Saturday, December 31, 2011

Cantonese songs 抱緊眼前人 許美靜 - 明知故犯 許美靜 - 城裡的月光 張宇 - 用心良苦 陳 慧嫻 千千闕歌 陳 慧嫻多少柔情多少夢 陳 慧嫻 跳 舞 街
http// 陳 慧嫻 逝去的諾言 林 志美 感情的段落 周 啟生 天長地久 彭羚 讓我跟你走 仇雲峰 半真半假 方麗盈- 傷感雨天 李 國祥 - 餘情未了 總有你鼓勵 - 倫永亮 + 李國祥 王 菲-愛與痛的邊緣 劉 嘉亮 - 你到底愛誰 本 多RuRu 美麗心情 林 宸希不再問 張學友 + 湯寶如 - 相思風雨中 張學 友 + 黎瑞恩 - 長流不息 林淑容 + 羅時豐 - 無言的結局 陳淑樺--夢醒 時分 黃凱芹 晚秋 盧 巧音 好心分手 關 心妍 你有心 關心妍 - 我太强 容 祖兒 痛愛 野孩子 - 楊千嬅 楊千 嬅-可惜我是水瓶座 陳 慧琳 - 最佳位置 梁 詠琪 死 心塌地 衛 蘭 - 大哥 明天 會更好 劉 德華-緣盡 劉德華-一起 走過的日子 劉德華-真我的風 采 葉振棠 - 勝利雙手創 紅 塵戀歌 安以軒 、 叢浩楠 華 夏英雄 鄧超 許冠傑 斤兩十足 (37首歌完整版) 詠梅 - 關正傑 蔡 楓華 - 何必曾相識 人之初 陳浩德、方伊琪 - 平湖秋月 張德蘭 鮮花滿月樓 情義兩心堅 神鵰2006 情 若無花不結果 - 張德蘭 杯酒當歌 周華健/成龍/黃耀明/李宗盛-在晴朗的天空下 童年 - 蔡國權 彭家麗-昨天今天下雨天 《借來的美夢》--彭健新 鄭君綿 - 賭仔自嘆 蔡楓華 - 煙外曉雲輕 蔡楓華 倩 影 陳奕迅-明年今日 陳百强 - 等 陳百强 - 今宵多珍重 陳百强 ~ 偏 偏喜歡你 張國榮, 許冠傑 - 沉默是金 陳百强 - 不 陳百強-漣漪 喝采 - 陳百強 林珊珊 - 戀愛預告 傷感雨天 方麗盈

Friday, December 30, 2011

Efficient Charities

Leaving money to the government is the same as leaving money to an addict of spending money like no tomorrow.

Leaving money to Gates Foundation does not fare well all the time. They should teach the poor how to fish, not giving them fish for their entire life. They should use a model specific to Africa (like the one from China) instead of the American model. However, they do some good deeds in many other areas. Really helping the poor is not a science but an art. Throwing money will not solve any long-term problem.

As Buffett's son said, once Americans leave with the big machines/equipments, Africans will return to the bad old days. You do not need to automate with abundant labor available. From his talk, I think he has better insight and vision to handle his father's foundation than giving it to Gates. He would contribute more to our world in heading the charity instead of running his father's fund company that he has no interest and desire to.

Buffett and Gates donate their life-time savings to charities. It is the most noble deed to mankind. I argue against the comments that they profit themselves. Of course, both should donate their appreciated stocks so they maximize their donations. They should appoint their heirs to supervise their foundations and get salaries for the work. The only objection is Buffett should not advocate the way he wants to change the tax laws. Without deduction to charities, the poor will get less aids.

The African farming industry is being destroyed as they cannot compete with freebees. Ensure your donation is not skimmed by the corrupt officials like in Haiti and some African countries.

Donate money to the charities with low overheads and spending the money correctly. If you donate limited funds, try to limit yourself to one charity. They will send you letters... and these are the cause of their high overheads. I also would ask how much their presidents are making.

US and its citizens are the kindest folks on earth as long as donations to the foreign poor is concerned. I hope our new tax laws will maintain the same deduction. As Gandhi said, the world has enough resources for all but we're not unselfish enough to share.

Friday, December 23, 2011

Reponse to James's all 100% cash for 2012

James recommended 100% cash in an article in seekingAlpha.

I analyze 2012 a little differently from James. I expect not much change from now to mid 2012 - we'll have the same volatile market. In mid 2012, we've to evaluate the market conditions again. If the problem like EU crisis is resolved, I would move all cash to equities and expect a 10% return for 2012.

It is not practical to predict for the entire year and we have to change our strategy when market changes. Other than that, I am pretty much with James.

Update. Even with the market up, James did not change his position and predicted sth bad could happen in April, 2012. Pretty agree with him that EU have to do sth drastic.

Click here for my crystal ball for 2012.

My profit calculator = (my rate of return - SPY return)/abs(SPY return)

Or, how well I did against S&P500 at year end.

If S&P loses 5% and my return is 0%, then I'm 100% better than S&P 500 even I gained $0.

You do not have to make money every year and you do not want to violate Buffett's first 2 rules of investment: Do not lose money and do not forget rule #1.

If you're good market timer, you can gamble with shorts and contraETFs. Personally I do everything with emphasize on safety at least for the next 3 months.


(c) TonyP4 2012. Written in 12/23/11. Last updated in 12/23/11.


Do not gamble your money you cannot afford to lose. Past performance is a guideline and does not guarantee future performance.

All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision.

Diets that always work

I know one diet that really works and I'm importing it from China. Millions of thin Chinese are the best living proof. It is the tape worm therapy. You inject big-mouth tape worms under control environment into your body. You need to sign a no-sue contract but life insurance (trust me it will come in handy) is included free. They will eat up all the nutrients in your body.

The other therapy that also works is sending you to a remote location in Africa where you cannot find a TV and processed food like chips and beer. You have to perform a daily exercise by running from wild animals that could eat you alive if they catch up with you. This is the ONLY motivating exercise that works.

In either therapy, your obesity problem will be fixed. Even if the therapy fails and you die, your obesity is still fixed GUARANTEED or your money back - well money may not be useful for you then :).

If you try it and it works, please share your experience and be my spokesman /woman in my new venture.

If you're offended and/or think the above is not a joke, please check into your neighborhood clinic to ensure what's wrong with you esp. in the sense of humor department.

Retail investors and market timing

The average retail investor has advantages over fund managers.

However, the average retail investor does worse than the market. Most just buy high and sell low - a kind of herd mentality.

In quarterly summaries, Fidelity demonstrated this more than one time. It shows the retail investors moved to money market fund when the market was at temporary bottoms (or close to), and moved to equities when market was at temporary peaks (or close to). It could be a good contradictory indicator if Fidelity or any fund company publishes this money market flow consistently.

Morningstar has similar proof. During 2000 to 2010, equity funds earn an annualized return 1.6% while an average investor captured a .2% return due to moving in and out of the funds at the wrong time.

Click here for Psychology 101 for investing.


(c) TonyP4 2012. Written in 12/23/12. Last updated in 12/23/11.


Do not gamble your money you cannot afford to lose. Past performance is a guideline and does not guarantee future performance.

All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision.

Tuesday, December 20, 2011

No Nativity Scene?

I got a email from my potential congressman as follows:

The Supreme Court has ruled that there cannot be a Nativity Scene in the United States’ Capital this Christmas Season. This isn’t for any religious reason. They simply have not been able to find Three Wise Men in the Nation’s Capital. The Search for a Virgin continues. There was no problem, however, finding enough asses to fill the stable.

My reply:

Beg to differ. All congressmen including yourself are wise men if you compare your bank account before your term and after.

You can find a lot of virgins but you've to lower your age requirement or change the definition of a virgin. For definition, borrow the example from Clinton's no smoker policy: As long as you do not exhale, you're a non-smoker. Change the word 'exhale' with many words I can think of but they are not too polite to write them down here - just in case the naive Sister Teresa is reading my blog secretly.

It appears to be a fact that there are more mouths kissing asses than asses available to be kissed. Hence, we really have a shortage of asses.

A true incident to TonyP4

Monday, December 19, 2011

The 'smell' of victory

When we tested out some strategies, we found out we could be a billionaire if we followed the successful one for the last 10 years. Most likely this is the false smell of victory, so do not wake up your wife to tell her your holy trail discovery. If it is that easy, most of us should be sipping some exotic, tropical drinks in some exotic, tropical island served by some exotic, tropical ladies :)

There are no investor heroes including Buffett.

The follow are the reasons I can think of now.

* The strategy worked last 10 years may not work for next 10 years. When one strategy is a headliner, most likely it is the top for the strategy. When too many follow, it will fail. It is the herd psychology.

* Survivorship bias. When you play with penny stocks that usually are big winners or big losers, half of them may bankrupt. Most historical database may not keep them. It gives you better performance than the actual. If you do not include Lehman Brothers, would your portfolio perform better?

* When you deal with penny stocks, you may end up to buy most of the company if you're successful. In reality, we never do so.

However, click for the strategy that always works and most likely will beat S&P 500.

