Friday, July 27, 2012

Table of content of this blog

Contrary to what you're thinking, my primary reason of blogging is not because of the plenty of free time in my early retirement. English is not my native language and being an ITer I have not written much during my career. I have never taken courses in social science and investment besides the required in college. It has to be the fun of trying something different and I enjoy it so far.

I find a lot of newspaper and on-line articles particular on China look right but are totally wrong. I try to use common sense to argue against them.

As I'm not using my full name, I'm not blogging for promoting myself and I have nothing to sell you. You may feel offended sometimes as I blog honestly and I do not care about political correctness and popular opinions (I'm not running for a political job).

Click the highlighted to access the blog. Hence, this blog serves as a rough table of content of the better blogs I wrote for last several years.

My contributions.
* The reason of secular stock market. As indicated by many articles, we've secular market about 20 years interval. My contribution is the cause. It is most likely due to wars for secular bear markets (Vietnam and the two current wars) or lack of for secular bull markets. The next, new bull secular market could start in 2015.

* Coconut Theory on why some natives are lazy naturally. So far no one objects or they're too lazy to defend themselves.

* Global Aging Demographics. I blogged years ago that India's explosive population growth is no good for India and the world. However, even today the popular belief of a larger and younger population is better for India including an article by a professor in a prestigious college.

* How Hong Kong gets so wealthy? A Stanford professor in a syndicated article (it means it has been published in most newspapers that Sunday) told the world that the British rule could make a poor country prosperous using Hong Kong as an example. I argued it was totally wrong and the primary reason for Hong Kong's wealth is its closeness to China then and now.

* Debunking some of Buffett's preachings. I only blog if my views are different to popular beliefs/opinions as I do not want to waste the bandwidth and electronic ink not counting  wasting your time.  Actually most investing heroes are not doing good recently.

Defending China.
The politicians cannot fix our problems and use China as a convenient scapegoat. Many newspapers, TV stations... want to sell their stuffs by giving what you want to hear/see by twisting the facts.

As a Chinese American, I am naturally biased but I'll not let my dumb nationalism to cover my eyes or yours. There are Chinese bashers and US bashers who do not convince us as they're not using facts. They promote distrust, confrontation, ... that I try to avoid.

Tibet. This comment has over 350 'likes' in an Economist's article. I estimate there are  3,500 reads (using 1 'like'  to 10 readers) on this long comment. Initially I faced many resentment from folks esp. from Tibetans in other articles.

Human Right. This blog has ignited discussions and scored some points for China. This one and the last one change the image of China for some.

China is a victim instead of an aggressor for last 250 years. A MUST read for Brits and Japanese.

Economy: Currency,  Rare Earth, Quality. Space Station, Tariff,

Social topics:  Intelligence PropertyEnvironment, Africa, Hong Kong, Child Labor ,
                        India, Politics,

What China should do in next 5 years.

US and socially speaking.
A Nation of No Losers. Quite popular. You can laugh and cry at the same time.
Trade War with China.
Our trade with China
Conflict with China
Lessons from Wars.
US and Wars
Efficient charities.
How to solve the trade imbalance
Dear recent college graduates,
Socialism could lead to self-destruction.
Why the wealth gap widens
Is Social Security going to survive?

Should we blame all our ills on China.
Is China friend or foe?
Extremes of Two Nations

Fixing the economy.
Why China is so poor and US so rich.
Effective Health Care Delivery.
Education by example
God of Gods
Defining freedom
Political parties and the economy
Corruption, American style

Our problems, solutions and implementations
Efficient Charities

Stock Market.
Market Top. My crystal ball in April is quite right.
Market Timing II
Spotting big market plunges
Market timing on asset classes
Strategies for secular bull and bear markets

Recovery or W-shaped recession?
A prolonged recession

When stock is over-priced

Invest Responsibly.
The mysteries of P/E.
Sell shorts.
Covered calls.
Should you hold a stock forever.

Hedge Fund 101
2011, when stock pickers die

Advice for retirees.
Dividend stock problems.
Sectors you want to avoid.
Stop Loss.
Refining Dogs of Dow Strategy.
Looking for a multi bagger

Technical Analysis.
Modern Portfolio Theories.
Investment Psychology 101. 
Retirees, take notice.
The evils of QE
Housing recovery?
Identifying Earnings Season Overreaction Opportunities
Different strategies
Volatility and Momentum
Distorting indexes

Fun and Jokes.
Even if you do not agree everything I said, hope some jokes would give you a laugh. If you get offended, you should check in your closest clinic esp. the humor department. It is not easy to write jokes that are totally unoffensive.

