A tighter rein on land transfers
Comment by ROGER TAN
There is a general sigh of relief with the Federal Court’s decision in favour of a landowner who was cheated of his property, overruling the decision in Adorna Properties which has wreaked havoc in land transactions and increased the number of land scams in the last nine years.
THE decision by the Federal Court last Thursday in Tan Ying Hong v Tan Sian San & 2 Ors to depart from its previous decision made in Adorna Properties Sdn Bhd v Boonsom Boonyanit 2000 has finally and correctly restored the principle of deferred indefeasibility in our Torrens system of registration after a gruelling wait of more than nine years.
For the benefit of the readers, let me first explain this principle in simple terms.
Under the Torrens system , the State will guarantee an indefeasible title to anyone whose name is registered on the register of titles.
This is enshrined in section 340(1) of the National Land Code, 1965 (“NLC”) which applies to West Malaysia.
However, sub-section 340(2) provides that a title or interest can still be defeasible if it is acquired, inter alia, by fraud, misrepresentation, forgery or through an insufficient or void instrument.
Sub-section 340(3) then goes on to say that if the immediate purchaser subsequently transfers the title or interest to a subsequent purchaser, the said title or interest is still liable to be set aside provided the subsequent purchaser is a purchaser in good faith (or bona fide) and for valuable consideration.
In other words, only the subsequent bona fide purchaser/transferee and not the immediate bona fide purchaser/transferee will get an indefeasible title created out of a defeasible title.
(Under the NLC, a purchaser is defined to include a bank taking a charge over the land.) To put it in another way, for example, A is the registered proprietor of the land.
B forges A’s signature and transfers the land to himself. B later sells and transfers the land to C. C, who has no knowledge of the forgery, will obtain an indefeasible title. Or if B forges A’s signature and transfers the land from A to C and C later transfers the land to D, then, D and not C, who has no knowledge of the forgery, will obtain an indefeasible title. C and D in the first and second examples are known as subsequent purchasers under s 340(3).
However, if the principle of immediate indefeasibility espoused in Adorna Properties applies, C will still get an indefeasible title if B forges A’s signature and transfers the land immediately from A to C without first having transferred to B himself.
That was exactly what happened in Adorna Properties.
An impostor of the genuine landowner, Boonsom Boonyanit, made a false statutory declaration that she had lost the original title to two pieces of lands in Penang, and successfully managed to obtain a certified copy of the title from the land office.
With that, the impostor registered the transfer of the lands to Adorna Properties Sdn. Bhd. (“Adorna”) for a sum of RM12mil.
A three-member bench led by Chief Justice Tun Eusoffe Chin held that Adorna had obtained a good title because the proviso in sub-section 340(3) would apply to sub-section 340(2) even though Adorna was an immediate bona fide purchaser.
As a result, Boonyanit lost everything as the forger had also disappeared with the money.
Despite two attempts made by Boonyanit’s family to have the decision reviewed by a separate panel of the Federal Court in 2001 and 2004, the Federal Court dismissed both applications on the ground that no grave injustice had occasioned.
It is, therefore, not surprising to hear Chief Justice Tun Zaki Azmi last Thursday describe the error committed by the Federal Court in Adorna Properties as “obvious and blatant”.
In delivering the main judgment of the apex court, Chief Judge of Malaya, Tan Sri Arifin Zakaria ruled that the Federal Court in Adorna Properties had misconstrued s 340 and came to the erroneous conclusion that the proviso appearing in sub-section 340(3) equally applied to sub-section 340(2).
With the latest decision, the law as respects indefeasibility of titles is now settled, and all the other judges must hereafter follow it conscientiously as the decision of this strong five-member bench has effectively overruled Adorna Properties.
In fact, it cannot be gainsaid that Adorna Properties has wreaked havoc in land transactions, and incidents of land scams have also increased in the last nine years. The police had even revealed before that the computerised land registration system in several states, including Kuala Lumpur, Penang and Johor, had been compromised by syndicates using “inside people” to forge land titles resulting in several registered proprietors and purchasers losing millions of ringgit.
