Sunday, April 15, 2018

The market

The earnings should be good with still low interest rate, tax cut... However, the market is still over-valued - about 24 P/E vs. the average 15.

It would boost the market. The negative considerations are geopolitics including the possiblity of a global trade war and now Syria. The market is fundamentally unsound and technicals has been changed from sound to average (SPY is now negative in SMA-20 and 50 but positive in SMA-200).

With rate hikes, banks should be doing well for the coming year. My CDs (15 months) pay about 2.5% and then they lend far higher rate to their customers. Hence it is easy money for them if the loans are not risky.

Rocket is plunging

I had a warning on FAANG and recommended using trailing stops last August. I bet they lost a lot since the recommendation as a group. Tesla should be included.

http://bit.ly/2GPbt2M

Driver-less cars

Cars in US or China will not be exported economically due to the tariff.

China has mastered electric car technology. Electric engine is far easier than the combustion engine / transmission (with the acquisition of Volvo, they master them too).

The real technology is the battery. I bet within 10 years there will be new technology that would obsolete the current battery technology.

Do we really need driver-less cars with abundant labor, road blocks, software / hardware mal functions...?

Investing and politics

The 24 P/E is based on the last 12 months and current price (used to be 25 in last Oct. the last time I checked).

I'm politically neutral. I had a lot of jokes (or warning) on Obama as described in my books. The biggest concern is the way he saved the market by printing money recklessly. Well, Trump gives us unlimited jokes. To be fair, I do like some of his ideas: No more Mr. nice guy!

Xi is gaining so much that China changed the constitution to unlimited terms plus many thanks from many countries. Trump and his party will lose a lot of re-elections. Many of his managers retire, are fired or just give up. This is not a good way to lead.

Splitting California

If Alaska is split into 2, then Texas will be downgraded to #3 from #2 by size.

California should be split as North California is quite different from SF and below. Hence, some laws does not make sense in North California.

Exploring space

Space programs should be subsidized by the government. A private company will only work on the area that would be profitable. Good or bad?

Our shuttle program crashed in disaster literally. It had good ideas to reuse the shuttle and retrieve obsolete space crafts. As in most major projects, rosy pictures were painted and now where are the 'good' decision makers?

Personally my best friend retired and his two children are still looking for jobs. They all have Ph.D. in space science. With most research grants reduced, all those talks on math. and science are just garbage.

AL

All the companies using aluminum in the US will suffer. We cannot compete with foreign countries that have cheap aluminum. How smart is Trump's decision?