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Canvas Art

From Canvas Art to Sculptures art, You will find your passion.

Vintage art: If your furniture came from estate sales and antique stores, complement the pieces with vintage art. From turn-of-the-century advertising to classic pin-up girls to old movie posters, vintage art fits into a room where the past is fondly remembered. Vintage art also looks good in rooms featuring contemporary decor due to the play between turn-of-the-century and cutting edge.

Sea and shore art: Sea and shore art looks exactly like it sounds and goes well with cottage decor or beach themes. Choose from sea and shore art featuring sun-drenched palm trees or rain-soaked lighthouses to complement your whitewashed bead board and jars full of seashells.

Landscape art: Landscape art depicts the natural beauties of the land, from untamed wilderness to rolling fields of wheat. In addition to being very soothing, landscape art can also open up a small room. By hanging a landscape art print on the wall, you simulate a window, making a little room feel larger.

Asian art: Asian art brings the calming influence and calligraphic art style of the Far East to your home. If you have filled a room with shoji screens, cut bamboo and tatami mats, it makes sense to hang Asian art on the walls. Lotus flowers, bamboo prints and Kanji scrolls of Japanese character writing all emphasize your Far Eastern style.

Flowers and still life art: Floral and still life art depicts wild or domestic flowers, fruit arrangements or both. Floral and still life art goes particularly well with country decor, but with such a huge selection, every flower lover can find floral art to coordinate with her decor.

Cuisine art: For a kitchen, a dining room or a home bar, cuisine art reminds you that food is the main reason you’re there. Cuisine art has a variety of colors and themes, with everything from a farmer’s market to a classic French chef, so if you want to decorate with this type of artwork, you’re sure to find something appetizing.

Country charm art: The rustic charms of the country make a comfortable decor style, which can be completed with country charm art. Whatever country means to you — mountain cabin, quaint cottage, Provencal or Americana — there’s country charm art to complement your down-home tastes.

Contemporary art and abstract art: Sleek lines, neutral colors and metallic finishes are perfectly accented with contemporary art or abstract art that adds a splash of bright color or a geometric pattern to the room. Contemporary art often brings a sense of cosmopolitan sophistication to your living space, and Abstract Art is great if your decor doesn’t have a particular theme or motif.

Cityscape art: From old European cities to modern American bridges, cityscapes reflect the style of the city they represent. Each unique piece captures the flavor of city life and can enliven or calm your space. Finish off your Paris-styled apartment with black-and-white photography of the Eiffel Tower or complement your cottage or country decor with cityscapes of Tuscan villas.

Children’s art: Cartoon characters, whimsical animals and sweet children fill the children’s art that is perfect for your child’s room. Bright colors in children’s art let you easily coordinate decorations, and fun themes will delight your child’s imagination.

Motivational art: Decorate your office or study area with motivational art to inspire you to do your best. Motivational art may also be more personal in nature, so hang it where you can see it whenever you need your faith to be renewed.

Original content from Overstock.com

http://www.overstock.com/Home-Garden/Canvas/13045/subcat.html

About the Author

Ethnic Identity and Development: Khat and Social Change in Africa $69.95 As khat chewing has become a popular Ugandan pastime, it is seen as a threat to law and order. Traders and consumers are harassed by the police, and one district authority has banned khat. New production areas, such as Uganda, share many common features with established khat production in Ethiopia and Kenya.  By telling of the story of khat, the book will serve as a vehicle for the analysis of so…

Self Help Africa Uganda Trek 2009

Self-Esteem and Academic Performance of Orphaned and Non orphaned Children

Self-Esteem and Academic Performance of Orphaned and Non orphaned Children

Mwebaza Micheal

Regional Coordinator

Book of Hope International USA

South Western Region of Uganda-East Africa

michealmwebaza@yahoo.com

Research Report-2007

Abstract.

This study concerned itself with finding out some of factors that affect children learning especially like self-esteem that may affect the performance of primary school children, particularly the orphaned as compared to non-orphaned children. Children are a deprived group of people and this deprivation may consequently affect their self-esteem. The aim of this study was to investigate whether there was any significant difference between the performance of orphaned and non-orphaned children. It was hypothesized that:

1). There is no significant difference between the performance of orphaned and non-orphaned children with high self-esteem and low self-esteem?

2). There is no significant difference between the self-esteem level of orphaned and non-orphaned children?

It was not yet known whether children without parents performed differently from those with parents. In this study, samples of 155 subjects were randomly selected from three schools in Masaka. The ruffle random sampling method was used. Results were computed and analyzed from the questionnaire.

Background of study

There has been a lot of political and social upheaval in Uganda. One of the consequences of such unrest is the growing number of orphans and widows.

Orphan children is on the increase due to the political and social unrest that include; diseases pandemic, civil wars, domestic violence in homes, hunger and poverty. This has resulted into death of fathers and mothers of the children. The only left guardians are the grandparents who are helpless themselves. They are unable to provide all the required life necessities to the children. The situation worsens because these grandparents hardly continue after the age of five. This counts for the increased deaths among the young people. Grandparents do not have enough food, they do not have money to provide for health services and many health centers are far from their reach and ill equipped. In the villages, there no health services provided and halfway-qualified personnel give the few services provided. This results into deaths mainly of the children and pregnant mothers. It is not surprising to find a home headed by young people looking after their siblings.

When you walk on the streets in the major cities of the country, street children have become many. They are sometimes dropped on the streets by guardians who fail to provide the necessities not because they do want but because they do not have. One day on the street, I found 5 children including a one month baby being left on the street by the mother who lied to them that she had gone to look for the taxi to go home. After two days the mother was nowhere to be seen up to now. Other incidences are leaving children inside the tax or in the tax parks. Young girls between the age of 13 and 17 are married off to men so that the guardians can get some money to keep them running from that man. The situation becomes worse when the family of the deceased did not have any piece of land. The resultant behaviors are thiefty and robbery in young boys so that they can get what to eat or they provide labor on other peoples’ farms just to get lunch and supper. Many times the young boys are hit and hurt while on these duties and they have nowhere to report. They have become beasts of burden to many managers who do not what to pay. These managers use young boys since these boys cannot complain for wages and they have fear to be chased away from the work. Girls are taken to work as house girls for some people who end up abusing them. They are not paid for their services, boys born in those homes rape these young girls (maids) and they are defiled by their bosses in those homes or farms. Many of these children are ignorant, deprived, poorly socialized, jobless and so on. The list is endless.

Problem Statement

It is evident from such background that orphans are deprived group of people. It is also necessary to note that these orphans are part of the population of Uganda and so they are as important as any other citizen and are entitled to all rights due to any other citizens. Such rights may include education, life, and ownership of property and so on. So, the issue at hand is to see to it that these orphans who are already deprived can be well adjusted in their social and personality development. Part of the deprivation suffered by orphans is the change in family circumstances. These tend to deprive them of the stimulus resources found in the normal family, and may affect their academic performance even in schools.  Usually, there is an attempt to bridge this gap of alternation from normal family resources. When the attempt fails, individuals may then develop maladaptive characteristics that include low self-esteem, self-rejection, identity confusion, alienation and distrust. What needs to be established is whether self-esteem affects performance of an orphaned child in comparison to the non-orphaned.

Study purpose

The problem is that deprivation caused by loss of parents seems to affect self-esteem. This may affect the orphans’ academic performance. Therefore for the purpose of this research, it is sought to investigate into self-esteem and academic performance of children.

Study Questions

1). Is there any difference between the performance of orphaned and non-orphaned children with high self-esteem and low self-esteem?

2). Is there any difference between the self-esteem level of orphaned and non-orphaned children?

Objectives

1). To find out whether there is a difference between the performance of orphaned and non-orphaned children with high self-esteem and low self-esteem

2). To find out whether there is any difference between the self-esteem level of orphaned and non-orphaned children

 Study Scope.

The study was carried out in Masaka district, Uganda. It covered 153 participants from three primary schools that had orphan and non-orphan children and their teachers. The main emphasis was to find out the academic performance of the orphaned and non-orphaned children.

Conceptualization
i)                   Deprivation

Deprivation in the study was mainly used to mean, leaving in an environment that lacked a sufficient level of complexity, to enable individuals to develop fully their human potentials. It was a group that was generally regarded as having suffered from some lack of opportunity or misfortune of some sort. Orphans for example had suffered a misfortune due to the loss of their parents leading to deprivation. To be fatherless or motherless during the first two years of life might have later consequences in terms of child’s socialization and personality development. Similarly these children may lose trust in the world, and more particularly, this may apply to those children being looked after by guardians. Their social and personality development may be retarded. When one of the parents dies, children will be deprived socially, economically and emotionally. There will be no model(s) to imitate of get advice from. According to this, deprivation has psychological consequences, one of which is self-esteem.

ii)                 Self-esteem and Deprivation

Self-esteem and deprivation are a function of one another. If a child is deprived of her/his parental care, it affects his/her self-esteem. Children always feel secure, confident and loved when parents tell them of their expectation. So, this indicates that children who are parentless may have no one to hold expectations of them and thus, their esteem may be affected adversely.

iii)              Self-esteem and Performance

People with high self-esteem are always encouraged to work harder and they perform highly than those of low esteem. Children, who think they are failing, stop trying while success tends to increase confidence, effort and the like hood of future success. Students certain of their low esteem relative to a given task do not show improvement in later performance after success. They only accept success if they see it as due to luck rather than to their own abilities and they improved after success attributed to luck. Therefore believing in failure may guarantee failure (a self-fulfilling prophecy).  This indicates that success or high performance raises the self-esteem. A child with high self-esteem is likely to perform better in schoolwork than that one with low-esteem.

Factors kept constant in this study: Intelligence of the children, motivation of the children, home background, child’s health, feeding at school and learning environment. These factors are strong in affecting children’s performance but considering these factors as constant minimized their influence.

Methodology
Design: The study was comparative using mainly qualitative research design and methods like observation, interview and discussions.

Sample: Through random sampling, the subjects were selected from schools that participated in the study. One scale for self-esteem was then administered to the subjects. Academic performance scores were average of termly marks obtained from the schools attended by the subjects.

Schools sample: Five schools were to participate but they were reduced to three schools due to financial constraints. These came from Masaka district. They belong to two types.

Table 1: Type of school that participated

Schools

Type (orphan and non-orphaned)

School 1

Mixed school day and boarding

School 2

Single schools for girls

School 3

Mixed boys and girls

Children sample: Primary five and six children were randomly selected because they had left the childhood stage and no longer do things unconsciously. So their self-esteem had developed. Their concentration to examinable subjects like social studies, mathematics, science and English had developed. From these subjects children’s performance was obtained. 180 children had to participate, 90 orphaned and 90 non-orphaned but the number reduced after the self-esteem inventory because some fell within the median. 

Table 2: Number of children who participated per school

School

Orphaned

Non-orphaned

Totals

1

33

58

91

2

30

—

30

3

20

14

34

Totals

83

72

155

☼Note: These children were in age range of 11-13 years

Instrumentation:

Questionnaire: After selection of children, a Rosenberg self-esteem inventory was administered first in the thirty minutes. During the administration of the questionnaires, the researcher, with the help of the class teachers would explain to the children what they could not understand.

Scoring

The modified Rosenberg self-esteem inventory: This questionnaire consisted of ten questions, each with four possible responses. Some of the statements were positive while others were negative.

            Results:   Positive Statements.

                                    Strongly agree        4 points.

                                    Agree                      3 points

                                    Disagree                 2 points

                                    Strongly disagree   1 point

                           Negative statements

                                    Strongly agree          1 point.

                                    Agree                        2 points

                                    Disagree                  3 points

                                    Strongly disagree   4 point

The scores were awarded for each question and the total for each subject was obtained and recorded. The scores ranged from 1-40 as the maximum. Those whose marks fell within the median were left out of the sample. Those who were above the median were taken to be having high self-esteem while those below the median were taken to be having low self-esteem.

Focused group Discussion and Interview: Teachers and children were interviewed. They also participated in the group discussions.

Heads of the school were also interviewed and their responses helped to provide additional information about the children who are orphans and non-orphans.

Data Analysis

The data was presented in tables, percentages, and diagrams. It was computed using the t-tests for all the groups.

Results and Presentation
Hypotheses one:

Null

There is no significant difference between the performance of orphaned and non-orphaned children with high self-esteem and low self-esteem?

The following tables3 and 4 show the results obtained.

Table 3: Performance of high self-esteem orphaned and non-orphaned children

Group

N

Mean Score

SD

t obs

t cv

Orphans

38

44.16

22.13

Non-orphans

44

32.48

11.13

2.95

2.00

df=degrees of freedom N=Number of subjects SD=Standard deviation  tobs= t observed

tcv-t critical value  P=0.05,    df=80,    tobs= tcv

Implication of Results: The orphans with high self–esteem seem to perform better than their counterparts’ non-orphaned children. However the performance off non-orphaned children was more homogeneous than that of the orphaned children.

            The results revealed that the difference between performance of high self-esteem orphaned and non-orphaned children is significant. (P =0.005, df =80)

More particularly, high self-esteem orphans perform significantly better than high self-esteem non-orphans. Since t obs is more than t cv, results are significant at 5% level of significance. So the Null hypothesis 1 is rejected

Table 4: Performance of low self-esteem orphaned and non-orphaned children

Group

N

Mean score

SD

tobs

tcv

Orphans

45

32.47

15.78

Non-orphans

28

30.29

13.73

0.62

2.00

df=degree of freedom,  N=Number of Subjects, SD=Standard Deviation  P=alpha level of significance.

Implication of Results: The results revealed that the difference between the performances of low self-esteem orphans is not significant from their counterparts who are non-orphaned. (At 5% level of significance df=71) 

The performance is almost the same with just a difference that is negligible. The analysis of Mean and Standard Deviation indicated that the orphaned children have displayed academic superiority over non-orphaned group of children. However, there is more homogeneity in performance of non-orphaned children than their counterpart orphaned children both with low self-esteem.  

Hypothesis 2

Null

There is no significant difference between the self-esteem level of orphaned and

Non-orphaned children?

The results are presented in table 5 and 6

Table 5: The self-esteem of orphaned and non-orphaned children

Group

N

Self-esteem

Mean score

SD

tob

tcv

Orphans

Non-orphans

72

27.86

3.98

1.96

1.96

df=153  p=0.005   tobs=tCv   N=Number of subjects  X=Mean score on the self-Esteem inventory, df=degrees of freedom,  tobs=value observed, tCv=Critical value   SD=Standard Deviation

Implication of Results: A t-test for independent groups was used to compare the means of the different groups (orphaned and non-orphaned). The comparison Means and Standard deviation indicates that non-orphaned children demonstrate a higher self-esteem than the orphaned children.

The results revealed that the difference between self-esteem of orphaned and non-orphaned children is significant. (0.05 level of significance, df=153).

Therefore, the null hypothesis 2 is rejected. More specifically, non-orphaned children have a significantly higher level of self-esteem than the orphaned children.

Findings and Discussion

Summary

The findings confirmed that some differences do exist in performance of orphaned and non-orphaned children. Some of the differences were significant though they varied in magnitudes. In many cases, very significant differences were recorded. In other cases, slight and negligible differences were found out. The study also confirmed many cases where there were no significant differences between variables that were studied at 5% level of significance, especially, the slight and negligible differences.

The Means of the two groups of interests were near one another. There was not much difference between the performance means except for the high self-esteem orphaned and non-orphaned children.

Difference in performance of orphaned and non-orphaned children of high and low self-esteem

i)                   Orphans and non-orphaned children with high self-esteem

Generally, both the orphaned children and non-orphaned children with high self-esteem differed in performance. More particularly, the orphaned children with higher self-esteem had recorded at least a higher performance than their non-orphaned counterpart.

When comparing their means, orphaned children’s mean score in performance was higher than that of their counterparts who were non-orphaned, though there was more homogeneity in the performance of the non-orphaned children than that of the orphaned children.

There was an assumption that, orphans were likely to achieve at lower level than children with parents alive. It was thought that parental encouragement was a great contributor to the Childs’ academic work. However this study found it different. Orphans too could perform better than non-orphans. The implication of this is that orphan children should not be neglected, when it comes to education. Their performance may be due to heredity, school influence or availability of good teachers and teaching material that facilitate the orphaned children’s performance. Teachers have to stop looking at these children as disadvantaged than other children. Though there social economic status may not be good, they still can perform and improve the school academic performance at large.

What was noted was that, children with high self-esteem were more assertive, competent, independent and creative. This applied to both orphaned and non-orphaned children that had self-esteem. They also set themselves higher goals, showed less interest for adult approval, less deterred by failure and had more realistic view of their own abilities.

ii)                 Orphans and non-orphaned children with low self-esteem

Both groups orphaned and non-orphaned children with low self-esteem did not indicate much difference in their performance. The difference between the performance of low self-esteem orphaned and non-orphaned children was not significant at 5% level of significance. The performance was almost the same. So the null hypotheses that there is no significant difference in performance of orphaned and non-orphaned children with low self-esteem was retained at 5% level of significance. Both groups indicated that there was heterogeneity in performance, unlike those of high self-esteem where performance of non-orphaned children was more homogeneous than that of orphaned children both with high self-esteem.