The former Director of Bukit Aman Commercial Crimes Investigation Department Datuk Ramli Yusoff was quoted in 2007 as saying the modus operandi of these perpetrators was to declare that they had lost their land titles and then obtained replacement titles with the assistance of “inside people” before selling the land.
In Tan Ying Hong’s case, the forger, Tan Sian San, had forged the signature of the landowner Ying Hong to create a forged power of attorney in order to charge the land to RHB Bank as security for loans totalling RM300,000 granted to a third party, Cini Timber Industries Sdn Bhd.
It follows that the apex court held that the charge was invalid because as RHB Bank was an immediate purchaser under s 340(2), the proviso under s 340(3) did not apply.
Of course, had Sian San first transferred the land to himself and then charged it to RHB Bank, the latter would have been a subsequent purchaser entitled to the protection of the proviso in s 340(3) .
At this juncture, it must be stressed that the latest decision of the Federal Court does not mean that a landowner is now legally incapable of losing his land to a forger.
The decision only makes it more difficult now for these thieves and conmen to fraudulently transfer the lands.
We must, of course, not underestimate these criminals as it is not difficult from now on for a forger to transfer the property to himself or another person before transferring it to a subsequent bona fide purchaser in order to enjoy the benefit of the proviso in s 340(3).
This is all the more so if there is help from “inside people”. Take Tan Ying Hong’s case, for example.
I am just bewildered as to how the Pahang state government could have “mysteriously” alienated a nine-acre plot of land in Kuantan to Ying Hong in 1976 when he did not even know about the existence of the land until he received a demand letter from RHB Bank in 1985.
As the alienation has not been challenged, it appears that the flawed system has mysteriously enriched Ying Hong with a property which is now probably worth millions of ringgit.
It is apposite to note that in every land scam like in Adorna Properties, there are two victims involved – the genuine landowner and the bona fide purchaser.
As everyone is either a landowner or a purchaser or both, it is indeed a balancing act when deciding whose interest requires more protection and to what extent the landowner should be protected in the entire chain of dealings.
In doing so, it must be borne in mind that if protection is given solely and wholly to the landowner, then Malaysia may not be so conducive for property investments.
In this respect, countries which practise immediate indefeasibility such as Australia, New Zealand and Singapore have an assurance fund to compensate victims of land scams.
That said, as land is a State matter here, implementation of such a fund may not be so straightforward.
All in all, the latest decision now requires the purchasers, banks and their lawyers to be even more vigilant and diligent when conducting land searches and verifying the identities of the sellers before purchasing any property or providing any finance.
It is also my considered opinion that notwithstanding this landmark decision, the NLC should still be amended to bring about more stringent procedures and measures as regards how replacement titles are obtained, and dealings are presented and registered in order to be one step ahead of the criminal minds of fraud and forgery.
The writer is a former Chairman of the Conveyancing Practice Committee of the Bar Council. In Tan Ying Hong’s case, he held a watching brief for the Bar Council as its counsel.
Monday, 25 January 2010
China rejects claims of cyber attacks on Google
BBC
China has denied any state involvement in alleged cyber attacks on Google and accused the US of double standards.
A Chinese industry ministry spokesman told the state-run Xinhua news agency that claims that Beijing was behind recent cyber attacks were "groundless".
US Secretary of State Hillary Clinton this week asked China to investigate claims by Google that it had been targeted by China-based hackers.
The US search giant has threatened to withdraw from China.
"The accusation that the Chinese government participated in [any] cyber attack, either in an explicit or inexplicit way, is groundless. We [are] firmly opposed to that," the unnamed spokesman of China's ministry of industry and information technology told Xinhua.
