Tuesday, May 27, 2014

On wars

Wars are not good to life and our economy (which in turn affects life).

* All the body bags coming back and the mentally damaged and/or bodily damaged veterans are bad and wars violate the uttermost import human right.

* Wars boost up some industries (those in offense), but in general it is bad for the economy in the long term (15 or so years). In my books, I suggested the reason for secular bear market and secular bull market is the result of a major war or wars (Vietnam in the 1960 and the current Middle East wars) and the lack of a major war.

It is too expensive to be the world policeman. Learn from the Soviet Union on Afghan and French on Vietnam. If we do not learn from history, we will repeat them. 


If we sent the children of our leaders to the front line, I bet we do not have even one war.

It is unfair to send young kids who do not really understand all the global issues and most likely they could not spell the country's name they are sent to. They should enjoy the best time in their life either in college or new jobs. The college graduates should have a good job instead of waiting tables for years.

Killing is not glorious.

Forcing others to accept our democracy is plain stupid.

Protecting our interest is our excuse (how many oil we save in the current two wars).

Boosting our 'prestige' by killing is no difference from Hitler or the imperial Japanese emperor in WW2.

Saturday, May 24, 2014

$1 special continues

For Scoring Stocks: Concise Version and Finding Stocks: Concise Version. Will be available for a couple days only. Do not miss it. Under Amazon, search "Concise Tony Kindle".

China and the green energy

From my article at SA, YZC is the best among coal companies (the next one is BTU) if you trust Chinese financial statements.

Even in 10 years with all the new nuclear generators on-line, China will still depend on coal for about 70% of their electricity generation. China is blessed with coal but not on oil/gas.

They have tried to alleviate the pollution problem by using better quality of coal (from the NE), demolishing older generator plants. I witnessed the barges carrying coal to the western China along the Yangtze even they have the 3-Gorges dam. However, burning coal is a chemical equation.

Can we be green like Scandinavian countries

Denmark and most Northern Europe countries are different. They're very rich esp. Norway. What works in Denmark may not work in the USA. I saw the long line of wind generator along the coast. It is not a beautiful sight and I bet they have better economical ways to generate electricity but not choose.

Cisco

Cisco is fine short-term considering all the devices and potential devices connected to the network.

Longer term is cloudy:

1. They do not have LTE 4G. Even if they have it soon, it is a little late.

2. You cannot depend on the US government to stop the Chinese routers that are cheaper on security issue that is not valid as you already have traffic routed to Chinese routers.

It angers the Chinese too by limiting their products (some are competitive); so the US sales folk do not care about their own Chinese sales folks.

3. The major problem is the development cost when 5 Chinese engineers work on the same project as 1 American engineer with the same payment for 5.

4. A company does not protect their own products (let Chinese steal it) does not have good management.

I hope it will change as I own the stocks too.

Essence of free trade

The essence of free trade: Buy the products you do not have an advantage (low-wage products for us) and sell those products that we have advantage (Hollywood, high tech, farm products...). You do not want to grow sugar cane in Alaska as an extreme example.

The US is one of the few countries in the world that we can cancel trading with foreign countries for the sake of more jobs. However, we have to enjoy a $50 toaster and dump all the chicken feet to the ocean instead of shipping them to China as a delicacy there.

As times go, China will move up the value chain (today, it is far higher than 10 years ago). China depends on trade more than us. That's why they are loaning us so much. However, at one point they have to kill the goose that lays the golden eggs for the remaining meat or bones for soup.

China mobile phones

I wrote not too long ago: Russia gas would go to China to ease the EU boycott. Now, I do not know how the EU gets the gas (from US?)

In 10 years or so, China will become #1 (at least in quantity) in mobile phone passing US and S. Korea. They already have cheap, smart phones with all the basic features. Chinese market is huge and Indian and other secondary markets will be next for them to attack.

The US market is the gem but it will not be here as many lawsuits for violating their technology (hey, we have the best lawyers money can buy) even some of our technology (not Apple) is behind. The 4GL phone technology is based on 2GL and 3GL.

