it is impossible to obtain is that money to spend on goods is scarce.
Enter the picture with the presence of capital market. A straight line is added which is tangent to PPF. This individual is borrower-spender.
Two indifferent curves are tilted towards t0 which indicate that the individual exhibits the charactertics of borrower-spenders. Two indifference curves are drawn below in this diagram indicates that they are impatient and want to consume now. They invest the amount of I0 and then borrows the money from the bank(the shorter arrow between C0 and Y0-I0.Why did they borrow??They want to spend some goods to consume(You can think of some ladies who can't resist buying beautiful clothes in Orchard Road). Therefore, they maximise their welfare(elevating his indifferent curve from U0 to U1). It implies that they are better off. In the future, the vertical arrow between Y1 and C1 indicates that they repay back to the bank.
Now we know the behaviour pattern of borrower-spenders. What about savers-lenders?
Notice that the two indifference curve are tilted towards t1. As what you thought, it represent savers-lenders because they save money and consume later. Similarly, the same reason also apply why two indifference curves are drawn there.They invest I0and they are left with Y0-IO. They save(the arrow between Y0-I0 and C0). They have C0to spend. They maximise their utilities(their indifference curve U0 shift upwards to U1). Therefore, they have more money(C1) to spend.
Back to the picture 1, you visualise yourself drawing indifference curve U1 that is tangent to any point(that is inside PPF). That is why it lower individual utility which in turn indicate inefficient(sub-optimal) choice.
Great!You know now. The biggest question you probably want to ask is how to identify each individual's indifferent curve. You need to have a chat and get an idea of this person's wants and needs.
Since i have time to write what i have studied for the psat 2 weeks, I am doing right now.
The figure Mick quote on his MSN could be nominal interest rate. Nominal interest rate is not the real interest rate because it is inflated by inflation rate. Any data of such interest rate on inflation and investment return is not 100% accurate. Who knows that it can be 1% return if you bother to calculate for the real interest rate. Up to now the statistic formulas used to derive interest rate are not 100% accurate. A lot of disparity cause the imbalance owing to ignorance of such factors such as human error,individual biases,the type of data they choose and so on.
Anyway, news has been screaming the headline that USA is looming towards recession.
You probably think of saving money in the bank. Unfortunately, it is not the safest measure. For simplicity sake, inflation rate eroded your interest rate(you save money in the bank) because central banks will reduce the interest rate for capital requirement of every commerical bank. Lower interest rate mean you earn little interest rate. Why should it be low interest rate? If I studied Macroeconomics properly last year, it is because government want to stimulate spending power which mean it want firms to invest more by borrowing. Firms have a lot of investment opportunities but lack of funds(to invest). That is why they borrow money from the bank or issue debt and equity instruments.
You probably find it half convincing. Let me fill the other half which I am currently studying. What must be done to get the economy to be healthy. There must be constant money flow from households(buy things) to firms and then back to the households(wages). This cycle goes on. Some people will say who cares about interest rates as long as my money is safe in the bank. That is very naive thinking. Bank's traditional acitivites is to issue long-term deposits and use funds from long-term deposits to make short-term loans to lenders. Nowadays, information technology has improved dramatically. It make things easier for the firms to issue securities directly to the public because the potential investors know more about the firms(surfing internet for the information about firms). It cause the reduction in the lending role of the banks. Banks need to earn higher interest rate returns in order to pay interest rate to their customers(saving account holders). Therefore their solution to compensate the decline in the income of traditional banking activities is to go to off-balance sheet activities and deriavtive trading. Off-balance sheet activities involve in fee income instead of interest income(loans). Some examples of off-balance sheet activities are loan commitments and letter of credit. Why did the banks engage into deriative activities? In the banks' balance sheet,they have deposits in the current liabilities and loans in current asset. As you know that interest rate movement is very volatile(moving up or down in any time). If that happen, it will cause imbalance between assets and liability column. How come? Beside interest rate, items such as loans,deposits(saving,time,checkable) and etc have its own maturity dates. For example,in asset side is greater than the value in liability side. Deposits in the liability side has two year maturity with 9% interest rate while loans in asset side have one year maturity with 10% interest rate. When interest rate rise, it is good news because the loans in liability side will repriced at higher interst rate, say 11% and of course, the deposits in liability side remain at 9% because of two years maturity. It mean that they earn more interest. But when the interest rate falls, then they are earning less interest which obviously that the loan's interest rate repriced its interest rate at,say, 8%.
Assume another scenario:deposits have 10% interest rate for 1 year maturity while loans have 9% for two years maturity. If the value in liability side is worth more than the value in asset side, good news is when interest rate go down assuming that the deposit repriced at 8% interest rate and bad news is interst go up causing the deposit to reprice at 11% interest rate(of course it is good news to depositors). That is why they use derivatve assets to hedge interest rate risk.
When the bank cannot 'balance' the asset and liability, it will suffer huge loss. It will have trouble meeting your obligations(withdrawing money from ATM). It means that you do not have money to spend because your saving account from that bank is worthless(illiquid). Once everyone know this problem about the bank, they will go and crash the bank demanding for withdrawals. The chance of you getting the money back is extremely low!
Before you fall off your chair, there are solutions to solve this problem but it is not 100% fool proof. You want to know more, you should monitor few banks particularly UK's Northern Rock, US's Citicorp, Swiss's UBS bank. I disagree with some people who think the singapore government investment on Citicorp and UBS bank is going to fail. Well, there is no right or wrong. I saw this opportunity to keep global economy afloat without creating another great depression. I say it is somewhat similar to 'donating to charaity' literally. I believe that great depression is unlikely to happen again since there are few mechanisms in place to keep economy afloat. You want to know great depression?Go and read more about it. It was dated at 1929-1932.