"Isn't it true that even in the United States, the homeland of Google, certain government agencies are also reported of often entering a massive number of personal e-mail accounts with certain excuses?"
China Daily newspaper
"China's policy on internet safety is transparent and consistent," he added.
Separately, China's state-run China Daily newspaper said America's internet strategy was "to exploit its advantages in internet funds, technology and marketing and export its politics, commerce and culture to other nations for political, commercial and cultural interests of the world's only superpower".
It also described the US government as being hypocritical, saying the country's "certain government agencies" had reportedly illegally checked a massive number of personal e-mail accounts.
On Thursday, Mrs Clinton urged Beijing to investigate the alleged cyber attacks on Google.
Hillary Clinton: "We look to the Chinese authorities to conduct a thorough review"
"We look to Chinese authorities to conduct a thorough investigation of the cyber intrusions," she said.
Mrs Clinton added that companies such as the US giant should refuse to support "politically motivated censorship".
Again in reference to China, she said that any country which restricted free access to information risked "walling themselves off from the progress of the next century".
Google said on 12 January that hackers had tried to infiltrate its software coding and the e-mail accounts of Chinese human rights activists, in a "highly sophisticated" attack.
The California-based company, which launched in China in 2006, said it would quit the country unless the government relaxed censorship.
On Tuesday, the Chinese government said Google and other foreign companies had to obey the country's laws and traditions.
The same day, Google said it was postponing the launch of two mobile phones in China.
When Google launched google.cn four years ago, it was criticised for agreeing to Beijing's demands to make certain search results off-limits - including those relating to the 1989 Tiananmen Square protests, Tibetan independence or Falun Gong.
China has more internet users, about 350 million, than any other country and provides a lucrative search-engine market worth an estimated $1bn (£618m) last year.
Google holds about a third of the country's search market, with Chinese rival Baidu having more than 60%.
Newscribe : get free news in real time
China has denied any state involvement in alleged cyber attacks on Google and accused the US of double standards.
A Chinese industry ministry spokesman told the state-run Xinhua news agency that claims that Beijing was behind recent cyber attacks were "groundless".
US Secretary of State Hillary Clinton this week asked China to investigate claims by Google that it had been targeted by China-based hackers.
The US search giant has threatened to withdraw from China.
"The accusation that the Chinese government participated in [any] cyber attack, either in an explicit or inexplicit way, is groundless. We [are] firmly opposed to that," the unnamed spokesman of China's ministry of industry and information technology told Xinhua.
"Isn't it true that even in the United States, the homeland of Google, certain government agencies are also reported of often entering a massive number of personal e-mail accounts with certain excuses?"
China Daily newspaper
"China's policy on internet safety is transparent and consistent," he added.
Separately, China's state-run China Daily newspaper said America's internet strategy was "to exploit its advantages in internet funds, technology and marketing and export its politics, commerce and culture to other nations for political, commercial and cultural interests of the world's only superpower".
It also described the US government as being hypocritical, saying the country's "certain government agencies" had reportedly illegally checked a massive number of personal e-mail accounts.
On Thursday, Mrs Clinton urged Beijing to investigate the alleged cyber attacks on Google.
Hillary Clinton: "We look to the Chinese authorities to conduct a thorough review"
"We look to Chinese authorities to conduct a thorough investigation of the cyber intrusions," she said.
Mrs Clinton added that companies such as the US giant should refuse to support "politically motivated censorship".
Again in reference to China, she said that any country which restricted free access to information risked "walling themselves off from the progress of the next century".
Google said on 12 January that hackers had tried to infiltrate its software coding and the e-mail accounts of Chinese human rights activists, in a "highly sophisticated" attack.
The California-based company, which launched in China in 2006, said it would quit the country unless the government relaxed censorship.
On Tuesday, the Chinese government said Google and other foreign companies had to obey the country's laws and traditions.
The same day, Google said it was postponing the launch of two mobile phones in China.