What was discovered was that, depression was rampart among the orphans. Their low self-esteem was related to home background where they thought isolated and they thought they lived nowhere. Many of the orphan children were deprived. They lived in an environment where they did not get enough resources. They did not have parents who would give them courage and sometimes it affected their performance. It was realized that guardians of the orphans were beginning to get stress due to the pressure over-exerted on their economic performance. Therefore there is a need to help the guardians who have little resources otherwise the life of the orphans is in a mess.

The orphans need to be brought up in a conducive environment where they are secure and loved like any other children.

The study discovered that low esteem children lacked trust in themselves. They were found to be afraid of expressing unusual ideas in a group. They were afraid of exposing themselves. They listened rather than participated in-group discussions and were the self-conscious and self-confused. They were lacking parental love, acceptance and approval of parents and they shifted these feeling even to school. Therefore the teachers at school have to play the role of the parent whenever they realize that they deal with orphaned and non-orphaned. The teachers should note that, low self-esteem children seem to have a strong need to have the acceptance and approval of others and a strong positive reaction to those they perceive as likely to meet their need.

The low-esteem children were less adjusted, had a relatively negative concept, saw them as less adequate, and felt more criticized, rejected and isolated than did children of equal ability who were not underachievers. Low self-esteem children were found less happy, more shameful and less confident of failure, they became increasingly distressed, and they experienced feelings of hopelessness and became anxious to attribute their failure to external factors.

Conclusion

The results of the study confirmed that, the difference between the performance of high self-esteem orphaned and non-orphaned children are significant at 0.05 level of significance. Contrary to public opinion that the non-orphans in primary schools perform better than primary orphans with high self-esteem, orphans with high self-esteem perform significantly better than their counterparts. The results have tended to favor the Orphaned group. The study has also confirmed that the difference between the performance of orphaned and non-orphaned children with low self-esteem was found not to be significantly different. Their performance was almost the same. The study also found out that, the self-esteem of the orphans and no0n-orphaned children was significantly different at 5% level of significance from

About the Author

Micheal Mwebaza, BA.Educ, Student of Masters in Education: Currriculum, Instruction and Design of Makerere University kampala Uganda, East Africa. Regional Cordinator Book of Hope International U.S.A in Uganda. Speciallised Researcher and Author of Books for Children and Young people.

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ISLAMIC MOTIVATIONAL VIDEO

The muslim woman and her friends and sisters in islam

Sisters in Islam: she loves them as sisters for the sake of Allah (SWT)

The way in which the true Muslim woman relates to her friends and sister in Islam is different from the way in which other women conduct their social affairs. Her relationship with her sisters is based on ta’akhi (brotherhood or sisterhood) for the sake of Allah (SWT).

This love for the sake of Allah (SWT) is the highest bond that may exist between one human being and another, whether man or woman. It is the bond of faith in Allah (SWT) which Allah (SWT) established between all believers when He said: (The Believers are but a single brotherhood . . .) (Qur’an 49:10)

The brotherhood of faith is the strongest of bonds between hearts and minds. It comes as no surprise to see that Muslim sisters enjoy a strong, enduring relationship that is based on love for the sake of Allah (SWT), which is the noblest and purest form of love between human beings. This is a love which is untainted by any worldly interest or ulterior motive.

It is the love in which Muslim men and women find the sweetness of faith: “There are three things that whoever attains them will find the sweetness of faith: if Allah (SWT) and His Messenger are dearer to him than anyone or anything else; if he loves a person solely for the sake of Allah (SWT); and if he would hate to return to kufr after Allah (SWT) has rescued him from it, as much as he would hate to be thrown into the Fire.”1

The status of two who love one another for the sake of Allah (SWT)

Many hadith describe the status of two people who love another for the sake of Allah (SWT), whether they are men or women, and describe the high position in Paradise which Allah (SWT) has prepared for them and the great honour which He will bestow upon them on the Day when mankind is resurrected to meet the Lord of the Worlds.

It is sufficient honor for those who love one another for the sake of (SWT), men and women alike, to know that their almighty Lord will take care of them on the Day of Judgement and will say: “Where are those who loved one another for My glory? Today I will shade them in My shade on the Day when there is no shade but Mine.”2 Such is the magnificent honor and tremendous reward that will be bestowed upon those who truly loved one another for the sake of Allah (SWT), on that awesome Day.

Love for the sake of Allah (SWT), and not for the sake of anything else in life, is very difficult, and none can attain it except the one who is pure of heart, for whom this world and all its pleasures are as nothing in comparison with the pleasure of Allah (SWT). It is not surprising that Allah (SWT) should give them a status and blessing which is commensurate with their position in this world, above whose concerns they have risen. We see proof of this in the hadith of Mu`adh, who said that the Prophet (PBUH) said: “Allah (SWT) said: `Those who love one another for My glory will have minbars of light, and the Prophets and martyrs will wish that they had the same.”3

Allah (SWT) bestows upon those who love one another for His sake a gift which is even greater than this status and blessing: that is His precious love which is very difficult to attain. This is proven by the hadith of Abu Hurayrah (RAA) in which the Prophet (PBUH) said: “A man went to visit a brother of his in another village. Allah (SWT) sent an angel to wait for him on the road. When the man came along, the angel asked him, `Where are you headed?’ He said, `I am going to visit a brother of mine who lives in this village.’ The angel asked, `Have you done him any favor (for which you are now seeking repayment)?’ He said, `No, I just love him for the sake of Allah (SWT).’ The angel told him, `I am a messenger to you from Allah (SWT), sent to tell you that He loves you as you love your brother for His sake.’”4

What a great love, that raises a person to a position where Allah (SWT) loves him and is pleased with him! The Prophet (PBUH) understood the impact of this strong, pure love in building societies and nations, so he never let any occasion pass without advocating this love and commanding the Muslims to announce their love for one another, in order to open hearts and spread love and purity among the ranks of the ummah.

Anas (RAA) said that a man was with the Prophet (PBUH), when another man passed by. The first man said, “O Messenger of Allah (SWT), indeed I truly love this man.” The Prophet (PBUH) asked him, “Have you let him know that?” He said, “No.” The Prophet (PBUH) said, “Tell him.” He caught up with him and told him, “Truly I love you for the sake of Allah (SWT),” and the man said, “May Allah (SWT) love you who loves me for His sake.”5

The Prophet (PBUH) used to do the same thing himself, teaching the Muslims how to build a society based on pure love and brotherhood. One day he took Mu`adh by the hand and said, “O Mu`adh, by Allah (SWT) I love you, so I advise you, O Mu`adh, never forget to recite, after every prayer, `O Allah (SWT), help me to remember You and to give thanks toYou and to worship You properly (Allahumma, a`inni `ala dhikrika wa shukrika wa husni `abadatika).’”6

Mu`adh began to spread this pure love among the Muslims throughout the Muslim lands, telling them what he had learned from the Prophet (PBUH) about the great reward that Allah (SWT) had prepared for those who loved one another for His sake, and about His great love for them. In al-Muwatta’, Imam Malik gives a report with a sahih isnad from Abu Idris al-Khulani who said: “I entered the mosque of Damascus, where I saw a young man who had a bright smile, and I saw the people gathered around him. When they disagreed on some matter, they referred it to him, and accepted his opinion. I asked who he was, and they told me, `This is Mu`adh ibn Jabal (RAA).’ Early the next day, I went to the mosque but I found that he had arrived even earlier than I. He was praying, so I waited until he had finished, then I approached him from in front, greeted him and said, `By Allah (SWT), I love you.’ He asked, `For the sake of Allah (SWT)?’ I said, `For the sake of Allah (SWT).’ He repeated his question, `For the sake of Allah (SWT)?’ And I said, `For the sake of Allah (SWT).’ So he took hold of my collar, pulled me towards him and said, `I have good news for you. I heard the Prophet (PBUH) say: “Allah (SWT) says: “My love is granted to those who love one another for My sake, who visit one another for My sake, and who spend on one another for My sake.’”‘”7 The effect of love for the sake of Allah (SWT) on the life of Muslim men and women.

Islam came to build an ideal society based on sincere love and brotherhood, so it had to plant the seeds of love in the hearts of the individuals of which society is composed. Therefore it made this love among believing men and among believing women one of the conditions of faith that will grant admittance to Paradise. This may be seen in the hadith narrated by Imam Muslim from Abu Hurayrah (RAA) in which the Prophet (PBUH) said: “By the One in Whose hand in my soul, you will not enter Paradise until you believe, and you will not believe until you love one another. Shall I not tell you of something that if you do it, you will love one another? Spread salam amongst yourselves.”8

The Prophet (PBUH), with his brilliant and deep insight, understood that nothing could eliminate hatred, jealousy and rivalry from people’s hearts but true brotherhood, based on sincere love, friendship and mutual advice, and free of feuds, hatred, insincerity and envy. The way to achieve this is through spreading salam, so that hearts may be opened to sincere love and friendship. So the Prophet (PBUH) frequently repeated this teaching to his Sahabah, aiming to sow the seed of love in their hearts and nurture them until they bore fruits of that great love that Islam wants for the Muslims, men and women alike.

With this sincere love, the Prophet (PBUH) built the first generation of Muslims, who formed the solid foundation on which the great structure of Islam was built and lit the way for the rest of ummah to follow. With this sincere love, the Prophet (PBUH) was able to build a model human society, based on the brotherhood of faith, a society that was remarkable both in its strength, durability and ability to make sacrifices in the cause of jihad to spread Islam throughout the world, and in the solidarity of its members, which the Prophet (PBUH) described in the most marvelous way: “Believers are like a structure, parts of which support other parts.”9

“The believers, in their mutual friendship, mercy and affection, are like one body: if any part of it complains, the rest of the body will also stay awake in pain.”10

From the very beginning and throughout history, the Muslim woman has always participated in the building of the Islamic society that is based on the brotherhood of faith, and she is still doing her share of the efforts to spread the blessed virtue of love for the sake of Allah (SWT) in Muslim society, turning to her sisters and friends with an overflowing heart to strengthen the ties of love and sisterhood for the sake of Allah (SWT).

She does not forsake or abandon her sister

The Muslim woman who truly understands the teachings of Islam does not ignore the fact that Islam, which encourages brotherly love and mutual affection, is also the religion that has forbidden brothers and sisters in faith to hate or abandon one another. Islam has explained that two people who truly love one another for the sake of Allah (SWT) will not be separated by the first minor offence that either of them may commit, because the bond of love for the sake of Allah (SWT) is too strong to be broken by such minor matters. The Prophet (PBUH) said: “No two people who love one another for the sake of Allah (SWT), or for the sake of Islam, will let the first minor offence of either of them come between them.”11

Anger may strike a woman in moments of human weakness, and she may hurt her sister, which could provoke harsh feelings and conflicts. In such cases, the Muslim woman should not forget that Islam does not ignore human nature and its vulnerability to changing emotions. For this reason, Islam has defined the length of time during which anger may subside. This time is considered to be three days. After this time has passed, it is forbidden for the two conflicting parties to refuse to seek a reconciliation. The Prophet (PBUH) said: “It is not permissible for a Muslim to be estranged from his brother for more than three days, both of them turning away from one another when they meet. The better of them is the one who is first to greet the other.”12

The word “Muslim” obviously includes both men and women when it occurs in hadith like this, which set out the regulations governing the lives of individuals, families and societies in the world of Islam.

Hence we can see that the Muslim woman whose soul has been shaped by Islam does not persist in ignoring her sister, no matter what the reason. Rather, she will hasten to bring about a reconciliation and greet her with salam, because she knows that the better of them is the one who is the first to greet the other. If her sister returns her salam, both of them will share the reward for the reconciliation, but if she does not return the greeting, then then one who gave the greeting will be absolved of the sin of forsaking her sister, while the one who refused to return the salam will have to bear the burden of that sin alone. This is made clear by the hadith in which Abu Hurayrah said: “I heard the Messenger of Allah (PBUH) say: `It is not permissible for a man to be estranged from a believer for more than three days. If three days have passed, then he should go and give salam to him; if he returns the salam, then both of them will have share in the reward, and if he does not respond then the one who gave the salam will be absolved of the sin of estrangement.”13

It goes without saying that the word “man” in the context of this hadith refers to both men and women. The longer the period of estrangement lasts, the greater the sin of both parties becomes, as the Prophet (PBUH) said: “Whoever forsakes his brother for a year, it is as if he had shed his blood.”14

How evil is the crime of forsaking one’s brother or sister, according to Islam! How heavy is the burden of the one who is guilty of this crime that is likened to the shedding of blood! The Islamic system of education is based on mutual love and affection, and ongoing contact. Therefore Islam wants Muslim men and women to eliminate hatred and envy from their lives, and not to give any room to those evil characteristics that contradict the brotherhood of faith. Hence Islam is filled with teachings that describe the best ethics ever known since man first walked on the face of the earth: “Do not break off ties with one another, do not turn away from one another, do not hate one another, do not envy one another. Be brothers, as Allah (SWT) has commanded you.”15

“Beware of suspicion, for speaking on the basis of suspicion is the worst kind of lie. Do not seek out one another’s faults, do not spy on one another, do not compete with one another, do not envy one another, do not hate one another, and do not turn away from one another. O servants of Allah (SWT), be brothers.”16

“Do not envy one another, do not outbid one another (in order to inflate prices), do not hate one another, do not turn away from one another, and do not enter into a transaction when others have already entered into it. O servants of Allah (SWT), be brothers. A Muslim is the brother of a Muslim. He does not oppress him, humiliate him or look down upon him. Taqwa is here” – and so saying, he pointed to his chest three times. “It is evil enough for a man to look down upon his Muslim brother. The whole of a Muslim’s being is sacred to another Muslim – his blood, his wealth and his honor are inviolable.”17

The Muslim woman who has received a sound Islamic education thinks deeply about these teachings of the Prophet (PBUH), which contain all the most noble characteristics such as love, friendship, brotherhood, sincerity, compassion and selflessness. She will not be able to persist in her hatred, for nobody can do so except the one who is mean and narrow-minded, or has a diseased heart or twisted nature. The true Muslim woman is far removed from such evil characteristics.

Therefore Islam issues a stern warning to those hard-hearted people, men and women alike, who are deviating from true Islam and its spirit of tolerance by insisting on remaining estranged. They are risking an awful fate in the Hereafter: their actions may prevent them from attaining the mercy and forgiveness of Allah (SWT), and may close the doors of Paradise to them. The Prophet (PBUH) said: “The doors of Paradise are opened on Monday and Thursday, and every servant who does not associate anything with Allah (SWT) will be forgiven, except for the man who bears a grudge against his brother. It will be said, `Wait for these two until they reconcile, wait for these two until they reconcile, wait for these two until they reconcile.’”18

The great Sahabi Abu’l-Darda’ (RAA) used to say: “Shall I not tell you about something that is better for you than charity and fasting? Reconcile between your brothers, for hatred diminishes reward.”19

How important it is for women to understand and meditate upon this great Sahabi’s penetrating insight into the spirit of this religion, which is based on brotherhood and love, when they have arguments and conflicts. Abu’l-Darda’, whose intelligence and good sense the Prophet (PBUH) used to trust, understood that hatred cancels out good deeds and destroys rewards, so reconciling the estranged Muslim with his brother is better for him than charity and fasting, because if he were to continue bearing a grudge against his brother, this would negate any reward he might receive for those acts of worship.

She is tolerant and forgiving towards them

The Muslim woman who is truly guided by Islam is tolerant towards her friends and sisters, and does not bear grudges against them. If she becomes angry with one of her sisters, she restrains heanger and freely forgives the one who has committed an error, without seeing any shame in doing so. In fact, she sees this as a good deed which will bring her closer to Allah (SWT): ( . . . [those] who restrain anger and pardon (all) men – for Allah loves those who do good.) (Qur’an 3:134)

If a person suppresses his or her seething anger, and does not forgive, that anger will turn into resentment and malice, which are more dangerous than anger. When a person forgives and forgets, the flames of anger are extinguished, and his or her soul is cleansed of the effects of anger and hatred. This is the level of ihsan which earns Allah’s (SWT) love for those who attain it: ( . . . for Allah loves those who do good.) (Qur’an 3:134)

The Muslim woman who truly adheres to the teachings of Islam is one of this group of muhsinin. She does not allow anger to continue boiling in her heart, because suppressed resentment is a very heavy burden on the soul; rather, she hastens to forgive and forget, thus freeing herself from this burden, and filling her soul with tranquillity and peace of mind.

Something that may help the Muslim woman to reach this difficult level of ihsan is the knowledge that forgiving one’s sister is not a source of humiliation or shame, rather it will raise her in status and honor in the sight of Allah (SWT), as the Prophet (PBUH) described: “Allah (SWT) will not increase His servant when he forgives except in honor. Noone humbles himself for the sake of Allah (SWT) but Allah (SWT) will raise his status.”20

If we compare this honour and status with the status of ihsan reached by the woman who is tolerant and forgiving, we will realize what an honor she has attained, for in the sight of Allah (SWT) she is one of the muhsinat, and in the sight of people she is a respected, beloved example.

