* Japan has almost no interest rate for a long while. If you borrow 1 M from them at almost 0% and invest in a country's debt for 8%, you think you win. However, you need to consider the currency conversion loss when converting back to USD, inflation, risk and taxes.
* High yield bond is good when you buy the bond yielding 8% or so and the interest rate falls from 8% to 1% as in 2008. 2007 is a bad year for high yield bonds. However, in 2008, some high yield bonds made over 50% return. 2007 was a tough year as most were afraid that it was the end of the world. So educated guess and timing is everything.
* Today the interest rate is almost too low to invest in bonds to me. Even the king of bonds made wrong judgement.
Conventional wisdom tells you to balance your portfolio with a combination of bonds and stocks in proportional to the risk tolerance. I prefer the reward/risk ratio.
* Now, cash could be a very good alternative to avoid the risky market and poor bond prospect. You may lose due to taxes and inflation, but you're buying insurance and move back to stocks or bonds when the reward/risk is high.
* The government bond price could collapse when its issuing country is printing and depreciating its currency.
A bond at 30% yield may not be good if the company/country has a 99% probability to default the bond.
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(c) TonyP4 2012. Written in 4/30/12. Last updated in 4/30/12.
Disclaimer:
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.
Monday, April 30, 2012
Sunday, April 29, 2012
Conflict with China
US is creating another conflict with China by helping the blind dissident. The territory disputes with Japan, Philippine, SE Asia... will be another big conflict backed up by US. Selling arms to Taiwan and the fleet surrounding China is not a friendly gesture.
Many small conflicts will lead to a big one and wars eventually. I will be very, very sad when my adopted country and my native country go to war like your parents throwing stuffs at each other. I hope it will not happen in my life time.
The market could lose 50% back to the last support level when China withdraws its US debts. Folks will have even harder times to find jobs. The poor will suffer with less money from the government and from private donations. In a sentence, wars are not good for everyone on earth except politicians to re-direct of their inability to fix our problems.
Many small conflicts will lead to a big one and wars eventually. I will be very, very sad when my adopted country and my native country go to war like your parents throwing stuffs at each other. I hope it will not happen in my life time.
The market could lose 50% back to the last support level when China withdraws its US debts. Folks will have even harder times to find jobs. The poor will suffer with less money from the government and from private donations. In a sentence, wars are not good for everyone on earth except politicians to re-direct of their inability to fix our problems.
Saturday, April 28, 2012
Market newsletters/subscriptions/systems
When you've accumulated a certain wealth and you want to handle your own investment, invest your money and time in systems that help your investment. It comes in several forms like newsletters, subscriptions, and databases for searching stocks.
Go to any investment seminar. Most are free and supposedly to be educational. There is no free lunch and their agenda is to sell you 'expensive' products. Some are good and worth every penny, but not all are.
You need to determine your need, your time available for investment, your investment dollar and what kind of a investor you're. There are systems for day traders, swing trader, long-term investor... or a combination. If you choose the wrong one, you would waste your money and your time, not to mention the loss in investment.
Some systems require you spend a lot of time and they could be the best system when you can master it. No free lunch again applies.
Do not trust what they boast about the performances that they can cheat as I described in my blog. If they know their system works perfectly, they will not share it with you.
Without mentioning specific subscriptions, click here for my experience.
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(c) TonyP4 2012. Written in 4/28/12. Last updated in 4/28/12.
Disclaimer:
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.
Go to any investment seminar. Most are free and supposedly to be educational. There is no free lunch and their agenda is to sell you 'expensive' products. Some are good and worth every penny, but not all are.
You need to determine your need, your time available for investment, your investment dollar and what kind of a investor you're. There are systems for day traders, swing trader, long-term investor... or a combination. If you choose the wrong one, you would waste your money and your time, not to mention the loss in investment.
Some systems require you spend a lot of time and they could be the best system when you can master it. No free lunch again applies.
Do not trust what they boast about the performances that they can cheat as I described in my blog. If they know their system works perfectly, they will not share it with you.
Without mentioning specific subscriptions, click here for my experience.
-------
(c) TonyP4 2012. Written in 4/28/12. Last updated in 4/28/12.
Disclaimer:
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.
Market: a 3-step dance
Market can move up or down. Usually it dances side way when switching from one to the other. When it moves down, it moves in a faster speed.
Market movement can be predicted by moving average (30 days moving average is one). When it moves above the average line, most likely it moves up. It is a prediction and many other factors should be considered.
Take advantage of the side way movements by buying at little dips and selling at little peaks which are defined as the support and resistance.
You can take advantage of market timing by not holding a stock forever by buying and selling the same stock or an ETF. I believe 'buy-and-hold' is dead since 2000. I cannot find too many articles praise this strategy with data after 2000.
Market timing is not a perfect science but educated guesses. However, the more educated you're, the better your chance of success in the long run.
There are secular market about 20 years, a market cycle about 5 years, and 2 market dips. In a secular market like 1980-2000 (approx.), every one can be a market genius and buy-and-hold works as the tide is with you.
It provides opportunities to buy at the two or three temporary market dips every year and sell at the same number of temporary market peaks.
The market cycle is divided into bottom, early recovery, recovery and peak. Do not buy at bottom, make most money in early recovery, switch to momentum strategy in recovery and be careful in peak (with stop orders). You could lose more than 40% from peak to bottom in a year.
Use the strategy according to the market movement and stage of the market cycle.
