2 Pieces of Paper for Life

8 Feb 2016 update: (CNY Day 1, day after mom's funeral), at breakfast with all and asked 3 girls to write down on paper 5 principles they learnt from me. Only Tian managed to include both principles here. Also asked her to collate all 3 lists to produce '3 pieces of paper for life'.

During the 2008 Global Financial Crisis when share prices were so beaten down that many of their PE (price/earning) ratios were below 10 and dividend rates were more than 10%, I used up all my cash together with some from my youngest sister buying up shares between Sep-Dec 08. My first purchase was $20k of Lehman Brothers (shares) which went bankrupt! (so lost all that money). After that, prices continued to go down through to Mar 09 when I was sitting on book losses of about 15% on my whole portfolio. However, after that things improved and a year later, my portfolio was up close to 60% (including dividends).

Because of that, I decided to get my kids and nieces/nephew interested in share investing. So during Chinese New Year of 2009 I offered the kids 2 choices of 'ang pows' - one containing $150 and the other with 'share certificates' (issued by me) for 1,000 shares of CapitaREIT China (a real estate investment trust run by Capital Land that invests in mainly shopping malls in China).

After showing the older ones (all below 12) how to check for the price of the share (about 50c) and its past year dividend rate online, they decided to take the 'shares' instead of the cash (the youngest who was about 6 then did not understand anything and just followed the others).

On those 'certificates' I outlined my terms - redemption of the shares from me can only be done after age 17 and dividends must be claimed within a year of dividend declaration by the company involved (although actual collection can be done later). The intent of the latter condition is to start them on where/how to check for dividend announcements and calculating them.

Over the next 2 years I issued other shares to the kids as CNY ang pows and took the opportunity to show them again how to do the online checks and calculate how much dividend they got. When they saw how much they were getting they were very happy.

During one of the training sessions (in Dec 2010), the one who impressed me was my niece TYL from Australia. When I announced that I will be showing her and my younger daughter how to do that, she asked me to wait while she ran upstairs to get her note book so that she could record what I was about to show. Some one had taught her well on the power of paper! (see History of Paper below)

So before I left KL for Singapore, I passed TYL 2 pieces of paper with notes on them and told her that they contain what I consider are important things to remember as she grow up. One was on the old Indian fable 'the elephant and 5 blindmen' and the other about the 3 levels of human development.


The Elephant and 5 Blindmen
This is an old Indian fable I learnt in primary school in Malaysia. I always tell others that if there is one fable they wish to remember or impart to their young, this is the one.

It is the story about 5 blindmen who wanted to find out what an elephant is like. But because they touched different parts of the elephant, each of them had a different perception:
- one touched the ear and said 'elephant is like a fan',
- one touched the body and said 'it is like a wall',
- one touched the leg and said 'it is like a pillar'
- one touched the tail and said 'it is like a rope'
- one touched the nose and said 'it is like branch of a tree'

This fable is trying to convey a few different messages:
- all of us start life like 'blindmen' with little experience and understanding of things
- sometimes we think we know the truth when we only have a partial or incomplete picture
- cooperation, listening to and learning from others can help one form a much more complete picture (so do not be arrogant and not talk/listen to others)

If each of those blindmen was selfish/arrogant and not receptive of what the others say, then each will end up with wrong or incomplete picture of the elephant. However, if they were to share their findings and cooperate to find out why they each had a different perception, then they all have a better chance of forming a better picture than they started with.


The 3 Levels of Human Development
Can't remember how I got this idea but only remember that it was sometime in 2001. I could have read something like it somewhere, probably from a book on Buddhism.

The idea is that different humans operate at different levels depending on their level of development or attainment :

Level 1 - Self and Greed
Level 2 - Awareness
Level 3 - Control and Choice

Level 1 - Self and Greed
Human behaviour tend to be driven by self (self centredness, self preservation, self first etc) and greed. Their first instinct is to take care of themselves or their self interests and satisfy their greed. At this level, it is all about 'what is in it for me?' with little or no consideration for other people or their environment.

Self first is hardwired into all animals because it is essential for survival. But human greed far exceeds that which is needed for survival. Other animals may collect and store enough food to last at most one winter. But there is no limit to some human greed as some will continue to gather wealth even when they already have enough to last many generations! Greed is the source of most conflicts and man-made disasters.

Quote: The world has enough for everyone's needs but not everyone's greed - Mahatma Gandhi

People who operate only at Level 1 are therefore very dangerous and one should be very careful when dealing with them because they will bring harm to others (more likely) and themselves.

People operating at this level also tend to think highly of themselves (egoistical), spiteful and deceitful (as they have to hide their self centredness and greed to avoid being found out). Because of their selfishness, they will not be willing to share things (including knowledge) with others.

To a frog at the bottom of the well, the sky is only as big as the well's opening - Mao Tze Tung

Until established otherwise, in all our dealings we must start with the assumption that the other party (friends, colleagues and family included) is operating based on self and greed, and one therefore should not be too trusting of what they say or do. Always double check and watch what they do!

The people most likely and able to steal from or take advantage of you are the ones closest to you (because you tend to trust them most).

People who get cheated by others tend to be Level 1 type because salesmen and con men etc. know how to make use of this human tendency to be selfish and greedy to entice/entrap them. They are the easiest to fool...