When Google launched google.cn four years ago, it was criticised for agreeing to Beijing's demands to make certain search results off-limits - including those relating to the 1989 Tiananmen Square protests, Tibetan independence or Falun Gong.
China has more internet users, about 350 million, than any other country and provides a lucrative search-engine market worth an estimated $1bn (£618m) last year.
Google holds about a third of the country's search market, with Chinese rival Baidu having more than 60%.
Newscribe : get free news in real time
Sunday, 24 January 2010
Google Will Stay in China, Poll Says
Google Will Stay in China, Poll Says
NEW YORK (TheStreet) -- Despite the heated battle over censorship and security breaches, Google(GOOG Quote) is not expected to leave China, according to TheStreet users
An overwhelming 66.4% said Google would stick it out, while 33.6% said the company would cease doing business in the country.
Google's fourth-quarter earnings report, which raised some concern of future growth prospects, could be one reason why voters believe Google will stay in the country.
On Thursday, the company reported earnings of $1.97 billion, or $6.13 a share, compared with $382 million, or $1.21 a share, in the year-ago period. Excluding special items, Google would have earned $6.79 a share, better than the $6.48 analysts expected.
Revenue grew 17% to $4.95 billion. While this matched Wall Street's forecast, it disappointed investors who believed the company would significantly surpass estimates.
The other red flag came from search paid clicks, which were lower than last year.
While the amount of Google's business coming out of China is minimal (analysts estimate only about 3% of its revenue will come from the country in 2010), exiting the country could have severe consequences for the future growth of the company.
China boasts one of the world's fastest growing Internet markets. In 2008, the country outpaced the United States, and now claims the most Internet users in the world.
Google did not reveal any new developments in its plans with China during its earnings call, simply stating that it would like to continue to work with China, but intends to stop censoring search results in the country within "a reasonably short time."
The battle between Google and China arose after Google reported a cyber-attack that seemed to target human rights advocates in the country.
On Friday, Beijing shot down U.S. claims that China is hindering the free flow of information over the Internet. Foreign Ministry spokesman Ma Zhaoxu said regulations are in-line with Chinese law and do not hurt the cyber operations of the rest of the world.
The Internet company also said that it will no longer adhere to China's censorship demands. Since 2006, Google has filtered its search results on its Google.cn, in compliance with the country's wishes.
Earlier this week, Google announced that it will delay the launch of two phones in China that use its Android operating system. The devices are from Samsung and Motorola(MOT Quote) and were set to launch on Wednesday.
-- Reported by Jeanine Poggi in New York.
NEW YORK (TheStreet) -- Despite the heated battle over censorship and security breaches, Google(GOOG Quote) is not expected to leave China, according to TheStreet users
An overwhelming 66.4% said Google would stick it out, while 33.6% said the company would cease doing business in the country.
Google's fourth-quarter earnings report, which raised some concern of future growth prospects, could be one reason why voters believe Google will stay in the country.
On Thursday, the company reported earnings of $1.97 billion, or $6.13 a share, compared with $382 million, or $1.21 a share, in the year-ago period. Excluding special items, Google would have earned $6.79 a share, better than the $6.48 analysts expected.
Revenue grew 17% to $4.95 billion. While this matched Wall Street's forecast, it disappointed investors who believed the company would significantly surpass estimates.
The other red flag came from search paid clicks, which were lower than last year.
While the amount of Google's business coming out of China is minimal (analysts estimate only about 3% of its revenue will come from the country in 2010), exiting the country could have severe consequences for the future growth of the company.
China boasts one of the world's fastest growing Internet markets. In 2008, the country outpaced the United States, and now claims the most Internet users in the world.
Google did not reveal any new developments in its plans with China during its earnings call, simply stating that it would like to continue to work with China, but intends to stop censoring search results in the country within "a reasonably short time."
The battle between Google and China arose after Google reported a cyber-attack that seemed to target human rights advocates in the country.