(c) TonyP4 2011. Written in 12/19/11. Updated 12/19/11.

Disclaimer: All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision.

Saturday, December 17, 2011

My crystal ball for 2012

First, I'm no market predictor and my crystal ball is as good as yours. I try to digest what experts are saying (from negative return to 25% gain) and try to make a conclusive conclusion . We should predict at 3-month intervals and plan accordingly. Market conditions change and hence it is not beneficial to predict for the entire year.

Being said, I predict we've the same volatility on the market based on headlines. After half a year and assuming the Euro problem resolved, we should be on our upward swing to a 10% gain (S&P and not counting dividends) at the end of the year.

If we believe the market will be volatile with no gain at the end of the next three months, we should sell covered calls, buy low and sell high on deeply valued stocks, but remain a good percentage in cash. I put my money where my mouth is so far. However, I'm an opportunist and change direction when I see fit.

Click here for why I have a rosier picture. Remember the market is usually 6 months ahead of the economy.

The following is based on my Oct 7, 2011 post My crystal ball. At least for the first 6 months of 2012, most are relevant so there is no need to update.

The perfect storm with the following unknowns:

* Portugal, Spain and Italy could follow Greece. They are far larger than Greece.
Click here for detail.

* Trade war with China over currency.
Can we afford to have a trade war with China and take the risk of China pulling out their huge debt from us?
Click here for detail.

If one of the above two happens, we will see Dow below 9000. Otherwise it will cruise between 10,500 and 12,500 (used to be 12,200).

When it goes up to 12,800 (used to be 12,500), I'll sell most of my stocks as the roots of our problems have not been resolved.

If you believe we'll have a good Q3 earning announcements, year-end rally, first two-week rally, huge cash held by corporations, and/or there are signs the wars are ending (update: one is done), you may want to act accordingly. I've started buying selectively and it could be the best time for a while for some stocks that have been beaten down badly.

My crystal ball is as good as yours.

(c) TonyP4 2011. Written in 12/11/11. Updated 01/10/12.

Disclaimer: All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision.
Posted by TonyP4 at 5:25 AM

Friday, December 16, 2011

Rosy outlook

The secular market will be started with USD appreciating for a change within 2-4 years. It is a presidential year.

* One war has been ended, and the other should be over hopefully. It would be peaceful for at least next 10 years if we do not irritate China from trade wars to a physical war.

* We already seen improvement in employment. It is slow but steady. Our high standard of living prevents us from competing with low-wage countries in low consumer products.

* Housing will recover. It may take 2 more years. It cannot take for ever to absorb the inventory.

* We're still the food supermarket of the world, the best universities in the world, highest research center, making movies/music... China is catching up but they're still a long way away.

* We have a lot of natural resources per capita. Gas will be the driving commodity when the environment regulations are relaxed. The pipeline from Canada will be materialized - to me it is a political balloon.


(c) TonyP4 2012. Written in 12/16/11. Last updated in 12/16/11.


Do not gamble your money you cannot afford to lose. Past performance is a guideline and does not guarantee future performance.

All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision.

Buyback vs dividend

Buyback is an excellent tool to boost the compensation of insiders who have a lot of options. Usually it could be a tax advantage over paying dividends. The decision on how to use the extra cash should be how beneficial to the average stock holder.

Besides dividends and buybacks, corporation can use the extra cash to plow back to the business such as reducing debts, boosting research and development, acquiring companies...

If the company is in developing stage, it should plow it back to research and development. Matured companies like Microsoft give dividends as there is not much the company can improve in theory.

We buy the company's stock is not solely due to dividend, but the earning potential (i.e. expected E/P) and the market conditions.

Some companies gives good dividends to cover their problems. Check out C, AIG, BOA, Lehman Brothers, Stern... If they fool you twice, shame on you. They all gave good dividends. Check their performances and I rest my case.


(c) TonyP4 2012. Written in 12/16/11. Last updated in 12/16/11.


Do not gamble your money you cannot afford to lose. Past performance is a guideline and does not guarantee future performance.

All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision.

Tuesday, December 13, 2011

Another screen - will test it out

Ben Graham later on in his life moved from specific stock picking to picking groups of stocks. In a 1975 seminar - not long before he died - he laid this out very well:

The last paragraph of this article makes a good point clear:

"It’s also important to remember that in this study, Graham was advising the purchase of a basket of around 30 stocks matching any one criteria of undervaluation, e.g. 2/3 of book. He even went so far as to say “You can’t lose when you do that.” His experience proved that buying a stock at such a criteria was a dependable indication of group undervaluation."

He recommended a basket of 30 stocks when using just one criteria to find an undervalued stock - low Price/Book as an example. I would assume (and it has worked in practical real life investing) that using more than one criteria would make the need for investing in 30 stocks at once less important.

I personally like to screen for:
1) low Price/Book
2) low Price/Sales
3) Price/Free Cash Flow under 15
4) Price/Operating Cash Flow under 5

I also look for a Price Earning Growth Ratio (PEG Ratio) of less than 1. It should be Number 2 or 3 in that list making 5 value finding ratios in that first set and a total of 8 rather than 7....

The next three criteria are used to eliminate too many choices usually although I have been known to use the Piotroski Score of 8 or 9 as a starting point rather than use the score as a tie-breaker...

5) Piotroski F-Score = to or better than 5. If they have an Altman Z-Score better than 3 at the same time - they are a standout company in their financials.
6) Dividend Payment over 1%
7) A Forward Intrinsic Value higher than today's price with a negative value being an instant washout no matter how good the stock looks otherwise....

This finds high quality stocks at a value price (Value outperforms Growth over time in any cap stock - company size does not matter) that will pay me to wait until the market finds them. Depending on how long they have paid that dividend and if it is a rising dividend and the percentage of that dividend - the stock could end up in either the Core Portfolio or the Exploration (Trading) Portfolio. The Core reinvests the dividends and is a long-term hold unless the stock fundamentals change (Stock price changes up or down make very little difference here.) and eliminate the stock from the Core.

The trading portfolio can be very short-term or much longer depending on the performance of the stock price itself. If it loses right away, it is gone right away. If it moves up - then I sell some at certain points until I have my starting cash out of the stock. My results doing this have given me 500% profits in a single year more than once and I very seldom ever have a year where I lose by the end of it. Profits from trading are split at the end of the year - one half going to add cash to the Core Portfolio and retaining half to increase trading cash. Free stock (stock with no starting investment left in them) may be kept in the trading portfolio for more than a year and may eventually qualify to go into the Core give time.

Between the two portfolios - I have not had a year that I have not beaten the S&P 500 benchmark in decades....Even when I am not doing well in the trading portfolio - the core supports me and is quite capable of beating the benchmark all by itself with no trading in the trading portfolio at all.

There are years when I have NO stocks in the Trading Portfolio - The Core just keeps right on keeping on - making effortless profits and growing larger every year from the effects of rising dividends that are reinvested and that marvelous compounding that comes from that reinvestment.

A suggested search - will try it out.

For this year, the following strategy has yielded over 50%:

Every fifteen weeks starting from the first full week of the year buy the two stocks that have done the best over the previous eight weeks. Close all positions on the closing day of the last week of the year.

This strategy applied to the basket of stocks that are currently in the SP500 does very well during 2001-2011 (only one year of 48% loss, but that followed a year of 100% gain), but obviously the result suffers from selection bias for the years prior to 2011.

The following are the trades for 2011 (the dates are the first days of the weeks at the close of which the trades were made).

THC 1/ 3/2011 TO 4/18/2011 -1.74%
TSO 1/ 3/2011 TO 4/18/2011 42.38%
GME 4/18/2011 TO 8/ 1/2011 -16.62%
COG 4/18/2011 TO 8/ 1/2011 22.40%
COG 8/ 1/2011 TO 11/14/2011 22.93%
VFC 8/ 1/2011 TO 11/14/2011 18.97%
FFIV 11/14/2011 TO 12/12/2011 5.81%
GR 11/14/2011 TO 12/12/2011 -0.18%

Thursday, December 8, 2011

Pearl Harbor memorial day

Japanese suffering from the 2 atomic bombs is TOTALLY JUSTIFIED. Most died in dignity at least. Without the two bombs, US would invade Japan and many innocent folks would die.

The two atomic bombs should have dropped on the imperial palace whose master (now becomes the parasite of society) started the Asian invasion, and some smaller bombs should drop on the 'shrines' of war criminals, who invented the term 'comfort women', raped women and even killed babies.

It seems heartless to say the punishment from God on Japan should start 50 years earlier as most of these war criminals have passed away. Consider the millions of Asians were killed, raped by these war criminals, the head cutting competition on innocent Chinese and the river of flood, and you'll agree it is TOTALLY JUSTIFIED.

If you're still now convinced, watch the Nanjing documentary which is available from Netflix. We should not hate a nation because of the past history but we have to learn from history. I do not think the current generation of Japanese with their high education will repeat history. However, Chinese should learn how to defend themselves and also not to offend others.