End of the talk of what i have studied. Anyway, I realised that former Starbuck CEO went over to Mcdonalds few years ago back. I happened to know by reading 'The Economist' magazine. No wonder i see many McCafes in most of McDonalds. I think it will work and starbucks may be in danger of losing its attractiveness if the current CEO don't know the receipt for success. Readers, think of globalisation effect(good and bad ones) and you will understand why you need to be ready for such kind of disaster.
Alvin and the Chipmunks(Hollywood Movie 2007)
Synopsis:(extracting from imdb.com)
In a tree farm, three musically inclined chipmunks, Alvin, Simon and Theodore, find their tree cut down and sent to Los Angeles. Once there, they meet the frustrated songwriter David Seville, and despite a poor house wrecking first impression, they impress him with their singing talent. Seeing the opportunity for success, both human and chipmunks make a pact for them to sing his songs. While that ambition proves a frustrating struggle with the difficult trio, the dream does come true after all. However, that success presents its own trials as their unscrupulous record executive, Ian Hawke, plans to break up this family to exploit the boys. Can Dave and the Chipmunks discover what they really value amid the superficial glamor around them?
Rating:6/10
Bonus: 1)very relaxing entertainment to watch this cartoonish live action movie.
Le Grand Chef (Korean Movie 2008)
Synopsis:(extracting from incinemas website)
Based on the bestselling manga by Heo Yeong-Nam. During a press conference, a Japanese representative brings out a cooking knife of special kind. The knife belongs to the last Korean royal chef of Chosun Dynasty who cut his arms with this knife to show his royalty to the king and the country. The Japanese politician was deeply moved by his story and he decided to bring the knife back to Japan. And now, his son came to Korea to return the precious knife back to the one who really deserves to own it. So he announced a cooking contest to find the best cook for this knife. Thus the grandsons of the two last apprentices of the royal chef participate to compete for the first place. The competition comprises of five levels of cooking match and the two survives to the final...
Rating:7/10
Bonuses: 1)If you are good, you are still good in the end. 2)The morale of the ending of this movie is that you should not claim such work that belong to somebody else.
American Gangster(Hollywood Movie 2007)
Synopsis:(extracting from imdb.com)
Following the death of his employer and mentor, Bumpy Johnson, Frank Lucas establishes himself as the number one importer of heroin in the Harlem district of Manhattan. He does so by buying heroin directly from the source in South East Asia and he comes up with a unique way of importing the drugs into the United States. As a result, his product is superior to what is currently available on the street and his prices are lower. His alliance with the New York Mafia ensures his position. It is also the story of a dedicated and honest policeman, Richie Roberts, who heads up a joint narcotics task force with the Federal government. Based on a true story.
Rating:9/10
Bonuses: 1)Enough credits to rank itself somewhere close to Godfather trilogy series. 2)Gore,cruelity,revenge are clearly demonstrated in this movie 3)Get yourself ready to blow away by this movie 4)You want respect?Simple-Do things in the right way and you will get one
바르게 살자 (Going By The Book)(Ba-leu-ge Sal-ja)(Korean Movie 2007)
Synopsis:
A string of bank robberies puts the public in a panic and they demand action from the newly appointed police chief to crack down on the perpetrators. In order to appease the residents of the city and carry out his own ambitions, The police chief appoints naive traffic cop JUNG Do-man to infiltrate the world of the robbers.
Rating:8/10
Bonuses:1)convicing bank robbery test 2)Indeed, it is always the best to put 100% into mock test 3)refer to no 2, and you reap the result like what the ending of this movie says so.
상사부일체 - 두사부일체 3 (Sang-sa-boo-il-ce - Doo-sa-boo-il-che 3)(The Mafia The Salesman)
Synopsis:(Extracting from hancinema website)
In the era of Free Trade Agreements (FTA), the head boss of the Young-dong ‘organized gang’ decides they should not lose their guard and rounds his top men together. After a long talk, they conclude they should benchmark off big corporations’ ‘globalized management’ and prepare their gang for globalization! Just then, the only one to graduate from college, GYE Doo-shik is called to the role. Will Doo-shik be able to carry out his mission in the mega company without a glitch?
Rating: 6/10
Bonus: 1) probably you can get such pleasure from this pranks and stupidity acts
지금 사랑하는 사람과 살고 있습니까?(Ji-geum Sa-lang-ha-neun Sa-lam-gwa Sal-go Iss-seub-ni-kka?)(Changing Partners)(Korean Movie 2007)
Synopsis:(Extracted from koreanmovie website
Young-joon and So-yeo are a young couple with their marriage relatively stable. On a day their mutual friend opens a wine bar, they come across Min-jae and Yu-na, a couple quite the opposite of themselves. After a trade of talks, Young-joon becomes a client of fashion consultant Yu-na, while hotelier Min-jae agrees to help So-yeo book a hotel for her Hong Kong business trip. So-yeo meets Min-jae by chance in Hong Kong, while Young-joon trades suggestive remarks with Yu-na who visits him on a consulting session. That night, the four of them find in the other partner what had been missing in their respective marriages…
Ratings:8/10
Bonuses: 1)This movie superbly demonstrate how love easily fade over the years and present itself to you once again in between you and new mate. 2)some raunchy acts to keep you watching this movie 3)superb actings: I have great respect for these two lead male actors and two lead female actresses.(you will know why if you watch this)
Tony Del Piero wrote and posted at at 8:03 pm