Market movement can be predicted by moving average (30 days moving average is one). When it moves above the average line, most likely it moves up. It is a prediction and many other factors should be considered.
Take advantage of the side way movements by buying at little dips and selling at little peaks which are defined as the support and resistance.
You can take advantage of market timing by not holding a stock forever by buying and selling the same stock or an ETF. I believe 'buy-and-hold' is dead since 2000. I cannot find too many articles praise this strategy with data after 2000.
Market timing is not a perfect science but educated guesses. However, the more educated you're, the better your chance of success in the long run.
There are secular market about 20 years, a market cycle about 5 years, and 2 market dips. In a secular market like 1980-2000 (approx.), every one can be a market genius and buy-and-hold works as the tide is with you.
It provides opportunities to buy at the two or three temporary market dips every year and sell at the same number of temporary market peaks.
The market cycle is divided into bottom, early recovery, recovery and peak. Do not buy at bottom, make most money in early recovery, switch to momentum strategy in recovery and be careful in peak (with stop orders). You could lose more than 40% from peak to bottom in a year.
Use the strategy according to the market movement and stage of the market cycle.
Thursday, April 26, 2012
Bread for China
Again,
China will make an impact if not already done so in food companies. The 1.35 B Chinese
have not suffered from starvation as they had 30 or so years ago. Thanks
to industrialization and urbanization to generate cash to buy food from foreign countries.
China is still very poor in farmland per capita. Their effort in improving food production is vast, but still a drop in the bucket for such a large population and shrinking farm land. The foreign countries that benefit/will benefit are Argentina, US, Russia, Australia and many SE countries.
India will compete with the global food supermarket when they're wealthier. However, it lacks China for decades and their population has not been controlled effectively.
Buy ADM and BG for long-term play.
Click here for the article.
China is still very poor in farmland per capita. Their effort in improving food production is vast, but still a drop in the bucket for such a large population and shrinking farm land. The foreign countries that benefit/will benefit are Argentina, US, Russia, Australia and many SE countries.
India will compete with the global food supermarket when they're wealthier. However, it lacks China for decades and their population has not been controlled effectively.
Buy ADM and BG for long-term play.
Click here for the article.
Wednesday, April 25, 2012
Should you hold on a stock forever?
There are many examples that you should hold on some stocks like APPL... Interestingly there are many examples to do the opposite like AIG, Lehman Brothers...
My point is you cannot execute any strategy based on exceptions. You really need to design a good test plan and execute it before you draw a conclude. The test plan depends on a historical database that takes survival bias (the bankrupt, the merged, the spun off...) into consideration. Otherwise, your test is not correct and make you lose money if you execute it.
I do not have such a test plan as I cannot find a good historical database. Why I trade is: 1. To improve my portfolio for better (supposedly to be) potential of total return and 2. Market Timing (not a sure thing).
I do have some sold stocks making another 100% or losing another 50% if I have hold them for n more months. I track the performance of sold stocks and I conclude they break even factoring in opportunity to buy another stock.
Never fall in love with a stock. Never be afraid to buy back a sold stock if there is potential for good return.
----
There are exceptions.
When your stock appreciates many, many times and you're close to your life expectant age, hold it and the cost basis will step up when you die.
Rotation of portfolio for diversification. Your ma told you not to put all eggs in one basket.
Sell when you're sure we're heading to a big plunge. You can always buy back the sold stock at supposedly better price.
You need money...
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(c) TonyP4 2012. Written in 4/25/12. Last updated in 4/25/12.
Disclaimer:
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.
My point is you cannot execute any strategy based on exceptions. You really need to design a good test plan and execute it before you draw a conclude. The test plan depends on a historical database that takes survival bias (the bankrupt, the merged, the spun off...) into consideration. Otherwise, your test is not correct and make you lose money if you execute it.
I do not have such a test plan as I cannot find a good historical database. Why I trade is: 1. To improve my portfolio for better (supposedly to be) potential of total return and 2. Market Timing (not a sure thing).
I do have some sold stocks making another 100% or losing another 50% if I have hold them for n more months. I track the performance of sold stocks and I conclude they break even factoring in opportunity to buy another stock.
Never fall in love with a stock. Never be afraid to buy back a sold stock if there is potential for good return.
----
There are exceptions.
When your stock appreciates many, many times and you're close to your life expectant age, hold it and the cost basis will step up when you die.
Rotation of portfolio for diversification. Your ma told you not to put all eggs in one basket.
Sell when you're sure we're heading to a big plunge. You can always buy back the sold stock at supposedly better price.
You need money...
-------
(c) TonyP4 2012. Written in 4/25/12. Last updated in 4/25/12.
Disclaimer:
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, April 24, 2012
When to sell a stock
My reasons to sell a stock.
1. Met my targets/objectives.
It could be n% return or x% after a year for taxable accounts.
2. The company fundamentals changed for the worse.
3. The market is predicted to be at peak.
4. Realize I made mistake in a stock due to bad analysis, unexpected frauds/lawsuits, and/or bad data.
We need to sell before we have cash to buy. Trading takes advantage of market timing and improves the quality of our portfolio for better appreciation potential.
-------
(c) TonyP4 2012. Written in 4/25/12. Last updated in 4/25/12.
Disclaimer:
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.
1. Met my targets/objectives.
It could be n% return or x% after a year for taxable accounts.
2. The company fundamentals changed for the worse.
3. The market is predicted to be at peak.
4. Realize I made mistake in a stock due to bad analysis, unexpected frauds/lawsuits, and/or bad data.
We need to sell before we have cash to buy. Trading takes advantage of market timing and improves the quality of our portfolio for better appreciation potential.