The Muslim woman who has truly understood the teachings of Islam cannot have any trace of hatred or resentment in her heart towards anybody, because she understands precisely the value of forgiveness and purity of heart, and their importance if she seeks Allah’s (SWT) forgiveness and pleasure, as the Prophet (PBUH) explained: “There are three sins, whoever dies free of these sins will be forgiven for anything else, if Allah (SWT) wills: associating anything with Allah (SWT); practicing magic or witchcraft; and bearing resentment towards his brother.”21

She meets them with a smiling face

The true Muslim woman is cheerful of countenance, always greeting her sisters with warmth and smiles, as the Prophet (PBUH) said: “Do not think little of any good deed, even if it is just greeting your brother with a cheerful countenance.”22

Having a cheerful and friendly face is a good characteristic which Islam encourages and considers to be a good deed which will bring reward, because a cheerful face mirrors a pure soul. This inward and outward purity is one of the distinguishing features of the sincere Muslim. Hence the Prophet (PBUH) said: “Your smiling at your brother is an act of charity (sadaqah).”23

The Prophet (PBUH) was cheerful of countenance, always greeting his Sahabah with warmth and smiles whenever he saw them, as the great Sahabi Jarir ibn `Abdullah described: “From the time I embraced Islam, the Messenger of Allah (PBUH) never refused to see me and he never saw me except with a smile on his face.”24

Islam wants the ties of friendship and brotherhood/sisterhood to remain strong among the Muslims, so it encouraged them to spread salam, to be cheerful of countenance, to speak gently and to greet one another warmly, so that hearts will remain pure and open, ready to work together in kindness to do good deeds, and capable of carrying out the duties of Islam no matter what effort and sacrifices may be required.

She is sincere towards them

One of the virtues of the true Muslim woman is that she is completely sincere, towards Allah (SWT), His Prophet, and to the leaders and the masses of the Muslims, as is stated in the sahih hadith: “Religion is sincerity25.” We [the Sahabah] asked, “To whom?”

He [the Prophet (PBUH)] said: “To Allah (SWT) (by obeying Him, attributing to Him what He deserves and performing jihad for His sake); to His Book (by reading it, understanding it and applying it to one’s daily life); to His Prophet (by respecting him greatly and fighting on his behalf both in his lifetime and after his death, and by following his sunnah); to the rulers of the Muslims (by helping them in their task of leading Muslims to the right path and alerting them if they are heedless); and to their common folk (by being merciful towards them).”26

This attitude makes the Muslim woman sincere towards her sisters. She does not cheat them, mislead them, or conceal anything good from them. When she is always sincere towards them it is not merely for the sake of courtesy or to show off her social manners; she behaves in this way because sincerity is one of the fundamental bases of Islam which the first believers used to pledge to observe in their oath of allegiance (bay`ah) to of the Prophet (PBUH), as Jarir ibn `Abdullah stated: “I gave allegiance to the Prophet (PBUH) and pledged to observe regular prayer, to pay zakat, and to be sincere towards every Muslim.”27

In the hadith quoted above, we see that the Prophet (PBUH) summed up Islam in one word, nasihah, showing that sincerity is the central foundation of the faith. For without sincerity, a person’s faith is invalid and his or her Islam is worthless. This is the meaning of the hadith of the Prophet (PBUH): “None of you truly believes until he likes for his brother what he likes for himself.”28

This is impossible to achieve unless one loves one’s brother with all sincerity.

A person’s liking for his brother what he likes for himself is no easy matter. It is very difficult to attain, and no man or woman can attain it except the one who has received a sound Islamic education, whose heart has been cleansed of all selfishness, hatred, envy and malice, and who is infused with love for others.

The true Muslim woman who feels in the depths of her soul that her love for her sister is one of the conditions of true faith and that her religion is based on sincerity, is more likely to attain that difficult level; indeed, it is something that comes naturally to her in her dealings with her friends and sisters, and she becomes a truthful mirror to them, advising and correcting them, and wishing them nothing but good, as Abu Hurayrah used to say: “The believer is the mirror of his brother. If he sees any fault in him, he corrects it.”29

In these words, Abu Hurayrah was echoing the hadith of the Prophet (PBUH): “The believer is the mirror of his brother. The believer is the brother of a believer: he protects him from ruin and guards his back.”30

It is natural that the true Muslim woman should have this noble attitude towards her sister. She could not do otherwise, even if she wanted to: the person who is living on such an exalted level of purity, love, loyalty and sisterhood cannot come down to the level of hatred, betrayal, malice, selfishness and jealousy. A vessel will leak whatever is in it; musk cannot but smell beautiful; and good soil cannot but bring forth good produce. How beautifully the poet Zuhayr ibn Abi Sulma expressed this: “Does any plant produce large flowers but the washij (a plant with spear-like leaves)?

Are palm-trees planted anywhere except in the soil which is suitable for them?”31

She is faithful and kind towards them

Islam does not stop at encouraging its followers to respect and be kind to their friends; it also encourages them to be kind to their parents’ friends too, in recognition of the virtue of kindness and loyalty and in order to establish these values as an essential part of Islamic life. The books of our heritage are filled with reports of loyalty and kindness that the salaf embodied in their daily lives, so that they became a fine example for all of mankind.

An example of this is the hadith narrated by Imam Muslim in his Sahih from Ibn `Umar (RAA), in which the Prophet (PBUH) said: “The best kind of goodness (b) is that a man should keep in touch with and respect his father’s friend.”32

The Prophet (PBUH) used to nurture the souls of the Muslims and plant the seeds of faithfulness in them whenever he found an opportunity to tell them something of his guidance. A man of Banu Salamah came to him and asked: “O Messenger of Allah, is there any deed of kindness and respect that I can do for my parents after they die?” He said, “Yes, pray for them, ask forgiveness for them, fulfil their promises after they die, keep in contact with your relatives – for you have no relatives except through them – and honour their friends.”33

The Prophet (PBUH) set the highest example of faithfulness and kindness by taking care of Khadijah’s friends after she died. He never forgot them or neglected to treat them kindly. The Prophet’s concern for the friends of Khadijah (May Allah be pleased with her) upset `A’ishah (May Allah be pleased with her), who felt jealous of her. This is clear from the words of `A’ishah: “I never felt jealous of any of the wives of the Prophet (PBUH) as I did of Khadijah (May Allah be pleased with her), although I had never seen her. But he used to mention her often, and sometimes he would slaughter a sheep, butcher the meat, and send it to Khadijah’s friends. One time I said to him, `It is as if there were no other woman in the world but Khadijah!’ He said, `She was such-and-such, and I had children by her.’”34

According to another report: “He used to slaughter a sheep and send to her friends a goodly amount of it.”35

By this example, the Prophet (PBUH) expanded the concept of faithfulness and kindness to include the distant friends of deceased parents and wives. So what about our own friends who are still alive!

She is kind to them

The Muslim woman who is truly guided by Islam is never arrogant towards her sisters and friends; she is never sullen towards them, and never uses harsh words with them. She is always kind, gentle and friendly towards them, treating them well and speaking nicely to them. The words of Allah (SWT) describing the believers, men and women, as being ( . . . lowly [or humble] with the believers, mighty against the kafirun . . .) (Qur’an 5:54) are sufficient to give her the most vivid picture of how the Muslim woman should be with her friends and sisters. The ideal situation is to be so gentle and kind that it almost looks like humility.

When the Muslim woman hears the Prophet’s teachings she finds strong evidence in support of kindness towards others; it is described as something that may adorn every aspect of life, as the Prophet (PBUH) said: “There is no kindness in a thing but it adds beauty to it, and there is no absence of kindness but it disfigures a thing.”36

When the Muslim woman studies the life of the Prophet (PBUH), she is impressed by the magnificent nature of his character, his overwhelming gentleness and his utmost kindness in his dealings with people. He was never known to scowl at anybody, or to speak harshly, or to be severe or harsh-hearted. Allah (SWT) indeed spoke the truth when He said: ( . . . Were you severe or harsh-hearted, they would have broken away from about you . . .) (Qur’an 3:159)

Anas (RAA), his servant and constant companion, described his noble character thus: “I served the Messenger of Allah (PBUH) for ten years, and he never said to me `Uff! [The smallest word of contempt]. If I did something, he never said `Why did you do that?’ and if I did not do something, he never said `Why did you not do that?’”37

Anas also said: “The Prophet (PBUH) never used obscene language, or uttered curses and insults. If he wanted to rebuke someone, he would say, `What is the matter with him, may his forehead be covered with dust!38′”39

She does not gossip about them The alert Muslim woman does not allow herself to be drawn into gossip or to attend gatherings where gossip takes place. She restrains her tongue and refrains from gossiping in general, and avoids backbiting about her friends and sisters in particular. She regards it as her duty to prevent gatherings from sinking to the level of cheap gossip, because gossip is clearly haram according to the words of the Qur’an: ( . . . Nor speak ill of each other behind their back. Would any of you like to eat the flesh of his dead brother? Nay, you would abhor it. But fear Allah, for Allah is Oft-Returning, Most Merciful.) (Qur’an 49:12)

The Muslim woman always refrains from indulging in any talk that could lead to gossip. From her understanding of Islam, she knows that it is the tongue that may lead its owner to Hell, as stated in the hadith in which the Prophet (PBUH) warned Mu`adh ibn Jabal. He took hold of his tongue and said, “Restrain this.” Mu`adh said, “O Messenger of Allah, will we be held responsible for what we say?” The Prophet (PBUH) said: “May your mother be bereft of you! Is there anything that causes people to be thrown into Hell on their faces (or he said: on their noses) but the harvest of their tongues?”40

Gossip is an evil characteristic which does not befit the Muslim woman who has been guided by Islam. Such a woman refuses to be two-faced, hypocritical or fickle, gossiping about her friends and sisters in their absence, then when she meets them, she smiles warmly and makes a display of friendship. She knows that such fickleness is haram according to Islam, which is based on straightforwardness, honesty and frankness. Such good qualities come naturally to believing men and women, for Islam has made them despise inconsistency, fickleness and hypocrisy. These characteristics are regarded as so loathsome by Islam that the one who possesses them is described as being two-faced, and those who are two-faced, men and women alike, are among the worst of people in the sight of Allah (SWT), as the Prophet (PBUH) said: “You will find among the worst people in the sight of Allah (SWT) on the Day of Judgement, the one who is two-faced, who approaches some people in one way and some in another.”41

The true Muslim woman is straightforward and consistent, never two-faced. She is always bright and cheerful, and treats all people in the same, noble, manner. She never forgets that the woman who is two-faced is a hypocrite: Islam and hypocrisy do not go together, and the woman who is a hypocrite will be in the lowest level of Hell.

She avoids arguing with them, making hurtful jokes and breaking promises

Among the good manners of the true Muslim woman are a sense of moderation, wisdom and tact. She does not exhaust her friends with irritating arguments, she does not annoy them with hurtful jokes, and she does not break a promise that she has made to them. In this, she follows the guidance of the Prophet (PBUH): “Do not argue with your brother, do not joke excessively with him, do not make a promise to him then break it.”42

Excessive arguing is a repulsive habit that fills people’s hearts with hatred and disgust; making hurtful jokes destroys the purity of a friendship between two sisters; and breaking promises weakens the ties of sisterhood and friendship, and destroys mutual respect. The alert Muslim woman avoids behaving in such a way that makes a person despicable.

She is generous and honours her sisters

The Muslim woman who understands the teachings of her religion is generous and gives freely to her friends and sisters. Her approach is friendly and sincere when she invites them, she welcomes them warmly and offers them food generously.

Friendly gatherings over food strengthen the ties of sisterhood and friendship between sisters, filling their lives with the sense of noble human emotions that have been lost by the Western woman raised in a materialistic culture, who has been filled with the spirit of opportunism, selfishness and individualism. The Western woman is suffering from spiritual emptiness and emotional dryness which result in a feeling of being deprived of true friendship and sincere friends. This is the situation of Westerners in general, and Western women in particular, and they compensate for it by devoting themselves to caring for their dogs, to makup for the lack of human emotional warmth drained from them by their materialistic philosophy. A French report states that there are seven million dogs in France, a country whose population is fifty-two million. These dogs live with their owners like one of the family. It is no longer strange in French restaurants to see a dog and its owner eating together at the same table. When an official of the animal welfare organization in Paris was asked, “Why do the French treat their dogs like they treat themselves?” he answered, “Because they want someone to love, but they cannot find any person to love.”43

The materialistic man, whether in the West or in the East, can no longer find a true, sincere friend in his own society on whom to bestow his love and affection. So he turns to these animals in whom he finds more gentleness and faithfulness than in the people around him. Can man become any more emotionally degenerate than this extreme love for animals when he has lost the blessing of faith and guidance?

This emotional degeneration from which Westerners are suffering and which has dried up the human feelings in their souls, is one of the first things that attracted the attention of emigrant Arab writers, both Muslim and non-Muslim. They noticed that the materialistic lifestyle that has overtaken Western societies has made men into machines who know nothing in life but work, productivity and fierce competition, who do not know what it is to smile warmly at a friend. They are overwhelmed by the haste and crowds of this machine-like existence. Seeing all of this alarmed those Arab writers, who had grown up in the Islamic world and breathed its spirit of tolerance, and whose hearts were filled with brotherly love. So they began earnestly calling the Westerners towards the values of love and brotherhood. One of them was Nasib Aridah, who raised the banner of this humane call to the Westerner whose heart was stained with materialism and who had been blinded and deafened by the roar of the machines: “O my friend, O my companion, O my colleague, my love for you is not out of curiosity or a desire to impose on you./ Answer me with the words `O my brother!’ O my friend, and repeat it, for these are the sweetest words./ If you wish to walk alone, or if you grow bored of me,/ then go ahead, but you will hear my voice, calling `O my brother,’ bearing the message,/ and the echo of my love will reach you wherever you are, so you will understand its beauty and its glory.”44

The burden of materialistic life in the West became too much for Yusuf As`ad Ghanim to bear, and he could no longer stand this life which was full of problems and sinking in the ocean of materialism, and was devoid of the fresh air of spirituality, brotherhood and affection. So he began to long for the Arab countries of the Islamic world, the lands of Prophethood and spirituality, the home of love, brotherhood and purity. He wished that he could live in an Arab tent, and leave behind the civilized world with all its noise and glaring lights: “If I were to live a short life in any Arab land, I would thank Allah (SWT) for a short but rich life in a world where He is loved in the hearts of its people. I got so tired of the West that tiredness itself got bored of me. Take your cars and planes, and give me a camel and a horse. Take the Western world, land, sea and sky, and give me an Arab tent which I will pitch on one of the mountains of my homeland Lebanon, or on the banks of Barada or the shores of the Tigris and Euphrates, in the suburbs of `Amman, in the deserts of Saudi Arabia, in the unknown regions of Yemen, on the slopes of the Pyramids, in the oases of Libya. . . Give me an Arab tent, and I will weigh it against the entire world and emerge a winner. . .”45

Many writings by emigrant Arab writers share the same tone, but it is sufficient to give just a few examples here. All of their writings express the emigrants’ longing for the emotional richness that they missed when they came to the West, an experience which awoke in them feelings of longing for the East where Islam had spread love, brotherhood, mutual affection and solidarity.

Islam planted the seeds of love and brotherhood in the souls of its followers, and encouraged them to make friends and exhange invitations and visits. Those who invite others to these kinds of gatherings are described as being among the best of people: “The best of you is the one who offers food freely and returns the greeting of salam.”46

The Prophet (PBUH) gave good news to those who are generous, men and women alike, that they will be among those who will enter Paradise in peace: “Spread salam, offer food generously, uphold the ties of kinship, stand in prayer at night when people are sleeping, and enter Paradise in peace.”47

The Prophet (PBUH) further encouraged these generous people with the promise of special chambers in Paradise: “In Paradise there are rooms whose outside can be seen from the inside, and whose inside can be seen from the outside. Allah (SWT) has prepared them for those who feed others generously, who are gentle in speech, who fast continuously, and who stand in prayer at night when people are sleeping.”48

She prays for her sisters in their absence

The sincere Muslim woman whose heart is filled with the sweetness of faith likes for her Muslim sister what she likes for herself. So she never forgets to pray for her in her absence, a du`a’ that is filled with the warmth of sincere love and sisterhood. She knows that such du`a’s are the quickest to be answered because of their sincerity and warmth of feeling and the noble intention behind them. This is confirmed by the words of the Prophet (PBUH): “The quickest prayer to be answered is a man’s supplication for his brother in his absence.”49

The Sahabah understood this and used to ask their brothers to pray for them whenever they were in a situation where their prayers would be answered. Men and women alike shared this virtue, which is indicative of the high level of the entire society during that golden period of our history. Bukhari reports, in al-Adab al-Mufrad, from Safwan ibn `Abdullah ibn `Safwan, whose wife was al-Darda’ bint Abi’l-Darda’. He said: “I came to visit them in Damascus, and found Umm al-Darda’ in the house, but Abu’l-Darda’ was not there. She said, `Do you want to go for Hajj?’ I said, `Yes.’ She said, `Pray for me, for the Prophet (PBUH) used to say, “The Muslim’s prayer for his absent brother will be answered. There is an angel at his head who, whenever he prays for his brother, says, `Amin, and you shall have likewise.’”‘” He (Safwan) said, “I met Abu’l-Darda’ in the market and he told me something similar, reporting from the Prophet (PBUH).”50

The Prophet (PBUH) instilled team spirit in the souls of Muslim men and women at every opportunity, strengthening the ties of love for the sake of Allah (SWT) between them, spreading an attitude of selflessness, and uprooting the inclination towards individualism and selfishness, in order that the Muslim society should be infused with feelings of love, close ties, solidarity and selflessness.

