Some elder readers may remember the old song "Helmsman handles sailing", which was familiar to everyone during the Cultural Revolution. Aside from the political tenor, the underlying philosophy of the lyrics, when carefully scrutinized, can be quite meaningful. If one imagines a ship sailing the ocean, continually adjusting its course to the winds and currents, finally it will arrive safely ashore, guided on its true course by the careful hand of the helmsman.

I think this principle is applicable to today's commercial milieu and may be applied equally to investment strategies. Why are there so many losers among investors and speculators? It's not because these individuals are not smart enough. It's because once they welter in the turbulent world of business they lack the understanding to correct their course after they've steered astray.

Suppose a man is driving a car aiming to reach a destination in the east. Instead of setting a true course he goes the opposite way, assuming that he is infallible. Being "infallible" he fails to notice his error until he comes to the wrong place. By then, however, it is too late. He's used up all the petrol in his tank.

There are parallels in equities investment. Some investors are obstinate in their refusal to study the trends, weigh conditions and to change their strategies amid the market tumult. They prefer to sail on blindly. Some fail to gain, though they hold long positions but take no profits. Some hold short positions, then fail to top up in a timely manner. Who's to blame?

A good helmsman should be something of a diviner, "having foresight and self-confidence, acuity and ingenuity, flexibility and free of the impediment of conventions," according to Zhuangzi, a great thinker in ancient China.

Investors should learn to be good helmsmen, steering a course of long-term development; to avoid being swamped amid the ebb and flow of stock trends and business upheavals. Distinguishing between opportunity and danger, weakness and strength, making good use of resources, remaining adaptable to market conditions, one can establish himself in an unassailable position.

A decision-maker familiar with the nature of a storm can lead a corporation on a steady course of development.

The monumental military treatise of Chinese literature, "The Art of War", stresses some important elements for a commander-in-chief whose hand is firmly on the tiller - "A general is a pillar of the nation. A general who knows the art of war holds the key to the safety of the people and of the country."

Similarly, business leaders, investors and speculators should avoid becoming too enamored of their own opinions but like the experienced mariner, to learn to sail with courage, intelligence, and dexterity, eyes firmly fixed on the way forward. Thus they reduce the danger of running afoul of hidden reefs and dangerous shallows, or of becoming swept into the raging tumult of the financial storm.

"Helmsman handles sailing" remains a song of depth and significance. Like the compass in the ancient days and the radar today, it may serve as a chart to guide a course for safe navigation for modern businesses, investors, and even speculators.

The author is the chairman and managing director of Hip Shing Hong Group

(HK Edition 07/16/2009 page4)