-------
(c) TonyP4 2012. Written in 4/25/12. Last updated in 4/25/12.
Disclaimer:
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.
Recovery or W-shaped recession?
This recovery is different from the previous ones:
1. For most job seekers, it is still a recession. If you lose a job, it is a depression. No matter how the government dresses up the employment picture for election, employment is still not promising.
2. Corporate profits are good after the bare bone cuts. They need to spend to ensure future earnings.
3. Interest rate drives up money supply.
4. We've inflation for most commodities but deflation for housing.
I do not want to ignore the chance of a W-shaped recession even the market is doing great lately.
1. For most job seekers, it is still a recession. If you lose a job, it is a depression. No matter how the government dresses up the employment picture for election, employment is still not promising.
2. Corporate profits are good after the bare bone cuts. They need to spend to ensure future earnings.
3. Interest rate drives up money supply.
4. We've inflation for most commodities but deflation for housing.
I do not want to ignore the chance of a W-shaped recession even the market is doing great lately.
Low interest rate
Low interest rates have many impacts on our investment:
* Usually they're better for the stock market as corporations can borrow at cheaper rates and hence improve the bottom line. It should be great for the housing market and retailers.
However, prolonged period of low interest rate will damage the economy. Japan is one example.
* Bonds will suffer big time.
* Dividend stocks will prosper from bonds moving to stocks.
* Folks depending on fix incomes will suffer.
The government has to adjust the rate to stimulate business by lowering the interest rate but at the same time not to prolong it too long.
-------
(c) TonyP4 2012. Written in 4/24/12. Last updated in 4/24/12.
Disclaimer:
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.
* Usually they're better for the stock market as corporations can borrow at cheaper rates and hence improve the bottom line. It should be great for the housing market and retailers.
However, prolonged period of low interest rate will damage the economy. Japan is one example.
* Bonds will suffer big time.
* Dividend stocks will prosper from bonds moving to stocks.
* Folks depending on fix incomes will suffer.
The government has to adjust the rate to stimulate business by lowering the interest rate but at the same time not to prolong it too long.
-------
(c) TonyP4 2012. Written in 4/24/12. Last updated in 4/24/12.
Disclaimer:
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.
What is inflation?
Inflation is:
invisible tax to those who have,
lower the tax burden (China is loser here),
invisible salary cut,
invisible cut in your entitlements/welfare,
investment incomes (dividends and appreciation) worse than on paper (the winner is stock losers)...
However, deflation is far worse than inflation. When the company produces a product and find out they have to sell it less, then their profit would be cut and they need to hire less. The government job is ensure inflation and deflation are at acceptable levels.
---
Joke:
Obama's body guards argued with the prostitutes inflation kept them losing purchase power and the prostitutes doing same should suffer same.
They said the prostitute did the same job with 1 or 2 at the same time.
Normally they got the 10th job free and Obama was busy that night.
They negotiated in local currency, not USD.
Important notice. I am not one of the body guards, so it is just an observation. :)
-------
(c) TonyP4 2012. Written in 4/24/12. Last updated in 4/24/12.
Disclaimer:
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.
invisible tax to those who have,
lower the tax burden (China is loser here),
invisible salary cut,
invisible cut in your entitlements/welfare,
investment incomes (dividends and appreciation) worse than on paper (the winner is stock losers)...
However, deflation is far worse than inflation. When the company produces a product and find out they have to sell it less, then their profit would be cut and they need to hire less. The government job is ensure inflation and deflation are at acceptable levels.
---
Joke:
Obama's body guards argued with the prostitutes inflation kept them losing purchase power and the prostitutes doing same should suffer same.
They said the prostitute did the same job with 1 or 2 at the same time.
Normally they got the 10th job free and Obama was busy that night.
They negotiated in local currency, not USD.
Important notice. I am not one of the body guards, so it is just an observation. :)
-------
(c) TonyP4 2012. Written in 4/24/12. Last updated in 4/24/12.
Disclaimer:
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, April 19, 2012
H1 visas
During my commute bus to downtown, I noticed a lot of Indians. Most likely they're on H1 visas and worked in banks, brokerage firms... Some have or will apply for the green cards eventually. Their living standards have been improved greatly and no one is stupid enough for India to fix their infrastructure and offer similar job opportunities for the equivalent salaries.
Several scenarios:
* If you're a technical manager, which ones you want to hire:
1. H1 workers who will work hard for peanuts but gold when comparing to their native country, or
2. Some one has no incentive to work hard but trying to get your job.
* We should encourage children to get into science and maths. Our system is great for creative folks like Jobs, Gates..., but not for general high tech folks that you find in Google, Microsoft... where most are foreigners and children of foreigners.
If we have enough qualified professionals, we can cut down H1 visas. Today we can't otherwise our high tech will not be competitive. Most H1 recipients eventually get their green cards, and move their parents to US burdening our welfare and entitlement system.
Several scenarios:
* If you're a technical manager, which ones you want to hire:
1. H1 workers who will work hard for peanuts but gold when comparing to their native country, or
2. Some one has no incentive to work hard but trying to get your job.
* We should encourage children to get into science and maths. Our system is great for creative folks like Jobs, Gates..., but not for general high tech folks that you find in Google, Microsoft... where most are foreigners and children of foreigners.
