Thursday, May 26, 2016

Common-sense politics



I do not like the presidential candidates from both parties. We have to choose the lesser of two devils. I am political neutral and seldom read articles on politics. You may find the following refreshing. Most are my original ideas but they are just common sense.

·        The major problem of our political system is buying votes. The politicians have to satisfy the voters. When 40% of the citizens do not pay Federal income taxes, their requirements will be satisfied first.

·        Most politicians do not tell you how to finance all the freebies such as free tuition. We need to force the government to balance the budget.

·        We have to ensure the campaign promises are fulfilled. We still have the two Middle East wars, not as promised.

·        Making illegals legal can buy many Hispanic votes. The best idea from the politicians is work visas. When they are legal, it is easy collecting welfare than working on jobs no one want. They will also burden our entitlement systems by bringing their family members in.

·        It is far more effective to punish the employers for hiring illegals than building a wall; you can make a small hole of the wall or build a small tunnel to let the illegals in.

·        The welfare system discourages folks to work. Why you want to give up free medical delivery (in many states) by taking a job?

·        Gun control has not been discussed much. I know it is impractical to enforce it. However, we should not let the guns sold to the mentally retarded, criminals…, especially the semi-automatic weapons. Hope someday we can send our children to school or see a movie without worrying about being shot at. Written on 5/2016.

Related links to my blog

Politics and Investing. Some told me it is the most detailed article on this topic.

Politcal convention, a satire. What the government should be.

Sunday, May 22, 2016

AMAG

I rarely recommend stocks in my blog. I came across AMAG on May 20, 2016. I placed an order right away. Initially the order was not executed as the stock price kept on climbing up. I got it by placing a market order. I also placed several orders at better prices and I bet they will not be executed.

It had passed my three scoring systems before: one described in my book Scoring Stocks and the other two including my subscription services (one for short term and another one for long term). Now, it is about half the price of the time I evaluated.

I looked at why it was priced that low from Seeking Alpha and Yahoo!Finance board. I looked at the expiration of its major drug and any lawsuit pending. I did not find any. It could be the crashing of biotech stocks after a great year or two. It did have some resembling of VRX (i.e. borrowing money to buy another drug company). However, it seems it has enough cash flow to keep it going. Here are some lessons.

·        Even in today’s risky market, there may still be some bargains. When the expected P/E is less than 3, it could be either a bargain or a trap. Only time can tell.

·        Do your homework especially on why it is so value.

·        When the stock price is rising, you can only buy it via a market order.

·        If I lose money on this trade, it is fine as long as my procedure is correct.
 
Most authors will give you their promising trades after the fact and this one is before the fact. You can blame me for being stupid but not for being honest.

Thursday, May 19, 2016

Why you want to read Complete The Art of Investing



This book should make you a better investor for advance beginners and fund managers alike. This book does not make you wealthy overnight. However, I have proven step-by-step techniques to time the market, find and evaluate stocks for profits from my experiences and other retail investors (not traders) like most of you.


We do not have the Holy Grail in investing but we have something close to it: Select the fundamental (technical too) metrics and the screens that have performed well lately. To illustrate, if the screen or a fundamental metric such as Price/Cash Flow works in the last few months, there is a better chance it will work this month than not.

For a successful example, I recommended buying Apple at $57 in June, 2013 and selling it at $132 in Feb., 2015. I recommended staying away from Buffett’s funds in August, 2014 (actually earlier).

My article at Seeking Alpha could have the best performance from the publish date to one year later for recommending more than 10 stocks. So far, there is no challenge. All the concepts behind this article are presented in this book. They are all documented in my blog.


All ETFs are not equal



Update as of 5/2016: Barron’s prediction is mostly wrong as oil has passed $45 per barrel. It is due to unexpected events such as the fire in Canada.

I bought OIL in Jan. 19, 2016 (one of my purchases in this period). I expected to increase in price by 50% as the oil does, but it only increased 25%. What happened to half of my profit? Consider USO as an alternative to OIL.

Expecting oil price will appreciate, it is better to bet on oil service companies instead of OIL. Here is an article on how to play the oil commodity and a site on energy ETFs. I have the annualized returns of energy ETFs and CVX from Jan. 19, 2016 to May, 12, 2016.

Symbol
Description
Ann. Return
OIL
Crude oil
33%
USO
US Oil Fund ETF
112%
OIH
Oil services
80%
XOP
SPDR Oil & Gas
138%
IYE
iShr DJ US Energy
75%
XLE
S&P Energy
76%
CVX
Chevron
81%
Average

85%
SPY

32%