One of the brillliant ways in which he instilled this team spirit was his response to the man who prayed out loud: “O Allah (SWT), forgive me and Muhammad only.” He told him, “You have denied it to many people.”51

In this way, the Prophet (PBUH) did not just correct this man alone, but he effectively instilled team spirit in the entire ummah of Islam, and taught every Muslim man and women, no matter when or where they lived, that it is not right for anyone who has uttered the words of the Shahadah to keep goodness to himself, because the believer should always like for his brother what he likes for himself.

In conclusion, then, this is how the Muslim woman who has received a sound Islamic education should be: she loves her sisters for the sake of Allah (SWT), and her sisterly love towards them is sincere and in their best interests; she likes for them what she likes for herself; she is keen to maintain the ties of love and sisterhood between them, and she does not cut them or forsake them; she is tolerant and forgiving of their mistakes and faults; she does not bear any hatred, envy or malice towards them; she always greets them with a cheerful, smiling face; she is kind and loyal towards them; she does not gossip about them; she does not hurt their feelings by being hostile or arguing with them; she is generous to them; she prays for them in their absence.

It is no surprise that the Muslim woman whose personality has been cleansed and moulded by Islam should have such noble characteristics. This is the miracle that Islam has wrought in the education and forming of human character, no matter where or when a man or woman lives.

Footnotes:

Bukhari and Muslim. See Sharh al-Sunnah, 1/49, Kitab al-iman, bab halawat al-iman.

Sahih Muslim, 16/123, Kitab al-birr wa’l-silah wa’l-adab, bab fadl al-hubb fi Allah.

Reported by Tirmidhi, 4/24, Bab ma ja’a fi al-hubb fi-Allah; he said, it is a sahih hasan hadith.

Sahih Muslim, 16/124, Kitab al-birr wa’l-silah wa’l-adab, bab fadl al-hubb fi-Allah.

Reported with a sahih isnad by Abu Dawud, 4/452, Kitab al-adab, bab akhbar al-rajul bi mahabbatihi ilayh.

Reported with a sahih isnad by Ahmad, 5/245.

Reported by Malik in al-Muwatta’, 2/953, Kitab al-shi’r, bab ma ja’a fi’l-muthabbayn fi-Allah. Sahih Muslim, 2/35, Kitab al-iman, bab bayan annahu la yadkhul al-jannah illa’l-mu’minin.

Bukhari and Muslim. See Sharh al-Sunnah, 13/47, Kitab al-birr wa’l-silah, bab ta’awun al-mu’minin wa tarahumuhum.

Ibid.

Reported by Bukhari in al-Adab al-Mufrad, 1/493, Bab hijrah al-Muslim.

Bukhari and Muslim. See Sharh al-Sunnah, 13/100, Kitab al-birr wa’l-silah, bab al-nahy ‘an hijran al-ikhwan.

Reported by Bukhari in al-Adab al-Mufrad, 1/505, Bab inna al-salam yujzi’ min al-sawm.

Reported by Bukhari in al-Adab al-Mufrad, 1/497, Bab man hajara akhahu sanah.

Sahih Muslim, 16/120, Kitab al-birr wa’l-silah wa’l-adab, bab tahrim al-zann wa’l-tajassus wa’l-tanafus.

Bukhari and Muslim. See Sharh al-Sunnah, 13/109, Kitab al-birr wa’l-silah, bab ma la yajuz min al-zann.

Sahih Muslim, 16/120, Kitab al-birr wa’l-silah wa’l-adab, bab tahrim zulm al-Muslim wa khadhaluhu wa ihtiqarahu.

Sahih Muslim, 16/122, Kitab al-birr wa’l-silah wa’l-adab, bab al-nahy ‘an al-shahna’.

Reported by Bukhari in al-Adab al-Mufrad, 1/505, Bab al-shahna’. Sahih Muslim, 16/141, Kitab al-birr wa’l-silah

wa’l-adab, bab istihbab al-’afuw wa’l-tawadu’.

Reported by Bukhari in al-Adab al-Mufrad, 1/505, Bab al-shahna’.

Sahih Muslim, 16/177, Kitab al-birr wa’l-silah wa’l-adab, bab istihbab talaqah al-wajh ‘ind al-liqa’.

Reported by Tirmidhi, 3/228, Abwab al-birr, 36. He said it is hasan gharib.

Fath al-Bari, 10/504, Kitab al-adab, bab al-tabassum wa’l-dahk; Sahih Muslim, 16/35, Kitab fada’il al-sahabah, bab fada’il Jarir ibn ‘Abdullah.

Nasihah is an Arabic word that may be translated by a number of words in English. The most common translation is “good advice,” but it also carries connotations of sincerity, integrity, and “doing justice to a person or situation.” [Translator] Sahih Muslim, 2/37, Kitab al-iman, bab bayan an al-din nasihah. The explanations in brackets are adapted from those given in the English translation of Sahih Bukhari by Dr. Muhammad Muhsin Khan (Vol. 1, p. 48). [Translator]

Bukhari and Muslim. See Sharh al-Sunnah, 1/63, Kitab al-iman, bab al-bay’ah ‘ala’l-Islam.

Bukhari and Muslim. See Sharh al-Sunnah, 13/60, Kitab al-birr wa’l-silah, bab yuhibbu li akhihi ma yuhibbu li nafsihi.

Reported by Bukhari in al-Adab al-Mufrad, 1/333, Bab al-Muslim mir’ah akhihi.

Ibid.

Sharh Diwan Zuhayr, 115, published by Dar al-Kutub al-Misriyyah.

Sahih Muslim, 16/110, Kitab al-birr wa’l-silah wa’l-adab, bab fadl silah asdiqa’ al-abb wa’l-umm.

Reported by Ibn Hibban in his Sahih, 2/162, Kitab al-birr wa’l-ihsan, bab haqq al-walidayn.

Fath al-Bari, 7/133, Kitab manaqib al-Ansar, bab tazwij al-Nabi (SAAS) Khadijah wa fadliha; Sahih Muslim, 15/201, Kitab al-fada’il, bab fada’il Khadijah.

Fath al-Bari, 7/133, Kitab manaqib al-Ansar, bab tazwij al-Nabi (SAAS) Khadijah wa fadliha.

Sahih Muslim, 16/146, Kitab al-birr wa’l-silah wa’l-adab, bab fadl al-rifq.

Bukhari and Muslim. See Riyad al-Salihin, 336, Bab husn al-khalq.

It has been suggested that what was meant by this expression was that the Prophet (PBUH) was praying that the person would increase his sujud, i.e. pray more, as this would guide and reform him. [Author]

Fath al-Bari, 10/452, Kitab al-adab, bab lam yakun al-Nabi (PBUH) fashishan wa la mutafahhishan.

A sahih hasan hadith narrated by Ibn Majah, 2/1315, Kitab al-fitan.

Fath al-Bari, 10/474, Kitab al-adab, bab ma qila fi dhi’l-wajhayn; Sahih Muslim, 16/157, Kitab al-birr wa’l-silah wa’l-adab, bab dhamm dhi’l-wajhayn.

Reported by Bukhari in al-Adab al-Mufrad, 1/485, bab la ta’id akhaka shay’an fa tukhlifahu.

Prof. Wahid al-Din Khan, Wujub tatbiq al-shari’ah alislamiyyah fi kulli zaman wa makan (“The necessity of applying Islamic shari’ah in every time and place”), in al-Mujtama’, No. 325, Kuwait, 24 Dhu’l-Qi’dah 1396/16 November 1976.

Diwan al-arwah al-ha’irah, qism al-naz’ah al-insaniyyah.

See ‘Isa al-Na’uri, Adab al-Mahjar, Dar al-Ma’arif bi Misr, p. 527

A hasan hadith narrated by Ahmad, 6/16.

A sahih hadith narrated by Ahmad, 2/295, and al-Hakim 4/129, Kitab al-at’amah.

A hasan hadith narrated by Ahmad, 5/343 and Ibn Hibban, 2/262, Kitab al-birr wa’l-ihsan, bab ifsha’ al-salam wa it’am al-ta’am.

Reported by Bukhari in al-Adab al-Mufrad, 2/83, Bab du’a’ al-akh bi zahr al-ghayb.

Reported by Bukhari in al-Adab al-Mufrad, 2/84, Bab al-du’a’ bi zahr al-ghayb.

Reported by Bukhari in al-Adab al-Mufrad, 2/85, Bab al-du’a’ bi zahr al-ghayb.

About the Author

Nasir Pasha, 36 Years, B.E Electrical and Electronic, Loving Father, Husband, Author, Thinker, Reader, strongly believe peace is the only way to solve all problems of the world.

What are some good stories to mention when speaking to a group of Muslim youth?

With about 2-3 minutes of speaking time, maybe just one story? It’s going to be at a picnic for the youth of our community, and we’re trying to encourage them to come to the Masjid more often, and we’re going to have weekly youth group meetings. So, what kind of story from Islamic history would be interesting or motivational for youth to gain interest in being active?

Surah Yusuf

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Anime Demotivational Posters by Jionunez

First of all I would like to start with my biography, where do I come from, our weather conditions and further facts that can affect on sweating.

I was born in Switzerland in central Europe. On the hills and lower valleys of Switzerland a moderate climate exists, with an average yearly temperature of about 10 – 11 degrees Celsius. The temperature decreases about 1,5 – 2 for every additional 300 m of elevation. So our climate is not so hot. However sometimes in summer we have 25 – 35 degrees Celsius. Especially we experience such temperatures during the last years may be it is connected somehow with global warming, but who cares, it’s simply very hot and a lot of people should attempt to find best solution for them to stop sweating.

During my childhood and puberty I didn’t even think about how embarrassing and demotivational excessive sweating could be. I understood that it is normal to sweat in summer or during some excessive activity and I really didn’t care about it. Maybe just because of sweating condition it wasn’t so excessive and terrible.

Now I will narrate about first meeting with excessive sweating.

Right now I’m a student, next year I will graduate our local university. Last year I had taken a part in students exchange program and I moved to the south, in Italy.

The weather in Italy was really hot and studying in such conditions is not so easy thing. I have understood that I just bet on the wrong horse because I sweat like a horse and this condition was really terrible. I tried to do all my affairs in the morning to decrease sweating during the day. But already at 9 am I had to take a shower because I was sticky and sweaty. My clothes were wet. Studying in the university was even worthier – it was a nightmare. I have learned in stuffy and hot rooms. It was needed only 10-15 minutes to get wet. In every situation I felt myself uncomfortable. I stopped to chat with girls in our group because I was confused due to excessive sweating and body odor.

I tried to use heavy antiperspirants and deodorants with aluminium, it didn’t help. I found some pills in the Internet and ordered them for 89 Euros. It was written that these pills will eliminate excessive sweating and I will stay dry for a long time. It also didn’t help. I Googled a lot and had read tomes of information and finally have found a technique that have helped me. It hasn’t eliminated my problem 100% and forever but I sweat now much less. I forgot about confusing condition and about body odor. I just spent a couple Euros on special ingredients that I had found on our local market. I really don’t know whether this natural technique will help you or not but you can also try because it took me just a half an hour. The link you will find below.

I don’t promise that these techniques will help you but I don’t sweat in excess any more. Try to forget about it and stop sweating today.

Is this girl hot or what?

OK, so I saw her in a demotivational poster, looked her up, so tell me what you think of her.

shes GORG.

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The Many Different Advantages Of Motivational Posters For Your Home Or Office

Tim is suffering from a bout of depression. The reason- Tim always dreamt of becoming an economist. However, one year down the line Tim feels that he is not as talented as others. His analytical skills are poor and he is not strong in quantitative analysis. He is sure that his dream will remain a dream.

One day, while on his way to college, he comes across two posters. The first one reads, “”Cherish your dreams and aspirations. They are the blueprint of your achievements.” and the second poster says, “What the mind can conceive and believe, it can achieve.”  Tim returns, organizes his study schedule and starts working hard. When it is time for the results, Tim is a surprise topper. So, what caused this sudden change in Tim? Well, the posters seemed to have an effect on Tim. Now, this is what a well-written motivational poster can do for you.

Motivational posters have become a rage. Be it a school, home or an office, the walls seem to be flaunting positive messages. The important question is ‘what are the advantages of putting up motivational posters?’

Words, when used in a correct way, can melt the stoniest of hearts. Words are known to have triggered mass movements, which changed the course of history. Who can ever forgot Martin Luther King and his words  ‘I have a dream’? Motivational posters, too, make use of concise words to deliver the message in the most striking of manners. Hence, they tend to create a rather strong impact on the mind. They have also initiated actions in many cases.

Motivational posters put up in office or home have a kind of hammering effect. A motivational poster on the wall of an office remains in sight for a long time. For instance, if you put a poster near the entrance lobby, employees will see the poster every time they enter and leave the office. The message, too, will remain in front of their eyes and hence after some time, it will begin to produce effect in some of the employees. This is akin to brain washing, albeit a positive one.

Motivational posters also add a class to your office and homes. It is like having your own personal style statement. For instance, if your office cabin displays the following poster “Focus on your goals and let nothing get in the way of your dreams”; chances are that you are a focused person. Motivational posters are a great of medium of displaying your beliefs with élan.

The other advantage of motivational posters is that most of them have a great picture or natural scene to compliment the words. Thus, they add a beauty to your otherwise drab walls. Many motivational posters are a treat to watch and definitely enhance the look of your office or home.  

The biggest advantage of having a motivational poster on the walls of homes and offices is that they induce a sense of optimism if things are not going well, a sense of love if you

About the Author

Find tips about shooting pain in breast and breast uplift surgery at the Breast Discomfort website.

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Customer Service – Motivating the Customer Service Team

A poorly performing Customer Service Representative isn’t just falling below par; they may be actively sending your Customers or Prospects off to the opposition. A whole Team of Customer Service Representatives who is performing badly can be a threat to your survival! And yet a Team can go off over a very short period of time. They can quickly become negative, have a bad attitude or just be totally de-motivated to perform well with their Customers.

Understanding Motivation

Motivation is the drive to WANT to perform well. Motivation refers to the DRIVE to use their skills effectively to achieve a positive outcome with every Customer – on each and every occasion. A motivated person wants to improve, to do better and better. A highly motivated Customer Service Team wants to beat the opposition – to be better with their Customers than any other Company! To do this they continuously work at their knowledge, skills, attitude and Customer focus.

The Prerequisites of Motivation

Obviously, there are prerequisites, some things that must be in place before motivation becomes relevant. It is important that the CSR knows exactly what the ‘desired’ performance is – that they truly understand what they are paid to do. People often talk of de-motivated staff, when the poor performance is really caused by something quite different. The staff has never really been told the goals with Customers in general, and on each specific call.

For example, a Technical help desk agent may think his role is to give information, and he does this in a way that is clear to HIM. The fact that other people find him totally unintelligible is the ‘fault’ of the ‘stupid’ callers. This agent may never have been told that his goal is to explain the information, preferably in one go, so that it is clearly understood by the LEAST knowledgeable of people. These are the skills he or she must build up, and a ‘professional’ is one whose callers never have to ask for clarity! Ensure your Team really do understand their goals, and what success is.

Work on Positive Attitude

Improving the Customer Service Team’s attitude to the Customer, to the Company and to your products or services is the first area of focus. A negative attitude to one or more of these factors can seriously de-motivate a Team if it gets imbedded in the culture.

The Team Leader is critical here. Often the Team Leader actually creates the negativity by displaying negative attitude themselves. Their Leadership influence cannot be underestimated, and they can bring a Team down very rapidly. The reverse is also true. Talking positively, praising positive attitudes in their Team and gathering positive evidence to present to the Team will help turn the negativity round in a very short period of time.

The quickest and most motivating way of changing Team attitudes is to engage the Team itself in actively working on this. For example, if the Team have a negative attitude to the Company, the Team Leader can help the Team brainstorm ideas to improve this. They might invite people from other departments to give a talk on their activities, invite sales people to give the benefits of their products or share briefings from Management on the direction the Company is taking at this point in time.

Lack of Skills is De-motivating

Your Team must also have the knowledge and skills to perform well. They must have a good working knowledge of your products and services, of the language to answer queries, and of the flow of interactions. They must have the skills to deal with every type of caller or situation, and to deliver a successful outcome on every occasion. Indeed, they must understand that this DOES require skills, and is not just a matter of ‘liking’ some Customers and not others!

If the Team lack product knowledge, or the approach to handle a tricky situation, they can quickly build up defences. These defences prevent them from even LOOKING for a good solution for this Customer or for good skills to handle this type of interaction.