A + B
My day as a farmer.  A real story to be told to my grand children.
Diets that always work. Offensive to fatsos.
No Nativity Scene. Offensive to politicians.
Politicians and prostitutes

How to save the airline industry. PG 17.
My stupid name is Boris.
Celebration of Olympic Bronze.
Lady missing a fight.
Playing lotteries.
Lady missing a flight

One paragraph could change your health and life
The best in life


The following are the best blogs from my other blog. It is a collection of good articles/jokes circulated to me.

The new student from India. Very funny!
Break the promise PG 17
The 11th husband PG 17.
 Living in 2009
 Funny Acronyms
 Dear Employees

Graduation pictures from China, USA,Japan PG17. Does not work all the time.
Gift for mom
Bishop goes to Hollywood
Sex for seniors
How Staten Island got its name
How 'America' got the name
Who actually is Jesus. 







The Yellow Flower Uprising.
Letter from a patriot





6 Great Foods 

50 health hints (in Chinese)




十穀米 - 10 grains

 吃蝦的時候喝橙汁等於自殺 - Shrimp & orange

 中風徵兆-- 請記住 "STR" 三个字


Amazing picture




(c) 2009-2012 TonyP4

Monday, July 23, 2012

Contrarian investing

An article said 

" Look for extremes in market sentiment and investing activity … and do the opposite."

I agree to some extend, especially in today's sideway market.

However, if the long-term trend is down (i.e. moving to a W-shaped recession), you want to wait longer before you move back in.

If we're heading to the same path as Japan's lost decades, you may want to wait even longer.

If we're heading to a secular bull market (not today), then waiting too long will be bad as every investor including your mother-in-law would be a genius.

What I try to say is we need to watch the market direction carefully.

Read the following link and its comments on market conditions.

My talk is gospel and your talk is garbage

My friend asked me why US has an embargo on dual purpose equipment to China while we are challenging China on rare earths. Come to think of it. It is not the only one. I can think of the following with an example followed each.

Industry subsidies. Farm subsidies with low-interest loans.

Pollution. We're the #1 polluter per capita wise.

Currency manipulator. The way we depreciate our currency by printing it to the max. is manipulating our currency.

Product dumping. Microsoft used to do it at one time to wipe out its competitors of Office and then raise prices.

Human rights. We just had our yearly shooting.

Nuclear weapons. We can own them, but not those who do not belong to the club.

Defense budget. We're #1 and our budget is far, far away from #2. We still ask what is your purpose of expanding your defense budget.

We also preached China to spend like no tomorrow. We need to learn from our mistakes first and do not judge others with our own yardstick.

Sunday, July 22, 2012

Drink water problem

It could be a large problem.

KDI said:

Here's a pictorial representation of the facts around water that kind of woke me up to the problem we're all facing: ; Limits to freshwater could restrict economic growth by impacting society in four primary ways: (1) by increasing mortality and general misery as increasing numbers of people find difficulty filling basic and essential human needs related to drinking, bathing, and cooking; (2) by reducing agricultural output from currently irrigated farmland; (3) by compromising mining and manufacturing processes that require water as an input; and (4) by reducing energy production that requires water. As water becomes scarce, attempts to avert any one of these four impacts will likely make matters worse with regard to at least one of the other three. 

I commented:
There are many ways to save drinking water. In Hong Kong, some buildings use sea water to flush the toilets. Under some controlled environment you can use minimum water to grow plants - it is not economical now as we still have a lot of water. Limit population growth. Reduce some mining that requires a lot of water.  

India could be the country to suffer more. China has projects to re-direct southern water to the north. They will not do it in large scale unless they have to.

South China suffers from too much water and the north from too little (a recent exception in Beijing). The west is a semi desert. Water could be more important than we expect. Shipping water from Africa is a long way, but we also shipping bottom water from all over the world. 


Friday, July 13, 2012

Olympic attires made in China

This politician accusing the Olympic attires made in China is biased and stupid. It is the same stupidity that drives our country to the wrong direction. He is brain washed and is spreading hatred.  If this is not protectionism, what is? China could stop our brand names. Hence, we save some small number of jobs (labor is a small fraction of the products like Apple) and lose a lot in corporate profits.

Is it better to buy them from India which is as if not more corrupt than China? Unless you live in fantasy, you should know $20 wage will never compete with $2. Check your clothes and see what are made in USA. Be realistic. So, you do not buy it from the good old USA. Dumb nationalism is just dumb.

There will not be chemicals to make the athletics sick from the attire. You buy the best at the least cost and it is free trade. 

I excuse him due to his old age and in his days when he could still see and was sober, he saw all Chinese had pigtails and working in the railroad (however, you  never see any Chinese laborer in the celebration pictures)... He has to bring his bias to his grave. 

Next Olympic, I have a win-win suggestion like Hong Kong did in 60s and 70s. You can have the entire attire made in China except two buttons and the label of Made in USA, which are made in China with the thread (also made in China) to sow them into the attire by American laborers.  