The rewrite of Japanese text books on invasion and worship the 'shrines' of war criminals will fool no one but the fools who acted cowardly to cover their conscience and sins.

Tuesday, December 6, 2011

Secular bull and bear market

* Secular Bull and Bear *

Even if you do not invest in the stock market, you need to understand it. The market is a forecast of our economy which in turn affects every aspect of our life. If the market is good, the economy is good and every one would have a job. Even the poor would benefit with more generous benefits from the government and more donations from individuals.

We have a secular bull and bear market as follows (the years are not exact but useful for illustration) as follows:

Secular bear market: 1960-1980
Secular bull market: 1980-2000
Secular bear market: 2000- now

In a secular bull market, every investor is a genius. Their stocks rise with the tide. With the profits from the market, they spend more on disposable consumer products and even give to the poor generously.

What causes the secular market condition that last for about 20 years? To me, the major common denominator is the war and it is my contribution to this theory if not already mentioned before. In 1960s, it is the Vietnam War and the effect after this war. Today it is the two wars in the Middle East.

After the war, our leaders do not forget the harmful effects. They cannot get re-elected with the war, so there will be no war for a long while. That’s my explanation of the secular bull market from 1980-2000. After 2000 our leaders forgot the wars and history repeated itself.

Wars are the primary cause of a secular market and bubbles are the triggers to recessions. In 2000, we had the internet bubble and we had the housing bubble in 2007 (derivatives is the pin that burst the bubble). With minor exceptions, all bubbles are caused by excessive valuation (housing value was too high due to the government easy money) and they will come back to the average value eventually. The only exception could be gold which does not really appreciate but the dollar depreciates.

If we concentrate our energy/wealth in economy rather than wars, we could fix the bubble easier before they’re burst and at least soft landing instead of hard landing.

I expect we’ll have a prolonged bull market three years after ending the two wars. By then, the housing problem will be solved by absorbing the inventory and the settling a solution on Euro crisis. Until the politicians forget the harmful effects on the war, the prolonged cycle will continue.

If the next secular bull market starts in 2015, we would shorten the cycle from 20 years to 15. For this reasoning, we may have to check again (on the possibility of war similar to Vietnam and these two Middle East wars) at the 10th year or so of the next bull market to see whether it would be 15 or 20 years.

There are market cycles within the secular market. I change the predicted duration from 4 to 5 years for similar reasoning.

Click on Strategies on Secular Markets.


(c) TonyP4 2012. Written in 12/06/11. Last updated in 1/18/12.


Do not gamble your money you cannot afford to lose. Past performance is a guideline and does not guarantee future performance.

All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision.

Saving some good links

China aims for high tech future.

Larry's portfolio.

Sunday, December 4, 2011

Dear recent college graduates,

Many of you do not have a job for over 2 years. Your generation of some EU countries have 50% or so unemployment. Do not be frustrated and we're seeing the light from the tunnel.

I had similar experience. After graduation I had no job. It was only 1 month (lucky me compared to today's graduates) but it seemed to me more than a year of desperation. The worst is that I ran out of money and my student visa had expired. I was so jealous of my room mates going to work, and they may be jealous of me for sleeping all day long. Some harsh words would hurt a lot but I pretended to be sleeping and crying inside. I was ashamed of not sharing my part of the rent.

It turns out to be a good experience. For example, I have not wasted a dollar since then. At that time, with that whole dollar I can kill 3 hours by watching double features. Too much free time drove me crazy.

It is a similar lesson I learned from my co-worker who lived through the depression. He finished his plate completely without leaving a speck of food.

If you like to protest for income disparity, bankers not going to jail for their crimes, plutocracy... by occupying your local city hall, it is fine to let some steam out, but you need to obey the law. Life is full of injustice. The best to resolve them is to prepare yourself so you will be in a position to make a difference.

You should also know most rich folks obtain their wealth by working hard (with many starting with nothing) and taking chances. Gates and Buffett even give back all their wealth to charities.

The economic problem gives us a temporary setback. Hopefully, we will look back and treat them as good lessons that we cannot learn from schools except by experiencing it. It is life's ups and downs. Without the downs, life would be no meaning and we do not appreciate and treasure the ups.

We should not let our destiny control our life, and the strong ones (I am not among them) can change their destinies. Bad experiences in life always make us a stronger man/woman.

Saturday, December 3, 2011

How to solve trade imbalance

US's $20 per hour cannot compete with $2 per hour (no matter it is from China, India, or Vietnam).

You cannot live with $2 per hour in US. It is better to live on welfare with food stamp, housing subsidies, free health care... when your income is low or 0.

The solutions are:

1. Abandon industries that use low-wage labor and/or outsource manufacturing jobs like Apple is doing. There is no quality problem of Apple products being outsourced to China, so it really depends on one to outsource.

2. Beg China and other countries to loan us more money with states as collateral (by now no one is stupid enough to use USD for future repayment) starting with all non-Democratic states first (according to Obama) and DC will be the last to sell. Just a joke. :)

Selling AK with Sarah to Russia for oil is no brainer. It is just like killing two birds with one stone.

Selling Hawaii is just genius like selling something you do not have as Hawaii is pretty much owned by Japanese already.

If we sold NYC to China, we would make a huge, huge capital gain. It is even more sweet if you recall we bought (cheated is a better word) it from native Indians for peanuts. The Indians/Eskimos were Chinese crossing the frozen strait due to losing their direction after too many drinks. I have my genes to prove my theory. So, it is selling to the original owner for a huge gain. :)

3. Close all trades with all foreign countries and enjoy the $50 toaster!

We can stimulate our farming like planting sugar cane in Alaska, but the chicken feet would be thrown to ocean instead of shipping them to China for cash. Don't laugh. It is smarter than building a bridge to no where or Obama getting his Nobel prize for doing nothing.

You can laugh, cry, or do both, but do not argue the above with me - it is just a satire.

Friday, December 2, 2011

Different styles in investing

There are two major styles to evaluate stocks: fundamental and technical analysis (TA).

The debate of TA and fundamental could be endless. I believe TA is good for short term and fundamental is good from longer term (> 3 months) - from one who makes good return for using fundamental.

When the insiders see some new products or unexpected earnings, they buy and tell their families to buy. The TAers notice the rise in stock price and buy. The last one to buy may end up losing money as the insiders would unload when the stock price is over-valued.

Try the following to see whether fundamental is better and share your conclusion.

1. Include all stocks that are below the 200 day ma - opposite to what a TAer would do.
2. The expected P/Es have to be lower than 15.
3. Exclude financial like banks and insurance, miners and bio drugs.
4. Buy these stocks less than 5% market prices - TAers give us the benefit.

Check the result in 6 months and 12 months.

A 200 ma is one every one uses even most fundamentalists know how to use it if they want. It is a good indicator for general market but not the best one for individual stock. There are many sophisticated tech. indicators.

The best ones in TA and the best ones in fundamental always make money in either market. However, fundamental is easier to master and many have make money than TA.

Fundamental can be divided into the following.

Value. I use it most. Esp. good for early recovery.

Dividend growth.

Momentum. Best in Up of the market cycle. Be careful of market crashes.

Day trade. In a nutshell on my definition of day trading, you want to get into the wagon when pension, mutual fund managers are buying and sell them at the end of the day. You can identify them from the increases of volumes. It is part of momentum.

Most likely you will make a lot of small profits every day. Watch out for losing a big one that could wipe out all the previous profits and sometimes even more. I enjoy the daily result esp. the good ones.

I just started day trading and so far so good. I do not use any charts.


(c) TonyP4 2012. Written in 12/02/11. Last updated in 12/02/11.


Do not gamble your money you cannot afford to lose. Past performance is a guideline and does not guarantee future performance.

All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision.

Covered calls

For basic description from Wikipedia, click here.

Covered calls do have its disadvantages like higher commission rate, forcing you to sell at higher tax rate for short-term capital gain, and you need to buy them back when they increase in prices beyond your strike price or lose its potential to appreciate more. Using another put costs could allow you not to lose any gain beyond the strike price. However I prefer to use my time for something more productive and insurance is not cheap. One's opinion.

My recent bad experience. I sold Netflix covered call with the strike price about 2% higher and 3% premium (from my memory) but the price shot up 12% higher in one day, so I'm potentially losing 7% profit.

It is like collecting rents from your apartment you bought. The difference is that the renter has an option to buy the apartment at a preset time and price.

Normally I prefer to sell covered options for stocks for 100 to 600 shares (i.e. 1 to 6 contracts) for the longest time (about 2-3 months). Some smaller stocks do not have a market and some stocks are not optionable. Usually high tech stocks have higher premiums to be collected. The right stocks can generate 25% or more in a year in addition to the fluctuations of the stock prices.

In general, if I feel the market will be down for the period, I use covered calls esp. for stocks over 1 year holding (unless I have short term loss to offset short term gain) or in retirement accounts. Watch out for any tax changes that may affect your total return.

When Dow doubles

Dow will double before the end of this decade if most of the following materialize.

* End the two wars and not to start another one for any reason other than protecting our trade/interest. We cannot afford to be the world policeman fighting for our idealism. Let others fight for their own freedom.