Again, the Team and the Team Leader together can work on improving skills. They can workshop a difficult call at a Team meeting and work out the best approach and timing of this call. They can work on improving a specific area of the call each week – the beginning one week, good closes the next etc. Team goals with a fun reward can be put in place to help focus on their skills, like ‘phrase of the week’ or ‘best save of the week’.

Listening back to calls always helps. It is much easier for someone to improve if they listen back to one or two of their calls every week. The Coach or Team Leader should guide the Customer Service Representative to identify 1 or 2 strengths on the call, and one area to work on for next week. This is an opportunity for praise and recognition as well as setting goals for next week – both highly motivating practices.

Praise and Recognition

Praise and recognition are your most important tool to motivate your Team to perform well, to have a positive attitude and to be good Team players. Management, Team Leaders and Coaches should use this motivational tool effectively to build high performing Teams.

About the Author

Kate Tammemagi is Customer Service Trainer and Consultant in Ireland. She designs and delivers customized Customer Care Training and Customer Service Courses.

I need motivational programs and work shop ideas for a customer service call center. Any ideas?

I recently received a promotion as an education and coordination manager of a customer service call center. I wanted some ideas on some motivational programs for my CSR’s. I also need some workshop ideas…I need to find a way to get these people a little more serious about this job… Alot of them are slacking and on the way out…I want to save whom I can and do what I can…any help and or ideas would be great…thanks….

There are great resources online such as ContactCenterWorld.com. Check out their articles and interact with other call center pro’s.

Make sure that your staff have the answers they need at their fingertips when answering calls. They are the key to your company’s growth and success! Make sure that important feedback provided to them from customers is captured and routed to the necessary managers who can take action. Empower the CSRs with a sense of responsibility for the customer experience. Measure individual and team CSRs’ responsiveness to customers, so you’ll be able to manage productivity and quality.

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Financial Modelling

FINANCIAL MODELING

Financial modeling is a process of forecasting performance of a certain asset, using relationships among operating, investing, and financing variables. The central aim of all financial modeling is valuation under uncertainty: how to estimate the value of a security when its future trajectory, or the trajectory of the other securities or economic variables it depends on, is unknown. Usually, financial modeling requires a great deal of spreadsheet work.

Financial Modeling Application

ü       Business valuation, especially discounted cash flow

ü       Cost of capital or WACC

ü       Modeling the term structure of interest rate and credit spread

ü       Option pricing

ü       Real options

ü       Risk modeling

ü       Portfolio problems

Standard and Premise of Business Value

Before the value of a business can be measured, the valuation assignment must specify the reason for and circumstances surrounding the business valuation. These are formally known as the business value    standard and premise of value.

Business valuation results can vary considerably depending upon the choice of both the standard and premise of value. For example, a business buyer and seller may bargain to establish the value of business assets that approaches the fair market value standard.

However, the value conclusions based on the going concern premise and that of assemblage of business assets may be quite different. One reason is that an operating business creates value by means of its ability to coordinate its capital, human and management resources to produce economic income. The same set of assets not currently used to produce income is generally worth less.

Reasons for Business Valuation

Business people may need to conduct business valuation for a number of reasons including sale, estate tax planning, estate tax valuation, divorce, business purchase price allocation, collateral documentation, litigation and documenting that a sales price is equitable.

Fair market value

“Fair market value”, a central standard of measuring business value, is defined as the price at which property would change hands between a willing buyer and a willing seller when the former is not under any compulsion to buy and the latter is not under any compulsion to sell, both parties having reasonable knowledge of relevant facts. See IRS Rev. Rul. 59-60, 1959-1, Cum. Bulletin 237, codified at 26 C.F.R. § 20.2031-1(b).

The fair market value standard incorporates certain assumptions, including the assumptions that the hypothetical purchaser is reasonably prudent and rational but is not motivated by any synergistic or strategic influences; that the business will continue as a going concern and not be liquidated; that the hypothetical transaction will be conducted in cash or equivalents; and that the parties are willing and able to consummate the transaction.

These assumptions might not, and probably do not, reflect the actual conditions of the market in which the subject business might be sold. However, these conditions are assumed because they yield a uniform standard of value, after applying generally-accepted valuation techniques, which allows meaningful comparison between businesses which are similarly situated.

Elements of business valuation

Economic conditions

A business valuation report generally begins with a description of national, regional and local economic conditions existing as of the valuation date, as well as the conditions of the industry in which the subject business operates. A common source of economic information for the first section of the business valuation report is the Federal Reserve Board’s Beige Book, published quarterly by the Federal Reserve Bank. State governments and industry associations often publish useful statistics describing regional and industry conditions.

Financial Analysis

The financial statement analysis generally involves common size analysis, ratio analysis (liquidity, turnover, profitability, etc.), trend analysis and industry comparative analysis. This permits the valuation analyst to compare the subject company to other businesses in the same or similar industry, and to discover trends affecting the company and/or the industry over time. By comparing a company’s financial statements in different time periods, the valuation expert can view growth or decline in revenues or expenses, changes in capital structure, or other financial trends. How the subject company compares to the industry will help with the risk assesment and ultimately help determine the discount rate and the selection of market multiples.

Normalization of financial statements

The most common normalization adjustments fall into the following four categories:

Comparability Adjustments. The valuator may adjust the subject company’s financial statements to facilitate a comparison between the subject company and other businesses in the same industry or geographic location. These adjustments are intended to eliminate differences between the way that published industry data is presented and the way that the subject company’s data is presented in its financial statements.

Non-operating Adjustments. It is reasonable to assume that if a business were sold in a hypothetical sales transaction (which is the underlying premise of the fair market value standard), the seller would retain any assets which were not related to the production of earnings or price those non-operating assets separately. For this reason, non-operating assets (such as excess cash) are usually eliminated from the balance sheet.

Non-recurring Adjustments. The subject company’s financial statements may be affected by events that are not expected to recur, such as the purchase or sale of assets, a lawsuit, or an unusually large revenue or expense. These non-recurring items are adjusted so that the financial statements will better reflect the management’s expectations of future performance.

Discretionary Adjustments. The owners of private companies may be paid at variance from the market level of compensation that similar executives in the industry might command. In order to determine fair market value, the owner’s compensation, benefits, perquisites and distributions must be adjusted to industry standards. Similarly, the rent paid by the subject business for the use of property owned by the company’s owners individually may be scrutinized.

Income, Asset and Market Approaches

Three different approaches are commonly used in business valuation: the income approach, the asset-based approach, and the market approach. Within each of these approaches, there are various techniques for determining the fair market value of a business. Generally, the income approaches determine value by calculating the net present value of the benefit stream generated by the business (discounted cash flow); the asset-based approaches determine value by adding the sum of the parts of the business (net asset value); and the market approaches determine value by comparing the subject company to other companies in the same industry, of the same size, and/or within the same region.

In determining which of these approaches to use, the valuation professional must exercise discretion. Each technique has advantages and drawbacks, which must be considered when applying those techniques to a particular subject company. Most treatises and court decisions encourage the valuator to consider more than one technique, which must be reconciled with each other to arrive at a value conclusion. A measure of common sense and a good grasp of mathematics is helpful.

Income approaches

The income approaches determine fair market value by multiplying the benefit stream generated by the subject company times a discount or capitalization rate. The discount or capitalization rate converts the stream of benefits into present value. There are several different income approaches, including capitalization of earnings or cash flows, discounted future cash flows (“DCF”), and the excess earnings method (which is a hybrid of asset and income approaches). Most of the income approaches consider the subject company’s historical financial data; only the DCF method requires the subject company to provide projected financial data. Most of the income approaches look to the company’s adjusted historical financial data for a single period; only DCF requires data for multiple future periods. The discount or capitalization rate must be matched to the type of benefit stream to which it is applied. The result of a value calculation under the income approach is generally the fair market value of a controlling, marketable interest in the subject company, since the entire benefit stream of the subject company is most often valued, and the capitalization and discount rates are derived from statistics concerning public companies.

Discount or capitalization rates

A discount or capitalization rate is used to determine the present value of the expected returns of a business. The discount rate and capitalization rate are closely related to each other, but distinguishable. Generally speaking, the discount rate or capitalization rate may be defined as the yield necessary to attract investors to a particular investment, given the risks associated with that investment. The discount rate is applied only to discounted cash flow (DCF) valuations, which are based on projected business data over multiple periods of time. In DCF valuations, a series of projected cash flows is divided by the discount rate to derive the present value of the discounted cash flows. The sum of the discounted cash flows is added to a terminal value, which represents the present value of business cash flows into perpetuity. The sum of the discounted cash flows and the terminal value is the value of the business.

On the other hand, a capitalization rate is applied in methods of business valuation that are based on historical business data for a single period of time. The after-tax net cash flow capitalization rate is equal to the discount rate minus the long-term sustainable growth rate. The after-tax net cash flow of a business is divided by the capitalization rate to derive the present value. Capitalization rates may be modified so that they may be applied to after-tax net income or pre-tax cash flows or income. There are several different methods of determining the appropriate discount rates. The discount rate is composed of two elements: (1) the risk-free rate, which is the return that an investor would expect from a secure, practically risk-free investment, such as a government bond; plus (2) a risk premium that compensates an investor for the relative level of risk associated with a particular investment in excess of the risk-free rate. Most importantly, the selected discount or capitalization rate must be consistent with stream of benefits to which it is to be applied.

Build-Up Method

The Build-Up Method is a widely-recognized method of determining the after-tax net cash flow discount rate, which in turn yields the capitalization rate. The figures used in the Build-Up Method are derived from various sources. This method is called a “build-up” method because it is the sum of risks associated with various classes of assets. It is based on the principle that investors would require a greater return on classes of assets that are more risky. The first element of an Build-Up capitalization rate is the risk-free rate, which is the rate of return for long-term government bonds. Investors who buy large-cap equity stocks, which are inherently more risky than long-term government bonds, require a greater return, so the next element of the Build-Up method is the equity risk premium. In determining a company’s value, the long-horizon equity risk premium is used because the Company’s life is assumed to be infinite. The sum of the risk-free rate and the equity risk premium yields the long-term average market rate of return on large public company stocks.

Similarly, investors who invest in small cap stocks, which are riskier than blue-chip stocks, require a greater return, called the “size premium.” Size premium data is generally available from two sources: Morningstars’ (formerly Ibbotson & Associates’) Stocks, Bonds, Bills & Inflation and Duff & Phelps’ Risk Premium Report.

By adding the first three elements of a Build-Up discount rate, we can determine the rate of return that investors would require on their investments in small public company stocks. These three elements of the Build-Up discount rate are known collectively as the “systematic risks.”

In addition to systematic risks, the discount rate must include “unsystematic risks,” which fall into two categories. One of those categories is the “industry risk premium.” Morningstar’s yearbooks contain empirical data to quantify the risks associated with various industries, grouped by SIC industry code.

The other category of unsystematic risk is referred to as “specific company risk.” Historically, no published data has been available to quantify specific company risks. However as of late 2006, new research has been able to quantify, or isolate, this risk for publicly-traded stocks through the use of Total Beta calculations. P. Butler and K. Pinkerton have outlined a procedure using a modified Capital Asset Pricing Model (CAPM) to calculate the company specific risk premium. The model uses an equality between the standard CAPM which relies on the total beta on one side of the equation; and the firm’s beta, size premium and company specific risk premium on the other. The equality is then solved for the company specific risk premium as the only unknown. While this is ground-breaking research, it has yet to be adopted and used by the valuation community at large.

It is important to understand why this capitalization rate for small, privately-held companies is significantly higher than the return that an investor might expect to receive from other common types of investments, such as money market accounts, mutual funds, or even real estate. Those investments involve substantially lower levels of risk than an investment in a closely-held company. Depository accounts are insured by the federal government (up to certain limits); mutual funds are composed of publicly-traded stocks, for which risk can be substantially minimized through portfolio diversification; and real estate almost invariably appreciates in value of long time horizons.

Closely-held companies, on the other hand, frequently fail for a variety of reasons too numerous to name. Examples of the risk can be witnessed in the storefronts on every Main Street in America. There are no federal guarantees. The risk of investing in a private company cannot be reduced through diversification, and most businesses do not own the type of hard assets that can ensure capital appreciation over time. This is why investors demand a much higher return on their investment in closely-held businesses; such investments are inherently much more risky.

Capital Asset Pricing Model (“CAP-M”)

The Capital Asset Pricing Model is another method of determining the appropriate discount rate in business valuations. The CAP-M method originated from the Nobel Prize winning studies of Harry Markowitz, James Tobin and William Sharpe. Like the Ibbotson Build-Up method, the CAP-M method derives the discount rate by adding a risk premium to the risk-free rate. In this instance, however, the risk premium is derived by multiplying the equity risk premium times “beta,” which is a measure of stock price volatility. Beta is published by various sources (including Ibbotson Associates, which was used in this valuation) for particular industries and companies. Beta is associated with the systematic risks of an investment.

One of the criticisms of the CAP-M method is that beta is derived from the volatility of prices of publicly-traded companies, which are likely to differ from private companies in their capital structures, diversification of products and markets, access to credit markets, size, management depth, and many other respects. Where private companies can be shown to be sufficiently similar to public companies, however, the CAP-M model may be appropriate.

Weighted Average Cost of Capital (“WACC”)

The weighted average cost of capital is the third major approach to determining a discount rate. The WACC method determines the subject company’s actual cost of capital by calculating the weighted average of the company’s cost of debt and cost of equity. The WACC capitalization rate must be applied to the subject company’s net cash flow to invested equity. One of the problems with this method is that the valuator may elect to calculate WACC according to the subject company’s existing capital structure, the average industry capital structure, or the optimal capital structure. Such discretion detracts from the objectivity of this approach, in the minds of some critics.

Once the capitalization or discount rate is determined, it must be applied to an appropriate economic income streams: pretax cash flow, aftertax cash flow, pretax net income, after tax net income, excess earnings, projected cash flow, etc. The result of this formula is the indicated value before discounts. Before moving on to calculate discounts, however, the valuation professional must consider the indicated value under the asset and market approaches.

Careful matching of the discount rate to the appropriate measure of economic income is critical to the accuracy of the business valuation results. Net cash flow is a frequent choice in professionally conducted business appraisals. The rationale behind this choice is that this earnings basis corresponds to the equity discount rate derived from the Build-Up or CAP-M models: the returns obtained from investments in publicly traded companies can easily be represented in terms of net cash flows. At the same time, the discount rates are generally also derived from the public capital markets data.

Asset-based approaches

The value of asset-based analysis a business is equal to the sum of its parts. That is the theory underlying the asset-based approaches to business valuation. The asset approach to business valuation is based on the principle of substitution: no rational investor will pay more for the business assets than the cost of procuring assets of similar economic utility. In contrast to the income-based approaches, which require the valuation professional to make subjective judgments about capitalization or discount rates, the adjusted net book value method is relatively objective. Pursuant to accounting convention, most assets are reported on the books of the subject company at their acquisition value, net of depreciation where applicable. These values must be adjusted to fair market value wherever possible. The value of a company’s intangible assets, such as goodwill, is generally impossible to determine apart from the company’s overall enterprise value. For this reason, the asset-based approach is not the most probative method of determining the value of going business concerns. In these cases, the asset-based approach yields a result that is probably lesser than the fair market value of the business. In considering an asset-based approach, the valuation professional must consider whether the shareholder whose interest is being valued would have any authority to access the value of the assets directly. Shareholders own shares in a corporation, but not its assets, which are owned by the corporation. A controlling shareholder may have the authority to direct the corporation to sell all or part of the assets it owns and to distribute the proceeds to the shareholder(s). The non-controlling shareholder, however, lacks this authority and cannot access the value of the assets. As a result, the value of a corporation’s assets is rarely the most relevant indicator of value to a shareholder who cannot avail himself of that value. Adjusted net book value may be the most relevant standard of value where liquidation is imminent or ongoing; where a company earnings or cash flow are nominal, negative or worth less than its assets; or where net book value is standard in the industry in which the company operates. None of these situations applies to the Company which is the subject of this valuation report. However, the adjusted net book value may be used as a “sanity check” when compared to other methods of valuation, such as the income and market approaches.

Market approaches

The market approach to business valuation is rooted in the economic principle of competition: that in a free market the supply and demand forces will drive the price of business assets to a certain equilibrium. Buyers would not pay more for the business, and the sellers will not accept less, than the price of a comparable business enterprise. It is similar in many respects to the “comparable sales” method that is commonly used in real estate appraisal. The market price of the stocks of publicly traded companies engaged in the same or a similar line of business, whose shares are actively traded in a free and open market, can be a valid indicator of value when the transactions in which stocks are traded are sufficiently similar to permit meaningful comparison.

The difficulty lies in identifying public companies that are sufficiently comparable to the subject company for this purpose. Also, as for a private company, the equity is less liquid (in other words its stocks are less easy to buy or sell) than for a public company, its value is considered to be slightly lower than such a market-based valuation would give

Guideline Public Company method

The Guideline Public Company method entails a comparison of the subject company to publicly traded companies. The comparison is generally based on published data regarding the public companies’ stock price and earnings, sales, or revenues, which is expressed as a fraction known as a “multiple.” If the guideline public companies are sufficiently similar to each other and the subject company to permit a meaningful comparison, then their multiples should be nearly equal. The public companies identified for comparison purposes should be similar to the subject company in terms of industry, product lines, market, growth, and risk.