On Friday, Beijing shot down U.S. claims that China is hindering the free flow of information over the Internet. Foreign Ministry spokesman Ma Zhaoxu said regulations are in-line with Chinese law and do not hurt the cyber operations of the rest of the world.
The Internet company also said that it will no longer adhere to China's censorship demands. Since 2006, Google has filtered its search results on its Google.cn, in compliance with the country's wishes.
Earlier this week, Google announced that it will delay the launch of two phones in China that use its Android operating system. The devices are from Samsung and Motorola(MOT Quote) and were set to launch on Wednesday.
-- Reported by Jeanine Poggi in New York.
Newspaper ads still the most effective
Newspaper ads still the most effective
By EUGENE MAHALINGAM
eugenicz@thestar.com
ADVANCES in technology may have spurred the growth of various forms of media, but newspapers are still a staple of our society and they continue to grab the lion’s share of advertising expenditure, says Omnicom Media Group (OMG) managing director Andreas Vogiatzakis.
Andreas Vogiatzakis ... ‘Habits don’t change dramatically.’
In its latest Optimum Impression 2009 study, OMG reveals that 57% of newspaper ads got noticed – which has been the trend since 2003.
“From the study, we found that habits don’t change dramatically. Newspapers continue to dominate in the ad spend despite the decline in ad spend,” says Vogiatzakis.
OMG director of communication insights for Asia Pacific, Guy Hearn, says the fact that the majority of ads were noticed by readers was proof of the continued relevance and importance of newspapers to advertisers.
He says that ad relevance picked up especially during a global economic downturn. In the study, it was revealed that readership of print newspapers in Malaysia rose 32% in 2009.
“Last year was the recession and the trend is that people spent more time at home. With the news that was going on in the marketplace, people wanted to be more informed about what was going on,” he explains.
Held in August last year, the study covered 2,452 different ads in 15 main newspapers and 1,023 readers aged 15 to 54 in Kuala Lumpur, Petaling Jaya, Penang, Ipoh and Johor Baru. Overall, there was a total of 14,522 ad exposures.
Guy Hearn ... ‘People wanted to be more informed about what was going on.’
The newspapers surveyed comprised five English newspapers (The Star, The Sun, New Straits Times, The Malay Mail, The Edge), six Chinese dailies (Sin Chew Daily, China Press, Kwong Wah, Guang Ming, Nanyang Siang Pau, Oriental Daily) and four Malay dailies (Utusan Malaysia, Kosmo, Harian Metro and Berita Harian).
OMG research manager Yong Shel Vei, in presenting the results of the study, says that ad noting among Malay language readers was the highest.
“More than two thirds (68%) of ads were noticed by these readers and this is probably due to the lower ad clutter in Malay language titles. On average, Malay language newspaper readers are exposed to 15% less ads than the Chinese language newspaper readers,” she adds.
Vogiatzakis says it is immaterial whether an advertiser chooses to place an ad in a paid or free newspaper.
“From my professional experience in Malaysia, once the decision is made to pick up the free paper and flip through the pages, whether it’s paid or free, it doesn’t matter,” he argues.
“If your creative is strong and is of substantial importance, like targeting a housewife with a shopping coupon, I guarantee you she will pick it (the newspaper) up. The fundamentals don’t change. You have to have a great product and an idea that captures the heart and mind of the consumer.”
Yong Shel Vei says ad noting among Malay language readers was the highest.
Overall, the study revealed that ad noting on Saturdays was highest due to lower ad clutter. The study also revealed that newspaper circulation had surged to 4.8 million currently from 800,000 in 2003.
“The higher ad noting on Saturdays is also possible because people have more time to read the newspapers on that day,” says Yong. She adds that ads that are larger have a higher chance of being noticed.
“Bigger ads are not only more likely to get the reader’s attention, they also enhanced the brand recall and increase the chances of readers reading the ad and absorbing its message. A full-page ad yields 21% higher ad noting than a quarter page,” she says.
