手是要这样子用的

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Answer for the Previous Riddle

WARNING: Just in case you stumble upon the answer here first, please read the previous post before continuing.

Full answer after the jump.

The answer is that there is no such thing as a missing dime in this riddle. The reader is misled by the presumptive nature of the question. There is no reason why the amount paid by the three men, $2.70, should add up to $3.00 if you add it to the 20 cents the waiter put in his pocket. That 20 cents came out of the $2.70 they paid. So the correct calculation is that the bill of $2.50 plus the 20 cents taken by the waiter should add up to the $2.70 (3 x $0.90) that the men paid. Nothing is missing.
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An Old Riddle

Three good friends frequent their favorite restaurant and get a check that comes to a total of $2.50. Each man hands the waiter a dollar bill. On his way back with their change of 50 cents, the enterprising waiter decides that it would be needlessly difficult for the three patrons to divide up the 50 cents, so he pockets 20 cents and hands each man a dime. Now, each man paid a dollar and received back 10 cents in change. So each man really paid 90 cents. From all three, the total was $2.70. The waiter of course has 20 cents in his pocket for a total of $2.90. The riddle is that since they started with $3.00 but we have accounted only for $2.90, where is the missing dime?

I will publish the answer tomorrow at 6pm. Continue reading...

Rant about Amanah Saham 1Malaysia, again

One month ago, I published a post regarding the dividend of Amanah Saham 1Malaysia. I explained that the return of Amanah Saham 1Malaysia is not 3.7% - 4% as everyone and every single articles in all newspapers claimed. Indeed, Amanah Saham 1Malaysia is benchmarked to 5-year MGS yield which is around 3.7% to 4%. But what does that mean anyway?

The purpose of benchmarking the fund is so that PNB as the fund manager has a yardstick to measure its performance upon. Normally, a fund manager's objective is to to beat the benchmark and realize a return higher than the benchmark. 3.7% - 4% is the return for 5-year Malaysian Government Securities (MGS), it is not the return for Amanah Saham 1Malaysia.

There was another article about this silly mistake on TheStar Online. I quote:

"UOB KayHian research head Vincent Khoo said 10 billion units was a difficult target to meet given the low return for such an equity income fund.

As stated in AS 1Malaysia’s prospectus, it is noted that the fund’s returns will be benchmarked against the five-year Malaysian Government Securities (MGS). The current yield of five-year MGS is about 3.7%.

Khoo said the return was slightly higher than bank interest rates but it was not as attractive as previous Amanah Saham funds."

Again, Amanah Saham 1Malaysia's lacklustre response is attributed to the fund's low return. Fact is, this occurs because the experts and professional have been trumpeting the "low return" in all major publications. Our fellow citizens buy it and hence the low subscriptions. Nevertheless, my friend thought of another brilliant factor - our countrymen dislike the man who launched Amanah Saham 1Malaysia and thus refuse to invest in the fund. To that, I have no comment. ;)

If we have done a little more research, we would have known that Amanah Saham Malaysia (ASM) and Amanah Saham Wawasan 2020 (ASW 2020) (which consistently return an average of 6%-7%) are benchmarked to 3-month Kuala Lumpur Interbank Offered Rates (3- month KLIBOR). Guess what, KLIBOR has been hovering between 2.5% to 4% for the past few years.

Another thing that intrigued me is all these fixed-price funds by PNB (AS 1Malaysia, ASM and ASW) have up to 90% of their total portfolio invested in local equities. They are mainly equities funds. Why are they benchmarked to MGS and KLIBOR, instead of KLCI? Continue reading...