In properties, market confidence determines the boom and doom of the industry. To property buyers and investors, trust can make or break a deal. In this digital world, trust is more valued than ever. Unfortunately, trust is increasingly rare to be found in industry stakeholders and the mass media.
Have something up your sleeve?
It is interesting to see how the stakeholders with vested interest interpret the market data in their favor, and craft a deceiving and misleading picture to place their products in a good light.
When it is time for budget announcement, we heard property agencies speculating that the government may tweak cooling measures and relax ABSD because of a considerable market correction.
When it is time for developers to announce financial results, we heard stock analysts telling investors that now could be a good time to buy property stocks which is best to ride on market rebound.
Where there are more new projects launched last quarter and even more new projects waiting to be launched, we heard noises that the rising transaction volumes show signs of potential pick-up or market recovery.
Their speeches and articles follow the same pattern: Manipulate relevant or irrelevant data from different sources to illustrate why a particular market segment is promising or non-performing – all for the sake of marketing a property-related product or service.
Once a media publish the news, the other media immediately replicate the same story without questioning. The mutual back-scratching coherent act works best to amplify the intended message.
True or not? Nobody cares.
Believe it or not? It’s up to you.
Can make money or not? It depends on your luck.
Is greed or naivety the Money Monster?
In the movie Money Monster, Wall Street expert Lee Gates (starring George Clooney) is a television celebrity who hosts a popular TV show called Money Monster. In the midst of a live show, one of his fans Kyle Budwell suddenly appears with a gun and takes Lee hostage.
Kyle has lost his entire savings of $60,000 that he inherited from his deceased mother in a company stock endorsed by Lee in his show. He looks into the camera to tell the TV viewers his frustrations as a victim.
“One time your mom left you some money. You’re trying to be smart about it. You turn on the TV. Boom, that’s how they fxxking take it. They take it so fast. They don’t even have to explain it. They’re literally on the airways. I’m telling you it’s rigged. They literally control the information. The whole damn thing! How’s that even fair?”
“I want everyone to know something. I might be the one with the gun here. But I am not the real criminal as these guys. They steal everything from us and get away with it too. Nobody’s asking how. Nobody’s asking why.”
“After they are done with stealing our money. They don’t even have to pay any taxes on it.”
Lee denies he has ever said on his show what Kyle accuses him.
“Four weeks ago you say that it’s safer than your savings account.”
“I’ve never said it.”
Kyle insists the crew to look for that episode and replay the tape. It proves that Lee did make that remarks. There truth is: there is a dirty trick played by the CEO and $800 million from investors is gone in just one afternoon. What a daylight robbery!
Lee simply says, “I made a bad call”.
To save his own life, Lee comes up with a trick to recoup Kyle’s $60,000 loss. He changes his recommendation for the stock from ‘sell’ to ‘triple buy’ and appeals to everyone in front of the TV to buy the stock right now, hoping that the share price will jump and the kidnapper will spare his life.
“I want you to ask yourself. What is a life worth to you? How much is my life worth?”
Instead of rising, the share price drops instead. Trading volume suddenly drops 90 percent.
“I guess that answers the question.”
Lee just humiliates himself in his live show. Kyle tells him the reason why.
“Do you want to know why that shit didn’t work out? Because even you don’t buy that bullshit. You believe in money. You don’t believe in people. They don’t believe in you either.”
Who still stand behind what they said?
Last month, the Ministry of Finance in Indonesia severed all ties with JPMorgan as a revenge to the bank’s report that downgraded the country’s equity rating to ‘underweight’. The official accused JPMorgan of ‘spreading panic’ in the country and the bank is now ‘sanctioned’.
(Read details in ‘JPMorgan in row with Indonesia over equities rating’, Financial Times, January 5)
How can analysts keep their rice bowls while remaining neutral in reports, ratings and recommendations?
Remember those popular articles, books and seminars that tell you to put your hard-earned money in hidden gems, rare opportunities and smart investments?
Remember those so-called gurus who share you with their property secrets and street-smart tricks that promise to create wealth, achieve financial freedom and be a property millionaire?
Where are they now?
Where is your property agent, renowned speaker or industry expert who once sold you the best-deal property which is now depreciating faster than leaving your money in any saving account?
By the way, I am sharing the boring truths and hidden traps in my Buying My First Private Property workshop on Sunday again. Anyone cares to spend time to learn the fundamentals?
See, I just manage to put across the workshop in my blog post seamlessly.
How to know what and who to trust?
You don’t have to earn a degree to survive a low-trust industry with Singapore’s high-trust culture. You can choose to trust, but trust smartly, not blindly.
There is an excellent Forbes article on ‘Trust: More Valuable Than Ever’ that shares 3 ways to determine whether you should trust someone (Again, don’t trust it 100 percent just because it is from a reputable source).
1. Insist on full disclosure
Don’t let people get away with leaving out critical information. Probe more than you used to and dig into the fine print. Sniff and eliminate any information that may be misleading, even if it is technically correct.
You don’t need to hear from the CEO or KEO. You are looking for the CTO (Chief Trust Officer).
Trust, but verify. Let people prove their innocence. Forget the naïve belief that everyone is correct or honest all the time.
3. Reference check
Do your reference checks for character as well as competence. Trust competence without character means you may find you’ve put your trust in the next Hitler. Trust character without competence means you could be trusting your mother to fly a 747!