* Sleep with China to avoid any trade war and take the risk of pulling out their trillion debts. No slaves would talk back to their master unless he does not know he is one.

* Buy more printers to print money. It would lead to super high inflation (so 30K can only buy 15K goods). In this case, Dow doubles but not in real purchasing power.

* Cut down entitlements and force those able, long-term welfare recipients to work on jobs taken by illegal aliens now.

* No more bailout.
No one including the government is too big to fail. Cut the government size to half.  It will be no reduction in service as most government workers work 20 hours a week. Sell Alaska with Sarah (not as a bonus) to Russia, sell Hawaii to Japan, file Chapter 11 for most states...:)

* Give incentives to businesses to invest here such as low tax rates, no ObamaCare, no complicated regulations/laws, low legal claims... We cannot compete if our wage is so high. We need to bring our living standard to how much we earn, and not to how much we can borrow.

They will not materialize as the politicians cannot buy votes with most measures and nobody wants to bite the bullet.

Fool of all fools aks Herd Theory

When the herd makes money, they think they're genius. The last one to leave the herd will be the fool of all fools like the last holders of Lehman Brothers, AIG, Stern...

The real genius is the one who makes money on the way up but leaves before the bubble bursts. Even a genius cannot predict the peak and the bottom but I'll call him/her a genius if s/he is right better than 80%.

It is our nature and bias to ignore others' ideas. We cannot be wrong, but usually we are.

We try to cover the entire sky by placing our hand between our eyes and the sky, so it is covered but every one else can see the sky. It is a rough translation from a Chinese proverb.

Now dividend growth stocks have the highest premium in last 30 years. It is a mild bubble when we've many retired or retiring folks seeking for income.

Same for internet bubble in 2000.


(c) TonyP4 2012. Written in 12/02/11. Last updated in 12/02/11.


Do not gamble your money you cannot afford to lose. Past performance is a guideline and does not guarantee future performance.

All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision.

Thursday, December 1, 2011

India vs China

In the 50s, India was ahead of China. For the last 30 years, China is decades ahead of India and the next 30 years will not look good for India.

Most favorable articles on India are written by Indians with their dumb nationalism and few have been written by Chinese which likely like to compare itself with US. Tier I cities in India cannot compete with Tier III cities in China in subway, airport, train, high rises, electricity, corruption, intelligent property enforcement, protectionism, quality… The last four must be a surprise to the westerners, but they are true. The list is endless.

Indians are happier, and it could be due to less internal competition. From my contact in US, Indians here are as smart as the Chinese.

Most Indians want to stay in US without waiting for the improvement in their native country while Chinese have a lot of ‘sea turtles’ swimming back to the mother land. India is grossly mis governed.

Why there are so little FDI to India compared to China? You have to ask how long it takes to open a business in India and how many bribes you have to pay.

I do not see a lot of Chinese settling down in India, but Indians could be the second among all Asian countries settling down in Hong Kong after the housekeepers from Philippine.

Count how many high rises in Hong Kong and how many in the largest city in India. Count how many articles in WSJ on China and India. Count how many top 100 computers, literacy rate (compare apple to apple for 10 years of education)...  The list again is endless.

From my contact, Indians and Chinese in US have the same intellectual level. Actually Indians are doing better here in US due to mastering English better and better educated (with H1 visas). The problem with India is mis governance, similar to Mao's reign in China.

India cannot catch up with China in the next 10 years. It is better for the world that India would catch up with the rest of the world and it is my hope and wish they do. However, the reality looks too bleak for India. You need to understand the problems of your country before you can fix it.



Click for more on this topic.

Political systems and the economy

Economy is controlled by political systems at least to some extent. Use China as an example.

Communism is good in principle to solve the class problem. However, it makes folks lazy and managers not taking risk - your extra effort is not rewarded.

Socialism is just in between the communism and capitalism. Laziness is encouraged and leaders are taking easy steps by buying votes. It happens in Greece, Italy and gradually in USA. The current ratios of debt over GNP in most PIIGS do not allow them to compete.

Does democracy lead to socialism?

Mao was a great revolutionist, and he is respected esp. in China.

Do you remember the Peter's Principle? When a successful manager is promoted to another position s/he has no experience and/or is not qualified for, s/he usually screws up big times. Mao is the poster boy of this principle when he was promoted from a revolutionist to a governor.

The last 30 year success in China is due to: 1. US played China hand against Russia and 2. Deng's reform with the economic special zone which is so simple but so genius. So the political system is as good as how it is administered and some luck helps a lot. Another example is how democracy is mis governed in India. Hence, we cannot conclude democracy is always good. I believe democracy needs a educated and developed country to make it useful.

As Deng said, we have to let some to make money and the 1% capitalists are the ones. We need them to invest so they can hire more folks. Hope the world economy would not go to another recession. The rising market yesterday and most likely today (if most market timers use the 200 day moving average as a guideline) does not mean anything as EU's problems have not been resolved.

Sunday, November 27, 2011

China 200 years ago

Being raised in Hong Kong, I wonder why we did not learn much on how Hong Kong was ceded to the Brits as a result of the Opium Wars about 200 years ago.

It started when Manchurians conquered China. The Chinese general was frustrated with the rebels who captured his woman and opened the gate of the Great Wall for the Manchurians.

Chinese emperor showed the Brits that his empire had everything and there was no need to trade with their inferior products for China's silk, porcelain and tea, which had the highest quality. The Brits found they had opium grown in India.

Imagine a nation pushing drugs, and use their military might to enforce drug trade openly!!!!!!

After these wars, China was semi colonized and was bankrupt with silver tales being shipped away. The summer palace was burned down in 3 days and 3 nights and all the loots can be found in London and Paris's museums today. They're still loots no matter how many times they have been changed hands. Shame on them for not returning the loots back to China. When you're in China, visit the ruins of the burned down summer palace which is not too far away from the other summer palace.

The emperor ignored the industrial revolution in the west and the powerful canons/iron ships. If Cheng Ho had traveled further west to Europe (his ships were many times bigger than Columbus's), then the Chinese would not be that eccentric.

It demonstrates that if we do not move ahead, others will. Saying Chinese are inferior just shows our ignorance and history will repeat itself but with the roles reversed.

Victoria was not the only one to blame as the Parliament had debated for at least a day. Come to think about it. China suffered first from British Empire and then the Japanese Empire. Today the royal families are just parasites of societies.

Be fair to the Brits, they did provide stability to HK and it was one of the several pillars that HK was prosperous. The other pillars all have to do with its closeness to China.

I benefited the most by avoiding China's problems in 50s and 60s.

Tuesday, November 22, 2011

Is China friend or foe?

China has been prolonging US's prosperity than the other way round:

1. They're our banker. The poorest country (at least at one time) lends money to the supposedly the richest country for gaining market.

It is a double-edged sword: like the modern-day opium that the Brits sent to China about 180 years ago. It increases your enjoyment at least temporarily, makes you addictive, bankrupts you, and finally kills you.

When China parks their money in US, it provides easy money and partially (a small part) causes the subprime melt down.

2. By allowing several corporations to survive like GM and some to prosper like CAT, Boeing...

3. We should be perfect partners as our major products do not compete with each other like farm products, movies, high tech. for their consumer products which would be produced in other low-wage countries if not from China.

4. Low-priced consumer products that our citizens esp. the poor enjoy.

5. Together with other hard working and educated citizens like Indians, they boost our college research and product development. Imagine Google, Microsoft, MIT or Stanford without Indians and Chinese.

6. Politicians can blame all our ills on China as they cannot fix our problems. They can blame China for not following American culture like saving too much and planning for 4 years max.

The power of a printer

Printing money is the way or the only way out of this mess for US and EU:

1. Our debt will be depreciated esp. we can ask our lenders to appreciate their currencies as long as the loan is in USD.

2. It is our children and grand children's problem.

3. There is no meaning for OWS protest as we can make the rich losing half of their buying money invisibly and the poor losing nothing (50% of 0 = 0) via the magic of super inflation.

4. The poor will be poorer with the buying power, but they cannot blame the government as the entitlement pay is the same.

Obama should get another Nobel Prize to solve the global problems for turning up the money printers - more deserved this time when he did not do anything.

The only drawback is USD will be replaced by Yuan soon as a reserve currency, so you better use your printer at the max. and before the next election.

Friday, November 18, 2011

No more hero investor?

As of 1/2012, Bill Miller is stepping down after big recent losses. Buffett's last 3 year performance is so lousy that he should be ashamed and should not show his handsome face in public. Gross, the king of bonds, made serious mistakes, so is Whitney on muni bonds. It is same for a famous shorter of Netflix with convincing arguments. Their arguments are correct but the timing is not. The fund manager of the decade in Morningstar advocated bank stocks and he was burned badly.

There are many examples of heroes turning into disgrace in the past. Recently the Boston Globe has an article on top fund managers and they all have turned into big losers. Even Professor Irvin Fisher, the father of Wall Street, could not predict the 1929 crash and lost a bundle including most of his life-long gains.

