The Manny Pacquiao Lesson

The last time I posted something here was Nov 24. What I was really into should be something that is worth my while. Well, it made the filipinos happy, and somehow proud.

I'm a pinoy, and just like every pinoy, I was swept into the Pacman frenzy. That was it.

To somehow justify my sidetrip to Pacland, which I do ever since I saw him fight as a thin 16 year old, I tried to extract some valuable lesson from it.

What made Pacman a success?

1. Preparation.

It is now an open ingredient to his success. His Preparation. JMM is the only boxer so far who has given Pacquiao the most difficult opposition. It is because JMM trains as hard, or even harder than Manny.
Against Dela Hoya, he prepared hard and long. There are three aspects of that preparation.
a. Physical training or conditioning.
b. Study of the opponent.
c. Strategizing

This is no different in a business setting. An entrepreneur would need all the mental and physical conditioning before going into the ardous task of doing business. I can not imagine a sickly person succeeding in business. The stress and the physical exhaustion would eventually take its toll to a weak and unprepared body.
And successful entrepreneurs are also living their physical and mental conditioning. Which means, the training does not end when the business begins, rather it became a continuous, life long conditioning process.

Study of the opponent. One of Pacquiao's trainor, Bubuy Fernandez revealed how he would break Dela Hoya's taped fights into segments-in seconds- to study the speed of his punches, his tendencies, his weaknesses, and his strengths. It is like hearing Sun Tzu giving advice to the Pacman to study your opponent. In modern day that would sound like SWOT analysis. Is this not something that is very close the discipline of business entrepreneurs?
If an aspiring entrepreneur would do similar preparation, he/she would be increasing his/her chances of success a hundred times.

And how the team was able to device a plan that would negate the advantages of Dela Hoya, and how they were able to incoporate into the plan the strengths of Manny-his speed- that Oscar would never have the chance to offset. Does it sound like devising a strategy along ones decisive advantage? Perhaps to counter Dundee's appearance in Dela Hoya's camp as a consultant, Roach could have secretely hired the services of Michael Porter in strategizing for the fight.

The most important ingredient of that masterful victory is the manner by which Manny was able to EXECUTE the plan near to perfection.

For budding entrepreneurs always remember that fight. They have a PLAN, and Manny exucuted it to the core. He stayed focus on it until vicotry was their's. Fight analyst would praise Pazquio's maturity on that aspect. He was in complete control of his inner instincts which to attack and attack fiercely specially when the enemy is hurt.

There are other intangible there like his determination, his confidence, his patience, but I think the above mentioned factors are the KEY INDICATORS, that entrepreneurs must always remember.

APEC Leaders Rejects Protectionism

APEC leaders said no to protectionism. I heard George Bush Jr. on the television echoing thesame line. They said, no matter how hard the effect of this financial crisis be, the government should resist the protectionist policy.

The next day, I heard the US government providing financial aid to CITI GROUP. Why is the US government always in the rescue? Why not allow the market forces do its trick, if the bank falls down hard, so be it. Because the US is not favoring protectionism does it mean that they will remove the farm subsidies that many US farmers are receiving from their government?

The US is saying something and doing some other things. China, Japan, India, and ASEAN should be strong enough to force US to do what they have agreed upon. But this is difficult to achieve because of American hands dipping in almost all economic groupings. I'd love to see an grouping such as the following; EU, US and the North and South American Countries, Asian (China, Japan, Korea, India, and ASEAN countries, the Oil rich countries of the Middle East.

My AIG Temptation

A few months ago, I attended an investment seminar sponsored by an AIG affiliate. That was a few weeks after Bear Stearns hit the headline for their financial troubles.

During the forum I asked the financial consultant who was facilitating the discussion how would the sub prime problem affect the financial status of AIG. In a way I was asking them how strong is the financial standing of their company. The explanation of course were the canned type, where they would narrate where they invested the funds, and how safe it is to invest with them since they are dealing with the top 500 corporation and their BRIC 40.

And even when I mentioned the financial woes of City Group, they insisted that they are not vulnerable. They even ventured into the assumption that granting any problem would occur in the near future, the federal government of America will never allow one of its flagship companies to fall.

I never invested though, not because they never convinced me with their motivational speeches, but because I don't have the money to invest. My gut feel then was whispering that they are agressive in inviting investors because they need new infusions.

With todays woes that befell Lehman and of course AIG, the thought of what if I had the money then, I would perhaps be one of those whose blood pressure will be shooting up. And the lesson learned. The safest way to avoid financial losses is to never have any financial savings at all.