You cannot find laborers here as when they work, they would lose their welfare and free health care. Easily we can import some women from China to do the final assembly. No one loses even those big-month politicians!

Order prices

First never use market orders as they can be manipulated especially on stocks that have low volumes.

In a fast rising market, market orders could be the only exception. However, I still prefer not to use it. If you really want that stock, trade it at prices closest to the last traded price. I seldom lose orders for that. Sometimes I use the day's lowest (or highest to sell).

We all want to pay less and sell higher. However, if they're too far away from the current prices (say > 10%), we may never materialize the trades. I have a long list of buy orders that are not traded and they could make me thousands.

On a falling market, 10% less than the current prices for buy orders are OK for some stocks. To illustrate, I had about 10 of such orders last two months. I got about half of them executed. Half of them have turned around and half of them are still falling. CAT, Cisco... are some recent buys at these discounts.

At the end of the day, there seems to be high volumes that move the prices a lot. It could be the effect due to day traders as they do not want to leave any positions overnight. Another effect is what the big boys are trading. They are the movers of stock prices. We like to ride with their band wagons than against them.

Tidbits on the coming Olympics

Just fun, satire, and some facts.

* I will be the coach of our basket ball team. The NBA champion is my team and the runner-up is my bench. For good competitors, I'll send out the first team in the first half and the bench in the second half and reverse for poor teams. No need for coaching except making sure they do not fool around with the British escort services on the night before the game and pay the service fees unlike Obama's 'body' guards.

* If there are only two spots in any sport, we select the one from competition and the other one from the best in this year. Hence we do not lose some one due to his or her flu.

* The current ranking of countries is all wrong by no. of golds or by no. of medals. It should be a scoring system such as 4 points for gold, 2 points for silver and one point for bronze (.25 for 4th place to encourage the mediocre).

* We should deduct half of the points for both Olympians and coaches  who just migrate to a new country within a year and those rich countries using expensive gears like the Speedo. Trying to be fair to poor countries. Olympics should not be a puppet for the rich, but sadly it turns out to be.

* The bronze should not be given to 3rd place finisher, but to the handicapped. If the average of the final in a swim event is 6', the 3rd place should be given to the fastest athlete below the average height. 

* We should have another ranks by medals by capita. In this case Jamaica and Ethiopia could score higher while China falls behind and India will not even on the map.

* We should select host countries with all the facilities built already so we do not waste money to create elephants. Athens is a good bitter lesson.

* Every year we should give a gold medal to the country who participates for the last ten Olympics and never wins a medal like playing the loser's bingo. The motto is: 'Every time you lose, you come back'  or 'Every time you come back, you lose'.

* We should have a medal race for how healthy is your average citizen. You can randomly select 100 shoppers in your local WalMart in your country and average the time for the group to run around the building.

* To the Chinese bashers, the Olympians will not not lose their strengths from the chemicals from their attires that are made in China.

Sorry for the US official who said about Ye with the word  'suspicious' and he was slapped on the face by someone unknown from US to break the record. He represented himself but not us. There is no evidence of her taking drugs. It has taken out the thunder of her legendary swim, and makes the American more ugly. We do have doping incidents. Guess what country? One is US and US had doping incidents before. The worst if many agreed with him and make us all ugly.

Every system has its advantages and disadvantages. US's training using private funds leads to many families in poverty as reported in this Olympics. For every successful US Olympian, there must be a few families losing their shirts or even some are at risk of being raped by their coaches.

Chinese are poorer and individuals cannot afford this kind of financial investment. They take more hardship and sacrifice as the average body size is smaller than the west. Working hard to achieve something is to be celebrated and not to be blamed.

Besides the badminton scandal, Chinese are more gracious with losing and even waved the British flag in the open ceremony. I do not put all the blame on the disgraced badminton players. The coaches are the ones to be blamed and the competition system too. I would be angry to see these crowns play.

* I sincerely hope other countries share some medals from US and China. I still remember how the first gold medal for Hong Kong lifted the spirit of more than 6 millions. US wants to be #1 and China never says they want to be #1. Different cultures?

There are other 75 similar articles:

The following two are the satires I wrote for the last Olympics and that was my first time I blogged. I bet you will have a good laugh. I was born in Hong Kong, so you know where the jokes came from.

Celebration of Olympic Bronze

My stupid name is Boris

Made-in-China attires.

Queen's Jubilee celebration

I enjoyed the opening. It is less expensive but provides good entertaining - thanks to the British culture.

Thursday, July 12, 2012

Average down or double down

When you lose 25% on a stock, do you want to buy more or even buy at the same initial dollar amount (i.e. double down)? Most likely the advice is not but there are some exceptions. Find out why it is down and is there any reason to recover. Here are some of my actual experience and my reasons. 

