29 Feb 2012 / Dow Jones

Hmm..... Today 29 Feb 2012. Leap Year. Once in every 4 years. One more working/schooling day for everyone.

Back in 15 Oct 2009, I wrote that Dow Jones broke 10,000 points on 14 Oct 2009. We were out of the recession woods.

On 28 Feb 2012, the Dow Jones broke 13,000 points. The strength looks weak. Sustainability above 13,000 points would depend largely on how Europe Debt would be resolved. However, this year is American Election Year. A strong Dow Jones would likely push P. Obama to a second term.

Are we seeing a clear blue sky or dark clouds ahead?

Concept of Value

I have been thinking about the concept of "Value". What makes a Value purchase? And what constitute a waste of money.


Income, will first determine whether a purchase is a value one. If a person monthly income is $1000, then it will be fair that a purchase of a $100 watch will be be significant to him given that it is 10% of his income. Value to him is a watch that provides the function of time monitoring with minimal cost. Afterall a $100 digital watch will tell time as good as a watch that is $1000. There is no luxury content in the purchase of the $100 watch. It is also likely that the watch has no resale value once it leave the shop premises.

Value purchase should also be across boundary. For a pen purchased in country X should cost the same in country Y. With the advance in technology, pricing information should be available that enable comparison to take place. Substantial price difference is a cause of concern for the consumer. A reduction in transportation cost would significantly encourage more price equalisation.


In my opinion, depreciation and value are intertwined. A purchase which offers appreciate in value is considered a smart purchase. An asset that depreciates in value within a short period of time is least preferred. At least, an asset must maintain its value when it is put up for sale as a second hand product. Someone ever said this, if one is to purchase a Japanese watch at $300, it would possibly cost less than $100 in 20 years time. But if one is to purchase a Rolex watch at $10,000, it might still be worth $10,000 in 20 years time even though the $10,000 in future may not be worth $10,000 due to compounded interest.

Technological products may be another value trap, given that time will dilute the advantage or convenience that the product may give. Imagine looking retrospectively what early technological adopters lost when they paid more than $3000 for a LCD TV which now costs less than $1000. I wonder how iphone, ipad supporters would feel when they look retrospectively the hours they spent lining up for purchase.

In economics study, the concept of price has correlation with satisfaction or what economists call utility. Whether an apple is worth $0.50 will depend his judgment of utility. Whether he will buy another apple at $0.5o will depend on whether the extra utility will be justifiable by the money that the consumer had to give up (Concept of Marginal Utility). When it comes to luxury goods, the utility that the goods create may be superficially high to the extend it justifies for the price that it demands, especially so when all basic needs are already met. While it explains human nature, the discipline involve in getting a value purchase cannot be emphasized enough.


Consumer is always affected by other environmental factors such as advertisement, association with an admirer/hero/person of authority etc.. Purchase may be irrational and sometimes passion comes into play. So many times, we heard purchase base on impulse and found something useless after a purchase was made. Marketeer always tries to associate branding, product unique feature as compared to a value product. Branding may also be linked to quality, whether such link is substantiated is another matter. Nonetheless, association (especially wealth) affects buying decision.

Whether a person chooses to be frugal or spendthrift is his/her perogative. However, choosing the extreme end would not be wise nor reasonable.

Brunei Darussalem Detachment Camp

The above photo shows the place where I had stayed for 6 to 7 months in Brunei Sultanate, back in 1988. I was staying in the South-Eastern barrack (shown in blue roof). It was a 2 storey barrack and I stayed in the 2nd storey. The road is off Jalan Muara, possibly about 15 to 30 minutes by car from Brunei International Airport.

You could see helicopters parked on concrete ground which is a helipad. If I could recall correctly, the cookhouse was the centre block in the photo with green roof.

I could remember as a teenager, I drove for the first time in a white manual transmission toyota car around the road surrounding the green field (without license yet). I also remember where a wild snake was skinned, hanged from the second storey and later cooked into snake soup for consumption.

The surrounding of the camp was all forest, just as it was back in 1988.

Credit: Google Maps

Upper Middle Class American and Singaporean

In US, the income of the upper middle class is quite high. Assuming that the net annual income, after adjustment for tax relief, of a US citizen is US$100,000 in 2011, the income tax (from wikipedia) is 28% (for single person). The amount of tax he has to pay is US$28,000 or US$2333/month.

In 2011 Singapore, if a person earns a net annual income of SGD$100,000, the income tax that he has to pay consists of 2 tiers; first SGD$80,000 is 5.375% or SGD$4,300, next SGD$20,000 is 14% or SGD$2,800. A total of SGD$7,100. This gives an effective rate of 7.1% and monthly tax of SGD$592. Source: Singapore IRAS webpage.

While the exchange rate of SGD and US$ is different, I am looking from a perspective of a upper middle class resident in Singapore and US$ which should earn about a quantum of $100,000 in annual income, irrespective of foreign exchange.

In California USA, the sales tax is 7.25% which can total up to 9.25% including local sales tax. In Singapore, the consumption tax (GST) is 7%. Comparable if you stay in both cities.