Transaction Method or Direct Market Data Method

Using this method, the valuation analyst may determine market multiples by reviewing published data regarding actual transactions involving either minority or controlling interests in either publicly traded or closely held companies. In judging whether a reasonable basis for comparison exists, the valuation analysis must consider: (1) the similarity of qualitative and quantitative investment and investor characteristics; (2) the extent to which reliable data is known about the transactions in which interests in the guideline companies were bought and sold; and (3) whether or not the price paid for the guideline companies was in an arms-length transaction, or a forced or distressed sale.

The most widely used transactional databases include:

Institute of Business Appraisers (smaller companies)

BIZCOMPS® (smaller companies)

Pratt’s Stats® (smaller to mid-sized companies)

Public Stats™ (larger companies)

DoneDeals® (larger companies)

Alacra (larger companies)

Discounts and premiums

The valuation approaches yield the fair market value of the Company as a whole. In valuing a minority, non-controlling interest in a business, however, the valuation professional must consider the applicability of discounts that affect such interests. Discussions of discounts and premiums frequently begin with a review of the “levels of value.” There are three common levels of value: controlling interest, marketable minority, and non-marketable minority. The intermediate level, marketable minority interest, is lesser than the controlling interest level and higher than the non-marketable minority interest level. The marketable minority interest level represents the perceived value of equity interests that are freely traded without any restrictions. These interests are generally traded on the New York Stock Exchange, AMEX, NASDAQ, and other exchanges where there is a ready market for equity securities. These values represent a minority interest in the subject companies – small blocks of stock that represent less than 50% of the company’s equity, and usually much less than 50%. Controlling interest level is the value that an investor would be willing to pay to acquire more than 50% of a company’s stock, thereby gaining the attendant prerogatives of control. Some of the prerogatives of control include: electing directors, hiring and firing the company’s management and determining their compensation; declaring dividends and distributions, determining the company’s strategy and line of business, and acquiring, selling or liquidating the business. This level of value generally contains a control premium over the intermediate level of value, which typically ranges from 25% to 50%. An additional premium may be paid by strategic investors who are motivated by synergistic motives. Non-marketable, minority level is the lowest level on the chart, representing the level at which non-controlling equity interests in private companies are generally valued or traded. This level of value is discounted because no ready market exists in which to purchase or sell interests. Private companies are less “liquid” than publicly-traded companies, and transactions in private companies take longer and are more uncertain. Between the intermediate and lowest levels of the chart, there are restricted shares of publicly-traded companies. Despite a growing inclination of the IRS and Tax Courts to challenge valuation discounts , Shannon Pratt suggested in a scholarly presentation recently that valuation discounts are actually increasing as the differences between public and private companies is widening . Publicly-traded stocks have grown more liquid in the past decade due to rapid electronic trading, reduced commissions, and governmental deregulation. These developments have not improved the liquidity of interests in private companies, however. Valuation discounts are multiplicative, so they must be considered in order. Control premiums and their inverse, minority interest discounts, are considered before marketability discounts are applied.

Discount for lack of control

The first discount that must be considered is the discount for lack of control, which in this instance is also a minority interest discount. Minority interest discounts are the inverse of control premiums, to which the following mathematical relationship exists: MID = 1 – [ 1 / (1 + CP)] The most common source of data regarding control premiums is the Control Premium Study, published annually by Mergerstat since 1972. Mergerstat compiles data regarding publicly announced mergers, acquisitions and divestitures involving 10% or more of the equity interests in public companies, where the purchase price is $1 million or more and at least one of the parties to the transaction is a U.S. entity. Mergerstat defines the “control premium” as the percentage difference between the acquisition price and the share price of the freely-traded public shares five days prior to the announcement of the M&A transaction. While it is not without valid criticism, Mergerstat control premium data (and the minority interest discount derived therefrom) is widely accepted within the valuation profession.

Discount for lack of marketability

Another factor to be considered in valuing closely held companies is the marketability of an interest in such businesses. Marketability is defined as the ability to convert the business interest into cash quickly, with minimum transaction and administrative costs, and with a high degree of certainty as to the amount of net proceeds. There is usually a cost and a time lag associated with locating interested and capable buyers of interests in privately-held companies, because there is no established market of readily-available buyers and sellers. All other factors being equal, an interest in a publicly traded company is worth more because it is readily marketable. Conversely, an interest in a private-held company is worth less because no established market exists. The IRS Valuation Guide for Income, Estate and Gift Taxes, Valuation Training for Appeals Officers acknowledges the relationship between value and marketability, stating: “Investors prefer an asset which is easy to sell, that is, liquid.” The discount for lack of control is separate and distinguishable from the discount for lack of marketability. It is the valuation professional’s task to quantify the lack of marketability of an interest in a privately-held company. Because, in this case, the subject interest is not a controlling interest in the Company, and the owner of that interest cannot compel liquidation to convert the subject interest to cash quickly, and no established market exists on which that interest could be sold, the discount for lack of marketability is appropriate. Several empirical studies have been published that attempt to quantify the discount for lack of marketability. These studies include the restricted stock studies and the pre-IPO studies. The aggregate of these studies indicate average discounts of 35% and 50%, respectively. Some experts believe the Lack of Control and Marketabilty discounts can aggregate discounts for as much as ninety percent of a Company’s fair market value, specifically with family owned companies.

Restricted stock studies

Restricted stocks are equity securities of public companies that are similar in all respects to the freely traded stocks of those companies except that they carry a restriction that prevents them from being traded on the open market for a certain period of time, which is usually one year (two years prior to 1990). This restriction from active trading, which amounts to a lack of marketability, is the only distinction between the restricted stock and its freely-traded counterpart. Restricted stock can be traded in private transactions and usually do so at a discount. The restricted stock studies attempt to verify the difference in price at which the restricted shares trade versus the price at which the same unrestricted securities trade in the open market as of the same date. The underlying data by which these studies arrived at their conclusions has not been made public. Consequently, it is not possible when valuing a particular company to compare the characteristics of that company to the study data. Still, the existence of a marketability discount has been recognized by valuation professionals and the Courts, and the restricted stock studies are frequently cited as empirical evidence. Notably, the lowest average discount reported by these studies was 26% and the highest average discount was 45%.

Option pricing

In addition to the restricted stock studies, U.S. publicly traded companies are able to sell stock to offshore investors (SEC Regulation S, enacted in 1990) without registering the shares with the Securities and Exchange Commission. The offshore buyers may resell these shares in the United States, still without having to register the shares, after holding them for just 40 days. Typically, these shares are sold for 20% to 30% below the publicly traded share price. Some of these transactions have been reported with discounts of more than 30%, resulting from the lack of marketability. These discounts are similar to the marketability discounts inferred from the restricted and pre-IPO studies, despite the holding period being just 40 days. Studies based on the prices paid for options have also confirmed similar discounts. If one holds restricted stock and purchases an option to sell that stock at the market price (a put), the holder has, in effect, purchased marketability for the shares. The price of the put is equal to the marketability discount. The range of marketability discounts derived by this study was 32% to 49%.

Pre-IPO studies

Another approach to measure the marketability discount is to compare the prices of stock offered in initial public offerings (IPOs) to transactions in the same company’s stocks prior to the IPO. Companies that are going public are required to disclose all transactions in their stocks for a period of three years prior to the IPO. The pre-IPO studies are the leading alternative to the restricted stock stocks in quantifying the marketability discount. The pre-IPO studies are sometimes criticized because the sample size is relatively small, the pre-IPO transactions may not be arm’s length, and the financial structure and product lines of the studied companies may have changed during the three year pre-IPO window.

Applying the studies

The studies confirm what the marketplace knows intuitively: Investors covet liquidity and loathe obstacles that impair liquidity. Prudent investors buy illiquid investments only when there is a sufficient discount in the price to increase the rate of return to a level which brings risk-reward back into balance. The referenced studies establish a reasonable range of valuation discounts from the mid-30%s to the low 50%s. The more recent studies appeared to yield a more conservative range of discounts than older studies, which may have suffered from smaller sample sizes. Another method of quantifying the lack of marketability discount is the Quantifying Marketability Discounts Model (QMDM).

DISCOUNTED CASH FLOW

In finance, the discounted cash flow (or DCF) approach describes a method to value a project, company, or financial asset using the concepts of the time value of money. All future cash flows are estimated and discounted to give them a present value. The discount rate used is generally the appropriate cost of capital, and incorporates judgments of the uncertainty (riskiness) of the future cash flows.

FV=PV (1+i)n

DPV=FV/(1+i)n

COST OF CAPITAL

The cost of capital for a firm is a weighted sum of the cost of equity and the cost of debt (see Capital investment decisions). It is also known as the “Hurdle Rate” or “Discount Rate”.

Capital (money) used to fund a business should earn returns for the capital owner who risked his/her saved money. For an investment to be worthwhile the projected return on capital must be greater than the cost of capital. Otherwise stated, the risk-adjusted return on capital (that is, incorporating not just the projected returns, but the probabilities of those projections) must be higher than the cost of capital.

The cost of debt is relatively simple to calculate, as it is composed of the rate of interest paid. In practice, the interest-rate paid by the company will include the risk-free rate plus a risk component, which itself incorporates a probable rate of default (and amount of recovery given default). For companies with similar risk or credit ratings, the interest rate is largely exogenous.

Cost of equity is more challenging to calculate as equity does not pay a set return to its investors. Similar to the cost of debt, the cost of equity is broadly defined as the risk-weighted projected return required by investors, where the return is largely unknown. The cost of equity is therefore inferred by comparing the investment to other investments with similar risk profiles to determine the “market” cost of equity.

The cost of capital is often used as the discount rate, the rate at which projected cash flow will be discounted to give a present value or net present value.

Cost of debt

The cost of debt is computed by taking the rate on a non-defaulting bond whose duration matches the term structure of the corporate debt, then adding a default premium. This default premium will rise as the amount of debt increases (since the risk rises as the amount of debt rises). Since in most cases debt expense is a deductible expense, the cost of debt is computed as an after tax cost to make it comparable with the cost of equity (earnings are after-tax as well). Thus, for profitable firms, debt is discounted by the tax rate. Basically this is used for large corporations only.

Cost of equity

Cost of equity = Risk free rate of return + Premium expected for risk

Expected return

The expected return can be calculated as the “dividend capitalization model”, which is (dividend per share / price per share) + growth rate of dividends (that is, dividend yield + growth rate of dividends).

Capital asset pricing model

The capital asset pricing model (CAPM) is used in finance to determine a theoretically appropriate price of an asset such as a security. The expected return on equity according to the capital asset pricing model. The market risk is normally characterized by the ? parameter. Thus, the investors would expect (or demand) to receive:

WEIGHTED AVERAGE COST OF CAPITAL

The Weighted Average Cost of Capital (WACC) is used in finance to measure a firm’s cost of capital.

The total capital for a firm is the value of its equity (for a firm without outstanding warrants and options, this is the same as the company’s market capitalization) plus the cost of its debt (the cost of debt should be continually updated as the cost of debt changes as a result of interest rate changes). Notice that the “equity” in the debt to equity ratio is the market value of all equity, not the shareholders’ equity on the balance sheet.

Calculation of WACC is an iterative procedure which requires estimation of the fair market value of equity capital

CAPITAL STRUCTURE

Because of tax advantages on debt issuance, it will be cheaper to issue debt rather than new equity (this is only true for profitable firms, tax breaks are available only to profitable firms). At some point, however, the cost of issuing new debt will be greater than the cost of issuing new equity. This is because adding debt increases the default risk – and thus the interest rate that the company must pay in order to borrow money. By utilizing too much debt in its capital structure, this increased default risk can also drive up the costs for other sources (such as retained earnings and preferred stock) as well. Management must identify the “optimal mix” of financing – the capital structure where the cost of capital is minimized so that the firms value can be maximized.

MODIGLIANI-MILLER THEOREM

If there were no tax advantages for issuing debt, and equity could be freely issued, Miller and Modigliani showed that the value of a leveraged firm and the value of an unleveraged firm should be the same.

INTEREST

Interest is a fee paid on borrowed capital. Assets lent include money, shares, consumer goods through hire purchase, major assets such as aircraft, and even entire factories in finance lease arrangements. The interest is calculated upon the value of the assets in the same manner as upon money. Interest can be thought of as “rent on money”.

The fee is compensation to the lender for foregoing other useful investments that could have been made with the loaned money. Instead of the lender using the assets directly, they are advanced to the borrower. The borrower then enjoys the benefit of using the assets ahead of the effort required to obtain them, while the lender enjoys the benefit of the fee paid by the borrower for the privilege. The amount lent, or the value of the assets lent, is called the principal. This principal value is held by the borrower on credit. Interest is therefore the price of credit, not the price of money as it is commonly – and mistakenly – believed to be. The percentage of the principal that is paid as a fee (the interest), over a certain period of time, is called the interest rate.

Interest rates and credit risk

It is increasingly recognized that the business cycle, interest rates and credit risk are tightly interrelated. The Jarrow-Turnbull model was the first model of credit risk which explicitly had random interest rates at its core. Lando (2004), Darrell Duffie and Singleton (2003), and van Deventer and Imai (2003) discuss interest rates when the issuer of the interest-bearing instrument can default.

Money and inflation

Loans, bonds, and shares have some of the characteristics of money and are included in the broad money supply.

By setting i*n, the government institution can affect the markets to alter the total of loans, bonds and shares issued. Generally speaking, a higher real interest rate reduces the broad money supply.

Open market operations in the United States

The Federal Reserve (often referred to as ‘The Fed’) implements monetary policy largely by targeting the federal funds rate. This is the rate that banks charge each other for overnight loans of federal funds. Federal funds are the reserves held by banks at the Fed.

Open market operations are one tool within monetary policy implemented by the Federal Reserve to steer short-term interest rates. Using the power to buy and sell treasury securities, the Open Market Desk at the Federal Reserve Bank of New York can supply the market with dollars by purchasing T-notes, hence increasing the nation’s money supply. By increasing the money supply or Aggregate Supply of Funding (ASF), interest rates will fall due to the excess of dollars banks will end up with in their reserves. Excess reserves may be lent in the Fed funds market to other banks, thus driving down rates.

Credit spread options:  credit call spread is a “bearish” call spread, which has more premium on the short call.  A credit put spread is a “bullish” put spread and has more premium on the short put.

Credit spread (bond): In finance, a credit spread is the difference in yield between different securities due to different credit quality. The credit spread reflects the additional net yield an investor can earn from a security with more credit risk relative to one with less credit risk. The credit spread of a particular security is often quoted in relation to the yield on a credit risk-free benchmark security or reference rate.

RISK MODELING

Risk modeling refers to the use of formal econometric techniques to determine the aggregate risk in a financial portfolio. Risk modeling is one of many subtasks within the broader area of financial modeling.

Risk modeling uses a variety of techniques including market risk, Value-at-Risk (VaR), Historical Simulation (HS), or Extreme Value Theory (EVT) in order to analyze a portfolio and make forecasts of the likely losses that would be incurred for a variety of risks. Such risks are typically grouped into credit risk, liquidity risk, interest rate risk, and operational risk categories.

Many large financial intermediary firms use risk modeling to help portfolio managers assess the amount of capital reserves to maintain, and to help guide their purchases and sales of various classes of financial assets.

Formal risk modeling is required under the Basel II proposal for all the major international banking institutions by the various national depository institution regulators.

Quantitative risk analysis and modeling have become important in the light of corporate scandals in the past few years (most notably, Enron), Basel II, the revised FAS 123R and the Sarbanes-Oxley Act. In the past, risk analysis was done qualitatively but now with the advent of powerful computing software, quantitative risk analysis can be done quickly and effortlessly.

PORTFOLIO PROBLEMS

In finance, a portfolio is an appropriate mix of or collection of investments held by an institution or a private individual. In building up an investment portfolio a financial institution will typically conduct its own investment analysis, whilst a private individual may make use of the services of a financial advisor or a financial institution which offers portfolio management services. Holding a portfolio is part of an investment and risk-limiting strategy called diversification. By owning several assets, certain types of risk (in particular specific risk) can be reduced. The assets in the portfolio could include stocks, bonds, options, warrants, gold certificates, real estate, futures contracts, production facilities, or any other item that is expected to retain its value.

Portfolio management involves deciding what assets to include in the portfolio, given the goals of the portfolio owner and changing economic conditions. Selection involves deciding what assets to purchase, how many to purchase, when to purchase them, and what assets to divest. These decisions always involve some sort of performance measurement, most typically expected return on the portfolio, and the risk associated with this return (i.e. the standard deviation of the return). Typically the expected return from portfolios of different asset bundles are compared.

Porfolio formation

Many strategies have been developed to form a portfolio.