Coloured ads were also revealed to attract attention. According to the study, 59% of coloured ads were noticed compared to 53% of black and white ones. Ads placed on right-hand pages were also more likely to be noticed, especially in tabloids.
Yong also says ads that were creative were better recalled by readers. “Media creativity enhances ad noting by 15%, ad read by 30% and brand recall by 25%.”
She says sandwich ads, namely those placed in the middle of a page between news articles, could generate as much as 40% higher ad noting.
By EUGENE MAHALINGAM
eugenicz@thestar.com
ADVANCES in technology may have spurred the growth of various forms of media, but newspapers are still a staple of our society and they continue to grab the lion’s share of advertising expenditure, says Omnicom Media Group (OMG) managing director Andreas Vogiatzakis.
Andreas Vogiatzakis ... ‘Habits don’t change dramatically.’
In its latest Optimum Impression 2009 study, OMG reveals that 57% of newspaper ads got noticed – which has been the trend since 2003.
“From the study, we found that habits don’t change dramatically. Newspapers continue to dominate in the ad spend despite the decline in ad spend,” says Vogiatzakis.
OMG director of communication insights for Asia Pacific, Guy Hearn, says the fact that the majority of ads were noticed by readers was proof of the continued relevance and importance of newspapers to advertisers.
He says that ad relevance picked up especially during a global economic downturn. In the study, it was revealed that readership of print newspapers in Malaysia rose 32% in 2009.
“Last year was the recession and the trend is that people spent more time at home. With the news that was going on in the marketplace, people wanted to be more informed about what was going on,” he explains.
Held in August last year, the study covered 2,452 different ads in 15 main newspapers and 1,023 readers aged 15 to 54 in Kuala Lumpur, Petaling Jaya, Penang, Ipoh and Johor Baru. Overall, there was a total of 14,522 ad exposures.
Guy Hearn ... ‘People wanted to be more informed about what was going on.’
The newspapers surveyed comprised five English newspapers (The Star, The Sun, New Straits Times, The Malay Mail, The Edge), six Chinese dailies (Sin Chew Daily, China Press, Kwong Wah, Guang Ming, Nanyang Siang Pau, Oriental Daily) and four Malay dailies (Utusan Malaysia, Kosmo, Harian Metro and Berita Harian).
OMG research manager Yong Shel Vei, in presenting the results of the study, says that ad noting among Malay language readers was the highest.
“More than two thirds (68%) of ads were noticed by these readers and this is probably due to the lower ad clutter in Malay language titles. On average, Malay language newspaper readers are exposed to 15% less ads than the Chinese language newspaper readers,” she adds.
Vogiatzakis says it is immaterial whether an advertiser chooses to place an ad in a paid or free newspaper.
“From my professional experience in Malaysia, once the decision is made to pick up the free paper and flip through the pages, whether it’s paid or free, it doesn’t matter,” he argues.
“If your creative is strong and is of substantial importance, like targeting a housewife with a shopping coupon, I guarantee you she will pick it (the newspaper) up. The fundamentals don’t change. You have to have a great product and an idea that captures the heart and mind of the consumer.”
Yong Shel Vei says ad noting among Malay language readers was the highest.
Overall, the study revealed that ad noting on Saturdays was highest due to lower ad clutter. The study also revealed that newspaper circulation had surged to 4.8 million currently from 800,000 in 2003.
“The higher ad noting on Saturdays is also possible because people have more time to read the newspapers on that day,” says Yong. She adds that ads that are larger have a higher chance of being noticed.
“Bigger ads are not only more likely to get the reader’s attention, they also enhanced the brand recall and increase the chances of readers reading the ad and absorbing its message. A full-page ad yields 21% higher ad noting than a quarter page,” she says.
Coloured ads were also revealed to attract attention. According to the study, 59% of coloured ads were noticed compared to 53% of black and white ones. Ads placed on right-hand pages were also more likely to be noticed, especially in tabloids.