While the Orientals (Japan, Korea and Hong Kong) are watching TV from the cell phones for years during commutes, we're still using 3G technology and reading books (nothing wrong with that esp. my books). It is due to the big corporations like Cisco force our government to slow down LTE 4G which is 10 times faster than the current network. When we cannot compete, our lawyers and government can. Only 3 companies have LTE 4G to build network: Huawei, Ericsson and ALU (French but with Lucent).

Sign of our education system

Have you seen on TV that the kids invited to the White House? One kid demonstrated how great the teacher to lure them to learn maths by dancing.

That explains the problem of our education system.

Most Asians kid learn maths. and science by themselves and go to extra school after school. The simple motivation: If you do not do good in school, you will be a nobody for the rest of your life.

With so many single parent families and multi generations of teenage mothers, do we have a future? The government discourages folks to work hard by giving generous welfare.

Noises on China

As a frequent SeekingAlpha reader/commenter, I notice good news and bad news on China. They're noises. Just ignore them as in other media. The fact is China is growing and moving up the product value ladder. It will not move as fast as 20 or so years ago. It is a norm when a developing country is moving to a developed one.

For the next 10 years, China should improve its citizens' living standard by providing clean water, fresh air, more social justice, more freedom and less corruption (doing that quite well now).

We have seen many countries doing that (even the US from the colonial days to WW2). However, we have not seen it in such a grand scale that affects the entire global economy.

South China Sea

When you cannot fight the giant, it is wise for Vietnam to go to the world court. I hope they will settle the dispute. It is quite hard. There are two main arguments: proximity of the disputed islet and the historical context.

The proximity is harder to measure as there are uninhabited islets belonged to both countries that would shorten the proximity.

China has the advantage on the historical context. Chinese have historical context more than 2,000 years ago in written form and official recording. Every emperor had an officer to record history since then. They are in a good form (first in bamboo and later in the discovered paper) without being damaged by weather. The language in traditional Chinese can be read easily with some names of places, official jobs... interpreted.

The better way is to let both countries explore the oil and gas resources and hopefully we'll not participate in the disputes. It would lead to secular bear market that the current government does not plan for long-term. Imagine what happens to the economy when China withdraws all the loans.

In the mean time, Vietnam is suffering from FDI (mostly from China and Taiwan), tourists (most are Chinese) and farm products (most to China). In the next 3 years or till they settle, do not buy an stocks and/or ETFs in SE Asia and Philippine. Indonesia looks good but be careful (just remember their riots against Chinese leading to bad economy). 


China has been a victim for the last 300 years or so - a conspiracy started in the Opium Wars. Hope China will not bully the weaker countries as they were bullied before.

Red Lobster

Red Lobster is suffering from the restaurant slow down due to the current recession (what recession if you invest in the market). It is targeted to families and it is a popular place for birthdays for middle (or slightly below) class.

Those in tourist areas such as in Disney World area are doing great with a recognized name. It has never run successfully against real sea food restaurants that are established in New England area. They advertise here (throwing money to the drain) but I cannot find any Red Lobster.

The lobster is dead when it is red - no intention to kick the dead but hoping dead lobster bounce. :)

Covered calls

I recommend covered calls in my books. Some stocks are good for covered calls and not all. On a rough average, it brings up another 10% for selected stocks using covered calls at the risk of losing extra appreciation of some rocket stocks. Some vendors advertise 48% gain on covered calls. When it is too good to be true, most likely it is not true

Market noises

Yesterday I mentioned about the noises in China, and today about the same in Europe.

Predictably (usually correct but not always), the market recovers in two years after the plunge. To illustrate, the market plunge of 6-2000 would recover in 6-2002; the market plunge of 8-2007 would recover in 8-2009. Not too far from the real dates.

Europe is harder to predict as the debts affect too many countries (i.e. no real commander to fix the problem) and now we've Russian invasion. The way to predict is via technical indicator.

It is all about market timing. Talking about this topic, I am virtually giving a concise version to my friends. Check it all and the deal is only good for a few hours.

http://amzn.to/1ib13nr

------------
Why we have market noises?