Assuming a upper middle class American drives a BMW 640i coupe in 2012, he will have to pay US$73,600 (MSRP from BMW USA). He will need to work 0.74 year to pay for that car. For the same car in Singapore in 2012, the upper middle class Singaporean would have to pay SGD$355,800 (price from SG Carmart including the infamous certificate of entitlement). In Singapore, he will have to work 3.6 years to pay for the same car.

Comparing the income tax and the car price (and associated taxes) over 10 years, the American would have paid USD$353,600 (US$280,000 + USD$73,600). The Singaporean counterpart would have paid SGD$426,800 (SGD$71,000 + SGD$355,800) over the same period.

Additional Info, the US annual median wage in 2010 is US$26,364. The Singapore annual median wage in 2010 is SGD$2710 x 12 = SGD$32,520. Source: social security on line and salary.sg.

From the Big Mac Index 2011, the big mac in US costs US$4.07. In 2011 Singapore, the big mac costs SGD$4.41.

Hero 204 Black Ink v. Mont Blanc Mystery Black

Here is a sample of the 2 black inks I have currently. The writing is a famous chinese poem which I like.

The top section shows the poem written by Hero 336 fountain pen on fine nib using Hero 204 black ink. As I earlier mentioned, there was better control over the ink flow and I could write slower without ink smear.

The bottom section shows the poem written by Mont Blanc 146 fountain pen on medium nib using Mont Blanc mystery black ink. The ink flowed faster causing ink smear to occur easily for this paper. I have to write faster with lesser control.

From photograph, it shows that Mont Blanc mystery black ink has a deeper black. This ink is 16 times more expensive than the Hero 204.

Hero 204 Black Ink

Hero 204 Black Ink in 60ml glass bottle.

Cost only SGD$1.50. Bottle finishes is not refined. Used it on my Hero 336 fountain pen with fine nib.

As it is on a fine nib, I am not able to detect any inconsistency in the ink. I am generally acceptable to the colour of the black ink. Unlikely to use it on an expensive pen until proven otherwise.

I also saw a red ink for sale in the shop.

8 Feb 1883

Lewis Waterman started experimenting capillary feeds for fountain pen from 8 Feb 1883.

Pelikan Souveran M300 Fountain Pen

I must first say that I am not exactly sure the model of this Pelikan which I brought. The salesman at Mustafa said it is M205 which I have doubt as M205 is demonstrator model. The marking on my pen body has straight line of black green strip. From Pelikan International website, my guess is it is a M300 base on the official length of 12.9 cm long.

The characteristics of this Pelikan Souveran pen are as follow:-

(1) The word Souveran can be found on the cap base.

(2) It is about 12.5 cm long (with cap)

(3) It is made in Germany with the word Germany on the cap base.

(4) It costs SGD$202 (approx USD$161)

(5) Salesman said that the medium nib is 14K Gold plated.

My views of the pen are as follow:-

(1) It is a light pen compared to MB 146 and Waterman Expert 2. It is so much lighter that writing with cap posted is not an issue. Reading wiki shows that it is probably due to cellulose acetate body.

(2) At first look, the green looks unusual on a pen. But Pelikan has the tradition of producing green coloured striped body for its vintage model 400 pens (since 1950s). Hence I made the decision to follow tradition.

(3) My son called the green and the strip a watermelon.

(4) At SGD$202, it is more expensive than Waterman Expert 2.

(5) I like the Pelikan logo on the top of the cap. This is better than the Waterman Expert 2 without any logo but a simple gold round cap.

(6) It uses piston filled mechanism, similar to MB 146.

(7) In terms of writing, the ink flow in the Waterman Expert 2 is the most smooth as it flows readily.

(8) I am using Waterman Havana Ink on this Pelikan.

(9) Pelikan M300 is the shortest of the fountain pens I have had at 12.5cm.

(10) The way I see it Pelikan Souveran series differs in size and there is insignificant difference in the jump from one M to another. I wonder what motivation (other than size) for a consumer to choose the higher price range. It is quite difficult for anyone to realise which model he is holding, unless finding a true connoisseur of Pelikan fountain pens.

(11) Because of its light weight, handling of the pen is easy as compared to the heavy Waterman.

Waterman Havana Ink

This is a review of the Waterman Havana Ink. The ink was brought from Fook Hing Trading at Bras Basah and cost SGD$14. It is more expensive than Pelikan 4001 ink which is about SGD$4. However, it is quite rare to get a brown ink, unlike the common black or blue. The ink bottle is only 50ml compare to the 62.5ml for the Pelikan 4001. According to the box, Havana ink is made in France.

What I like about Waterman Havana? I like the darker and deeper colour of the brown. Being darker, it is readily visible. As I mentioned in my earlier post the Pelikan Royal Blue ink is lighter than my liking.

What I don't like about Waterman Havana? Obviously, it is more costly and comes in a lesser volume. But it is cheaper than Mont Blanc Ink at SGD$25 for 60ml.

The photograph shows the 3 inks that I currently have.

Mont Blanc - Mystery Black (written by a Mont Blanc 146)
Pelikan 4001 - Royal Blue (written by a Waterman Expert II)
Waterman - Havana (written by Pelikan M300)