I Prefer Gang Bang

Ahem Ahem Ahem... According to wikipedia, a gang bang or gangbang is a situation in which one individual, either a woman or man, has sexual intercourse with multiple partners in turn.

These multiple partners share one thing in common - to derive sexual satisfaction on one target. Don't get me wrong. I am not beginning to write about sexual fantasies here. Much to the disappointment for some I believe.

Drawing reference to the essence of a gangbang, a group of close friends of mine have decided to jointly incorporate a fund with aim of deriving financial satisfaction on our target. And our target is none other than financial freedom.

I have talked about setting aside RM500 solely for investments in stock market. Now, together with them, we have managed to collectively agreed to build up a cash flow of RM4,000 per month for a ten years investment horizon. Hence, this blog now also serves as an update on investment decisions made by myself, as the fund manager for the fund and other news in the market that they would also like to know.

Trust is extremely important among ourselves to be able to pool in resources and achieve our aim together and sooner. Nevertheless, I have decided to put in writing our understanding in undertaking this fund of ours which we called it the Hengdai Equity Fund IV ("HDFIV"). Hengdai literally means "brothers" in Chinese language and we have decided to just to stick with "brothers" although there are girls within the group. It's the relationship that counts. A relationship with trust and similar aim in life. Roman IV is basically number 4 and again in Chinese, 4 means "die". Probably Lilian Too, the famous fengshui consultant in Malaysia will ban the usage of 4 in such important fund of ours. However, we decided to take the risk as we would like to remind ourselves that we will "die" financially if we don't start investing.

Our agreement reads:

This fund agreement dated 26 February 2008 sets out the agreement between the persons listed in Section 3 to collectively contribute an agreed sum for investment in accordance with the parameters of the Fund listed in Section 3.

This agreement is not a legal agreement nor it is an invitation or offer for sale to public. The purpose of the agreement is to capture the understanding between the persons listed in Section 3.

This agreement also does not meant to be exhaustive in terms of terms and conditions. The information set out in Section 1 and 2 may be added/altered provided ALL the shareholders agree to the amendment for fairness purpose.

Section 1 Fund Information

Name	:	Hengdai Equity Fund IV
Category	:	Equity
Launch Date	:	15 February 2008
Closing Date	:	25 February 2008
Commencement Date	:	1 March 2008
Investor’s Risk Profile	:	Aggressive
Fund Objective	:	For aggressive investors who can stomach volatility in the value of the fund in the short run for long term capital appreciation. Seek capital growth over long-term period through investments in growth stocks.
Investment Strategy	:	Focuses on diversified portfolio of companies with good growth prospects that are listed on Bursa Malaysia Securities Berhad. May invest in foreign markets if outlook is good. With no pressure on reporting dates, the fund can sit idle on cash or fixed income securities to wait for downturn in stock market. Do not need to actively trade stocks to take profit or cut losses.

Section 2 Investment Information

Initial amount	:	Nil
Minimum amount	:	RM100
Frequency	:	Every month
Amount per frequency	:	Units of RM100
Management fee	:	Nil
Other fee	:	Relating to purchase of stocks.
Investment Horizon	:	10 years
Withdrawal option	:	Any point of time during the Investment Horizon.
Withdrawal value	:	Value of investment based on proportion of invested amount to the fund. Value will be calculated based on closing price of the fund on the day of receipt of request for withdrawal.
Dividends	:	No dividend will be declared as return made will be reinvested for growth purpose.
Fund manager	:	Seane and will decide on investments for the fund
Auditors	:	Cat and Nerd Nerd
Liquidator	:	Jiggy

Section 3 Shareholders

Monkey 500 (12.20%)
Alien 500 (12.20%)
Seane 500 (12.20%)
Piggy 400 (9.76%)
Old 400 (9.76%)
Valerie 300 (7.32%)
Pet Pet 200 (4.88%)
Nerd Nerd 200 (4.88%)
Vy Vy 200 (4.88%)
Nick 200 (4.88%)
Kit 200 (4.88%)
Fat Cat 200 (4.88%)
Jiggy 100 (2.44%)
Ghost 100 (2.44%)
Hoon 100 (2.44%)
Total 4,100 (100.00%)

Section 4 Procedures

For deposit

Timeline		Procedures
Last day of each month (commencing 29th February 2008)		Deadline for depositing of the investment amount. A late penalty of RM1 per day will be charged

For withdrawal

Timeline		Procedures
T day*		Submit request for withdrawal
T day		Calculation of market value of fund on the closing prices of stocks
T + 1 day		Commencement of sale of stocks
T + 4 days		Receipt of monies from broking house
T + 7 days		Clearance of cheques receipt from broking house
T + 8 days		Commencement of transfer of monies from Hengdai Equity Fund IV bank account to shareholder. Transfer may take more than 1 day as transfer amount is limited by the setting in the bank account. Cheque may be written to fasten the process.

* Day is referred to working day which excludes Saturday, Sunday and public holidays

Section 5 Responsibilities

(a) Liquidator

In catering for any unforeseen events whereby the Fund Manager is no longer able to invest for the fund or can't access the bank account and trading account, the Liquidator will step in and perform the following:

(a) Obtain the password to access the internet banking account from the Auditors.

(b) Call the stockbroker and order for sale of all stocks as soon as possible without delaying unless ALL shareholders agree to extend and hold on to the stocks.

(c) Bank in cheques received from the sale of stocks into the bank account.

(d) Transfer the cash obtained from sale of all assets to all shareholders in accordance to the proportion of shareholding listed in Section 3 (after confirmation with the Auditors)

(b) Auditors

(a) Obtain and safeguard the password of the internet bank account of the Fund Manager.

(b) Keep the contact details of the stockbroker.

(c) Perform random check on the internet bank account on the inflow and outflow of cash. Raise queries whenever appropriate.

(d) Audit the account statements prepared by the Fund Manager on a monthly basis.

(e) Confirm the liquidation value before Liquidator distribute cash upon liquidation.

(c) Responsibilities of Shareholders

(a) Bank in money according to Section 4.

(b) Monitor investment and performance of portfolio at your own discretion by logging on to http://seanelynch.blogspot.com/.

(c) ALL shareholders must agree to any additions, amendments or deletion of the terms in this agreement

(d) Fund Manager

(a) Invest in accordance with Fund Information for the interest of shareholders.

(b) Prepare account statements on a monthly basis for audit purpose.

(c) Update value of investments on a weekly basis.

(d) Clarify and communicate investment decisions to shareholders.

Section 7 Declaration

I, [name as per Section 3], understand and agreed to the above. I may have to bear any losses and of course enjoy the profits if I decide to withdraw early and during the investment horizon.

Nevertheless, I promise that I will not put any blame or cause any form of sufferings, either direct or indirect, to Fund Manager as I believe the Fund Manager has put the money where her mouth is and as a result will enjoy the profits and bear the losses together with me.

I also understand that the Fund Manager has given her undertaking to act in the best interest of the fund and will not in any event withdraw the fund for personal interest or commit fraud or whatsoever that deprived the financial benefits of the fund.

Yours sincerely

[name as per Section 3]

Let the gangbang begins....