Recently Barron's had a round table discussion on 2012 with the experts. They also listed the recommended stocks from same experts a year ago and their performances. Guess what? Their average does not beat Dow. Am I stupid enough to follow their 2012's recommendations?

What do we learn:

- Retire at your peak like Peter Lynch - you can call him a coward but he has a good sleep and laughs all the way to the bank. With his fame, it is easy to sell some books and lives nicely.

- Do not invest on your losing horse like Miller. Doubling on the way down is a fool's game.

- Need specialty advice on banks, bio drugs and mines. Their financial statements do not tell the whole story.

- Do not believe you're always right and put all eggs on a basket. Market is irrational. The black swan could kill you unexpectedly.

- Even the genius could not be right all the time. It only took one big loss to wipe out your entire saving.


Why we, the retail investor, can beat the professional fund managers?

The fund managers usually are 10 times smarter than I, have 10 times more research than I, have 10 times more computer power than I, but they do not beat me, the usual, casual retail investor. It could be:

- Most likely their good performance could be due to 1. taking risky stocks and 2. leverage. When the market is good or the specific bets are good, they make more, but the vice versa kills their performances.

It is like a thousand monkeys banging on the keyboard to find stocks. At least one can find a winning stock.

However, they do not want to take risk. If they do not perform within a certain range of a benchmark, they get canned.

- They cannot beat the market all the time. When they do, money flows in and vice versa. It is very hard for them to perform with extra or lack of fund.

- They cannot play market timing and they have to satisfy all the rules.

- By my estimate, they have about 1,000 stocks (about 600 for most larger funds) to deal with and I as a retail investor have about 3,000 stocks. Their stocks have been fully evaluated by analysts and newsletters/subscriptions like ValueLine. Hence, they do not gain any advantages but follow the herd.

- Their performance as a group is not real. Some bad mutual funds close and their bad performances are not added to the performance of all mutual funds. It is termed as survivorship bias.

- They are so big that they're the market.

The hedge funds perform even far worse. Hence why you pay them 2% plus 20% on the profit?

(c) TonyP4 2011. Written in 11/18/11. Updated 02/06/12.

Disclaimer: All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision.

Wednesday, November 16, 2011

The strategy that works best

Buy low and sell high.

It is simple but most retail investors just do the opposite. It turns out to be a reliable contrarian indicator when the flow to/from money market fund.

2003, 2009 and the later part of 2012 (not confirmed yet) could be the best time to buy.

Sell when every one including your silly mother-in-law is making good money and all think they're market geniuses. It could be the riskiest time. The high interest rate could give you some hint as folks falsely expect better return even they pay more to borrow money.

Do not buy the stocks that were the bubble stocks like technology stocks in 2002 and bank stocks in 2009 as some 'optimists' think it is time to return and usually they're wrong. You buy them only when the root problem has been fixed. Many bubble stocks never recover.

Do not buy dividend stocks for big returns as they do not swing much. They may lose less value in a recession, but they will not make a lot when the recession is over. In addition, consider new tax changes and it may not be favorable for dividends.

Buy value stocks that seem to be bottomed out. It is hard to identify the bottom (read investment articles for hints), but usually they give best profit returns.

As of 7/2012, coal stocks may have been bottomed out. Oil and other resource stocks could have been bottomed out before the coal stocks. Health care should be bottomed out judging from their low P/Es unless ObamaCare screws it up.

Buy the stocks that have been losing some money but their burn rates can last for over two more years. They're risky but the potential profits are great. We can find many in 2003. Today many corporations are making good money at historical low P/Es even the economy is lousy with high unemployment.

Buy against the experts who have unfavorable predictions in extremely lousy market. They usually exaggerate to sell their stuffs. This is one of the few times you should bet against them.

You cannot predict when the market is bottom unless you borrow my time machine. :) However, use your better judgement with educated guesses.

Do not gamble your money you cannot afford to lose. Past performance is a guideline and does not guarantee future performance.

(c) TonyP4 2011. Written in 11/16/11. Updated 7/16/12.

Disclaimer: All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision.

Corruption, American style

60 Minutes showed a unique way how the Congress men/women get rich. It is a big loop hole as it is legal for congress men to trade with insider info. When they make some decisions without public knowledge and buy stocks and profit based on the knowledge - it is a crime for the powerful. When they sell this info to others, it is a bigger crime.

In addition, many start new jobs in the companies they gave favors to when their tenures are over. Unlike many global leaders, US presidents are usually not corrupt, but they make a lot of money in their books, speeches…

The lobbyists are corrupt but legally if they lobby within the laws. It is buying influence / access with money. Check how many congress men receive money from NRA and how they return the favors.

It is the mutually beneficial ‘co-operation’ between those who have power and those who have money. I would like to change the phrase 'those who have gold make the rules' to 'those who make the rules own the gold.'


Corruption is not an American invention but a global problem. Judging on how may bribes you have to pay in order to open a business, India is the worst, China is in the middle and America is not bad. At least it can be shown on American TV.

US is very strict in insider's trading. Recently Raj was fined and sent to jail for 11 years from my memory. Martha was sent to jail too for the same crime. She is famous so the 'kill one and warn hundreds' works. Folk like Bill Gates know the companies they're going to acquire, so Bill's money is administered by a blind trust.

Last year SEC sued a couple in HK in using insider's info to make millions. That's the primary function of SEC. China does not have similar organization and it is a wild, wild west in China with many making money (legally there but illegally here) and there are many frauds. SEC has delisted many Chinese companies.

That's the social injustice the Occupy Wall Street folks should fight, not that much on income disparity. The folks who make the law will not be stupid to make a law to stop their greed until the voters become so furious on this 'legal' corruption.

Monday, November 14, 2011

Chinese bashers

In blogging in public, I comment against Chinese bashers. In most cases, I try to meet them half way as there are no absolute right and wrong on almost everything. I hope to change some of them esp. the younger folks. It has cost them some money if they have not invested in US companies that invest and benefit in China's rise.

I try to find out why there are so many Chinese bashers.

* We cannot change the older generation as they still see Chinese with pigtails working as cooks and butlers as the top jobs for them. They have to bring their biases to their graves.

* I hope to change the younger generation that is influenced by politicians and the media. Some are true but most are not true. To illustrate, they blamed China on poor construction that caused so many lives in earthquake, but no one blamed same on other poor countries.

Here are some of my comments defending China.

* China will have soft landing.
- China is not run by fools looking for 4 year re-election at all costs. The fixes are fast and efficient (sometimes inhuman to me).

If China were run by fools, why they become #2 in economy and millions were lifted from poverty (i.e. not starving to death) in last 30 years from a economy far worse than India.

- There are a lot of monetary reserves. Money can fix everything, almost.


You must live in a cave in your last 30 years to find US is not a currency manipulator and you do not know the purpose of printing money to lower our debt burden. China applies the same trick by pegging the currency to USD initially.

The middle class in China is the best saver (compared to US easily). The down payment is huge compared to US in 2007.

They're mastering the western technologies from virtually 0. Sometimes it is too fast to me and problems pop up naturally. It is a wake up call and nothing more. You do not know how many train wrecks we've in US.

The space docking is no small task even it is about 35 years behind - 35 years is not too generous estimate if you consider their speed, skilled workers, and today's supporting technologies such as CPU. Not to mention many other advances. The macro view is they've a government and wealth to promote technologies and the qualified scientists - 3 factors US is lacking.

The housing problem is under control and judging from how the government handled crisis in the past I or any intelligent folk would not want to bet against it.

China is not a rich country per capita, but is rich enough for the government to fix all these problems.

- The middle class is a huge internal market. If you go to any Chinese city 10 years ago and now, the changes will surprise you.

- China has moved to the next stage of developing its economy with products of higher value and better quality.

* The only unknown is a trade war with US. The politicians who cannot fix our problems will put all the blames with China in order to buy votes.

The housing bubble should have a soft landing with further 10% depreciation. It is a riskier predication as human psychology is unpredictable. However and as most assets, they will return to the average price.

Nobel prizes take about half a generation of education/development judging from the average age of the winners. I should say they re-started their school system about 50 years ago (about the time after the Cultural Revolution).

Nobel prizes are getting political against China. Why Obama got it for doing nothing and Deng not getting it for lifting millions from starvation? Why the prize winners are awarded to Chinese residents who left China? It is my logic and nothing against Nobel Prize.

Shanghai school kids (above the average in urban China but not too much above) are #1 in science and maths. in the world. Check the % of Chinese PhDs in your top local colleges, and sometimes is higher than the local born. Amazing, or eye-opener for some!

High creativity is not needed for most jobs like accounting, programming, managers, lawyers and even doctors. We need folks like Jobs and Gates to create jobs for the educated group that Chinese have now with rote learning. China does have schools for genius and we will see how they work out in the future.

They do copy. It is a stage of becoming developing country. Japan and S. Korea all passed through the same stage. They need to enforce intelligent property before they can move to the next stage. Did US pay Germany for using their atomic bomb technology?

I do think China should improve (not reform) their education system and enforce intelligent property very soon.

