Saturday, June 29, 2013

Believe it or not (from my friend Sam) in Chinese and English


我不常在facebook分享療方,但這方的來源很可靠,而且用的都是日常食物,所以也寧可信其有登出來。

赭石 一位居住在倫敦的人的親身經歷,他去巴基斯坦開會的時候,突然胸口劇痛,後來被醫院驗出來,他的三條心血管已經被嚴重堵塞,需要做搭橋手術。手術的時間是一個月以後,在這個期間,他去看一位 Hakim─就是回教國家對古法治療師的專稱。

這位 Hakim讓他自己在家中做一個食療,他吃了一個月。一個月後他去同一家醫院做檢查,發現三條血管乾乾淨淨,原來堵塞的地方已經全通了。他是一位虔誠的回教徒,為了讓更多的人受益,他把自己的經驗放在網上分享,他的前後兩張血管照片也放了在網上,在照片中,服用食療之前與之後的分別, 連普通人也看得出來。

材料:

同份量的檸檬汁、薑汁、蒜頭汁、蘋果醋各一杯,蜜糖適量。
一個半檸檬
二大塊薑
三頭蒜
一小瓶蘋果醋

做法:
1,蒜頭去皮,姜去皮切小片,一起放入榨汁機榨汁,或者放入攪拌器打成漿,用網布隔渣,手絞出汁。
2,將蒜頭、薑汁放入瓦煲,加入檸檬汁與蘋果醋,大火滾,小火慢煮,不要蓋鍋蓋,讓水份蒸發,大約需要半小時,剩下大約一半汁液
3,溫度降下後,加入蜜糖,仔細攪勻,蜜糖適量,主要湯匙是令汁液容易入口。
將成品存在有蓋的玻璃瓶中,放入雪櫃。每天早飯前空肚服用一湯匙
吃上一個月以後去醫院做次檢查,會發現血管乾乾淨淨,堵塞的地方已經全通了。必須存!必須轉!打通血管絕密配方,給親愛的人試試
In Facebook I don't usually share the cure, but this source is very reliable, and are daily food, so better to have written off. Ochre experience of a person who lives in London, when he went to meet Pakistan, sudden severe pain in the chest, was later test conducted in hospitals, three of his heart has been severely clogged, bypass surgery needs to be done.

Surgery time is a month, and during this period, he went to see a Muslim State Hakim-exclusive to the ancient healers. Hakim was at home by himself to make a diet, he ate for a month. A month later, he went to check at the same hospital, found three arteries clean, clogging the place was full.

He is a devout Muslim, in order to allow more people to benefit from, sharing his own experiences on the Web, he has two blood vessels before and after photos on the Internet, in the photos, taken before and after diet, respectively, even ordinary people see it.
Materials: an equal amount of lemon juice, Ginger Sauce, garlic sauce, all a cup of Apple Cider vinegar, honey and moderate.
Two chunks of lemon and a half three-head and a small bottle of Apple Cider vinegar with garlic ginger practice: 1, garlic peeled, ginger, peeled and cut into small pieces, into juicer juice together, or put in Blender pulp, with mesh screening, hand wring out juice.
2, place garlic, ginger into a pot, add lemon juice and Apple Cider vinegar, rolling fire, Cook with small fire, do not cover the lid and moisture evaporates, it takes about half an hour, about half of the remaining juice.
3, after the temperature down, adding sugar, stir carefully, sugar amount, mainly tablespoon juice is easy. Finished in a glass jar with a lid, placed in the refrigerator.
A spoon before breakfast every day taken on an empty stomach. Eat a month later went to the hospital to get checked, will find the blood vessels clean, clogging the place was full. Must be saved! You must go! Getting through blood vessels the formula, to my dear people try!

Tuesday, June 25, 2013

Bubbles in 2013



Bubbles have existed throughout our history. It is due to excessive valuation driven up by the big boys and then driven even higher by the individual investors. As of 5/2013, the market bubble is caused by the government interventions via money supply policy and subsidies. The first ones riding the wave make good money and the last ones buying at the peak will suffer most.

From our recent history, we have the 2000 internet bubble, and then the 2007 housing bubble. The chapter Spotting Big Market Plunges (Chapter 39) shows you how easy to detect the last two plunges. Read the chapter AGAIN and digest it. It would save you 40% of your portfolio in the next plunge.