Yong also says ads that were creative were better recalled by readers. “Media creativity enhances ad noting by 15%, ad read by 30% and brand recall by 25%.”
She says sandwich ads, namely those placed in the middle of a page between news articles, could generate as much as 40% higher ad noting.
Becoming a realistic investor
Becoming a realistic investor
Review by ERROL OH
errol@thestar.com.my
Even Buffett Isn’t Perfect: What You Can – and Can’t – Learn from the World’s Greatest Investor
Author: Vahan Janjigian
Publisher: Portfolio
THE title invites an instant retort: “C’mon, nobody really thinks Warren Buffett is perfect.”
Thus is the shakiness of the book’s apparent premise; that people are so wowed by Buffett’s extraordinary track record as an investor that they are somehow blind to the fact that he has made his share of missteps and that his investment philosophy and strategy are not for everybody.
Referring to many Buffett-watchers, Vahan Janjigian writes: “They believe he has become successful by simply implementing the same basic strategies over and over again. They also like to believe that anyone can be a tremendously successful investor just by learning some of Buffett’s favourite tricks and doing what he has done in the past. If only things were that simple.”
Of course, it’s up to the author to uncover Buffett’s feet of clay and the areas of incompatibility between the Buffett way and what most investors can do, given the latter’s more slender resources.
Some of these points are patently obvious. Do we need to be reminded, for example, that unlike Berkshire Hathaway and Buffett, most investors can’t afford to buy a significant stake in a listed company, let alone entire companies?
Nevertheless, it’s an important distinction. Buffett’s deep pockets and stellar reputation mean he can typically exert influence over the businesses he has invested in, thus improving his chances of getting good returns. Other investors can only hope they have made the right bets or that fellow shareholders with the same kind of clout that Buffett has, will step in when things go wrong.
Also, Buffett doesn’t need to spend much time sniffing out potential investments. Instead, he cherry-picks from the tonnes of deal proposals that he receives regularly.
This book is actually yet another analysis of the Oracle of Omaha’s moves that doubles up as an investment manual. “By studying Buffett you can learn what works and what does not work in most circumstances,” the author writes in the introduction.
“By learning everything you can about Buffett’s strategies, you will ensure that you have the information you need to maximise the probability of success no matter what your investment horizon.
“You will also develop an understanding of and an appreciation for the risks involved in the various kinds of investment strategies that are available to you. And you will make yourself a more realistic investor.”
Even Buffett Isn’t Perfect’s unique selling proposition is that Janjigian, chief investment strategist at Forbes, tackles the job by adopting a less-than-awed stance on some of the things the Berkshire Hathaway CEO has said and done.
The author highlights inconsistencies and mistakes, debunks common misconceptions, and offers alternative opinions, often backed by research findings.
For one thing, our fondness for convenient labels – plus, the man himself cultivates a certain public image – breeds inaccurate notions about Buffett’s approach to investment. Many people see him as strictly a value investor, but he also buys growth stocks. He is famous for his insistence on long-term holdings, but he also trades.
Janjigian takes up a few chapters to pick apart Buffett’s well-known views on corporate governance, succession planning, stock options, taxes and earnings guidance.
The author provides some sturdy arguments against Buffett’s positions, but when you consider the basis of the book, the question has to be asked: Since when is it an imperfection to have opinions that are open to debate?
Again, this exposes the flimsiness of Even Buffett Isn’t Perfect’s gimmicky framing device. But if you look past that, the book is a useful addition to the library of publications about Buffett. Its main value is that it promotes critical thinking over adulation.
And mind you, the book is not meant to put a dent in the Buffett legend. In the last chapter – indeed, the book’s subtitle is already a dead giveaway – Janjigian gives a tip of the hat to Buffett, pointing out that the man has made many of the other Berkshire Hathaway shareholders rich as well.