Critical Thinking

Justin Menkes in his book EXECUTIVE INTELLIGENCE opined the importance of critical thinking for corporate leaders. A quote from the book;"...some individuals can understand and navigate complex interpersonal situations but are hopeless when it comes to analyzing a new strategic intiative. Others might have tremendous analytic skills, but when it comes to dealing with other people, they do blundering things at inopportunate moments. Still others are simply blind to their own shortcomings and unable to correct for their own missteps." Based from the hypothesis that a leader have to have the exact mix with regards to; task, people, oneself, Menkes argued that a leader must master all three aspects of leadership to be considered a star leader.

I am just wondering why a CEO should have to master all three when a process could be followed to finetune the decision making of the leader. He even quoted Robert Johnson; "Even the sharpest thinkers need teams of sharp people around them. And these high-performing teams develop over time. It is one of the basic laws of attracting talent: the more talented people you have, the more talented people you can attract. You get the highest level of input in decision making and the best critique of things you should or should not undertake when you are surrounded by such individuals. Once you reach that critical mass of talent, there's literally nothing you can't undertake."

A talented team may offset the weaknesses of the leader. Can it be said that a star leader is not really they key towards success but a team of highly intelligent people?

War and Business

For the soldiers, their business is war. Every time their is war, they are given the chance to prove themselves, thus a chance for a promotion. So for them it is good to have war. Well, in the first place, what they are here for.

In reality though, the business of war is not coherent with the business environment. In Mindanao where I am based, investment comes a trickle because of the age old conflict between the moros and the government. The businessmans pragmatism dictates that it is never wise to invest in war torn areas. And in the broader spectrum, any conflict, affects the investment potential of any country.

War affects everybody. And my daily, or shall I say, minute by minute, attention to what is happening in my community affects even my blogging. Natural instict dictates that blogging should never come ahead of self preservation. After the MILF attack in Kauswagan and Kolambogan, and other parts of Mindanao, we are at hightened alertness day and night. Afraid of the possible attack from the rebels, I never focus on posting in this blog, which is about business and economics. I must admit though, that I have been posting regularly with my other blog that deals with my political and social aspiration, specially about my Mindanao.

Now that I am posting again, this may mean that things are back to normal again. Amidst this war, of struggles for self determination, of struggles from Manila Centric control, there are business enterprises. Today, it is business as usual.

War and Oil

America destroyed Iraq with the lame excuse of liberating its people from the evil. One of the result is high oil crisis.

The other day Russia another oil producing country bomb Georgia with the excuse of liberating its people. I don't know how much oil Georgia has, but there is very important oil pipe line that traverses the country, and war such as this would surely affect the price of oil.

Venezuela and Indonesia should watch out. Oil now a days has become the magnet of war and foriegn invasion. This is true other parts of the world, in Africa and even int the underdevelop provinces of the Philippines, Mindanao where governments forces and insurgents are at war, partly because of the believed oil deposit in the island.

Blessed are those who have no oil, for they shall not inherit the wrath of the greedy.

Economic Forum

In a recent economic forum hosted by ANZ,

The hot issues are: subsidy
VAT
Government Spending
Wages
oil prices/ food prices

Panelist, who are mostly academic economist, tried to somehow clear the uncertainties by somehow providing incisive analysis of the present day economic crunch. As an ordinary citezen, I had a hard time following their discussion, and I found little economic wisdom which I could apply to my daily economic struggle.

However, with the help of Greg Mankiw's "10 second macro economic review';

GDP = Consumption + Investment + Government spending + Exports - Imports = C + I + G + X - M.

I could somehow understand what the government economist are trying to tell about the importance of investment. And how pump priming are being equated to Government spending.

Indeed, when the government provides assistance to the poor constituents, in form of money or in kind, the short term effect would be the fullness of the stomach. The C in the GDP equation however will hardly be affected since the majority poor will still have no money to spend. And as ordinary person on the street, I will lost more earning opportunities when I wait for government assistance to come. And more of the aid will go to the pocket of the officials than to us poor constituents. The programs are not delivering the desired effect.

Micro-lending for example. My understanding about its effect is that it does not help the less fortunate the way the proponents expected. People are not becoming entrepreneurs, rather, they are becoming micro-creditors. Goverment spending in this form have a significant impact on the upper class who have access to the GFI's and other financial institutions. It may perhaps affect the year end GDP, but it will not be of great help in curving poverty. (There should be a study on the real effect of CARD, KMBI and other similar programs, on the lives of the poor constituents. Did the program made their lives a lot better?)

Wage and salary increases. The 20 pesos wage increase and the 10 percent the government employees recieved have been wiped out by the 12% inflation. But an increase is an increase, without it they should be 12% percent in deficit. I agree with the experts that it is impossible for all business enterprises to icrease wages for certainly many will close shop. And that increase, if forced to those who could somehow make ends meet, will push the prices of the products upwards.