Level 2 - Awareness
Humans can progress beyond Level 1 only after they start to use their awareness and thinking ability. 

Awareness is the prerequisite for the acquisition of knowledge. Knowledge is power.

One who has a keen sense of awareness may start to observe and analyse what is happening around (the enviroment0 and by so doing begin to understand how and why things work the way they do. That may be understanding how Nature works (e.g. science, maths) or how humans behave (e.g. the principles contained in this article)

If one is not so egoistical (Level 1) as to think that others have nothing to teach them, awareness also allows that person seek to learn from others. People who are not aware that books or the internet exist or are too arrogant to learn from others will not be able to expand their knowledge as quickly as others. Egoism or arrogance is self centredness.

Combination of awareness and good analysis allows one to differentiate real knowledge/truths from false knowledge/untruths or misconceptions.

Quote: To know what you know and know what you don't know is true wisdom - Confucius

With REAL knowledge one can also improve one's ability to judge other people and determine their real character and intent.

To establish the true character of another person:
 - be aware of what the other party do or say at different times,
 - seek other people's opinion about that person (but dont take as truths)
 - observe how that person deal with other people who cannot do anything to or for that person
 - analyse all above together!

Essentially, it is to apply the 'elephant and 5 blindmen' principle on judging human character. A person below Level 2 will not be able to apply that principle beause to fully appreciate that fable and its teachings require awareness.

Level 3 - Control and Choice
When one has gained REAL knowledge, then one can progress to the next level. Instead of just operating in Level 2 and gathering knowledge, one can begin to use those knowledge to manage or improve one's future or environment.

Some people operate in Level 2 but do not progress further because they do not know how to utilise the knowledge they have or are too lazy (no desire or will).

Knowledge is worthless if not used nor shared

Compassion without knowledge is ineffective
Knowledge without compassion is inhumane - Victor Weisskopf

Level 3 people are also better able to predict what is going to happen ahead of time and others (see further), prepare for their impact and, if possible, influence their outcome. In other words, they are better able to understand and manage risks.

Knowledgeable people tend to have more choices in life and less fearful when faced with new challenges because their knowledge enable them to think through issues and challenges and come up with alternative responses or action plans.

Only with real knowledge can one be able to make right choices and control outcomes positively which in turn is the source of true freedom and satisfaction (happiness).

But knowledge can also be dangerous if deployed for ill intent. There are knowledgeable people who by choice use what they know to satisfy their greed and self, and use their control of information and knowledge to control others for the same purpose. These are the most dangerous people because they are pros doing it consciously and in controlled fashion (because they are Level 3!). Big time and sophisticated conmen and salesmen fall into this category. Only sharp people with high awareness can spot such people. Similarly, such pros can spot those sharp people and would not go near them nor target them to con (there are lots more easier preys).

People today is more 'free' than people in the past because with new techonologies like telephone, radio, TV and internet, more people have access to knowledge and selfish people are less able to keep knowledge to themselves or control who get access to those knowledge.

Quote: Know oneself and know one's competition, a hundred battles a hundred victories - Sun Ze (Sun Tzu)

Quote: In the land of the blind, the one-eye jack is king


RELATIONSHIP BETWEEN THE 2 CONCEPTS:
A level 1 blindman may think that he already knows all that is to be known about elephants and ignore the other blindmen. His egoism will be the cause of his problems because he would go round thinking that he is right and the others are wrong. Believing a Level 1 blindman's view but not others will bring disaster.

A level 2 blindman who listen to the other blindmen may quickly realise that he may not have complete picture and stop claiming his view is whole truth and be open to consider possibility others may also be right but have incomplete picture like him. But that does not mean he would end up with a better picture of the elephant. It depends on what he chooses to do further with the others' information.

A level 3 blindman that chooses to react to the additional information from the other blindmen (by exercising his choice and control over his own action) in a positive way, will combine all 5 blindmens views and if he manage to get the others to cooperate, overtime end up with much better picture of what an elephant is like!


HISTORY OF PAPER, PRINTING PRESS AND THE SPREAD OF KNOWLEDGE:
People who know history know that paper is a cheap means for disseminating information and knowledge, and together with the invention of the printing press contributed significantly to the great leap in science and technology after Europeans learnt how to make paper and invented printing press.

Paper was invented by the Chinese 2,000 years ago (Han Dynasty). Around 700 AD the Arab armies had taken over the Persian empire (which included today's Afghanistan). That brought them next to the Chinese Tang empire which then included today's Tajikistan (a country north of Afghanistan). As a result, the 2 armies met. In one of the battles, the Tang army was defeated and the Arabs caught many Chinese soldiers and support staff which included army scribes responsible for recording events for reporting back to emperor.

From those Chinese scribes, the Arabs learnt how to make paper and from there that knowledge spread throughout the muslim world which then included places like North Africa, Spain and Portugal.

In the 12th century, Spanish christians defeated the muslims and learnt to make paper from Arabs ruling Spain then. From there, knowledge of paper making spread throughout Europe.

In the 15th century, German Johannes Gutenberg invented the 'movable type printing press' which allowed books to be mass produced much more cheaply and faster than reproduction by hand and other means. That invention substantially enabled the spread of knowledge in Europe.

18th century German philosopher: Johann Gottfried Herder said about paper: Hail to the inventor of paper who did more for literature than all the monarchs on earth.