The readers you like market noises that promotes the advertisers to tell the media to do so

On Market Timing & dividend stocks

However, beating the market (or SPY for easy measure for most) is a common yardstick esp. for fund managers. In this case, we look at 5-year average return.

Dividend stocks have been good for the last few years due to the low interest in bonds. However, the interest rate I expect to change by the end of this year, and at that time the dividend bubble (already historically high) may be burst. It is hard to tell the lottery winners not to buy lotteries.

Market timing is about educated guess. I have examples after 2000. It will not predict the exact peak (it is possible via SMA% and RSI, but I have not fully confirmed). The last two plunges, the simple chart told us to leave the market and it could save you a lot of money and it will most likely work in the future as it depends on the falling stock prices.


From 1970-2000, the average annual return with dividend is about 10%. There is no need to time the market. However, from 2000 to today, we have 2 major plunges with an average return of about 45%.

How and why I blog

Most blogs are written as comments in Seeking Alpha, an investment site. The good ones are copied here judged by myself and the no. of 'likes' by others. Some appropriate ones are copied to my books.

I comment frequently in the Wall Street Breakfast at SeekingAlpha.com on current events.

Friday, May 23, 2014

Starting a music business

One in every four businesses (could be less in this recession) survives in the first few years - do not mean to throw cold water but only true friends care about the risk your friends are taking.

You need an advantage (such as good in music eduction) and a niche of the market is opening up (such as more kids and the growing middle class). Hard work is a must (the old days of coming to the office to sign paper and going back to sleep are gone for all except your father owns the business).

I wrote software for TRS-80 (the first practical PC) - this was the niche. I was a programmer (that was my advantage) and my wife's insurance covered the entire family (so the risk was manageable). There were many programmers in the same situation, but few had the gut to start a business. Even for my failure, you have to admire my gut.

It had been 5 enjoyable years. Bill Gates finally caught up with me. My 10 software programs written by 1 programmer (me) could not compete with 1 software program written by 100 programers. After so many years, my co-worker then still remembered my ad "Top quality software at mass production price". The company was Micro Architect Inc. Incorporation is a necessity  to reduce the liability in selling accounting software.

I had been excited spiritually with the dream of making big money though reality is cruel. I did make some money especially after the tax-deductible expenses (you can deduct your meals at McDonald's for example as long as you talked about business during the meals).

If you have an opportunity (= niche + advantage) and you do not take it, you will regret it for the rest of your life. Life without hope and dream is not a life worth to live for for many. In another words by a famous Chinese, that life is the same as a salted fish (dead and smelly) - must be lost in translation.

My friend, a mechanical engineer, thought of making a machine to automate wrapping won tons when there was nothing similar in the market. If you do not try it, it remains a dream and a regret forever.

A friend after layoff started a restaurant because he is big and likes food (his advantage). Of course, it failed as the restaurant business (not a niche) is the easiest business to open but the toughest business to be successful.

A friend in Hong Kong partnered with his friends to start a broker firm (not a niche). He lost all the money by taking verbal orders (not a niche). The list goes on and on.

The only 2 billionaires (an advantage by knowing the languages and cultures in both countries at that time) I know participated in IPOing for Chinese companies (a niche at the time). They are the exceptions rather than the norm.

The objective of my writing books is not for money but sharing my ideas and building my 'legacy'. It also gives me a break in doing something enjoyable when the market is risky. My English (not my native language) is more a challenge than an advantage but today's digitized publishing is a niche.

Opportunities knock in every generation to every one two or three times in a lifetime. Evaluate them before you leap. Prepare yourself for failure. Even if you fail, you will never regret the decision for chasing after the dream and at least you have something to tell your grandchildren.

-----
Click here for Special on my investment books.

How to be filthy rich

If you put your money under your pillow, you will receive nothing after inflation (at 3% per year) but literally a headache.

Our capital system punishes us not to take some risk.

----------
If you bought Manhattan from Indians for a few dollars, you're the richest person in the world besides Putin.

---
From Bee G.

If you invested $200000 in real estate in Edmonton, Canada in 1979, 35 years ago, today your investment is worth a cool $ 1 million.