So with the increasing food and fuel prices, what should the government do? One thing that it could do is not to imposed new taxes. It could retain the VAT, because removing it would mean fiscal problem and the consequence of balooning budget deficit is even worst. As a small fish, I don't mind paying the VAT, but I mind the increasing food prices, and fuel. However,fuel prices, is something that is not within the control of our national leaders, so we have to swallow this bitter reality. Food on the other hand is something that within their control, and it is not a long term problem. With correct approach, in 4 to 6 months, the food prices would go down. We will not be poorer in 6 months of high food prices, we are already poor, and surviving is already a way of life. The answer as everybody knows is increase productivity. The government should be more creative here because providing the support to the small farmers will not solve the problem. We will have more of the same productivity if the focus will simply be on improving the infrastructure, input aid, credit or financial assistance. That will not result to a sustainable and greater productivity.

Perhaps the answer is in commercial/industrial food production. Dole, DelMonte or San Miguel are example of this kind of farming. Rice farming should be transformed towards this format, and farmers will become incorporators instead of being just ordinary farmers.

This is a long term solution, but a long term solution is what we need. I don't believe that the filipinos are dying. The economic condition in the 80's is worst than today, but we manage to survive. One of the small things that we ordinary citezen could do is not paint a negative image of our situation.

I may not have enough money today, but I am not poor. I could still find solution to my daily needs, and I could still send my kids to school. I could still buy my medicine. In short, help the people to focus more on what they can do. And they could do it.

The Economics of Living in the Province

Living in cosmopolitan centers have its upside and downside. More and more people are migrating towards the urban centers which c ould mean that for most people, the upside far outweighs the downside.

Economics. This is the greatest concern for the greatest number of people. You can't think if you don't eat. Even if you are not using your brain, economics needs will push you to do something to survive. In the metropolis, economic opportunities is better. "What will I do in the province?" Has become a standard querry of those used to the life in the city.

If you are a top notch ceo, what business orgnization will give you the opportunity to exercise your skills and knowledge. Living in the laid back community will make you a hermit, if not, atrophy will takes its toll. Fair enough.

Cost of living in the city is not a problem. The laws of economics will take care of the difference. Income level will rise commensurate to the social cost, the physiological cost, psychological cost, and the environmental cost.

Living in the province, you will have none of those cosiderations. Low income is fair enough because one has to endure less stress, less pollution, less travelling time which means more time with the family (than in the car). This also means less health related expenses.

When time comes for those enjoying the provincial providence, to send their kids to college (where the best schools is always located at the heart of the mega cities), the disparity of income becomes an issue. Unless one is living in the province but owns thousand of agricultural land which is into commercial farming, then sending kids to the metros will make a dent to financial stability. Imagine a small town businessman sending his son to study economics in Harvard.

However, if you are dreaming to establish a conglomerate to challenge Henry Sy, or are dreaming of unsetting Warren Buffet at the top of the money list, then the province is the wrong place for you. Move to New York and fight tooth and nail with Donald Trump.

I am not sure if the world of Berners-Lee will someday break this imbalance. Maybe W.Buffet will soon be challenged as shown by the Indians, the Russians, or a Mexican.

Greatest Modern Day Thinker

Recently I was reading some article about the greatest modern day thinker. The question is very intriguing that it created so much interest thus varied responses. One blip though that is not too difficult to miss is the geographic identification of those nominated. Hawkings, Friedman, Einstein, Sowell, Ayn Rand, Berners-Lee, Andreessen, with Gandhi being the exception.

I'm even wondering whether the Japanese suceeded in their pursuit of excellence without thinking, of whether not a single soul from 2.5 billion chinese and indians are capable of thinking. Or perhaps it is a third world reflection of intellectual allofness.

Or maybe, just maybe, less developed countries like the Philippines don't do so much thinking, the very reason why it remained underdevelop.

I tried to answer the question, nonetheless, just for its cents worth. Who really is the greatest modern day thinker?

First I have to define what is a thinker, and second what modern day means.

Let me start with the second. Modern day. If it means present day then it is very difficult to give justice. If it means the last 50 years, then we could somehow glimps on some and see who they are. So let us define modern day as the last 50 years.

What is a thinker? Do monks think when they meditate? most likely they do. A cyclist is said to make millions of decisions while on bike so it means the cycling cyclist is a thinker (and think of it, they train for about 8 to 10 hours a day). And how about the chess player, the computer hacker, they are all thinkers. If the question means the thinker who has the greatest enfluence on our lives; or the thinker who have change the way we see things like copernicus or Darwin; then we could narrow it down to fields of expertise like politics, physics, economics, mathematics; then narrow it down by placing geographic bounderies like western thought, eastern. Because it is hard to compare the chinese scholar to an american scholar, specially if they are covering different diciplines.