If we have enough qualified professionals, we can cut down H1 visas. Today we can't otherwise our high tech will not be competitive. Most H1 recipients eventually get their green cards, and move their parents to US burdening our welfare and entitlement system.
Wednesday, April 18, 2012
Volatility and Momentum
You can take advantage of the fluctuations and the short-term trends of the market.
The strategy of taking advantage of volatility and that of momentum work opposite to each other. Select the fluctuation (volatility) or short-term trend (momentum) according to current market conditions.
When we've so many 3% fluctuations and the S&P stays flat, you can take advantage of fluctuations by buying at the dips and selling at the temporary ups.
Momentum is profitable by buying when the last n days is up by x% and selling vice versa.
Design tests using historical data from Yahoo!Finance and implement your strategy accordingly.
Volatility usually happens when market goes to the next phase of the market cycle and/or during times the investors are divided into two camps of market directions. Momentum works during the market rise to the top. Monitor the market peak and it will plunge very fast and steep. In most cases, use Stop Limit to limit the plunge.
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(c) TonyP4 2012. Written in 4/18/12. Last updated in 4/18/12.
Disclaimer:
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.
The strategy of taking advantage of volatility and that of momentum work opposite to each other. Select the fluctuation (volatility) or short-term trend (momentum) according to current market conditions.
When we've so many 3% fluctuations and the S&P stays flat, you can take advantage of fluctuations by buying at the dips and selling at the temporary ups.
Momentum is profitable by buying when the last n days is up by x% and selling vice versa.
Design tests using historical data from Yahoo!Finance and implement your strategy accordingly.
Volatility usually happens when market goes to the next phase of the market cycle and/or during times the investors are divided into two camps of market directions. Momentum works during the market rise to the top. Monitor the market peak and it will plunge very fast and steep. In most cases, use Stop Limit to limit the plunge.
-------
(c) TonyP4 2012. Written in 4/18/12. Last updated in 4/18/12.
Disclaimer:
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, April 17, 2012
Market top?
There are some signs of market top today. Basically I'm using an article from seekingAlpha, digest it, and include my personal opinions.
* Non-confirming signals. US market rally is not likely sustainable. The world is economically connected. The problems in EU and China will affect US.
* Fluctuations. The market in the last two weeks acts differently from the last 3 months or so. To me, the market is deciding whether to continue its rally or start its correction. Both sides have not won the argument yet. The recent volumes are low to indicate most are watching and not participating.
* The AAII sentiment and VIX have been reversed from positive. They are good short-term indicators.
* Profit taking. The big boys have not participated yet, but they will. Once they do, we will see the sudden rise or fall of the market.
Well, sell in April and go away has some truth. Why April instead of May? It has been up too high and Newton's gravity law applies. Do not forget to come back to the market on Oct. 1, which is the best month from my recent statistics.
Market timing is not a science. When I predicted right on the peak and bottom, 75% is luck. It also depends on your risk tolerance. I do not want to take the risk to make the last buck. When it blows up, you do not have time to react fast enough.
Many including the author of the mentioned seekingAlpha article predicted wrongly on the market since the beginning of this year even with good arguments. Very seldom the experts are wrong two times in a row. Even a broken clock is right two times a day.
The market may go side way (about 3%) and you may be able to take advantage of the volatility.
Here is my view on market today.
-------
(c) TonyP4 2012. Written in 4/17/12. Last updated in 4/17/12.
Disclaimer:
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.
* Non-confirming signals. US market rally is not likely sustainable. The world is economically connected. The problems in EU and China will affect US.
* Fluctuations. The market in the last two weeks acts differently from the last 3 months or so. To me, the market is deciding whether to continue its rally or start its correction. Both sides have not won the argument yet. The recent volumes are low to indicate most are watching and not participating.
* The AAII sentiment and VIX have been reversed from positive. They are good short-term indicators.
* Profit taking. The big boys have not participated yet, but they will. Once they do, we will see the sudden rise or fall of the market.
Well, sell in April and go away has some truth. Why April instead of May? It has been up too high and Newton's gravity law applies. Do not forget to come back to the market on Oct. 1, which is the best month from my recent statistics.
Market timing is not a science. When I predicted right on the peak and bottom, 75% is luck. It also depends on your risk tolerance. I do not want to take the risk to make the last buck. When it blows up, you do not have time to react fast enough.
Many including the author of the mentioned seekingAlpha article predicted wrongly on the market since the beginning of this year even with good arguments. Very seldom the experts are wrong two times in a row. Even a broken clock is right two times a day.
The market may go side way (about 3%) and you may be able to take advantage of the volatility.
Here is my view on market today.
-------
(c) TonyP4 2012. Written in 4/17/12. Last updated in 4/17/12.
Disclaimer:
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.
Monday, April 16, 2012
China's labor problem
It is one of the major problems in China. The labor cost is more higher than before. A million or so workers in Foxconn get big raises and it will affect the rest of the labor wages. They have:
* Control rising wages. Too high wages will cause the jobs going to other countries like Vietnam which has taken some jobs already.
* Develop local market fast.
* Move to higher value products.
* Improve quality - making the last quick buck is short sighted.
* Keep the one-child policy to reduce future no. of laborers.
It should not take too long for India or other low-wage countries to copy the model of China, but so far there are not too many successful stories.
There are many low-wage countries to replace China's higher wages. However, it is not opening the flood gate as Chins still offers the best deals besides labor.