As of 5/2013, the gold price has been down from its height of 1,850. It will remain in this range (1,200 – 1,900) until the USD appreciates and / or the global economies improve. The USD is doing quite well recently (actually at its highest level since 2008). It could be the other countries (EU and Japan) are doing worse than us and /or our shale energy is very promising – it will be clearer in two years whether it is a mirage.

The market will start a 10% or so correction to me or at least its bubble is forming fast. Investing in stocks today is quite risky. The bond bubble will burst when the interest rate rises. It will as the interest rate should be bottomed by now – it can’t go negative I guess. Farm products and the farm land have reached high price levels. The student loan is getting its status as a bubble soon.

Today all the mentioned bubbles could be caused by pumping too much money into the economy by the government (Chapter 38:  A Non-Correlation of the Market and the Economy). However, we cannot keep on pumping the money and ask our children to pay our debts forever. When the music stops, the market will drop fast.

Unless you borrow my time machine (which is still in development), you cannot pin point when the bubble will burst.  Your timing to act depends on your risk tolerance, your knowledge (a commodity trader can afford to take more risk on commodities for example) and your past experience and your greed that could give you false security.

For me, it is safer not to make the last buck as the reward / risk ratio is too low. A good sleep would improve your health and that is worth all the gold in the world.






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My e-book Debunk the Myths of Investing could save you a lot of money in investing. The above is one chapter out of 105 and some important chapters will not be included in the blog.
  http://ebtonypow.blogspot.com/2012/12/special-debunk-myths-of-buffett.html

Sample portfolio for the book.
  http://stockportfolios.blogspot.com/2013/03/welcome.html

(c) 2013 Tony Pow

Disclaimer. I'm not responsible for your actions in your investment. Treat this as educational information and past performance does not guarantee future performance.

Thursday, June 13, 2013

Bonds 101



Bonds are classified into several categories and each has its different characteristics. Briefly, they are classified as 30-year Treasury bonds, 20-year Treasury bonds, 10-year Treasury bonds, short-term Treasury bonds, municipal bonds, investment-grade corporate bonds and high-yield (junk) bonds.

As of 5/2013, the long-term Treasury bonds are very risky. The interest rate is so low and it has no way to go but up. It will when the economy is improving. I do not expect that we will have zero interest rate for a long while.


Here are random comments on bonds.

·         Japan has almost virtually zero interest rate for a long while. If you borrow 1 M from them at almost 0% and invest in another country's bond at 8%, you think you win. However, you need to consider the risk in converting the country’s currency back to Japanese Yen, inflation, bond loss, and taxes.

·         In 2008, almost all assets lost. However, some high yield bonds (or junk bonds) made over 40% for 2009.  To illustrate, you bought these bonds yielding about 8% dividends in the beginning of the year. The government lowered the interest rate to stimulate the economy and hence the average yield was about 1% at the end of the year. The bonds you held yielding 8% was worth far more than the current bonds yielding 1%.

·         As of 4/2012, the interest rate is almost too low to invest in bonds to me.

Even the king of bonds made the wrong call. Do not bet against the Fed as they control the interest rate. 

Conventional wisdom tells us to balance your portfolio with a combination of bonds and stocks in proportional to the risk tolerance, which for some is determined by their ages. I prefer the reward/risk ratio and only buy bonds when interest rate is expected to fall which usually occurs after the first six months of a market plunge. The government has stimulated the economy by lowering the interest rate in almost all recessions.

As of 4/2013, the bond crash seems to be coming. When the economy improves, the interest rate will rise. The interest rate is so low now that it has no way to go but up. It will affect adversely to the bonds you’re holding especially the ones with low interest rates and long maturity from today.

If you have not got out yet, it could be your last chance. Even if it will not crash, the risk/reward is too high for me. You have been warned. If you read this article after the crash, check how much you have lost, learn it, and be smarter next time. If you have made some money by not following my advice, check whether the extra money is worth it for the risk.

If your guru tells you to stay with bonds this time, check his agenda and find another adviser if I am 100% correct.

·         As of 4/2013, cash could be a very good alternative to avoid the risky market and the poor bond prospect. You may lose due to taxes and inflation, but you're buying insurance. Move back to stocks when the reward/risk is higher.

·         The government bond prices could collapse when its issuing country is printing too much and depreciating its currency.

A bond at 30% yield may not be good if the company/country has more than 50% chance to default on their bonds.

·         These holding the GM bonds before the reorganization (i.e. the first bankruptcy) lose more than 40% of the bond values. Corporate junk bonds (i.e. high yield bonds) have its risk.

·         The muni bonds are risky to me. I do not really care about the small tax advantages. Some default. If you really want to buy them, use a bond fund to spread out the risk.