Having nominated no one in particular, I think the greatest thinker of all is the flat screen in front of you

Balance Sheet

Two weeks ago I had a real life lesson about balance sheet. It is tempting to change the 'ee' of the sheet to 'i', because when the deficit beacons, it can not be helped.

The present day is crunch time for me, with two college students, one in elementary, and with my other half pursuing her Ph.D., high gas prices, and irrationally high food (rice) prices, inflation,...; so I have to be on my toes. I have to revisit accounting 101,(and with no back ground in business or economics, because curriculum experts failed to include that in chemistry course), and have to be contented with the simple income statement.

The balance sheet is only between income and expenses. When I was introduced to the world of business, a chinese friend advised me to watch my expenses. That I should not spend more than I earn. He also shared to me the chinese secret-that everyone knew- to save at least 10%, if I cannot afford the suggested 20%, of my income. Obviously, I only remembered my friend today when time is difficult. Had I followed his advice, John Gokongwei Sr. should be proud of me and this economic malaise will not affect me.

Anyway, it is never too late. So I listed all my expenses (like most people I don't have a journal of expenditure so I have to estimate some from memory), posted it against my income. The result is as expected. My expenses is more than my income. Luckily for me, it is almost even, maybe because I based my data not from a year on year or month on month record, but from the recent expenses.

This is also my mistake as a micro entrepreneur, and perhaps most other micro entrepreneur. One major reason why only a handful would make the jump from micro to small to big.

I now have my record.

Taxation

The government system was invented to help those who cannot help themselves, but in many instances it ends up helping those who needs less help. An ironic existence, one reason why NGO's are very visible these days. However, for the longest time, NGO's also failed to make a dent on poverty, mal-education and in almost every front they vowed to annihilate.

Poor people still outgrow the rich. The gap is growing even wider. Less than ten percent of a nations economy is being controlled by the elite. This is the scenario before and it is still the scenario today. A scenario that brings me to doubt the validity for the existence of this government.

If it fails to uplift the lives of the very people it supposed to serve, why on earth should it be allowed to tax the poor. Why should we allow the government to levy taxes on almost every thing on earth just to support its very existence that amounts to nothing? Of course we should not allow that to happen, only if we have any alternative. An inutile government is always better than no government at all.

Free Trade and Me

The debate is still on. Is Free Trade doing us any good? Should the government protect their own, give it ample support. Allow its muscle to grow bigger and stronger, before it faces the big boys who were always in the look out for the blue ocean-where there is no tariff and restrictions to protect the small fishes. The sharks are always lurking, ready to swallow the over matched competitors.


This is the classic tension. Generally, economist (in the western hemisphere) agrees that free trade is better. The onslaught of the Chinese products, and Indian services, though, have them on the defensive. Free trade is once again being questioned,....because they are losing the competition.

Free trade is often viewed as the fight of the small versus the big. The small countries who dreams of cornering its own share of the global pie, and the big who says their economy of scale provides cheaper and better quality products. This competition between the old dominant player and new kid in the block is actually a major price determinant. It indicates that the global pie is not growing, or the dominant economic model is flawed.

Another consideration is the tension between the consumer and the producer. As an end consumer, I would always favor free trade, because I have the choice where I will find the cheaper product or the dearer but reliable alternative. (tbc)

(ihavetogo...)

The Pains of Being Filipino

Like every Filipino I, too, am faced with challenges, economic and socio-psychological. And like every Filipino here and abroad, I also asked my self; when can we be proud of being Filipino. I also have relatives abroad, from the closest of kin, distant cousins, or just relatives in name. And in the next couple of years, there is a big possibility that one of my children will also fell prey to the lure of the foreign land. I can't blame them, for many times I am almost tempted to follow the diaspora. Though I have stayed abroad, when my wife was on a university scholarship , and I like what I have seen there, the opportunities and the amenities that is so lacking here, long time ago I already have made my choice, I am definitely staying.

Staying here, and do little good things one at a time, so that soon we will have a country that we will be proud of. Here, every way may be a challenge; but far away from home, everyday is a struggle. Here, we can have all the opportunity all the time to do something we can be proud of; but from a distance we can only hoped of that someday to come when we will be of help to our fellowmen.

That might be a good story line, in reality though, when the stomach is empty, when the heart is dumb, when the mind is confused, when the spirit is desperate,.......when all the bills have attached notice 'for disconnection,' when next year means another child going to college, when a medical check-up is deliberately forgotten so that additional illness will not be discovered; to seek for greener pasture is no longer an option, it becomes a must.

Poor Philippines, when will the exodus last? When can we be proud of being a Filipino?

(next will be my wish list)

A start

Like rain drops,
gathered to form the lake;

ink drops,
I'd like to gather,
and see where it would lead.