Some jobs are coming back to US? To me, it is a election trick. $20 wage never compete with $2 wage. There are some higher end jobs coming back but they're just a drop in the bucket. US will NOT gain a single job. China's loss is gain by other countries which have lower labor cost which is one of the factors including infrastructure, political stability, educated work force...
* Control rising wages. Too high wages will cause the jobs going to other countries like Vietnam which has taken some jobs already.
* Develop local market fast.
* Move to higher value products.
* Improve quality - making the last quick buck is short sighted.
* Keep the one-child policy to reduce future no. of laborers.
It should not take too long for India or other low-wage countries to copy the model of China, but so far there are not too many successful stories.
There are many low-wage countries to replace China's higher wages. However, it is not opening the flood gate as Chins still offers the best deals besides labor.
Some jobs are coming back to US? To me, it is a election trick. $20 wage never compete with $2 wage. There are some higher end jobs coming back but they're just a drop in the bucket. US will NOT gain a single job. China's loss is gain by other countries which have lower labor cost which is one of the factors including infrastructure, political stability, educated work force...
Friday, April 13, 2012
iPad3 for investers
I just bought the iPad3. The following is my experience and questions of using iPad3 as an investor.
* Office access is HERE!
The second good news it is free for the first 2 GB. Steps to follow.
1. You can download the apps OnLive Desktop from Apps.
2. You have to create an OnLive Desktop account using the browser to do so.
3. Run the apps.
4. You need to transfer files from your PC to OnLive via
https://desktop.onlive.com/account/myfiles
------
Good apps: Fidelity, Facebook, Angry Bird, Tetgris, Mah Jon [the four player version], Netflix, Google Earth, Skype, iTune U, Radio.
------
* Most have some minor bugs. Mah Jon got hung and I need to use up all the battery to remove running programs.
* iPad is amazing. I can bring it on vacation, but most likely I do not use it to buy stocks or open my bank accounts as I do not trust the Wifi security. Vacation is time to relax after all.
* Netflix looks and works better than my PC.
* Bad apps: Barron, Popular Mechanic,
* I still do not know how to load a bunch of MP3 songs from my PC. I can load one by one via Onlive Desktop. Some one suggests to use the white cable and a SD adapter. The best suggestion is to set up iTune in my PC and they will be accessed from my iPad - will try it.
* How to input traditional Chinese charaters for e-mails? Found the solution and it works. Under setting, select keyboard, and select alternative language and tradition Chinese in my case. Now the keyboard has a Alternate Keyboard key to switch between English and Chinese. You write Chinese in the board and several suggestions will be displayed for your choosing. Quite easy and fine for my need. Slower for some.
* Still cannot how to Play All for the Playlist in Youtube. Try Sound Boomer and so far it does not work.
* Office access is HERE!
The second good news it is free for the first 2 GB. Steps to follow.
1. You can download the apps OnLive Desktop from Apps.
2. You have to create an OnLive Desktop account using the browser to do so.
3. Run the apps.
4. You need to transfer files from your PC to OnLive via
https://desktop.onlive.com/account/myfiles
------
Good apps: Fidelity, Facebook, Angry Bird, Tetgris, Mah Jon [the four player version], Netflix, Google Earth, Skype, iTune U, Radio.
------
* Most have some minor bugs. Mah Jon got hung and I need to use up all the battery to remove running programs.
* iPad is amazing. I can bring it on vacation, but most likely I do not use it to buy stocks or open my bank accounts as I do not trust the Wifi security. Vacation is time to relax after all.
* Netflix looks and works better than my PC.
* Bad apps: Barron, Popular Mechanic,
* I still do not know how to load a bunch of MP3 songs from my PC. I can load one by one via Onlive Desktop. Some one suggests to use the white cable and a SD adapter. The best suggestion is to set up iTune in my PC and they will be accessed from my iPad - will try it.
* How to input traditional Chinese charaters for e-mails? Found the solution and it works. Under setting, select keyboard, and select alternative language and tradition Chinese in my case. Now the keyboard has a Alternate Keyboard key to switch between English and Chinese. You write Chinese in the board and several suggestions will be displayed for your choosing. Quite easy and fine for my need. Slower for some.
* Still cannot how to Play All for the Playlist in Youtube. Try Sound Boomer and so far it does not work.
Tuesday, April 10, 2012
Growth and Value stocks
The following may change the performance data and conclusion.
* You may want to select value or growth in different secular markets as follows.
Secular Bull Market (approx. 1980-2000). I bet growth is better.
Secular Bear Market (approx. 2000-2013 and 1960-1980). I believe value is better. I expect bull market will start in 2013 as the two wars are ending. My theory.
* Holding periods. I would use 1 year for value stocks as we're buying against the trend and it takes longer for the value to be recognized. I would use 3 months for momentum stocks.
You can annualized the returns for comparison.
* Survival bias. If you use ETFs, it will be ok. We have several big financial companies go belly up in 2008.
* Value is a major category and dividend stock is under Value. Growth is the other major category and Momentum is under Growth.
-------
(c) TonyP4 2012. Written in 4/10/12. Last updated in 4/10/12.
Disclaimer:
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.
* You may want to select value or growth in different secular markets as follows.
Secular Bull Market (approx. 1980-2000). I bet growth is better.
Secular Bear Market (approx. 2000-2013 and 1960-1980). I believe value is better. I expect bull market will start in 2013 as the two wars are ending. My theory.
* Holding periods. I would use 1 year for value stocks as we're buying against the trend and it takes longer for the value to be recognized. I would use 3 months for momentum stocks.