If the money was invested in 1984, it is worth $ 800000.
If the money was invested in 1992, it is worth $ 560000.
If the money was invested in 2007, it is worth $ 150000.
If the money was invested in 2009, it is worth $ 260000.


Note. From 1970 to 2000, the average return is 10%.

Market noises

esterday I mentioned about the noises in China, and today about the same in Europe.

Predictably (usually correct but not always), the market recovers in two years after the plunge. To illustrate, the market plunge of 6-2000 would recover in 6-2002; the market plunge of 8-2007 would recover in 8-2009. Not too far from the real dates.

Europe is harder to predict as the debts affect too many countries (i.e. no real commander to fix the problem) and now we've Russian invasion. The way to predict is via technical indicator.

It is all about market timing. Talking about this topic, I am virtually giving a concise version to my friends.

http://amzn.to/1ib13nr

------------
Why we have market noises?

The readers you like market noises that promotes the advertisers to tell the media to do so.

Thursday, May 22, 2014

Islet disputes

When you cannot fight the giant, it is wise for Vietnam to go to the world court. I hope they will settle the dispute. It is quite hard. Two main arguments are: proximity of the disputed islet and the historical context.

The proximity is harder to measure as there are uninhabited islets belonged to both countries that would shorten the proximity.

China has the advantage on the historical context. Chinese have historical context more than 2,000 years ago in written form and official recording. Every emperor had an officer to record history since then. They are in a good form (first in bamboo and later in the discovered paper) without being damaged by weather. The language in traditional Chinese can be read easily with some names of places, official jobs... interpreted.

The better way is to let both countries explore the oil and gas resources and hopefully we'll not participate in the disputes. It would lead to secular bear market that the current government does not plan for long-term. Imagine what happens to the economy when China withdraws all the loans.

In the mean time, Vietnam is suffering from FDI (mostly from China and Taiwan), tourists (most are Chinese) and farm products (most to China). In the next 3 years or till they settle, do not buy an stocks and/or ETFs in SE Asia and Philippine. Indonesia looks good but be careful (just remember their riots against Chinese leading to bad economy).

The riots in Vietnam seems to be organized by opposite political party. The government is corrupt and stupid but not that stupid to bite the hands that feed them. It seems it is backed up by the US.

Wednesday, May 21, 2014

$1 special

Check it out. It is my experience to test how low price affects the sales. The Kindle book is on Market Timing for 2 more days only.

Click here.


http://www.amazon.com/Market-Timing-Concise-Tony-Pow-ebook/dp/B00JSRKQNW/ref=sr_1_1?s=digital-text&ie=UTF8&qid=1400604010&sr=1-1&keywords=concise+market

Monday, May 19, 2014

On Chinese hacking



There is nothing wrong with hacking (except for national security). All companies try to steal business secrets from their competitors EVERY day unless you live in a cave for the last 10 years, or you believe in fairy tales or CIA a friendly, information-gathering agency.

We should protect our secrets. Period.

It is like a beautiful lady (with a lot of goodies and secrets) dressed almost naked and jogging in the middle of the night in a crime neighborhood. Can she justifiably ask  you or her father to prosecute the violator? If so, should the world prosecute NSA (who is no angel especially to Angela) for spying on them? I rest my case.

Wednesday, May 14, 2014

We do not hate the poor but the rich

Actually we hate the rich more. It is human nature to hate those who accomplish more than us. 

The recent example is the owner of Clippers. We ignore all his contributions to the society, especially his deeds to minority. First he was set up for sure. Have we all said something we did not mean to under certain circumstances? Let the one who has no prejudice (again, a human nature) throw the stone at him. The punishment does not fit the 'crime'. 

Why the minority comedians can say something bad about their own race and get away with laughs? We have double standard in and it makes our society more oppressive. There is nothing to do with racial discrimination. 

The poor accuse the rich not to set up stores and supermarkets in their neighbor. With all the looting, do you blame them?

On suggestion setting higher min. wage

Max. wage = Min. wage.

We're communists now.