Ø       equally-weighted portfolio

Ø       capitalization-weighted portfolio

Ø       price-weighted portfolio

Ø       optimal portfolio (for which the Sharpe ratio is highest)

VALUATION OF OPTIONS

Black–Scholes:

The term Black–Scholes refers to three closely related concepts:

Ø       The Black–Scholes model is a mathematical model of the market for an equity, in which the equity’s price is a stochastic process.

Ø       The Black–Scholes PDE is a partial differential equation which (in the model) must be satisfied by the price of a derivative on the equity.

Ø       The Black–Scholes formula is the result obtained by solving the Black-Scholes PDE for European put and call options.

Binomial options pricing model: In finance, the binomial options pricing model (BOPM) provides a generalisable numerical method for the valuation of options. The binomial model was first proposed by Cox, Ross and Rubinstein (1979). Essentially, the model uses a “discrete-time” model of the varying price over time of the underlying financial instrument. Option valuation is then computed via application of the risk neutrality assumption over the life of the option, as the price of the underlying instrument evolves.

Monte Carlo option model: In mathematical finance, a Monte Carlo option model uses Monte Carlo methods to calculate the value of an option with multiple sources of uncertainty or with complicated features.

REAL OPTIONS ANALYSIS

In corporate finance, real options analysis or ROA applies put option and call option valuation techniques to capital budgeting decisions.[1]

A real option is the right, but not the obligation, to undertake some business decision, typically the option to make a capital investment. For example, the opportunity to invest in the expansion of a firm’s factory is a real option. In contrast to financial options, a real option is not often tradeable—e.g. the factory owner cannot sell the right to extend his factory to another party, only he can make this decision; however, some real options can be sold, e.g., ownership of a vacant lot of land is a real option to develop that land in the future. Some real options are proprietory (owned or exercisable by a single individual or a company); others are shared (can be exercised by many parties). Therefore, a project may have a portfolio of embedded real options; some of them can be mutually exclusive.

The terminology “real option” is relatively new, whereas business operators have been making capital investment decisions for centuries. However, the description of such opportunities as real options has occurred at the same time as thinking about such decisions in new, more analytically-based, ways. As such, the terminology “real option” is closely tied to these new methods. The term “real option” was coined by Professor Stewart Myers at the MIT Sloan School of Management; this happened most likely around 1977.

The concept of real options was popularized by Michael J. Mauboussin, the chief U.S. investment strategist for Credit Suisse First Boston and an adjunct professor of finance at the Columbia School of Business. Mauboussin uses real options in part to explain the gap between how the stock market prices some businesses and the “intrinsic value” for those businesses as calculated by traditional financial analysis, specifically discounted cash flows.

Additionally, with real option analysis, uncertainty inherent in investment projects is usually accounted for by risk-adjusting probabilities (a technique known as the equivalent martingale approach). Cash flows can then be discounted at the risk-free rate. With regular DCF analysis, on the other hand, this uncertainty is accounted for by adjusting the discount rate, using e.g. the cost of capital) or the cash flows (using certainty equivalents). These methods normally do not properly account for changes in risk over a project’s lifecycle and fail to appropriately adapt the risk adjustment. More importantly, the real options approach forces decision makers to be more explicit about the assumptions underlying their projections.

Generally, the most widely used methods are: Closed form solutions, partial differential equations, and the binomial lattices. In business strategy, real options have been advanced by the construction of option space, where volatility is compared with value-to-cost, NPVq. Latest advances in real option valuation are models that incorporate fuzzy logic and option valuation in fuzzy real option valuation models.

Real options are a field of academic research, and at the present one of the leading names in academic real options is Professor Lenos Trigeorgis (University of Cyprus). An academic conference on real options is organized yearly (Annual International Conference on Real Options).

About the Author

The Girls’ Book of Wisdom: Empowering, Inspirational Quotes from over 400 Fabulous Females $13.91 Summary:Aimed at advising and amusing girls age 12 and up, this collection includes quotations from 500 famous women, including suffragists, pioneers, politicians, moms, musicians, athletes, and actors. The quotes are grouped by categories, such as friendship, confidence, and creativity.About the Author:•0Author: Catherine DeeIllustrator: Lou M. PollackPublisher:Little, Brown Books …

The Communicators: Leadership in the Age of Crisis $29.94 The Communicators: Leadership in the Age of Crisis redefines the professional strategies and personal qualities that this current age of incessant crisis demands of leaders in corporate C-suites, boardrooms, courtrooms, and in the corridors of political power. Drawing on dozens of extensive interviews with prominent leaders who describe and reflect on their most significant experiences, Richard Le…

No Excuses: The True Story of a Congenital Amputee Who Became a Champion in Wrestling and in Life $4.93 Excuses are often what holds us back from reaching our dreams and goals that we desire. Kyle Maynard’s book, “No Excuses”, is truly a testimony of strength and courage….

10 Great Motivational Quotes

Three Attributes of Success

As a keen observer of people from different walks of life and their behaviour, I have come to the conclusion that success is not only the life-force of an Identity, but that it is also subjective.

While to the world, in its most generic manifestation, the rich entrepreneurs and businessmen, the heads of organizations, famous people in sports, media and entertainment are all supremely successful, I have a skewed view on that. To my mind the cobbler-by-the-street corner who has been practicing his craft over all these years and has become the colony favourite is a successful man. The deft nurse who gets asked for by most of the patients, who does her work with utmost sincerity to the Hippocratic Oath and ably assists the doctor in saving may lives yet many a times remains nameless, is a successful health provider. The teacher who has earned a reputation of churning out students who go on to become stars in their chosen profession yet she stays on at the same school year after year content with practicing her job to the best of her knowledge and with a rare sense of commitment, is a highly successful Guru.

Many years back we had a lady who used to work for us at home, tending to our domestic needs. Like other members of her profession, she worked in several other houses besides ours. But what stood her apart was that she was never short of work. People asked for her to come and join their households, she was bestowed with a lot of gifts both on occasions and otherwise. We took turns in giving her money if she ran out of cash or needed the extra buck for getting herself or her husband treated. When she decided to leave this line and join a school as an administrative support, we all gave her glowing references – all true, mind you. Even now she visits us and is welcome anytime. And I think she is one of the most successful people I know. She is not rich, mighty or famous, but she IS successful.

If Sunita Williams is a successful astronaut, so are the set of skilled workers who work hard to ensure that every cog in the wheel of her spaceship works smoothly. If the flamboyant striker in a football league team is successful then so is the goalie who does not drop even a single ball.

If we must take names of the very famous, then Shahrukh Khan, Aamir Khan and Akshay Kumar – India’s celluloid superheroes – are all successful. Yet each has had a different approach or strategy. Shahrukh is populist, has a lot of fire in his belly, is hungry for recognition and for being the best in whatever he does and plays unabashedly to the gallery. He has a deep need to be the number one in whatever he chooses to dabble in – movies, endorsements, cricket, television, even awards and the recognized lists of the rich and famous. Aamir is more niche, likes to do only what he really likes to do; makes wonderfully intelligent and sensitive films yet refuses to fill nominations for the popular awards, turns down million bucks offered by corporates for making run-of-the-mill films. Aamir has a maverick approach to his art and follows his heart and breaks several moulds in the process. Akshay cashed in on his strengths – action, martial arts, dancing – to gain a foothold; worked on his weaknesses – voice modulation, dialogue delivery; and added to his skill base – drama, comedy, romance. Three people, three strategies and three success stories.
Having established that success permeates through caste, creed, colour and social standing, I would like to state that there are several common threads that run through the successful people in their respective ilk and genres.

The first thread or quality definitely is hard work or smart work. If you need to get somewhere you will have to burn the midnight oil to get there. There are no short cuts or quick fixes. Henry Wadsworth Longfellow uttered the following famous words, definitely my favourite quote –
Lives of great men reached and kept
Were not obtained by sudden flight;
They while their companions slept
Were toiling upwards in the night.

That was then, but even now look at the success stories of the geek-entrepreneurs dotting the Silicon Valley skyline and you will discover that many of these young guns end up sleeping for only a few hours putting in 18 working hours to realize their dreams.

If you want to be promoted, if you want to move up the corporate ladder then you need to be a fast, smart worker who packs in quite a punch in terms of his deliverables and quantum of work.

The second quality would be persistence, perseverance and a consistent internal push. We would not have had light bulbs or telephones or planes or the revolutionizing concepts of relativity and Archimedes principle, to site a few, had it not been for the never-say-die spirit of these zealous, determined folk. How many times have we been told by our seniors – If you try and fail once then try again. Would any of us have learnt any of the stuff we did while growing up, be it academics, sport, dramatics, elocution or hobbies had we just tried them once and not gone back, again and again? Ask the innovators, developers, manufacturers and entrepreneurs and they will reel off some mind boggling numbers for the times they tried, failed, tried again, failed once again, re-attempted ………………till they finally succeeded.
With persistence I would link in grit and tenacity that keeps you in the groove of your chosen activity.

So go for it and keep going till you get there.

The third most important quality is, undoubtedly, passion. That definitely is the main driver in your path to success. If you don’t let that little light within you extinguish or quell the inner voice that eggs you on or keep the fire in your belly alive and stoked then it is passion that does it for you. It is passion that keeps you motivated in the face of flak, failure or fear.

Fervour, ardour, enthusiasm, zeal, craze ………………..call it by any name but it is passion that is your undying spirit which keeps your dreams alive and brings you a step closer to your coveted calling.

Vincent van Gogh, Christopher Columbus, Johann Sebastian Bach, King “Tut” Tutankhamun, John Keats …….. some  of the world’s super famous and successful who either died poor or unknown and gained fame only posthumously. But it was their unstinting passion that kept them at it as they went about churning masterpieces after masterpieces.

If I could get to vote a fourth quality then it would be serendipity. The streak that sees the need, that truly believes that necessity is the mother of invention, that takes risks and craves for finding the extraordinary among the ordinary. It is the curious, insatiated spirit and the un-accepting diehard mind that http://search.uk.miva.com/search/redirectorpss.asp?url=http://uk.ask.com/ar?q=lets&qsrc=999&l=dis&siteid=41634479&bidid=1566837551&searchguid=

About the Author

Aruna Dhir has recently taken a sabbatical after holding the position of the Director – Public Relations at The Imperial New Delhi. Prior to this, Aruna has worked with The Oberoi and Hyatt Regency heading their Marketing Communications. Aruna has also enjoyed a four year long stint with the Australian High Commission in the capacity of Media Relations Officer besides having been engaged in freelance work for National Television, Radio and FM. Aruna has been the first–ever Creative Writer for the Indian greeting cards giant – ARCHIES Greetings and Gifts Ltd. Aruna also dabbles in poetry and has to her credit two titles of Anthology published and marketed by Archies Greetings and Gifts Ltd. An alumnus of the Jawaharlal Lal Nehru University, she began her career as a freelance journalist in 1987 and has published her articles in major Indian newspapers. Aruna topped at the All- India level in her PG Diploma in Public Relations and Advertising. In 2001 Aruna represented India in the United States, as a Cultural Ambassador under The Rotary Foundation. Aruna has worked on several social awareness projects – People for Animals, Earthquake Relief, National Blind Association.

A motivational quote or short story?

I need a motivational/inpirational quote or short story to read to my high school soccer team right before our next game to get them pumped up. Any ideas? Sports-related would be nice, but it is not needed. Thanks.

Somewhere behind the athlete you’ve become and the hours of practice and the coaches who have pushed you is a little girl who fell in love with the game and never looked back… play for her.

- Mia Hamm

The Girls’ Book of Wisdom: Empowering, Inspirational Quotes from over 400 Fabulous Females $13.91 Summary:Aimed at advising and amusing girls age 12 and up, this collection includes quotations from 500 famous women, including suffragists, pioneers, politicians, moms, musicians, athletes, and actors. The quotes are grouped by categories, such as friendship, confidence, and creativity.About the Author:•0Author: Catherine DeeIllustrator: Lou M. PollackPublisher:Little, Brown Books …

The Communicators: Leadership in the Age of Crisis $29.94 The Communicators: Leadership in the Age of Crisis redefines the professional strategies and personal qualities that this current age of incessant crisis demands of leaders in corporate C-suites, boardrooms, courtrooms, and in the corridors of political power. Drawing on dozens of extensive interviews with prominent leaders who describe and reflect on their most significant experiences, Richard Le…

No Excuses: The True Story of a Congenital Amputee Who Became a Champion in Wrestling and in Life $4.93 Excuses are often what holds us back from reaching our dreams and goals that we desire. Kyle Maynard’s book, “No Excuses”, is truly a testimony of strength and courage….

The Wisdom of Sports

If You’re not In, Get in

Hey ladies!  Go to the recording of my teleseminar today on www.blogtalkradio.com for some positive perspective on the markets and advice on staying the course to be eligible to reap the returns that the stock market has historically given.

I congratulate all who have not sold out of their stock mutual funds, realizing that monies invested in the stock markets are there for the medium-to-long term goods and services that we will buy as we age.

Yet I want to invite those who may have sold out of their stock mutual funds or stocks to begin buying back into the markets, perhaps utilizing a strategy called Dollar Cost Averaging, which is fancy language for investing systematically into the market on different days thereby attaining different purchase prices whose average has historically been favorable to simply choosing one particular day in which to invest (or sell, for that matter). 

The main point is to think through what cash you will need in the near term, in the medium term and in the long term, and to match those time goals with the most appropriate investment types.  For example if you need to purchase goods or services within the next 2 years, those funds should be set aside in a Money Market, preferably a Government Money Market or a series of short term Certificates of Deposit.  Monies needed in 2-7 years should be invested in diversified no-load bond mutual funds, (or better yet, bond index funds) and monies need to buy goods and services in 7+ years should be invested in diversified stock index funds that historically have returned in excess of inflation.  Let’s invest in our own empowered retirements and provide ourselves more choices that historically stock mutual funds have provided.

Market timing–getting out of the market at high price levels and then getting back into the market at low price levels–has lured many an investor, as well as many a professional money manager over the years.  Yet when Peter Lynch–the single most successful stock picker of our age, and the former manager of Fidelity’s wildly profitable Magellan Fund from 1977-1990 when that fund’s asset base swelled from 20 million to 14 billion, and beat the S & P 500 11 out of 13 yrs, sporting an annual ave return of 29%–is quoted as saying he has never known anyone to be “right” on timing decisions more than once in a row;  that should be fair warning to the amateurs among us not to try this at home.

That said, it has been VERY difficult to maintain our equilibrium amidst the media’s barrage of negativity and Chicken Little admonitions, so if you scurried to the sidelines and into cash out of fear, pull your courage back up and become an investor again, to reap what would certainly be stock market gains over the next 24 months and longer.  We Can Do It Women!™

About the Author

Debra is a sought-after international motivational speaker who is passionate about empowering women to break out of their white-knuckled fear and paralysis about their finances. Women will learn easy tips to manage their fears-including that of becoming a bag lady — thereby increasing both their net and self worth.

What are some good Motivational Quotes for sports?

I already have “no excuses, play like a champion” and “play like a beast”.. i need short quotes to stay motivated and help by teammates as well… just please be short. they need to fit on field hockey sticks

“A particular shot or way of moving the ball can be a player’s personal signature, but efficiency of performance is what wins the game for the team.” – Pat Riley

“Talent wins games, but teamwork and intelligence wins championships.” – Michael Jordan

“Sport is part of every man and woman’s heritage and its absence can never be compensated for.” – Pierre de Coubertin

“In sports, you simply aren’t considered a real champion until you have defended your title successfully. Winning it once can be a fluke; winning it twice proves you are the best.” – Althea Gibson

“Sports is the toy department of human life.” – Howard Cosell

“I don’t know any other way to lead but by example.” – Don Shula

“The best and fastest way to learn a sport is to watch and imitate a champion.” – Jean Claude Killy

“The triumph cannot be had without the struggle. And I know what struggle is. I have spent a lifetime trying to share what it has meant to be a woman first in the world of sports so that other young women have a chance to reach their dreams.” – Wilma Rudolph

“Football Is an honest game. It’s true to life . It’s a game about sharing. Football is a team game. So is life.” – Joe Namath

“To brag little – to show well – to crow gently, if in luck – to pay up, to own up, and to shut up, if beaten, are the virtues of a sporting man” – Oliver Wendell Holmes

Sports Psychology: Visualization-Performing Coaching Tips for Sports

The Big Picture of Permanent Weight Loss

Most people who read my articles and e-books know me as a science guy who likes to quote studies and apply research to everyday problems such as weight loss, bodybuilding, and other health/fitness related topics. However, sometimes you have to step back from the science and look at the big picture to help bring people back into focus, so they can see the forest for the trees, so to speak.

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For most people reading this article, finding an effective diet that works most of the time must seem as complicated as nuclear physics. It’s not, but there are a bewildering number of choices for diets out there. High fat or no fat? High carbohydrate or no carbohydrate? Low protein or high protein? To make matters worse, there are a million variations and combinations to the above diet scenarios to add to the confusion. It seems endless and causes many people to throw up their hands in frustration and give up. In this article I will attempt to change all that.