·         The long-term bond price moves in the opposite direction of the interest rate. It is about a 1 to 5 ratio by my rough estimate. If the interest rate moves 5% up, then the bond price would moves 25% down. It is very rough estimate as it also depends on how long will the bond matures (i.e. short-term vs. long-term).

·         Few sell the bond until it matures. If you need a steady income, buy the government bonds at an acceptable rate (for example, greater than 8%). 2012 is not a good year to buy bonds with the low interest rates. Some bonds did default and the owner lost most or even the entire investment. The GM bonds before its first bankruptcy is one of them though it is quite rare.


·         China has been a big player to buy US treasuries.
Chinese do not want to kill the goose that lays the golden eggs. They need a good economy in the USA in order to sell their stuffs, which would create jobs for their citizens and reduce their unrest and dissatisfaction on their government.

However, when your loan is repaid with the USD that is losing buying power, it is about time to switch to other assets including gold or ask your loanee to repay in gold instead of the USD. When the goose becomes meatless, it is time to slaughter the goose and make soup. Hopefully the USA will most likely be saved by the shale energy.


Afterthoughts

·         Bond ETFs: TLT (20+ years Treasury Bond) .

Contra Bond ETFs: TBF (Short of TLT). Click here for an article on contra Bond ETFs.

Click here for other bond and contra bond ETFs.

·         To respond to my ‘Edu-mercial’ (my new term) in 5/29/13, JTS said, “Very educational. Thanks! I'll be out my bond funds end of the day.”

·         Buying a bond fund and an individual bond could be quite different. Bond funds usually buy a large number of bonds maturing in different periods. The mature periods are according to the objective of the fund such as long-term bond funds.

·         There is a way to structure buying funds varying in maturity periods to lower the risk of the interest rate fluctuations. Check your broker to see whether they provide such a tool.

However, I believe it could be better to buy long-term bonds when the interest rate is high (say 8%). A 3% yield does not beat inflation (about 3%) even without including the taxes.




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My e-book Debunk the Myths of Investing could save you a lot of money in investing. The above is one chapter out of 105 and some important chapters will not be included in the blog.
  http://ebtonypow.blogspot.com/2012/12/special-debunk-myths-of-buffett.html

Sample portfolio for the book.
  http://stockportfolios.blogspot.com/2013/03/welcome.html

(c) 2013 Tony Pow

Disclaimer. I'm not responsible for your actions in your investment. Treat this as educational information and past performance does not guarantee future performance.

Tuesday, June 11, 2013

Volt and Tesla



Financially Volt is a disaster but it serves as a compliance car. It drove GM to the brink of bankruptcy – thanks to Chinese for saving GM. Without Volt, the investors of the new GM could make more money. The current owners of Volt do not have good resale values.

Estimate how many miles you drive in a year to calculate how much money you save in gasoline. Most likely it will not pay back the extra investment / maintenance (two drive trains until we have a pure electric car) / reliability, the extra electricity bills, the inconvenience of charging (your time as a Volt owner must be more expensive than the time of a Corolla driver), finding a qualified mechanic (except from the dealer who will charge  you a bundle), the tickets for driving too slowly, the increased chance of hitting something due to no warning sound...

Why folks buy it besides the rebates from the government (at least at one time)? It is the same folks camping in line to buy the new iPhone to replace the ones they bought several months ago except of the age difference of iPhone owners and Volt owners. Don't tell me the iPhone would improve the productivity after they have wasted one night camping in the cold.

They want to be the first one in their town to own a Volt and show the world they're green conscious (that is debatable). It boosts their social standing and 'prestige' for some. It is not for me even if I had the money. Well, it could save them money by visiting a psychiatrist to boost their ego and most likely a prostitute could do a better job for less. J

There are a very small number of folks buying the car for the good of the environment. It is debatable as I said before. There is no convincing figure that it will reduce carbon dioxide emission significantly even when 80% of all cars are electric. However, I have to thank the first wave of electric car owners and the government rebates. Without them, we will never have a truly usable and affordable electric car in the future.

The battery technology is evolving and M.I.T. has a very promising technology. It may take at least 10 years for M.I.T. folks to deliver the next breakthrough from a research project to a commercial product.

I’m very absent minded. Many days I may have to call my boss that I cannot come to work as I forget to charge or I may drive the car with the charger on that could do some harm to the car, the charger or the house (hopefully it would not burn it down).