Mom & Pop Eateries

"Mom & pop" shop owners (eateries in particular) work for:

- less than minimum wages (many work 7 days even they do not open on Sunday or Monday) for at least 12 hours a day and

- no health benefit


They do cheat taxes (if they do not, they cannot compete with other "mom & pop" who do. So, you cannot find too many Christians or Washington work(ed) as restaurant owners.

However, they beat many chain restaurants by providing great food at affordable cost.


-----
Chinese restaurants made great money at only one time - when Nixon returned from China with his big belly gaining 30 lbs as the best ad for Chinese restaurants. You get back your investment in one year in a new Chinese restaurant. Long gone are those days!

Monday, May 12, 2014

Measure the success in one's life

Contrary to popular belief, your success in life is not measured by how many friends or how many stocks you have. It is measured by:

When we die, we're

smart with all toys;

dumb with all toys not upgraded (Disclosure: I've stocks on Apple);

stupid with all money not converted to toys;

genius with all toys being shared (Gates and Buffett).

----
I'm pretty stupid. :)

Friday, May 9, 2014

Different yardsticks for different countries

We're using a yardstick to a developed country to measure China, a developing country.

Facts are:

1. Millions have been saved from starving in the last 25 or so years in China. Food is #1 in human rights, a roof over the head and clothes to keep them warm is second and then followed by freedom.

2. My classmate wondered why the West fighting against child labor while his only meal for the day was the compensation from working as a child labor.

Wednesday, May 7, 2014

Great book: China Study

A book on health. Check it out in amazon.com.

I read about 25% of the book. The theme is eating less animal-protein but more plant-protein and whole food (as opposed to chips, soda, cookies...). Soy food and milk over diary products.

I prefer to choose the middle road by cutting down meat and diary products. Live long or live well? Your choice.

Monday, May 5, 2014

On cancer cures

http://www.life.com.tw/?app=view&no=119465


Summary: Eat more fruit and vegetables to fight off cancer.

US as the world policeman



We should stay away from being a world policeman - currently too many commitments on Ukraine and the Pacific islet disputes. We're not as rich financially 15 or so years ago.

If you look at the last 300 years or so, China has been more a victim rather than an aggressor starting from Opium Wars (Brits as a nation pushed opium to China) to WW2 by the brutal war criminals from Japan. If we do not learn from history, history will be repeated. On the other hand, China should learn from the aggressors and should not do the same to the weaker countries.

Friday, May 2, 2014

Joke but real




                                ###   Real joke   ###
My six-year old grandson called the library about the availability of the book Mine Craft. The lady told him that only Mine Craft for Dummies was available. He told her it was not for him as he was not a dummy.

My dumb thoughts after a few laughs:

From the eyes of a dummy (that’s me), the dummy thinks he is not a dummy most likely is no dummy. Hence, logically we are both not dummies. However, if the dummy argues he is not a dummy due to his young age and was born naively dumb is a dummy. :)

I feel the word dummy has just been over-used by dummies like me. Right?

-----------
From my friends:

Don't you just love the way kids see through all the BS and tell it like it is?  

At the firm I formerly worked for, the 'old man' had a popular saying -- "in any deal, if you don't know who the dumb money belongs - it's probably yours".

That was one of favorite parts of teaching Pre-K for 10 years...honesty from the children, much to the embarassment of their parents at times! Eye opening to watch children act like their parents while playing in the toy kitchen...some wonderful stuff and language to match!  

Thursday, May 1, 2014

On buyback

To my understanding, when the company buys back stocks to reduce the number of outstanding shares, so in theory the remaining shares should appreciate in value in this aspect. However, the company uses the company's cash, then in theory again, the stock value should remain the same. So, it is a no win and no loss situation and supply and demand should not hold for this situation.

However, the management understands better than any one about the value of the company. They buy back due to a good value with respect to how to use the company's cash such as giving dividends, plowing back to research/development... They also in theory consider the total return of the investor (tax rates...).

Most officers take care of themselves first: How to boost the value of their stock options. In last several years, boosting dividends have proven to raise the stock price.


If the number of the outstanding shares has been reduced, many metrics with earning per share will be improved such as P/E.  If the company borrows money to buy its stock, the metrics on debts will head to the other direction.

One's two cents.

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