There are some general guidelines, rules of thumb, and ways of viewing a diet program that will allow you to decide, once and for all, if it’s the right diet for you. You may not always like what I have to say, and you should be under no illusions this is another quick fix, “lose 100 lbs. in 20 days,” guide of some sort. However, if you are sick and tired of being confused, tired of taking the weight off only to put it back on, and tired of wondering how to take the first steps to deciding the right diet for you that will result in permanent weight loss, then this is the article that could change your life…

You will be able to apply what you learn here to any diet you are considering and decide if it makes sense, once and for all! The process, however, is neither easy nor quick per se, but I never promised you either of those things… This article does not look at specific diets but will teach you to take a logical approach and apply some common sense to choosing a nutritional plan for life long weight loss. If you are willing and able to make a paradigm shift, then let’s proceed.

Does your diet pass “The Test”?
What is the number one reason diets fail long term; above all else? The number one reason is…drum roll…a lack of long term compliance. The numbers don’t lie; the vast majority of people who lose weight will regain it – and often exceed what they lost. You knew that already didn’t you?

Yet, what are you doing to avoid it? Here’s another reality check: virtually any diet you pick which follows the basic concept of “burning” more calories then you consume – the well accepted “calories in calories out” mantra – will cause you to lose weight. To some degree, they all work: Atkins-style, no carb diets, low fat high carb diets, all manner of fad diets – it simply does not matter in the short term.

If your goal is to lose some weight quickly, then pick one and follow it. I guarantee you will lose some weight. Studies generally find any of the commercial weight loss diets will get approximately the same amount of weight off after 6 months to a year. For example, a recent study found the Atkins’ Diet, Slim-Fast plan, Weight Watchers Pure Points program, and Rosemary Conley’s Eat Yourself Slim diet, were all equally effective. (1)

Other studies comparing other popular diets have come to essentially the same conclusions. For example, a study that compared the Atkins diet, the Ornish diet, Weight Watchers, and The Zone Diet, found them to be essentially the same in their ability to take weight off after one year. (2)

Recall what I said about the number one reason diets fail, which is a lack of compliance. The lead researcher of this recent study stated:

“Our trial found that adherence level rather than diet type was the primary predictor of weight loss”(3)

Translated, it’s not which diet they chose per se, but their ability to actually stick to a diet that predicted their weight loss success. I can just see the hands going up now, “but Will, some diets must be better than others, right?” Are some diets better then others? Absolutely. Some diets are healthier then others, some diets are better at preserving lean body mass, some diets are better at suppressing appetite – there are many differences between diets. However, while most of the popular diets will work for taking weight off, what is abundantly clear is that adhering to the diet is the most important aspect for keeping the weight off long term.

What is a diet?
A diet is a short term strategy to lose weight. Long term weight loss is the result of an alteration in lifestyle. We are concerned with life long weight management, not quick fix weight loss here. I don’t like the term diet, as it represents a short term attempt to lose weight vs. a change in lifestyle. Want to lose a bunch of weight quickly? Heck, I will give you the information on how to do that here and now for no charge.

For the next 90 to 120 days eat 12 scrambled egg whites, one whole grapefruit, and a gallon of water twice a a day. You will lose plenty of weight. Will it be healthy? Nope. Will the weight stay off once you are done with this diet and are then forced to go back to your “normal” way of eating? Not a chance. Will the weight you lose come from fat or will it be muscle, water, bone, and (hopefully!) some fat? The point being, there are many diets out there that are perfectly capable of getting weight off you, but when considering any eating plan designed to lose weight, you must ask yourself:

“Is this a way of eating I can follow long term?”
Which brings me to my test: I call it the “Can I eat that way for the rest of my life?” Test. I know, it does not exactly roll off your tongue, but it gets the point across.

The lesson here is: any nutritional plan you pick to lose weight must be part of a lifestyle change you will be able to follow – in one form or another – forever. That is, if it’s not a way of eating you can comply with indefinitely, even after you get to your target weight, then it’s worthless.

Thus, many fad diets you see out there are immediately eliminated, and you don’t have to worry about them. The question is not whether the diet is effective in the short term, but if the diet can be followed indefinitely as a lifelong way of eating. Going from “their” way of eating back to “your” way of eating after you reach your target weight is a recipe for disaster and the cause of the well established yo-yo dieting syndrome. Bottom line: there are no short cuts, there is no free lunch, and only a commitment to a lifestyle change is going to keep the fat off long term. I realize that’s not what most people want to hear, but it’s the truth, like it or not.

The statistics don’t lie: getting the weight off is not the hardest part, keeping the weight off is! If you take a close look at the many well known fad/commercial diets out there, and you are honest with yourself, and apply my test above, you will find most of them no longer appeal to you as they once did. It also brings me to an example that adds additional clarity: If you have diet A that will cause the most weight loss in the shortest amount of time but is unbalanced and essentially impossible to follow long term vs. diet B, which will take the weight off at a slower pace, but is easier to follow, balanced, healthy, and something you can comply with year after year, which is superior? If diet A gets 30 lbs off you in 30 days, but by next year you have gained back all 30 lbs, but diet B gets 20 lbs off you in the next 3 months with another 20 lbs 3 months after that and the weight stays off by the end of that year, which is the better diet?

If you don’t know the answer to those questions, you have totally missed the point of this article and the lesson it’s trying to teach you, and are set up for failure. Go back and read this section again…By default, diet B is superior.

Teach a man to Fish…
A well known Chinese Proverb is – Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.

This expression fits perfectly with the next essential step in how to decide what eating plan you should follow to lose weight permanently. Will the diet plan you are considering teach you how to eat long term, or does it spoon-feed you information? Will the diet rely on special bars, shakes, supplements or pre-made foods they supply?

Let’s do another diet A vs. diet B comparison. Diet A is going to supply you with their foods, as well as their special drink or bars to eat, and tell you exactly when to eat them. You will lose – say – 30 lbs in two months. Diet B is going to attempt to help you learn which foods you should eat, how many calories you need to eat, why you need to eat them, and generally attempt to help teach you how to eat as part of a total lifestyle change that will allow you to make informed decisions about your nutrition. Diet B causes a slow steady weight loss of 8 -10 lbs per month for the next 6 months and the weight stays off because you now know how to eat properly.

Recall the Chinese proverb. Both diets will assist you to lose weight. Only one diet, however, will teach you how to be self-reliant after your experience is over. Diet A is easier, to be sure, and causes faster weight loss than diet B, and diet B takes longer and requires some thinking and learning on your part. However, when diet A is over, you are right back where you started and have been given no skills to fish. Diet companies don’t make their profits by teaching you to fish, they make their money by handing you a fish so you must rely on them indefinitely or come back to them after you gain all the weight back.

Thus, diet B is superior for allowing you to succeed where other diets failed, with knowledge gained that you can apply long term. Diet programs that attempt to spoon feed you a diet without any attempt to teach you how to eat without their help and/or rely on their shakes, bars, cookies, or pre-made foods, is another diet you can eliminate from your list of choices.

Diet plans that offer weight loss by drinking their product for several meals followed by a “sensible dinner;” diets that allow you to eat their special cookies for most meals along with their pre-planned menu; or diets that attempt to have you eating their bars, drink, or pre-made meals, are of the diet A variety covered above. They’re easy to follow but destined for failure, long term. They all fail the “Can I eat that way for the rest of my life?” test, unless you really think you can eat cookies and shakes for the rest of your life…Bottom line here is, if the nutritional approach you use to lose weight, be it from a book, a class, a clinic, or an e-book, does not teach you how to eat, it’s a loser for long term weight loss and it should be avoided.

The missing link for long term weight loss
We now make our way to another test to help you choose a nutrition program for long term weight loss, and it does not actually involve nutrition. The missing link for long term weight loss is exercise. Exercise is the essential component of long term weight loss. Many diet programs do not contain an exercise component, which means they are losers for long term weight loss from the very start. Any program that has its focus on weight loss but does not include a comprehensive exercise plan is like buying a car without tires, or a plane without wings. People who have successfully kept the weight off overwhelmingly have incorporated exercise into their lives, and the studies that look at people who have successfully lost weight and kept it off invariably find these people were consistent with their diet and exercise plans. (4)

I am not going to list all the benefits of regular exercise here, but regular exercise has positive effects on your metabolism, allows you to eat more calories yet still be in a calorie deficit, and can help preserve lean body mass (LBM) which is essential to your health and metabolism. The many health benefits of regular exercise are well known, so I won’t bother adding them here. The bottom line here is, (a) if you have any intentions of getting the most from your goal of losing weight and (b) plan to keep it off long term, regular exercise must be an integral part of the weight loss strategy. So, you can eliminate any program, be it book, e-book, clinic, etc. that does not offer you direction and help with this essential part of long term weight loss.

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Side Bar: A quick note on exercise:
Any exercise is better than no exercise. However, like diet plans, not all exercise is created equal, and many people often choose the wrong form of exercise to maximize their efforts to lose weight. For example, they will do aerobics exclusively and ignore resistance training. Resistance training is an essential component of fat loss, as it builds muscle essential to your metabolism, increases 24 hour energy expenditure, and has health benefits beyond aerobics.

The reader will also note I said fat loss above not weight loss. Though I use the term ‘weight loss’ throughout this article, I do so only because it is a familiar term most people understand. However, the true focus and goal of a properly set up nutrition and exercise plan should be on fat loss, not weight loss. A focus on losing weight, which may include a loss essential muscle, water, and even bone, as well as fat, is the wrong approach. Losing the fat and keeping the all important lean body mass (LBM), is the goal, and the method for achieving that can be found in my ebook(s) on the topic, and is beyond the scope of this article. Bottom line: the type of exercise, intensity of that exercise, length of time doing that exercise, etc., are essential variables here when attempting to lose FAT while retaining (LBM).

Psychology 101 of long term weight loss
Many diet programs out there don’t address the psychological aspect of why people fail to be successful with long term weight loss. However, quite a few studies exist that have looked at just that. In many respects, the psychological aspect is the most important for long term weight loss, and probably the most underappreciated component.

Studies that compare the psychological characteristics of people who have successfully kept the weight off to people who have regained the weight, see clear differences between these two groups. For example, one study that looked at 28 obese women who had lost weight but regained the weight that they had lost, compared to 28 formerly obese women who had lost weight and maintained their weight for at least one year and 20 women with a stable weight in the healthy range, found the women who regained the weight:

• Had a tendency to evaluate self-worth in terms of weight and shape
• Had a lack of vigilance with regard to weight control
• had a dichotomous (black-and-white) thinking style
• Had the tendency to use eating to regulate mood.

The researchers concluded:

“The results suggest that psychological factors may provide some explanation as to why many people with obesity regain weight following successful weight loss.”

This particular study was done on women, so it reflects some of the specific psychological issues women have – but make no mistake here – men also have their own psychological issues that can sabotage their long term weight loss efforts. (6)

Additional studies on men and women find psychological characteristics such as “having unrealistic weight goals, poor coping or problem-solving skills and low self-efficacy” often predict failure with long term weight loss. (7) On the other hand, psychological traits common to people who experienced successful long term weight loss include “…an internal motivation to lose weight, social support, better coping strategies and ability to handle life stress, self-efficacy, autonomy, assuming responsibility in life, and overall more psychological strength and stability.” (8)

The main point of this section is to illustrate that psychology plays a major role in determining if people are successful with long term weight loss. If it’s not addressed as part of the overall plan, it can be the factor that makes or breaks your success. This, however, is not an area most nutrition programs can adequately tackle and should not be expected to. However, the better programs do generally attempt to help with motivation, goal setting, and support. If you see yourself in the above lists from the groups that failed to maintain their weight long term, then know you will need to address those issues via counseling, support groups, etc. Don’t expect any weight loss program to cover this topic adequately but do look for programs that attempt to offer support, goal setting, and resources that will keep you on track.

“There’s a sucker born every minute”
So why don’t you see this type of honest information about the realities of long term weight loss more often? Let’s be honest here, telling the truth is not the best way to sell bars, shakes, books, supplements, and programs. Hell, if by some miracle everyone who read this article actually followed it, and sent it on to millions of other people who actually followed it, makers of said products could be in financial trouble quickly. However, they also know – as the man said – “there’s a sucker born every minute,” so I doubt they will be kept up at night worrying about the effects that I, or this article, will have on their business.

So let’s recap what has been learned here: the big picture realities of permanent weight loss and how you can look at a weight loss program and decide for yourself if it’s for you based on what has been covered above:

• Permanent weight loss is not about finding a quick fix diet, but making a commitment to life style changes that include nutrition and exercise

• Any weight loss program you choose must pass the “Can I eat that way for the rest of my life?” test,

• The weight loss program you choose should ultimately teach you how to eat and be self reliant so you can make informed long term choices about your nutrition.

• The weight loss program you choose should not leave you reliant on commercial bars, shakes, supplements, or pre-made foods, for your long term success.

• The weight loss program you choose must have an effective exercise component.

• The weight loss program you choose should attempt to help with motivation, goal setting, and support, but can’t be a replacement for psychological counseling if needed.

Conclusion
I want to take this final section to add some additional points and clarity. For starters, the above advice is not for everyone. It’s not intended for those who really have their nutrition dialed in, such as competitive bodybuilders and other athletes who benefit from fairly dramatic changes in their nutrition, such as ‘off season’ and ‘pre-contest’ and so on.

The article is also not intended for those with medical issues who may be on a specific diet to treat or manage a specific medical condition. The article is intended for the average person who wants to get off the Yo-Yo diet merry-go-round once and for all. As that’s probably 99% of the population, it will cover millions of people.

People should also not be scared off by my “you have to eat this way forever” advice. This does not mean you will be dieting for the rest of your life and have nothing but starvation to look forward to. What it does mean, however, is you will have to learn to eat properly even after you reach your target weight and that way of eating should not be a huge departure from how you ate to lose the weight in the first place. Once you get to your target weight – and or your target bodyfat levels – you will go onto a maintenance phase which generally has more calories and choices of food, even the occasional treat, like a slice of pizza or whatever.

Maintenance diets are a logical extension of the diet you used to lose the weight, but they are not based on the diet you followed that put the weight on in the first place!

Regardless of which program you choose, use the above ‘big picture’ approach which will keep you on track for long term weight loss. See you in the gym!

References

(1) Truby H, et al. Randomised controlled trial of four commercial weight loss programmes in the UK: initial findings from the BBC “diet trials” BMJ 2006;332:1309-1314 (3 June),

(2) Michael D., et al, Comparison of the Atkins, Ornish, Weight Watchers, and Zone Diets for Weight Loss and Heart Disease Risk Reduction. A Randomized Trial. JAMA. 2005;293:43-53.

(3) Comparison of Diets for Weight Loss and Heart Disease Risk Reduction-Reply. Michael Dansinger. JAMA. 2005;293:1590-1591.

(4) Kruger J. et al. Dietary and physical activity behaviors among adults successful at weight loss maintenance. International Journal of Behavioral Nutrition and Physical Activity 2006, 3:17 doi:10.1186/1479-5868-3-17

(5) Byrne S, et al. Weight maintenance and relapse in obesity: a qualitative study. Int J Obes Relat Metab Disord. 2003 Aug;27(8):955-62.

(6) Borg P, et al. Food selection and eating behaviour during weight maintenance intervention and 2-y follow-up in obese men.Int J Obes Relat Metab Disord. 2004 Dec;28(12):1548-54.

(7) Byrne SM. Psychological aspects of weight maintenance and relapse in obesity. J Psychosom Res. 2002 Nov;53(5):1029-36.

(8) Elfhag K, et al. Who succeeds in maintaining weight loss? A conceptual review of factors associated with weight loss maintenance and weight regain. Obes Rev. 2005 Feb;6(1):67-85

Author Bio

Will Brink is an author, columnist and expert in the supplement, fitness, bodybuilding, and weight loss industry and has been extensively published. Will graduated from Harvard University with a concentration in the natural sciences.

His often ground breaking articles can be found in publications such as Lets Live, Muscle Media , MuscleMag International, The Life Extension Magazine, Muscle n Fitness, Exercise For Men Only, and numerous others.

He has been co author of several studies relating to sports nutrition and health found in peer reviewed academic journals, as well as having commentary published in JAMA. Will formerly trained high level Olympic athletes, bodybuilders and fitness and now runs seminars for (SWAT).

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About the Author

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Every Other Day Diet Review – The Every Other Day Diet has been called the easiest diet on earth. Also known as EODD. Even the name tells you there are no sacrifices greater than 24 hours. Those “sacrifices” are no sacrifice at all, just more foods you love (in smaller portions). Developed by degreed fitness professionals (formerly obese themselves) who came up with an easy diet plan that works for everybody,Using the ultra easy SNAPP System.

Fat Burning Furnace will teach you the truths behind quick and permanent weight loss. It also gives some information about fad diets and how they are unable to help you lose weight, as they just make you lose water making your body dangerously dehydrated. It also reveals the truth about low-carb diets and low-fat diets and how they can drain your body of the energy and nutrients that it needs to function properly.

Strip That Fat is an online diet program that has recently become very popular with those looking for a realistic solution to weight loss. It uses a no-nonsense attitude, sound nutritional knowledge, and positive strategies to help you lose up to 2 pounds per week. The authors of Strip That Fat claim that their diet program is easy to follow and sustainable.