You can annualized the returns for comparison.
* Survival bias. If you use ETFs, it will be ok. We have several big financial companies go belly up in 2008.
* Value is a major category and dividend stock is under Value. Growth is the other major category and Momentum is under Growth.
-------
(c) TonyP4 2012. Written in 4/10/12. Last updated in 4/10/12.
Disclaimer:
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.
Monday, April 9, 2012
Anticipating the first correction of 2012?
Anticipating a correction
Today is April 4, 2012. The market has been down by 2% on last 3 losing sessions. Is it the correction we're looking for? Or, it is too early to call.
I have been selling stocks for awhile and moved most Annuity positions to money market fund. My total cash is about 50% and it is the max. for me. I've missed a lot of gains by selling too early even it is the correction.
* Arguments for no correction:
- Corporate profit is still good.
- The economy is improving.
* Arguments for correction
- The next QE will not be materialized and no money to stimulate the economy and the stock market. Contradictory with above argument!
- Virtually 0 interest rate normally stimulates the economy. However, prolonged low rate will lead to long term depression like the lost decades of Japan.
- The market is taking a breather.
- Global problems from China, EU, Japan, N. Africa.
The above is a summary of what experts said. I do not do any research (as they're already available from the web), but summarize their opinions, select what make sense to me, and act accordingly.
A good article on the same subject, click here.
(c) TonyP4 2012. Written: 4/9/2012. Updated: 4/9/2012.
#####
Disclaimer: All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision.
Today is April 4, 2012. The market has been down by 2% on last 3 losing sessions. Is it the correction we're looking for? Or, it is too early to call.
I have been selling stocks for awhile and moved most Annuity positions to money market fund. My total cash is about 50% and it is the max. for me. I've missed a lot of gains by selling too early even it is the correction.
* Arguments for no correction:
- Corporate profit is still good.
- The economy is improving.
* Arguments for correction
- The next QE will not be materialized and no money to stimulate the economy and the stock market. Contradictory with above argument!
- Virtually 0 interest rate normally stimulates the economy. However, prolonged low rate will lead to long term depression like the lost decades of Japan.
- The market is taking a breather.
- Global problems from China, EU, Japan, N. Africa.
The above is a summary of what experts said. I do not do any research (as they're already available from the web), but summarize their opinions, select what make sense to me, and act accordingly.
A good article on the same subject, click here.
(c) TonyP4 2012. Written: 4/9/2012. Updated: 4/9/2012.
#####
Disclaimer: All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision.
Sunday, April 8, 2012
Tax season
Finally I finished my tax via Turbo Tax. Some interesting questions and experiences could be helpful to you.
* This is the last year for low tax on l.t. capital gain unless there are changes. Take advantage of it. For detail click here.
For 15% or lower tax bracket, l.t.capital gains and dividends are virtually 0 (not 0 due to some social security adjustment). If you're still working with higher tax bracket, it is 15% max. (vs the 20% max. in 2013). Dividends in 2013 will be the income tax rate plus 2 or 3% for Medicare. Consider passing appreciated securities to your children if they can profit with lower tax rate. Try Wikipedia for updated info.
* Turbo Tax treated my MA refund as income. If it is still not fixed, use the refund for next year's tax withheld, so you will not have a refund. I used it as estimated tax for next year.
* MBTA passes are deductible for MA.
* The cost basis for stocks will be kept after 1-1-2011 by your broker and reported to IRS. When you have appreciated stocks/assets, the way to avoid capital gain taxes is to keep them for ever. When you pass away (eventually every one does), their cost basis will be stepped up, hence there will be no Federal taxes. However, your estate will be larger.
* Turbo Tax allows you loan the software to others - I do not think it is a good idea for the company selling Turbo Tax but great for us. The one who loaned mine uses e-file. It used to be: You need to print the final tax return on the computer that you installed Turbo Tax.
---
I'm not a professional in taxes. Consult your tax lawyer and accountant for details.
* This is the last year for low tax on l.t. capital gain unless there are changes. Take advantage of it. For detail click here.
For 15% or lower tax bracket, l.t.capital gains and dividends are virtually 0 (not 0 due to some social security adjustment). If you're still working with higher tax bracket, it is 15% max. (vs the 20% max. in 2013). Dividends in 2013 will be the income tax rate plus 2 or 3% for Medicare. Consider passing appreciated securities to your children if they can profit with lower tax rate. Try Wikipedia for updated info.
* Turbo Tax treated my MA refund as income. If it is still not fixed, use the refund for next year's tax withheld, so you will not have a refund. I used it as estimated tax for next year.
* MBTA passes are deductible for MA.
* The cost basis for stocks will be kept after 1-1-2011 by your broker and reported to IRS. When you have appreciated stocks/assets, the way to avoid capital gain taxes is to keep them for ever. When you pass away (eventually every one does), their cost basis will be stepped up, hence there will be no Federal taxes. However, your estate will be larger.
* Turbo Tax allows you loan the software to others - I do not think it is a good idea for the company selling Turbo Tax but great for us. The one who loaned mine uses e-file. It used to be: You need to print the final tax return on the computer that you installed Turbo Tax.
---
I'm not a professional in taxes. Consult your tax lawyer and accountant for details.
Thursday, April 5, 2012
Obama's Easter dinner
How come there are so many open chairs in Obama's Easter dinner?
The hint is the immigrant agents outside his house.
The hint is the immigrant agents outside his house.