“Perhaps no other single individual has created more millionaires. Based on the evidence, it is certainly fair to conclude that Buffett is one of the greatest investors – if not the greatest investor – of all time.”
Review by ERROL OH
errol@thestar.com.my
Even Buffett Isn’t Perfect: What You Can – and Can’t – Learn from the World’s Greatest Investor
Author: Vahan Janjigian
Publisher: Portfolio
THE title invites an instant retort: “C’mon, nobody really thinks Warren Buffett is perfect.”
Thus is the shakiness of the book’s apparent premise; that people are so wowed by Buffett’s extraordinary track record as an investor that they are somehow blind to the fact that he has made his share of missteps and that his investment philosophy and strategy are not for everybody.
Referring to many Buffett-watchers, Vahan Janjigian writes: “They believe he has become successful by simply implementing the same basic strategies over and over again. They also like to believe that anyone can be a tremendously successful investor just by learning some of Buffett’s favourite tricks and doing what he has done in the past. If only things were that simple.”
Of course, it’s up to the author to uncover Buffett’s feet of clay and the areas of incompatibility between the Buffett way and what most investors can do, given the latter’s more slender resources.
Some of these points are patently obvious. Do we need to be reminded, for example, that unlike Berkshire Hathaway and Buffett, most investors can’t afford to buy a significant stake in a listed company, let alone entire companies?
Nevertheless, it’s an important distinction. Buffett’s deep pockets and stellar reputation mean he can typically exert influence over the businesses he has invested in, thus improving his chances of getting good returns. Other investors can only hope they have made the right bets or that fellow shareholders with the same kind of clout that Buffett has, will step in when things go wrong.
Also, Buffett doesn’t need to spend much time sniffing out potential investments. Instead, he cherry-picks from the tonnes of deal proposals that he receives regularly.
This book is actually yet another analysis of the Oracle of Omaha’s moves that doubles up as an investment manual. “By studying Buffett you can learn what works and what does not work in most circumstances,” the author writes in the introduction.
“By learning everything you can about Buffett’s strategies, you will ensure that you have the information you need to maximise the probability of success no matter what your investment horizon.
“You will also develop an understanding of and an appreciation for the risks involved in the various kinds of investment strategies that are available to you. And you will make yourself a more realistic investor.”
Even Buffett Isn’t Perfect’s unique selling proposition is that Janjigian, chief investment strategist at Forbes, tackles the job by adopting a less-than-awed stance on some of the things the Berkshire Hathaway CEO has said and done.
The author highlights inconsistencies and mistakes, debunks common misconceptions, and offers alternative opinions, often backed by research findings.
For one thing, our fondness for convenient labels – plus, the man himself cultivates a certain public image – breeds inaccurate notions about Buffett’s approach to investment. Many people see him as strictly a value investor, but he also buys growth stocks. He is famous for his insistence on long-term holdings, but he also trades.
Janjigian takes up a few chapters to pick apart Buffett’s well-known views on corporate governance, succession planning, stock options, taxes and earnings guidance.
The author provides some sturdy arguments against Buffett’s positions, but when you consider the basis of the book, the question has to be asked: Since when is it an imperfection to have opinions that are open to debate?
Again, this exposes the flimsiness of Even Buffett Isn’t Perfect’s gimmicky framing device. But if you look past that, the book is a useful addition to the library of publications about Buffett. Its main value is that it promotes critical thinking over adulation.
And mind you, the book is not meant to put a dent in the Buffett legend. In the last chapter – indeed, the book’s subtitle is already a dead giveaway – Janjigian gives a tip of the hat to Buffett, pointing out that the man has made many of the other Berkshire Hathaway shareholders rich as well.
“Perhaps no other single individual has created more millionaires. Based on the evidence, it is certainly fair to conclude that Buffett is one of the greatest investors – if not the greatest investor – of all time.”
Subscribe to:
Posts (Atom)