* I would average down on CAT, or even double down on CAT. I just bought the company and it lost 10%. CAT does not have a good audience of shorters. It will recover when the economy improves. At this price and P/E (about $75), it is hitting bottom to me, esp. the big boys are selling like hot cakes.

You need to be patient as you're swimming against the tide. Wait for 2 to 3 years.

* Average down is about timing. Take CROX several years ago as an example. CROX had a good audience of shorters and it suffered from temporary setbacks to me. You would lose another 50% at its low. However, after one year, it shot up to over 200% gain from the bottom. When to double down is important. Stay away when the downward momentum is high.

* You need to make sure the fundamentals are there and it is just a temporary setback. When the stock has a potential to go to 0 with fraud or a lawsuit pending, it would be a fool's game to average down.

* Averaging down on BAK is not wise when it is losing from $50 several years ago to about $8 today. When it was $25, it was still not a good price as it was still a falling knife with the problem unresolved.

* Averaging down just because you love a company is not rational.

So, there is no Yes and no No answer. Your success requires you to do some homework and sometimes some luck.

Sell Lockheed (to China)

We have a hard time to find a worthy enemy - China and Russia are not even combined.

Best deal of the century: Sell Lockheed to the highest bidder (it would be China). I know what you're thinking, but will China be stupid enough to be our enemy after Russia and many smaller ones?

The last war is pressing a button to destroy the world many times over. We do not need the carrier with dual nuclear generators.

What did we gain in Vietnam War, the two Middle East wars... in monetary value and decrease in human suffering? Are Vietnamese living worse than before the war?


Talking to my friend Crozz on CAT.

You may need to hold CAT longer like two years (after 2014) when the economy starts to recover. Even with the present metrics, it looks great. The mining and construction businesses are slowing down but they will come back after the 2007 recession. 

I use a scoring system. From 5/7/12:  It scores at 24 for short term and 17 for long-term. I think the reverse is true (i.e. 17 for short term) - with 15 is a buy.

Value Line indicates annualized 16% return after 3 years (8% is good for me.) Fidelity has 9.5 out of 10 from analysts. 17% of its stock price is cash. It is 98% cheaper compared to its 5-year average P/E.

The only negative point besides the global economy is its high debt / market capital. It is quite normal in its industry.

On that day of the analysis, the stock price is 97.19 and now is 79.14. I bought it two times in between these prices. Is it a gem or will it fall further? Only time can tell.

Tuesday, July 10, 2012

Why middle class sucks

First I have to proclaim I'm a not a member of any political party and any religion. In other words, I am not biased and I do not have to stick to the view of any political party or religion. 

We have to ensure the middle class should have better medical care than the poor as they pay more for their share.

Can anyone explain:

1. The poor get 100% free health care and prescription (say in MA), while the middle class like me are very careful to decide whether to see a doctor or not. I have to pay good money even after the insurance.

2. The poor can go to nursing home free and we only go when we have no choice as it is very expensive.

Thursday, July 5, 2012

Can China say no to US?

Japan can say no and should say so to US in last twenty years. Now China can and has proven it can without being the puppet of US.

US used to play China card against Russia 30 years ago and now may play India card against China. Oue foreign policy should not be a game of cards. We cannot be the world leader / policeman all the time. The glorious days of either my friend or my enemy has long gone.

Wednesday, July 4, 2012

Illegal workers

Well, it is a double-edged sword.

If you've not worked in the farm, you may not know how tough farm work is
. The poor natives here prefer to collect the social welfare than working. We have to cut down these entitlements and force (encourage is a better word) them to work before we can shut out the illegals.

To me, preventing illegals from coming is quite easy. We do not need all the wires, sophisticated devices and manpower. You do not want to penalize the illegals (they come here for better economical reasons that I do not blame them), but penalize the employers. With better regulations like requiring work permits and the employers paying the expenses including health care, temporary works could benefit the society.

Tuesday, July 3, 2012

Politcal systems

Capitalist-Socialist is a better term to describe China's political system, However, China  is also ruled by a single party with about a handful of rulers. It is some how authoritarian.

Communism evenly shares food and other stuffs among its citizens. So, it encourages laziness and China today does not look like communism but really looks like capitalism where you die if you do not work.

Socialism is in between capitalism and communism. Democracy could lead to socialism, which in turn could lead to self destruction like Greece.

What do we call US? Socialist-Democracy? We have generous welfare and free speech.

Democracy may not work for countries with low education. It could and have led to corruption as indicated in many Asian countries, present or past.  

We cannot weigh the same vote for an educated citizen and a bum. We can have an IQ meter in the vote booth. Your tax return for last year will be handy too as we should not allow representation without taxation. Quite extreme even for me but just a thought. :)