Wednesday, April 4, 2012
China, Canada and Australia
The common factor of the financial conditions of Canada and Australis is China. China buys a lot of natural resources, energy, and farm products from both countries. When China rises, both benefit, and vice versa.
China's buying affects the prices of these products globally even China does not buy from the specific country.
In addition, these two countries welcome immigrants based on financial capabilities instead of the 'political prosecution' in the US. They both benefit from Chinese immigrants in 3 waves: 1. prosecution of corrupt officials in Hong Kong (almost every one in the old HK police depart was corrupt), 2. Hong Kong takeover and 3. the current massive immigration from China.
Vancouver's real estate doubled fast during the period. It is a bargain price for HK folks who used to spend half a million for 500 square feet apartment. The local folks said their next generation will not be able to buy a house in Vancouver. If some one pays double for your house, will you complain?
Sorry for this generation of Vancouver folks who have to adjust and live in smaller quarters. In this case, the older generation benefits and the younger one suffers. Vancouver is just a beautiful place to live with beautiful places, nice climate and highly educated citizens. A secret cannot be hidden for ever!
China's buying affects the prices of these products globally even China does not buy from the specific country.
In addition, these two countries welcome immigrants based on financial capabilities instead of the 'political prosecution' in the US. They both benefit from Chinese immigrants in 3 waves: 1. prosecution of corrupt officials in Hong Kong (almost every one in the old HK police depart was corrupt), 2. Hong Kong takeover and 3. the current massive immigration from China.
Vancouver's real estate doubled fast during the period. It is a bargain price for HK folks who used to spend half a million for 500 square feet apartment. The local folks said their next generation will not be able to buy a house in Vancouver. If some one pays double for your house, will you complain?
Sorry for this generation of Vancouver folks who have to adjust and live in smaller quarters. In this case, the older generation benefits and the younger one suffers. Vancouver is just a beautiful place to live with beautiful places, nice climate and highly educated citizens. A secret cannot be hidden for ever!
China's outlook on demographics and trade partners
Demographics is one minor problem for China as there are still a lot of youths looking for jobs. However, China's one-child policy limits its population growth effectively though there are many bad stories that personally I know.
India has younger population but there are too many and consume everything India produces plus their small farm land/natural resources per capita is getting smaller.
The major problem is China's trading partners like US and EU have economical problems.
The world economies are connected at least the ones described as follows.
1. US trading with high tech and farm products.
2. EU and Japan with high tech.
3. China with low tech and some medium tech.
4. Countries with commodities like Brazil, Australia, Canada and many African countries.
When one is down, all are down. There is no exception. The global trades are good for consumers and hence better living standard. It is possible US can live without trade. However, most will not live in the same living standard even every one can have a job.
India has younger population but there are too many and consume everything India produces plus their small farm land/natural resources per capita is getting smaller.
The major problem is China's trading partners like US and EU have economical problems.
The world economies are connected at least the ones described as follows.
1. US trading with high tech and farm products.
2. EU and Japan with high tech.
3. China with low tech and some medium tech.
4. Countries with commodities like Brazil, Australia, Canada and many African countries.
When one is down, all are down. There is no exception. The global trades are good for consumers and hence better living standard. It is possible US can live without trade. However, most will not live in the same living standard even every one can have a job.
Dividend stock problems
When a strategy is over-used, it would create a mild bubble waiting to burst. There is no exception except one or two with unusual circumstances (like the current gold rush that is due to our money printers at the max.). When the shoe shine boy told a investor he was buying stocks, a famous Wall Street investor (forgot his name) unloaded everything as he knew the boy did not do any research and it was the herd mentality.
When Sarah Cohen (could be another skater) told the TV reporter she was into dividend stocks, she seems to be the shoe shine boy except she is prettier and she has a lot of skills except in investing.
When all the money flows from other funds to funds and ETFs specialized in dividend stocks, it is a mild bubble. History tells us the average retail investor always selects the wrong side of the market. Fidelity's money fund flow always is a good contra indicator for the market.
Past performance does not guarantee future performance unless market conditions are the same which seldom happens. Examples abound from 2000's internet boom to bust. It is still a mild bubble as the market in general is fairly valued today. Dividend stocks perform better than the market but not by a large amount when we take out survival bias. When we exclude the financial companies like Lehman Brothers, AIG, Bear Stern..., the dividend stocks perform better than reality.
There were several articles (at least two from WSJ) on how the dividend stocks are over-valued. The premium on dividend stocks has been the highest in last 30 years compared to stocks without dividend on same fundamentals in theory.
The straw that breaks the camel's back could be Obama's proposal of taxing dividends as regular income plus several percentage for Medicare. When the law is passed, I'll lead the herd to dump the dividend stocks.
The other straw could be the general market is heading to a big plunge.
The arguments against mine are 1. We used to pay more dividend tax before today's low tax rate, and 2. It has to compare with capital tax rate.
When 10% of population controls 50% of this country's wealth, the rich will most likely replace dividend stocks with other investment for total return (= appreciation + dividend + covered call (for some) - taxes - inflation). They would have to pay about 42% tax for dividends plus some for state/local taxes.
You can argue that all your dividends are in tax-free retirement accounts and/or my tax rate is not that high. However, most likely you and I do not belong to this group who drives the market but they are.
You do not have to realize the gains on capital gain. When you die, the cost basis will be stepped up. In a word, you have more control with capital gains but not with dividends. The capital gain will be proposed to be 20% (vs about 42% max. for dividends).