I also wonder how long it takes to drive an electric car from Boston to Washington, D.C. (including the time to recharge) for my family vacation.

Afterthoughts

·         Tesla is an electric car. It still has similar problems as the Volt except with one simple drive train. The problems are:

1.       The service stations are built for free charging. Are they really free? The charging range for the average owner is far worse than the range under ideal conditions.

2.       The other problem is some states do not (or will not) allow selling a car there without a dealership.



3.       My estimate is $10,000 per car sold by Tesla from the government. That’s part of the reason of the public debt of 17 trillion. Will the government subsidize them forever?

4.       Even the company is making easy money in selling the carbon credit, it is still have a big loss.

Musk is very brilliant in pumping up the stock. He will sell it without the restrictions in the loan after he paid it back to DOE. The last owners of this stock will be the biggest losers. I could be wrong in the timing but not wrong in the fundamentals of the company. 


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My e-book Debunk the Myths of Investing could save you a lot of money in investing. The above is one chapter out of 105 and some important chapters will not be included in the blog.
  http://ebtonypow.blogspot.com/2012/12/special-debunk-myths-of-buffett.html

Sample portfolio for the book.
  http://stockportfolios.blogspot.com/2013/03/welcome.html

(c) 2013 Tony Pow

Disclaimer. I'm not responsible for your actions in your investment. Treat this as educational information and past performance does not guarantee future performance.

Monday, June 3, 2013

CSCO and ALU





Did Huawei steal Cisco's technology?
Do they pass information to the Chinese government on sensitive data from their routers?
They're all unfounded accusations to fight competition.

If the secrets can be stolen that easily, we have to blame Cisco for not protecting their secrets and we would have many companies like Huawei. Cisco is using this to protect its bidding from Huawei unfairly. This tactic works successfully in the U.S., but not outside the U.S. It is a case of its sales force in the U.S. does not care about the sales force in China.

The fact is there is no trap door to steal data from the network. If there is one, a good percentage (about 20%) of the global traffic has been routed via the Chinese equipment already.

It is a fact that companies spy against each other (same as countries), no matter it is a Chinese company or an American company.  If you believe CIA is just gathering information, you believe in fairy tales or your dumb nationalism covers your eyes. This will back slash Cisco when China stops Cisco from selling its products to China for the same reason.

Cisco does not have the technology in G4 LTE as the top three companies (ALU, Ericsson and Huawei) do. The stealer has better products than the stealee! Cisco has missed the opportunity to buy ALU when ALU was $1 per share. I hope they’re working on this important technology.

Cisco and its rival Huawei are riding on the economy. Many devices will be connected to the web. Cisco, Huawei and companies in this sector will all benefit. Singapore today provides a glimpse to the future. Every street has surveillance cameras which are connected to the internet via routers.  

I expect Cisco's stock price will fluctuate with today's range (as of 5-2013) and it will take off after two or three years hopefully when the global economy recovers. Huawei will be in better position in the long term as their research and manufacture costs are far lower than the U.S. Huawei's products are very competitive and already have captures good market shares outside the U.S. The margin of the industry will still be favorable. 

Afterthoughts

·         Cisco was up 10% in one day when she announced earning and boosting the dividend rate from 1.8% to 3.2%. The intrinsic value of the company is the same as the day before and dividend should not change its value by 10% in one day.

Dividend investors are willing to pay premiums on dividend stocks and some dividend ETFs have to buy them when they raise dividends above the average (about 2% for S&P 500 companies).

For the same reasoning, if a dividend stock cuts its dividend, their stock price will fall. As of 8/2012, it happens to several energy trusts. In the boom days of oil prices in 2007, two of my energy trusts were almost doubled and paid great dividends. When the oil prices fall, the reverse would be true especially with so many blind dividend chasers. These trusts require more effort in preparing tax returns unless you buy them in your retirement accounts.

Cisco should use its cash to buy companies like ALU, which would provide the state-of-the-art products they do not have and a customer base in the EU.

·         Every time I posted this article, it was deleted. Do you find this article offensive or wrong?






-------

My e-book Debunk the Myths of Investing could save you a lot of money in investing. The above is one chapter out of 105 and some important chapters will not be included in the blog.
  http://ebtonypow.blogspot.com/2012/12/special-debunk-myths-of-buffett.html

Sample portfolio for the book.
  http://stockportfolios.blogspot.com/2013/03/welcome.html

(c) 2013 Tony Pow

Disclaimer. I'm not responsible for your actions in your investment. Treat this as educational information and past performance does not guarantee future performance.