Friday, November 11, 2011

Why stock price surges or purges

It is part of my ritual looking for the holy grail in investing. I try to look at my big winners and big losers to find out the reasons of the big gains/losses, so I can adjust my buy criteria accordingly.

Sometimes I cannot find good reasons or the reasons are not logical or convincing, or some events I cannot control. When this happens, I just ignore these irrational reasons, which could do more harm.

The following is one of the many of such stocks. GTIV just appreciates 50% in 10 days I bought. It seems most experts are wrong and in this case I am right. However, do not bet against the experts. First, the experts are still good to follow, but for some strange reasons, they all rate potentially good stocks to Sell. It could be these stocks have been down for a long and hence very risky, while and the experts do not realize they are headed for a rebounce.

IBD's composite score is 10 out of 100 and usually it is recommended not to buy any stocks with the scores less than 70.

Fidelity's Opinions from advisers is Sell. Usually it is a good advice as the score is according to how the advisers performed historically on the stock.

ProTrader has a grade of F, the lowest.

ValueLine does not have a predicted 3-5 year return.

Zack (the free version) has a rating below average.

To conclude, most newsletters/advisers do not favor this stock. Its sector (health care) is not favorable either and it could be due to the unpredictable ObamaCare. That could be the reason why it had lost 34% in the last 30 days.

At bottom or early recovery, almost all ratings on these stocks are Sell. It happened in last bottom (in 2003), March, 2009 and hopefully today. Do not buy the stocks just because they have Sell ratings. You need to further analyze whether they would go to zero.

Today many companies are making good profits, a lot of cash and low P/Es. In 2003, some companies struggles. At that time I ensured the company could survive in 2 years by dividing the cash position by the burn rate.

I bought this stock based on:
- huge expected earning - from the predictions of the experts even they do not like this stock.
- low P/E esp. with respect to the historical P/E.
- huge net short term asset %.
- this sector could be bottomed out.

This is my contrary stock that works so far. I'm an optimist, so the chance of doing one on a loser is pretty slim as we all look for #1.

(c) TonyP4 2011. Written in 11/11/11. Updated 11/11/11.

Disclaimer: All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision.

Thursday, November 10, 2011


Here are my takes and I do not prepare to argue as there is no right or wrong answer - all depending on what you believe.

* I'm pretty believe there is Jesus as the recordings are quite credible and there are many real hints.

* If there were Eve and Adam, who recorded it, how and in what language? I know some scripts in India did not survive the hot climate. The translated script to Chinese helped the Indians to locate an old city and the life at that time. If Eve and Adam were Chinese, they should have eaten the damned snake or dog, we should still be in heaven. :)

* The expedition from Hong Kong found Noel's Ark? Hope it is not a shed that has been there for thousands of years. There have been too many similar incidents and all have been false discovery. If it is the one, then there will be a lot of credit to the old testament.

* No matter what the conclusion is, there is no denial that religions have helped a lot of poor, orphans, the hopeless, the needy...

* Chinese see after life very differently from the west. No Chinese saw the light from the end of the tunnel. There are no angels for Chinese but jumping corpses sticking their tongues out.

If there is after life, they should look the same no matter you're a Westerner or a Chinese.

* Buddhism believes in re-born and Christians believe in eternal life. If one is right, the other must be wrong, or both are wrong.

Click here for religion could cause WW3.

Tuesday, November 8, 2011

My coconut theory

In a tropical island, every one sleeps under a coconut tree. He is waken up by a fallen coconut on his head once a while. He eats the coconut and goes back to sleep. He is lazy due to the nice weather (no need to find shelter) and the nice resource (the coconut tree). He is happy and rich by his own standard.

US is richest by the developed citizens, hard-working immigrants and the huge natural resource per capita . However, Norway is the richest for that size group (3 M) and some smaller oil countries like Brunei is richer.

Norway is rich due to the rich off-shore oil field and the fish export (second in the world after China but far, far #1 per capita wise). It is smart not to boast except in the Olympics to prevent jealousy and invasion.

Singapore is rich due to the port location and hard-working citizens (most are Chinese). When the hard-working folks land to a land of coconuts (i.e. resources), they are natural to be rich as indicated in my coconut theory.

Thursday, November 3, 2011

EU' mess

My predication:

* Euro will be dissolved or will at least kick out the cheaters, free loaders and parasites like Greece. In any case, it would depreciate a lot compared to gold.

* After that, default is not a bad answer.

* The lesson of having a good life without working hard is learned again and again. First it is Ireland, then Greece, then Spain/Italy.

* Another lesson is living off from the treasures/commodities they stole in their colonial days is long, long over.

* EU will be a problem for years to come. When the country has that high debt with regard to GNP, they will not be competitive except sending their citizens to be slaves to work for other countries.

I can hire some to clean my house, cook for me, dance for me and take care of my grand children if the wage is right as long as they're not lazy and cheaters from their bad culture.

* Decoupling is the solution. US and China will not be stupid or big enough to rescue a sinking ship.

* There will be conflicts in the citizens in Greece between those who have (still a lot collecting over $40K USD pension) and those who have to suffer due to passing the debts/miseries to them.

(c) TonyP4 2011. Written in 11/3/11. Updated 11/3/11.

Disclaimer: All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision.

Monday, October 31, 2011

A Nation of No Losers

* A Nation of No Losers *

We do not let you be a loser!
Your mistakes will be rewarded handsomely.

When you bought a mansion that you cannot afford, we're going to bail you out.
When you bought a clunker that you should not have, we give you $4,500.
When you bought any inefficient appliance or anything, we'll pay you no matter how old they are.
When you returned an old gun, we give you money for a better, updated gun so you can kill more.
When you lost your job, we extend your benefit.
When you cannot pay your college loan, we will give you amnesty.
When you ran out of money for Christmas gifts, we give you 2% payroll tax reduction.

When you do not have saving, we give you free health care.
When you have saving or a job, we take your health care away.
You die penniless, we help you out.
You die with millions, we share your wealth.

Teenagers, the more babies you have, the more benefits you have. Keep them coming.
Drunk drivers, no one will prosecute you as the entire jury and even the judge are drunk.
Rapists, you’re in good company of our politicians, coaches and clergymen who rape and cheat as a glorious sport.
Druggists, as long as you do not inhale, you’re still a no-loser.
Old ladies, your driver's license is also a license to kill.
Black kids, we give you special pass to go to college and jobs.
Congressmen, insider trading is legal to your privileged group.
Lobbyists, we can add import taxes on Chinese products that your industries cannot compete.
Prisoners, you will get the flu shots first and free dental care. If your local jails are full, we beg you to leave with free transportation.
Baby killers, we give you a movie/book deal to give you incentive to kill your next baby.
Altar boys, you could be the top 1%.
Fatsos, do not worry. Our up-coming drugs will melt all your fat while you sleep.
At the mean time, we double all seat sizes in buses, airplanes..., triple size the value meals and replace the slim actors with fatsos to make you look like a no-loser.

All athletes are rewarded with millions for taking drugs.
We’re outrageous on foreign athletes doing same.
It is an American invention and how dare you copy it without paying us royalty!

No other developed country lets their citizens own guns.
NRA and his puppet politicians will give you millions of funny 'reasons' like the only efficient way to control population.

When you cheated billions, you can retire in a resort-like 'prison'.
Also, the billions your wife hid is hers - no questions asked.

When your company fails, we bail it out.
The executives are rewarded with bailout money for bringing down a company.
When your company is failing, we give you half a billion – what a country!!!

The small catch.
We need your vote to re-elect us in 4 years.

The children cannot vote today, so let's pass our debts to them.
China does not have a voice here, so let's pass all the blames to them.

Even the entire world agree with us.
Our president was awarded the Nobel prize for doing nothing but reckless spending, so why you need to work hard and save?

I wonder why.

Even with insurance, I pay a lot for doctor visits while the poor get it free.

The well-dressed lady in front of the check-out-line bought expensive meat using food stamp that I could not afford.

The ‘disabled’ youngsters spend all their time fixing up their motor bikes.

My friend's late father-in-law could not afford to go to nursing home while the poor get it free, and he paid a million or so for his estate tax.

The above serves as a wakeup call/satire/joke and nothing more. It is written by the 'winner' who actually is a loser.

(c) TonyP4 2008-2012

Trade by headlines

When it rains in Brazil, buy coffee futures.

Recently, it rains too much in SE Asia, so buy rice futures. I do not trade futures, so I miss the opportunity and unfortunately there is no equivalent ETF.

However, I benefit on two major trades as follows.

A magazine article pointed out coal should be bottomed but it could have another 20% down. I placed 5 orders and 4 got executed. I had to dip into my credit line. Made $5,000 on the same day. My theory: retail investors and hedge fund managers read the same article, but acted later the day - all the meetings with their wives and fellow managers caused them some change. I made about 22% average on the 4 stocks in two weeks as of last Friday.

Update as of 4/ 26/12. The coal stocks did not do well. The run up could be due to the magazine article.

Another article from the same magazine said same on copper and FCX. I placed the order but copper was up by 8% on Monday. Hence I did not get the order executed. Once a while a market order is good.