You may argue your dividends are not taxed as they're in retirement accounts. However, when you distribute the retirement accounts, they're treated as regular income. Most likely your tax bracket will be lowered when you retire. It does not apply to those who are successful in investment in their retirement accounts.
There is a good chance Obama will be re-elected but the Congress will be controlled by Republicans. If so, the tax laws may not be passed that easily esp. in the proposed form. Once he is re-elected, raising taxes could be just another election promise to be broken and he will blame the Congress for not passing it.
The current low tax laws will be expired by the end of this year unless there is rescue or postpone. Vote Republicans for better tax treatment on in investment though I do not belong to any party.
There are other 75 articles in my book that could be the best investment in your life.
http://ebtonypow.blogspot.com/
-------
(c) TonyP4 2012. Written in 4/4/12. Last updated in 4/29/12.
Disclaimer:
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.
When Sarah Cohen (could be another skater) told the TV reporter she was into dividend stocks, she seems to be the shoe shine boy except she is prettier and she has a lot of skills except in investing.
When all the money flows from other funds to funds and ETFs specialized in dividend stocks, it is a mild bubble. History tells us the average retail investor always selects the wrong side of the market. Fidelity's money fund flow always is a good contra indicator for the market.
Past performance does not guarantee future performance unless market conditions are the same which seldom happens. Examples abound from 2000's internet boom to bust. It is still a mild bubble as the market in general is fairly valued today. Dividend stocks perform better than the market but not by a large amount when we take out survival bias. When we exclude the financial companies like Lehman Brothers, AIG, Bear Stern..., the dividend stocks perform better than reality.
There were several articles (at least two from WSJ) on how the dividend stocks are over-valued. The premium on dividend stocks has been the highest in last 30 years compared to stocks without dividend on same fundamentals in theory.
The straw that breaks the camel's back could be Obama's proposal of taxing dividends as regular income plus several percentage for Medicare. When the law is passed, I'll lead the herd to dump the dividend stocks.
The other straw could be the general market is heading to a big plunge.
The arguments against mine are 1. We used to pay more dividend tax before today's low tax rate, and 2. It has to compare with capital tax rate.
When 10% of population controls 50% of this country's wealth, the rich will most likely replace dividend stocks with other investment for total return (= appreciation + dividend + covered call (for some) - taxes - inflation). They would have to pay about 42% tax for dividends plus some for state/local taxes.
You can argue that all your dividends are in tax-free retirement accounts and/or my tax rate is not that high. However, most likely you and I do not belong to this group who drives the market but they are.
You do not have to realize the gains on capital gain. When you die, the cost basis will be stepped up. In a word, you have more control with capital gains but not with dividends. The capital gain will be proposed to be 20% (vs about 42% max. for dividends).
You may argue your dividends are not taxed as they're in retirement accounts. However, when you distribute the retirement accounts, they're treated as regular income. Most likely your tax bracket will be lowered when you retire. It does not apply to those who are successful in investment in their retirement accounts.
There is a good chance Obama will be re-elected but the Congress will be controlled by Republicans. If so, the tax laws may not be passed that easily esp. in the proposed form. Once he is re-elected, raising taxes could be just another election promise to be broken and he will blame the Congress for not passing it.
The current low tax laws will be expired by the end of this year unless there is rescue or postpone. Vote Republicans for better tax treatment on in investment though I do not belong to any party.
There are other 75 articles in my book that could be the best investment in your life.
http://ebtonypow.blogspot.com/
-------
(c) TonyP4 2012. Written in 4/4/12. Last updated in 4/29/12.
Disclaimer:
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, April 3, 2012
US and Wars
Most recent wars we participate/participated are caused by ideology to prove our system and our leaders are better than others including Vietnam War. Do we have world peace when every country wants to be #1?
We're not rich enough like we were in 50s and 60s to be the world policeman. Wars destroy our economy, not to mention the human sufferings of fallen heroes/returned veterans and jobs.
We have not learned from history like the failed attempt by French on Vietnam and Russian on Afghan which could be the main cause of the breakup of Russia.
Wars due to resources, shame on us. Wars due to religions, shame on Israel who controls our congress. Most of us do not understand the complexity of Middle East and I have no intention or interest to do so. Should we send our children over there to be killed while they should enjoy the best time of their lives. I rest my case.
If we sent the children of our leaders to the front line, we will not have wars.
WW2 destroyed our competitors while there was no major destruction in US mainland. It could be the major reason we've been so rich in 50s and 60s. We may not be that lucky now with 911 as the recent proof.
When your country wants freedom, you have to fight it yourself. US should not send soldiers and at most enforce sanction to the offending regime.
We're not rich enough like we were in 50s and 60s to be the world policeman. Wars destroy our economy, not to mention the human sufferings of fallen heroes/returned veterans and jobs.
We have not learned from history like the failed attempt by French on Vietnam and Russian on Afghan which could be the main cause of the breakup of Russia.
Wars due to resources, shame on us. Wars due to religions, shame on Israel who controls our congress. Most of us do not understand the complexity of Middle East and I have no intention or interest to do so. Should we send our children over there to be killed while they should enjoy the best time of their lives. I rest my case.
If we sent the children of our leaders to the front line, we will not have wars.
WW2 destroyed our competitors while there was no major destruction in US mainland. It could be the major reason we've been so rich in 50s and 60s. We may not be that lucky now with 911 as the recent proof.
When your country wants freedom, you have to fight it yourself. US should not send soldiers and at most enforce sanction to the offending regime.
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