I refer to the following blog. I not anti gahmen. But the following news is very similar to how unit trust fund managers kept on claiming how they “outperform” the market. They will start a very convenient base year with their fund NAV and the index, then draw the graph, then will claim that they OUTPERFORMMMMMMMM the index.

I think and think, from an engineering perspective, how shall we CORRECTLY compare a fund performance against an index. I looked at all my electrical circuit theories, mathematics, fourier analysis and so on, and most importantly, common sense. After a long analysis, I finally thought of the MOST CORRECT way to gauge a fund performance against an index. The correct way is:

To take the derivative of both graphs. =)

Whenever the d/dt (fund_performance) > d/dt (index) means outperform for that particular period.

Whenever the d/dt (fund_performance) <>

The following picture below illustrates when the HDB Resale price outperforms or underperform the median household income.

Then next, we sum up all the period of time of outperformance and underperformance.

For example in a period of 5years, Fund_A has a total period of 1.2345years outperforming the index, whilst the rest of the time underperforming the index.

Alas, it does not need a super guru to do the above. Everyone of us has done calculus before and appreciates it (not just by route memorizing, doing 10year series) will be able to do the job. The only trouble is figuring out which theoretical method to use to solve different nature of problems. 8)

Taken from http://hazelpoa.blogspot.com/2010/04/housing-prices-vs-household-income.html

Housing Prices Vs Household Income – Alternative ways of viewing the statistics

With reference to today’s Straits Times article where Mr Mah Bow Tan said it is not true that HDB resale prices have outstripped income growth. He supported his statement with the following statistics:

This is the data behind the graph:

I would like to point out that the choice of the base year can be very significant.
Let’s see what happens when we change the base year to 2000 and 2001:

And if we look at it since the last General Election:

Resale prices up by 45.6%, while median household income is up 21.3%.

Choosing a suitable base year to support your conclusions is quite a useful trick that we should all learn.

FSM gg?

FSM’s new pricing structure, with the introduction of "platform fee" wef 1st April10 has sparked numerous protest in sgfunds forum thread with 6pages in just 2days and FSM forum thread.

As early as March2007, a mysterious man nicknamed “newbie_George” aka ZGL sparked a protest against FSM with the following thread,
“Pissed off with both Fund House and Distributor” after the then Lion Captial Thailand revalued their NAV -10% whilst no crash in index.

ZhuGeLiang also went down to FSM event organized by NTU IIC in year2007 and debated with the speaker Wong Sui Jau, FSM General Manager, on the spot even though ZGL was not a student of NTU during that time.

Ever since the saga, ZGL vowed not to have a single unit trust in his cash portfolio.

With the current annual platform fees, it seems that massive amount of buy_and_hold investors are transferring out their unit trust to other distributors, which will in turn lead to FSM’s probable slow death?