On the same week, CROX lost almost 40% in one day. I bought some and made about 10% profit today by selling it. CROX's fundamentals are no good and it does have the history of roller coaster ride in its stock price.

I predict the 4 coal stocks have a long way to realize its potential value, so I keep them. It could be a year, two or even three years.

This style of investing is trade by headlines. I practiced it before and more today. The market currently favors this style to me for the following reasons.

* The market is volatile.
* Retail investors are willing to get rid of the losers for year-end tax planning.
* Fund managers use it for window dressing.
* Investors are not rational and follow the market blindly.
* We have so many good news and bad news.
* The media influence the market.

I've missed applying the same trick to the rise of Apple. I should have bought the stocks of its part suppliers. Hope learn it and take advantage of future similar circumstances.

(c) TonyP4 2011. Written in 10/31/11. Updated 04/26/12.

Disclaimer: All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision.

Tuesday, October 25, 2011

Repeat and repeat

I posted the following again and again.

Some of the posts do not stick with facts. When you belong to a political party, your points are twisted to what your political party wants you to say.

* A full-scale trade war with China would bring us to another recession for sure and China would pull out the 1.3 trillions of the government debts. Our farmers are making good profits from China esp. when they start to export rice.

Click here for potential trade war with China.

Most have the myth that China stole all our jobs. Those are manufacturing jobs with low pays and India and the other low-wage countries would take China's place. Western Europe is our competitors with same high tech products.

It is quite easy for the politicians to unload all our problems to China as they cannot fix our problems.

* We have 1% richest folks and 45% do not pay income taxes. I and most of you belong to the 54%. The 1% are the investors and they will invest the money where the profits are better as most of us do in investing. At worst, we could kill the goose that lays the golden eggs or they survive by flying to other countries with lower taxes.

Small businesses are not hiring as they cannot foresee the economy and would be penalized for the unemployed workers, not to mention the uncertainty of the ObamaCare.

Currently, US is not a good place to invest with high corporate taxes, regulations and high labor costs. The root of our problem is the expensive wars we cannot afford and we do not live within our means. Government is buying our votes and it does not take a rocket engineer (now most are unemployed) to figure it out.

Click here for 'Democracy leads to socialism'.

The government should improve our economy and treat it as a long-term agenda. Entitlements should be cut. If you lose your free health care by taking a job, you will not work.

Friday, October 21, 2011


All nations except the involved should keep away from the Middle East conflict. WW3 will be most likely started in Middle East. The Bible says Israel will be surrounded by enemies. Israel is doing fine to protect herself with the jet fighters that are very useful in the desert. Let US, EU, China… isolate themselves from the conflict.

If it is about oil, shame on us. If it is a prolonged Crusade, shame on the misinterpretation of the religion and the Jews who control the US congress and drive us to the conflict.

A nasty joke:
The terrorist would go to heaven and is promised to have 6 virgins (need one day for rest). However, the fine print does not include the quality, age and the reasons they're virgins all their earthly lives of the virgins. As in their culture, female terrorists get nothing.

Tuesday, October 18, 2011

Outrage over toddler run over by vans followed by passers-by not helping

It made to the prime news in US. Very sad!!! This is not an isolated incident that I want to believe.

It is the worst of public behavior in a civilized society. I try to find answers.

1. It could be the product of lack of education due to the Cultural Revolution. The parents without good education would have strong effect on the current generation. My theory anyway.

Definitely demonstrates our failure of education and lack of general awareness on how to react in such situations. Education is not just a tool to get a good job, but also teaches us how to be a good human being and a good citizen.

2. It could be our culture. Do you remember the poem roughly translated as follows? Only sweep the snow from your doorstep and do not care much about the snow flake on the roof of your neighbor’s house.

3. Most likely it is the publicized cases that the Samaritans were punished. The judge who ordered the Samaritan to pay the expenses for helping an old lady who fell should be prosecuted. The judge could have no training and could be the result of Cultural Revolution. I bet China will set up laws to protect Samaritans.

Also, why did the parents let the kid running around?

When I watched how the passers-by moved the guy under a burning car in US risking their lives, I asked myself would I do it myself. The answer is a shameful ‘no’. In US, their insurance companies tell the doctors do not help a dying stranger in the street as it would cost an expensive lawsuit. So, it is not a China-only problem.

In the old days, I bet it had happened many times but they were never publicized. When we do not know the events, we never find ways to fix the problem.

Another instance that internet and the surveillance cameras (though I do not like it myself) could change the public behavior of a nation. We do not gain respect on how rich we are but how we behave in public. The child did not die for nothing if we can learn our lesson and set up laws to ensure it will never happen again.

Sunday, October 16, 2011

Protest due to income disparity

If you work hard and/or take chances to profit from investment, you're entitled to have good wealth.

If you are lazy, collect entitlements, take drugs, and drop out from high school, you're entitled to be poor.

The rich and the poor have one vote each, and the politicians are buying votes so they will take care of the poor at first glance. However, the politicians have to satisfy first the special groups who pay their campaigns.

When the protesters are not against wars in Middle East, I conclude they bark at the wrong tree. It is the wars that drive us into recession. I feel sorry for the unemployed and in particular to the fallen heroes. However, I do not feel sorry for the prolonged welfare recipients.

You know who suffer most for the bankers' greed that caused this recession. The rich who own most of the bank stocks. Who is negligent? The government for not setting up/enforcing corrective regulations. Who are guilty? The bank management who tried to make money for the bank and their own bonuses. Also, the government and those of us who do not live within their means.

It seems it is representation without taxation. 45% of us do not pay any income tax. I'm not saying the poor should not have the right to vote, but the long-term welfare recipients should not have this right.

When you're born in the wealthy US, you're not entitled to be lazy and collect welfare for life and/or have a good job after college. If we cut down the entitlements of teenage mothers, I bet we'll not have the multi generations of teenage mothers and hence less single-parent families.

If we set up the entitlement system correctly so you do not lose your free health care when you work, I bet we will have more folks working in place of illegals.

The rich should pay their fair share. We do not want to drive them out to other countries with lower taxes. We encourage the rich to invest here by fair tax treatment (with less entitlements and ending the two idealistic wars). They are investors like we're. You do not want to kill the goose that lays the golden eggs.

I do not belong to any political party. I believe to help the poor by teaching them how to fish but not giving them fish everyday. The young kids fixing their bikes all day long should go to work, so are thousands of 'disabled' workers collecting disability social security!!!!

Our political system is leading to socialism and self destruction. Click here for details.

From the return of the stock market in last 3 years, you cannot get rich by investing. I still wonder why the rich increase their wealth that much in the same period. Did they trade with insider's info? If so, our enforcement is too ineffective. I just smell something is wrong with corruption.

On the second thought, globalization may have widened the wealth gap. Yesterday's jobs/services offered by lower society are being replaced by workers overseas.

Friday, October 7, 2011

Trade War with China

If our politicians had 1/1000 of the brain of Steve Jobs, we would be in better shape. Recently they accuse China for depreciating the currency. We will not gain anything, but lose a lot.

* From recent history, China will retaliate like stopping our export of chicken feet, a delicacy over here but not fitted to feed our cows. Not to mention selling them airplanes and other farm products.

However, we started the trade war first by new taxes on Chinese tires and solar panels via the lobby groups/special interest groups. China retaliated with import cars... Our politicians always seek short-term solutions to satisfy certain groups or groups paying them money.

China is the best of the cheap labor countries, but there are many who will take China's place and we do NOT gain any job. The $20 wage will never compete with a $2 wage.

* China will not care about our economy if we do not allow their import. To pull back the trillions of debt is a no brainer to them. Again, our politicians have less than 1/1000 of the brain of Steve Jobs, and stupid folks will do stupid things.

* We hypocritically depreciate our USD by QE1, 2, and potentially 3. Hence, we try to lower our debt burden.

* It hurts US in the future by forcing a lot of pro US decision makers in China losing power/positions. Do you remember the Chinese missile scientist was falsely accused of being a communist and was forced to return to China and became the father of Chinese missiles? History is repeating itself.

The silly politicians insult our intelligence by blaming all our ills on China as they cannot fix our problems. They want to be re-elected and we should never fall into their stupid trap. We are not as stupid as our leaders as it would start the double dip recession.

(c) TonyP4 2011. Written in 10/7/11. Updated 10/7/11.

Disclaimer: All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision.

What China can learn from Steve Jobs

Is SJ a product of the education system of last generation that encourages folks to think outside the box, to be innovative… We need one or two geniuses out of a million for these innovative products/inventions.

Hope China will have more of these geniuses and move up to higher value products and assemble our own versions of iPod, iPhone…that are invented in China.

SJ did not graduate from college, so was Bill Gates. It could be a waste of time for geniuses to go to traditional colleges. Education starts in the family and carries to high school. Well, the 3 pillars of success to me are: genes, hard working and some luck/opportunities. SJ and BG have all 3.

The environment provides important hands to nurture creativity for innovation and enterprise. Protecting intelligent properties is the key too, otherwise we just copy others’ ideas if there is no law enforcement.

China lacks such environment now but it is changing as the country develops further. China has schools for geniuses (not as established as in US) and I hope they’re admitted due to IQs instead of the wealth/power of their parents.

SJ demonstrates we can get up from failure and it could be the best opportunity in life. It is harder today to do same in China.

(c) TonyP4 2011. Written in 9/3/11. Updated 9/3/11.

Disclaimer: All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision.

Market today from my crystal ball

The perfect storm with the following unknowns:

* Portugal, Spain and Italy could follow Greece. They are far larger than Greece.
Click here for detail.

* Trade war with China over currency.
Can we afford to have a trade war with China and take the risk of China pulling out their huge debt from us?
Click here for detail.

If one of the above two happens, we will see Dow below 9000. Otherwise it will cruise between 10,500 and 11,500.

When it goes up to 12,500, I'll sell most of my stocks as the roots of our problems have not been resolved.

If you believe we'll have a good Q3 earning announcements, year-end rally, huge cash held by corporations, and/or there are signs the wars are ending, you may want to act accordingly. I've started buying selectively and it could be the best time for a while for some stocks that have been beaten down badly.

My crystal ball is as good as yours.

(c) TonyP4 2011. Written in 10/7/11. Updated 10/24/11.

Disclaimer: All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision.

Wednesday, October 5, 2011

China and political systems

China has a very unique political system. You can call it socialism with Chinese characteristics or capitalism with Chinese characteristics, or whatsoever. The president appears to be the most powerful person, but a handful of members control the power and the succession of presidency.

It will be debated endlessly on the benefits and the problems of such a system. Judging from what China has done in last 30 years, we have to agree it is not a bad system. When this political party is looking for the long term of the country, we do not care how to get re-elected by buying votes to satisfy all.

Judging from the medical care system and contrary to popular belief, Canadians are communists, US are socialists, and China are capitalists.

Every one in Canada gets the same, free health care. In China, if you do not pay, you die.

China is unique in the scale and the speed of moving to a developed country. Many countries like US and China’s competitors are caught by surprise and fail to respond to the changes. China can produce a product far cheaper than from Mexico several miles away from US. China is also challenging the products of higher value in our generation and I cannot imagine what the educated, hard working Chinese kids will do when they grow up.

Singapore is very unique. It is democratic with single party, but you will be punished for not flushing the toilets (they have cameras every where). If you’re not fit, they will force you to exercise or else.

India has been democratic for many years. They are still poor, uneducated… Democratic system may not be right for countries with low literary skills. How can we weigh the vote from a farmer who cannot read and one from the educated folk in the city? Most ‘democratic’ countries in Asia are corrupt. S.Korea and Japan are not too corrupt and probably the reason is their education levels.

What I try to say is every country is different from other countries. Two democratic countries like US and India are quite different in many aspects.

Click here for "Democratic system could lead to socialism".

Tuesday, October 4, 2011

Democracy leads to socialism?

I heard more folks talking about it. It is what is happening in Greece today and to some extend in US.

The major flaw of the US political system is the re-election in 4 years. Our leaders do not plan or care about the long term. We've more poor than the rich and each has one vote. However, after they've been elected, they have to pay back to the special interest groups (such as no gun control) that have funded their campaigns. That's why democratic system always leads to corruption and self destruction.

Politicians have to watch out for the benefits/welfare of the poor in order to buy votes. The rich will migrate to other countries with less taxes, and be rewarded for their investment and taking risks. So are the corporations moving jobs and investments overseas. We have to blame ourselves as we vote to elect our leaders.

Most of the recent protesters in Wall Street belong to the unemployed and the 40% (excluding the unemployed due to our economic mess) of the citizens who pay no Federal taxes. It is some kind of taxation without representation in reverse. They should take minimal paid jobs (that are taken by illegals today), give back their entitlements... They are taking more from the society than giving back.

Greece has been illustrated this concept thoroughly. Democratic system esp. the rich ones could lead to socialism/corruption, and socialism/corruption in turn could lead to self destruction. With the world interconnected, it could lead to global recession.

Obviously non-democratic systems could also lead to socialism, which in turn could lead to capitalism with corruption too.

Click here on "China and Political Systems".

Saturday, October 1, 2011

China's space station

First congratulations to China. It has to be supported by many high technologies, so it does polish the image of China Inc.

Besides the prestige, it is not a lot to be gained from the investment that US and Russia have found out. What do you gain from a journey to Mars? We have a lot to be done in planet earth like pollution, food, product safety/quality… Hope China will keep the space exploration to a minimum but never terminate it so we can all dream. Never use the station for military purpose.

Space exploration has no defined benefits. So are many pure research in many areas. We can learn from the history of the US space program.

* What are the new products invented due to the US space program? There are some but not profitable compared to the cost of the program.

Most technologies in consumer electronic products are invented in US, but Japan and now Korea take them to the market and benefit from them.

* Shuttle (a good program in concept but not practical in the start) and the space station is a waste of money and again which products are developed due to these two programs and how many obsolete/disabled satellites have been retrieved? US gambled too much on the shuttle program and abandoned the rocket vehicle.

* Our government just pretty much shuts down our space program. Remember it is the turtle who wins the race. Being a developing country, China could be the only country having a space station by 2020. Incredible?

Chinese are far behind from US/west in space exploration. However, if you consider this program is only about 10 years old (longer depending on how you determine the start date), the progress is astonishing, so we cannot say China is 50 years behind.  Another argument is that shooting down a satellite that US could not do 50 years ago.

Although US/west do not share the technologies such as the docking with China, many components such as computer chips are more advanced than 50 years ago.

We should not start a cold war in space program with China. We still decades ahead of China. However, we're cutting funds and China is moving forward. China has not say a word on the superiority in space program. Most of us know that and Chinese know that. It will take a larger rocket to life tons of space station to space.

Many space scientists lose their jobs and their desire in fund cutting and many students lose their dreams.  It is our policy keep on changing every 4 or 8 years. We've gambled too much on the shuttle and lost that's ok but not with the changing policy.

A good link.

The song is clearly American the Beautiful. It is not the first time that CCTV screws up.

Resume from an unemployed NASA researcher:

Years of valuable, classified experience. PhD and considered to be the top scientist in the world. Abandoned by my country due to poor management and stupid politics. Will work for peanuts in any place in this planet and beyond. Desperate, proud, dedicated, heart-broken, patriotic but confused. Screwed by my ex company's office politics, ambitious but not practical objectives, kiss-ass leadership... Reply to my broken trailer or see me, an old man with thick glasses, carrying a sign asking for a dollar in the highway leading to the Cape's deserted launch pad.

Monday, September 19, 2011


CROX had perfect fundamental metrics. I bought some, and then it went about 25% down. I bought some more and it went down another 25%. I bought more and finally it went up 100%. I still lose money on the purchases as I did not buy enough on my last purchase.

1. You only make good profit when you buy a good stock at the right time.
2. Never buy stocks on its way down.
3. Stock shorters of good stocks will hurt you but eventually the last of them will screw themselves up - it does not apply to emerging markets though.
4. Ugly shoes have nothing to do with the profits of the companies that make them. Beauty has different yardsticks.

Friday, September 9, 2011

Job plan that does not work

The job plan has the same problem: spend, spend, spend and do not know how to get the money.

1. Pass our loan burden to our children.

2. Will have high inflation (not now due to the deflated prices of houses, but not commodities/gold) - an invisible tax for those who have.

3. Will raise our debt ceiling and hence will screw up the stock market.

4. Do not spend wisely.
Education starts at home, not at school. With 40% dropout of Black/Hispanic who will be the majority, we do not have a future even throwing money at schools. Money will be well spent to limit single parent families.

Creating more government jobs is not a good way to boost employment.

We should calculate the actual cost of each job created.

5. The most you can save is to end the two wars - check how many billions we can save a month. We really need to fix our economy and unemployment first. We cannot afford the two wars. Even with the mightiest army on earth, we're really a paper tiger if we cannot fix our internal problems. Same as Mao telling his starving citizens that you're the greatest citizens on earth.

6. Bite the bullet for all by increasing taxes, decreasing welfare/entitlements...

Obama is a good communicator but he should have acted far earlier to solve our economy problem that is created by the previous government. It is obvious Obama is buying votes for the next election.

We elect our leaders, so we have to blame ourselves. The major flaw is our political system to ensure our leaders plan for 4 years and not for the long term. We've more poor than the rich and each has one vote. However, after they're elected, they have to pay back for the special interest groups that have funded their campaigns. That's why democratic system also leads to corruption.

Politicians have to watch out for the benefits/welfare of the poor in order to buy votes. The rich will migrate to other countries with less taxes, and be rewarded for their investment and taking risks. So are the corporations moving jobs and investments overseas.

Greece has been illustrated what, why, and how thoroughly. Democratic system esp. the rich ones could lead to socialism/corruption, and socialism/corruption in turn could lead to self destruction of our society.

(c) TonyP4 2011. Written in 9/9/11. Updated 9/26/11.

Disclaimer: All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision.